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Expats leave South Africa for many reasons – to travel, to study, to explore new job opportunities abroad or to permanently relocate to a new country. If their move abroad becomes permanent, their thoughts turn to their investments in South Africa and the best way to access them while living abroad. This is when many expats consider financial emigration as an option to access their South African retirement annuities and any other investments they may have.
 

Why choose financial emigration?

For expats who still have a lot of their capital tied up in South Africa, it can make good financial sense since one of the main benefits of financial emigration is the establishment of the free flow of capital from South Africa – to your new home country abroad.

 

The important thing to realise is that financial emigration does not affect your South African citizenship or your right to reside in the country. You do not have to give up your passport, and if you so choose, you can return to South Africa and continue to live and work there in the future.

 

As a financial emigrant you may transfer offshore:

 

 

  • The proceeds of your retirement annuity, even before age 55. This can be used for any purpose in your new country
  • 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

 

How to financially emigrate

Financial emigration can be a complex process filled with red tape if you are undertaking it without expert assistance. The first thing you have to be able to prove to the SA Reserve Bank (SARB) is that you are legally able to permanently reside in a foreign country. To do this you will either need to show proof of your foreign citizenship or permanent residency or a valid visa work permit that will allow you to become a permanent resident or citizen after the allocated period of time. If you have been living outside the country for less than five years, you will need a tax clearance from SARS. You will then need to submit your documents to SARB and formally apply to change your states to non-resident.

 

Opening up a non-resident bank account

Once SARB has approved your financial emigration status, you need to open a non-resident bank account with the bank that submitted your application to SARB. At this stage you can ask your financial provider to withdraw your retirement annuity. This withdrawal is subject to tax and an application for a tax directive needs to be made to SARS. Once SARS has approved the application and your bank has seen proof of your SARS tax clearance and proof of your financial emigration, the funds can be placed in your non-resident bank account.

 

Once your funds have been reflected in your non-resident account, and your bank has run the necessary checks, they will give the all clear and your funds will be released in the bank account of your country of residence.

 

Cut through the red tape with expert assistance

The financial emigration process does involve a lot of forms and red tape and for expats living abroad this can be problematic. As South Africa’s first and most experienced offshore financial specialist, FinGlobal has helped thousands of South Africans financially emigrate and the majority of these were done many years after the South African expats had left the country. For more information about the financial emigration process, contact us today.

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