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Three ways to move money offshore within exchange controls

by Andrew Rissik | May 18, 2014
  • The National Treasury announced significant relaxation of exchange controls in the national budget in February this year, but the paperwork demands are still an obstacle to moving money in or out of South Africa.
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    High Net Worth (HNW) individuals were pleased to receive some relief when South African residents’ foreign capital allowance increased from R4 million to R10 million per calendar year or on emigration, or R20 million per family, but many of our clients are still experiencing long delays in their increased capital allowance being approved.

    Non-residents, as long as their paperwork is in order, can move all their funds offshore, however, there are more restrictions on tax residents. Here are three ways that tax residents can move their money swiftly and without administrative hold ups.

    1. Use an authorised forex broker

    Since ordinary South Africans don’t deal directly with the Reserve Bank, but with an authorised exchange control dealer, many believe the banks are the only institutions authorised to move money internationally. But there are preferred non-bank forex brokers like our forex team, who move a considerable amounts of money, daily, and at competitive rates with no hidden fees.

    2. Ensure all your paperwork is up to date with SARS and your tax affairs in order

    Since February 2015, SARS will issue a tax certificate for the original R4 million being transferred, but over this amount tax residents must apply for tax clearance if they wish to transfer the additional R6 million. Despite the further relaxation of exchange control in South Africa, which has been systematically approached over the last few years, tax residents will still have to navigate a complex bureaucratic process in order to transfer their funds offshore.

    3. Ensure you have all the required paperwork and exchange control requirements available when applying

    When sending funds offshore, certain requirements must be met that include obtaining appropriate tax clearance, clearance from the Reserve Bank, making declarations of adherence to transfer allowances (set amounts for personal transfers) and submitting audit trails of money remitted to South Africa that is to be repatriated. The list of requirements can be onerous, but our trained brokers deal with SARS and the Reserve Bank daily and will have full knowledge of all the requirements and all the details of any particular application.

    With the increase in foreign capital allowance many of the obstacles to investing offshore are now administrative and with our turn-key solution delays and stress in the complex application procedure will be minimised.

    For more information on the topics covered in this post, or for any other wealth-related queries, you can contact us on +44 (0) 20 7759 7519 or email our wealth team.

    This article was first posted on Invest SA.

    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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    Sable International is a trading name of 1st Contact Money Limited (company number 07070528), registered in England and Wales. We are authorised and regulated by the Financial Conduct Authority in the UK (FCA no. 517570), the Financial Services Conduct Authority in South Africa (1st Contact Money [PTY] Ltd - FSP no. 41900) and hold an Australian Financial Services License issued by ASIC to deal in foreign exchange (1st Contact Group - AFS License number 335 126).

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