INVESTMENT OPTIONS
How To Unlock Your Cash
Unlocking South African Capital for Offshore Investment
BY ANDREW RISSIK
T
ransferring South African Rands out of SA
has never been a simple process. Since the
1960s anyone wanting to transfer funds
abroad has been restricted by South African Reserve
Bank (SARB) Exchange Controls to varying degrees.
Excon relaxations over the past decade have resulted
in most South Africans who can afford to transfer
money out of the country, doing so to the fullest
possible extent.
In the last three years, Excon restrictions have
effectively vanished, except for the ultra-wealthy,
with the annual allowance adjustment in 2015 to
R11 million per individual (or R22 million per
married couple) – broken down into a R10 million
Foreign Investment Allowance (FIA) and one
million discretionary allowance per individual.
Although this relaxation is positive, it has coincided
with a rapidly devaluing Rand, making the reality
of offshore money transfers no less challenging for
those wanting to access SA capital from abroad.
Taking the currency valuation question out of the
equation, what are the options for South Africans
wanting to unlock SA capital for purposes abroad?
There are three distinct categories of
South Africans to consider:
1. South
African
investors
looking
for
diversification and Rand hedged investment
opportunities abroad.
2. Relocated South Africans (aiming to- or having
24
Offshore Handbook 2016
left), looking to access capital to remit offshore,
but who are still tax-residents in SA.
3. Emigrations, in the traditional sense - South
Africans willing to effectively sever financial
ties with SA, are becoming non-tax residents in
SA and moving abroad with the aim of settling
elsewhere permanently.
“The R1 million annual
discretionary allowance does
not require tax clearance from
SARS.”
Relocated South Africans
The same allowance mechanisms available to SA
investors seeking to invest directly offshore are
available to those who have relocated and not yet
taken advantage of the existing allowances.
The R1 million annual discretionary allowance
does not require tax clearance from SARS (individual
good standing) but the annual R10 million FIA
does. You are only able to make use of the R1 million
discretionary allowances during your first calendar
year out of SA.
South Africans,