Many expats leave South Africa without any major long-term plans in mind. They might just be heading over to the UK, or any other destination, to enjoy a two or three-year working contract. However plans often change and this temporary move can often become more permanent.
When this happens, expats end up navigating a lot of red tape as they try to release their capital and assets in South Africa to now make a life for themselves abroad. A relatively simple solution to this is financial emigration.
The freedom of financial emigration
The main reason for recording financial emigration with the South African authorities is to establish and facilitate the free flow of your capital from South Africa. Financial emigration does not require you to give up your citizenship or your passport or sell your property. It is merely a formality giving legal certainty to your non-resident status.
Once you have financial emigrated, you may keep your assets and investments in South Africa and transfer portions (or all) abroad as and when you wish. All that is involved is a simple instruction to your bank, which facilitated your financial emigration, and keeps your capital account (previously known as a blocked rand account) to pay funds to any account anywhere in the world.
Financial emigration also gives access the capital in your retirement funding policies, before the age of 55.
Read our latest article for more information about the benefits of financial emigration.
Financial emigration has no time limit
Fortunately even after many years abroad, South African expats still have the option of financially emigrating from South Africa. In fact, at FinGlobal we have assisted many South African expats to financially emigrate and most of these instances were done respectively, with expats leaving SA and never recording their financial emigration at the time of their departure.
The financial emigration process
In order to financially emigrate your tax affairs must be in order and up-to-date and, for exchange control purposes, your South African bank account will become a capital account which is subject to regulatory restrictions. Your remaining South African-based assets and transactions from this account will be controlled by the bank holding your capital. As a financial emigrant you may transfer offshore:
- The proceeds of your retirement annuity, even before the age of 55, which you may then use as you please
- South African source inheritance
- The proceeds of assets declared in your emigration application
- Passive income i.e. rent, dividends, director’s fees, salary for services rendered in South Africa and income from discretionary or vesting trusts
- Proceeds from a third party life policy
If you’re thinking of moving abroad and would like to financially emigrate, contact FinGlobal for more information about how to make the move and unlock your wealth in your new home.