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Budget Speech update – SARB to relax its grip on South Africa’s cash flow

by Andrew Rissik | Feb 27, 2015
  • In a groundbreaking move, the South African Reserve Bank (SARB) has increased the annual foreign investment allowance from R4 million to R10 million per individual per year, or R20 million per family unit.
    Joburg sunset skyline

    This change reflects the SARB’s decision to modernise capital flow management in a bid to attract more foreign investment. As of 1 April 2015, you will be able to send up to R20 million abroad to any account.

    This outstanding news was released alongside a list of other positive exchange control threshold changes:

    • The corporate investment limit that authorised dealers can process has been increased from R500 million to R1 billion per year.
    • The annual R1 million individual single discretionary allowance subcategories have been scrapped, allowing for the discretionary use of all funds in this category.
    • Dispensation of credit cards usage will be extended to corporations; currently this is only available for individuals.

    What this means for you


    Until recently, the SARB’s stranglehold on money movement out of South Africa has made it difficult to invest large amounts of money abroad. Previously, the per-person allowance amount was increased to R4 million per year, allowing you to transfer up to R8 million if your spouse is also a registered taxpayer and South African citizen.

    A fair amount of money, but with the steady fall of the Rand and the rising costs of house prices and other investments abroad, often not enough to make a meaningful purchase within the EU.

    The complexity involved in securing both allowances also made the exercise longwinded and often plagued by red tape.

    This latest move by the SARB, to  increase the annual allowance, has created a golden opportunity for individual foreign investment. With a R1 million discretionary allowance that has no restrictions and R10 million investment allowance, a single person could quite comfortably make a sizable investment abroad.

    What this means for South Africa

    Some people may believe the SARB made a bad decision to relax exchange control thresholds, and that it may increase the possibility of a run on the banks by the country’s wealthiest. However, a more practical perspective may be to take a step back and allow commerce to find its natural flow. This could well be the best possible way to boost investor confidence and pull South Africa out of its current nosedive.

    By relaxing controls and allowing foreign investors to move money in and out of the country without the fear of being trapped in a bad financial situation, we are opening our doors to long-term capital investment. This can only be a good thing.   

    If you are worried about how this might affect you or your investments or are interested in investing your money abroad, contact Sable International on +27 (0) 21 657 2153 or email us at forex@sableinternational.com.

    We are a professional services company that specialises in cross-border financial and immigration advice and solutions.

    Our teams in the UK, South Africa and Australia can ensure that when you decide to move overseas, invest offshore or expand your business internationally, you’ll do so with the backing of experienced local experts.

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