Many South Africans living abroad and in South Africa hear the term ‘financial emigration’ and are not quite sure what it means and are worried that if they financially emigrate they will renounce their citizenship. The simple answer to these concerns is: NO. If you financially emigrate from South Africa, you do not renounce your citizenship or affect your South African residency status. You keep your passport and you can come back and work and live in South Africa any time you please. As we like to say at FinGlobal, “Once a South African, always a South African”.
What is financial emigration?
Financial emigration is a process that concludes your financial affairs when leaving South Africa to settle in another country and simply means your status with the South African Reserve Bank (SARB) changes from resident to non-resident. Financial emigration does not affect your South African birth right, your citizenship or your right to retain your South African passport. Instead, the financial emigration process facilitates the flow of your capital out of South Africa.
As a financial emigrant you many 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 worldwide tour
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
Financial emigration means you may keep your assets and investments in South Africa and transfer portions, or all, abroad as and when you wish. Accessing your capital simply involves instructing your bank, who facilitated your financial emigration and keeps your capital account, to pay the funds to any account, anywhere in the world.
In addition, once your financial emigration is concluded and approved from a South African point of view, any capital invested offshore will be deemed from a non-resident source. This means, any investment (income and capital) will be freely transmittable from South Africa and not subject to any exchange control.
How might you renounce your South African citizenship?
Many South African expats who move abroad for work purposes may end up with permanent residency or even naturalise as citizens of their new country. What some South African’s don’t know, is that if they accept a new passport without applying for dual citizenship priorto gaining their new citizenship, they automatically lose their South African citizenship.
South Africa does not prohibit dual citizenship or even multiple nationalities, but in order to retain your South African citizenship, you need to first apply for retention of your South African citizenship status. Only once you have had this confirmed, you may formally obtain your foreign passport. The automatic loss of citizenship status is as a result of the Citizenship Act (No. 88 of 1995 and thereafter).
What does the loss of SA citizenship mean?
If you lose your South African citizenship, you still retain your right to permanent residence in South Africa. If you have lost your South African citizenship because you did not follow the procedures by first applying for retention of your South African status, you can apply to resume your South African citizenship status.
How to financially emigrate
Now that you know that financial emigrationdoes not mean you have to renounce your South African citizenship and instead brings with it many financial benefits if you are moving abroad for the long-term, you might like to know more about it.
With over 60 000 clients living all over the world, FinGlobal is regarded as a leading migration company and regularly assists South Africans financially emigrate.
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.
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