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How financial emigration assists South African expat entrepreneurs

By July 2, 2018October 17th, 2023Financial emigration

How financial emigration assists South African expat entrepreneurs

July 2, 2018

Many South Africans move abroad to start their own businesses. Not only do countries like Australia offer working visas for entrepreneurs starting their own businesses, but it’s also a step towards gaining permanent residence in a country.
In order to invest in a business abroad, it’s essential that you have enough capital to get the business going, especially during the first few months when setup costs can be high. One of the ways to access your South African investments and capital is through the process of financial emigration.

Free the flow of your capital to assist your new business

Financial emigration is also known as formal emigration and simply means your status, for exchange control purposes with the South African Reserve Bank, changes from resident to non-resident. Financial emigration does not change your status as a South African. You and your family still have the right to South African citizenship and your South African passports.

Financial emigration helps free the flow of your capital (and income) from South Africa and enables you to invest your South African capital in your business abroad. For many people, the huge advantage is that they are able to withdraw and transfer the proceeds of their South African retirement annuity offshore, even before retirement age. The cash from their retirement annuity can be used for any purpose, including giving your new business a financial boost.

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 including buying property – or even a round the world trip
  • 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

Ensure expert assistance every step of the way

Starting a new business is a very challenging process, and financial emigration can also be quite a daunting complex process if you undertake it on your own. In order to financially emigrate, your tax affairs must be in order and up-to-date. Once you have financially emigrated, for exchange control purposes, your South African bank account becomes 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 account.

The entire process, from submitting your documents to accessing your funds, is usually six months, providing everything proceeds smoothly. There are many rules, regulations and requirements to meet at every stage, however with the right advice and support from a South African Reserve Bank approved foreign exchange intermediary, South African expats can be assured that all the boxes are ticked.
FinGlobal has assisted thousands of South African expats to financially emigrate from South Africa and the bulk of instances, the financial emigration was done after the expats had left the country. For more information about financial emigration, contact us today.

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