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10 important financial questions to consider when you emigrate

By February 13, 2014October 10th, 2023Financial emigration

10 important financial questions to consider when you emigrate

February 13, 2014

By Mariette Janse van Rensburg

01. How to exchange your Rand to your new home currency

It is bad enough to exchange your money at a ratio of 10 to 1, and it is therefor important to negotiate the most competitive exchange rates and fees when you transfer your money. Many immigrants make use of the mainstream commercial banks, simply because they are not aware of alternative options to exchange and transfer money from South Africa. Considering alternative options can save you a great deal of money in the form of costs and fees, and you’ll end up with more dollars/ euros/ pounds in your new home country. Can you negotiate your exchange rate upfront? Are all the costs and fees disclosed upfront?

Consider making use of service providers who offer clients highly competitive exchange rates combined with exceptional personal service to make the exchange of your money as painless as possible.


02. How to transfer your South African money legally

Any remittance of money from South Africa is subject to Exchange Control Regulations. Contravention of the regulations is deemed a criminal offence in the eyes of the authorities. If you transfer money from South Africa, you are required to obtain authorisation from the South African Reserve Bank and in some instances obtain tax clearances from SARS.

The South African Reserve Bank will grant authority to transfer money in the form of a:

  •  Discretionary allowance (R1m per person per annum) or
  •  Foreign investment allowance (R4m per person per annum)

Each allowance has specific qualifying criteria which needs to be complied to. In addition, depending on your personal circumstances, it might be an option to record your formal emigration with the South African Reserve Bank. Get the correct information from trusted sources to ensure that you move your money legally.


03. Why not to use your South African credit card abroad

The use of  South African credit cards abroad for an indefinite period of time is illegal and constitutes a contravention of the Exchange Control Regulations in South Africa. The consequence of such a contravention can lead to material penalties of up to 200% of the amounts spent on credit cards. The South African Reserve Bank monitors and regulates all foreign money spent on South African credit cards offshore.  Stop using your South African credit card if you do not return to SA on a regular basis.


04. How to transfer your South African Retirment Annuities abroad

Once you have left South Africa on a permanent basis there is no reason to leave your retirement annuities behind. With the change in tax legislation in South African in 2008,  you are now able to transfer the full capital value of your South African retirement annuity to your new home country, even before age 55. You will have to record your formal emigration with the South African authorities in order to allow you to make use of this opportunity. Obtain professional advice regarding your personal circumstances to ensure that you consider all the pro’s & cons of emigration from South Africa.


05.  How to record formal emigration with the South African authorities

If you have not recorded your formal emigration (exit) from South Africa, you will be deemed  a “South African resident temporarily abroad”. Many migrants believe that their South African residency status changed once they’ve received permanent residency or citizenship in their new home countries, which is however not the case. From a South African exchange control point of view you will still be regarded as a South African resident. This “residency status” can be changed via formal emigration, a process in South Africa where you declare your intentions and SA asset base to SARB (South African Reserve Bank) and SARS (South African Revenue Services). This will not have an impact on your South African citizenship.

Obtain proper advice from registered advisors in South Africa to obtain all the relevant information before you make any decisions.


06. How to make sure you do not pay double tax

The simple general test to determine where you are liable to pay tax is:

  •  your physical presence and
  • your residency

For example, if you have moved to a new home country and reside there on a permanent basis (physical presence) and have obtained a “permanent” residence (residency) status, you are considered a taxpayer in that country. This effectively makes you a “non-resident taxpayer” from a South African point of view.

There are certain exceptions to this general rule, as some assets left behind in South Africa may be subject to South African tax on the source basis of taxation.There are double taxation agreements/ treaties in place between South Africa and various countries, which governs where you would be liable for tax and to ensure that you wouldn’t have to pay double tax on income and assets. Obtain proper cross-border tax advice in order to determine your personal tax position.


07. How to obtain Tax clearances from SARS

Application for tax clearances in South Africa are not as straight forward as you might think, and you need to be certain of which type of tax clearance you require. There are currently 3 types of tax clearances you can apply for:

  1. Certificate of good standing
  2. Tax clearance for allowance purposes and
  3. Tax clearance for emigration purposes

The application forms can be downloaded from the SARS website. An application for a tax clearance from SARS is usually subject to a tax audit on your tax record. You should thus ensure that your tax affairs are up to date. It is advisable to engage the services of a SARS accredited tax practitioner to assist you with your application of a tax clearance.


08. How to open a new bank account in South Africa

It is a challenge to open a new bank account in South Africa when communicating over a long distance from offshore.  The FICA and anti-money laundering regulations in South Africa need to be satisfied before accounts can be opened. It is important to select the appropriate account for the purposes that you wish to use the bank account for. Bank cost and ancillary fees must be considered with the view of minimising the operational cost of a bank account in South Africa. There are unique solutions available from smaller, specialised banks operating in South Africa.

Obtain appropriate information from service providers to assist you with making informed banking decisions to satisfy your needs.


09. How to  transfer inheritances from South Africa

Do you have parents, in-laws or other family members in South Africa whom you are likely to receive an inheritance from in the future? As the transfer of inheritances are subject to Exchange Control Regulations,

appropriate estate planning is required to ensure that beneficiaries outside South Africa comply to receive their inheritances. Inheritances must be paid to a South African bank account. Should a beneficiary residing offshore not have an active bank account, you are now able to open a new bank account in South Africa. Once this new account is funded with the inheritance, you can avail of your exchange control allowances to remit the funds offshore.

Alternatively you can record your formal emigration from South Africa, which, when an inheritance arise, allow for the funds to be freely remitted to an offshore bank account, without any further exchange control regulations that need to be fulfilled.


Obtain proper information from service providers in this field and consider your personal circumstances in order to determine the best solution to suit your needs.


10. WHY consider the services of is a licensed Financial Services Provider regulated by the FSB in South Africa.  The groups’ headquarters are based in Hermanus (South Africa) and has fully operational offices in Australia and the United Kingdom. The resource team currently consist of 55 highly skilled professional staff specialising in migrant financial services globally.

To contact us for a FREE, no obligation, consultation – simply click here

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