The topic of emigration is an emotional one for most South Africans. Leaving familiarity behind in pursuit of new career or lifestyle opportunities in a new country is incredibly challenging. Whether you’re considering starting a new life abroad or have already emigrated to your new home country – it’s important for you to think carefully about how you’re going to get your money out of South Africa. As convenient as it would be, your money isn’t going to follow you automatically. There are foreign exchange and tax regulations to consider and because your money will be moving across borders this will be of interest to both the South African Revenue Service (SARS) and the South African Reserve Bank (SARB). In order to wrap up financial affairs and gain access to your money and assets, one of the options available to you as a citizen no longer residing in South Africa is a process called “financial emigration“.
What are the benefits of financial emigration from South Africa?
While not compulsory (i.e: you don’t have to financially emigrate if you don’t want to, or you have, for example, plans to return to South Africa in the future for retirement purposes) financial emigration is an attractive option for taking your money abroad.
There are a number of advantages to completing the process of financial emigration:
- It becomes easier to transfer money (both capital and income) out of South Africa
- Taking your savings abroad will protect your nest egg against the fluctuating Rand
- You become eligible to access and cash in your retirement annuity before the age of 55
- It becomes simpler to transfer your South African inheritances and passive income out of the country.
For most South Africans living abroad, the biggest drawcard is the money they’ve been diligently saving for retirement. Leaving South Africa doesn’t mean you have to leave these savings behind. In fact, leaving South Africa and completing the process of financial emigration is your ticket to cashing in these funds early, before you hit the golden retirement age of 55 years. Once you’ve completed financial emigration and cashed in your retirement annuity, the proceeds can be transferred abroad to you in accordance with exchange control regulations, and used for any legitimate purpose.
That’s right. Any legitimate purpose. You’re not forced to reinvest in a local retirement savings vehicle, and you’re free to use that money in a way that best secures your new future in your new home country.
What is financial emigration?
Financial emigration is a process that South African citizens may only undertake once they’re already living abroad. Through this process, you are simply formalising (making it official) your exit from South Africa for exchange control purposes. This process does not mean you are cancelling your South African citizenship or breaking up with SARS. You still keep your green passport, because you’re still a South African citizen.
By officially declaring your exit to SARB, your status changes from resident to non-resident, purely from an exchange control perspective. None of your other rights or obligations as a citizen are affected by financial emigration.
What do I need to know about financial emigration process?
To record your financial emigration from South Africa, you need to show the South African Reserve Bank (enforcer of exchange control regulations) that you are in good standing with the income tax authorities. Your tax affairs must be up-to-date, and you will need a tax clearance certificate issued by SARS. Your South African bank account will be redesignated as an emigrant’s capital account (previously called ‘blocked account’) and subject to South African exchange control, once the process of financial emigration is completed.
If you’re going to do it, do it properly. Call the financial emigration specialists.
A specialised financial emigration company like FinGlobal will come in handy at this point, if you have money and assets in South Africa that you don’t want to leave behind indefinitely. Our expert teams will be able to provide you with an obligation-free financial report that details the actual surrender values of each and every one of your policies, along with an estimate of tax likely to be incurred. Upon evaluating your unique circumstances and cash flow requirements against your asset list, we can provide an exact financial emigration solution to fit your needs.
We’ll help you get through the process of financial emigration from South Africa, guiding you every step of the way back to your assets. To do this, we offer a full range of in-house services, including investigating and identifying policies to be surrendered, while handling every aspect of your financial emigration, providing you with signature-ready paperwork and the peace of mind that comes from knowing everything we do is foreign exchange and tax compliant.
Interested in learning more about financial emigration? You should be. Give us a call and let’s start that life-changing conversation. Alternatively you can submit your contact details via our website for a free and no obligation consultation and or quote.
If you are a South African living abroad and would like to know more about how you can maximise your finances through the financial emigration process, accessing your South African retirement annuity and our tailor-made tax solutions for South Africans around the world, contact FinGlobal today.