It’s all over the news – a leak of over 11.5 million files from the fourth biggest offshore law firm in the world, Mossack Fonseca, has revealed at an unprecedented scale how individuals are stowing money away offshore by exploiting secretive tax regimes.

This, of course, is something which has raised many a red flag for international migrants, and even more for tax authorities.

So what are the implications for you as South African emigrant when considering moving money abroad?

Knowing the law of the land

The most important thing you must consider when moving money between jurisdictions is the legal implications of each transaction and account.

Though chances are you’re really not intentionally trying to evade the authorities, many emigrants unintentionally fall foul of the law. Legislation between countries varies greatly, and unless you are a legal or financial expert it’s highly unlikely that you’ll understand what your rights and privileges are.

The implications of unlawful international transactions, however, can be quite significant. You could face fines in various jurisdictions and possibly even prosecution. Claiming ignorance will not hold up in any court of law.

Don’t entrust your cross-border finances to anyone

Unfortunately not even financial consultants always understand which rules apply to offshore finance – especially if they don’t have the necessary international financial experience to offer you valid advice. Sadly, there are even some advisors who knowingly advise clients on the wrong course of action in order to save them a quick buck or stow away money from tax authorities.

It’s crucial that you entrust your cross-border finances to specialists with the requisite expertise and accreditation to manage your portfolio and facilitate fund and asset transfers. Some important pointers to consider when choosing a financial services provider:

1. Research their reputation – use search engines, word of mouth and any other means at your disposal to gauge the quality and efficiency of the provider or individual you choose.
2. Don’t be afraid to ask – even questions which may seem stupid to you are important so you understand exactly what is expected of you and what you can expect in return.
3. Be 100% honest – the only way providers can ensure safety of your funds and efficacy of service is by knowing exactly what they are dealing with.
4. Check accreditation – all financial services providers need to be listed with tax and other authorities (like accountancy bodies and financial services boards) in order to operate within a particular or multiple jurisdictions.
5. Keep an eye on the news – changes to tax regulations and laws are published intermittently, so it’s a good idea to keep your eye on the news and subscribe to newsletters of legislators and governmental bodies.
6. Get a second opinion – if you’re worried that your services provider is not following the correct course of action or is dishonest in their dealings, you have every right to get a second opinion.
7. Disclose sooner rather than later – if you have made an erroneous move with regards to your international transactions, it’s best to disclose this to the relative tax authorities sooner rather than later. You may still face fines, but authorities will generally be more lenient if you act promptly in correcting your mistakes.

Do you need help with your cross-border finance?

finglobal.com is the foremost authority on managing cross-border finance for South African emigrants. We are a fully accredited financial service provider and have the necessary expertise to ensure that all your transactions remain fully compliant and above board.

If you need assistance with transferring the full value of retirement annuity policies offshore, transferring funds offshore, tax queries or advice on a financial emigration plan, simply leave your details and we’ll call you.