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Ever wondered exactly how much money you can take out of South Africa every year? While there are limits to the amount of money that can be moved out of the country, citizens – whether living in South Africa or abroad – can still move up to R11 million annually using their exchange control allowances, which is a fair chunk of cheese really.

So whether you’re thinking of transferring money out of South Africa for the first time, or you simply haven’t done your money moves for 2019 yet, the end of the calendar year is approaching rapidly. December is almost done! This means that you haven’t got much time left to make use of your 2019 exchange control allowances. Let’s take a quick look at what you need to know before you make an international money transfer from South Africa.

The exchange control lowdown

Effectively using your annual transfer limits starts with doing your homework so that you know exactly how exchange control regulations (and tax regulations too, for that matter!) affect you when you want to take your money offshore.

The South African Reserve Bank (SARB) is in charge of exchange control. This is a mechanism and set of rules by which the movement of money through South African borders can be controlled by the government. These exchange control rules state exactly how much and under what circumstances you may transfer money into and out of South Africa, restricting how you can access the money you’ve left back home.

How do you know if exchange control regulations apply to you?

These regulations apply to South African residents, so if you live abroad but you’re still considered a resident for exchange control purposes, then they apply to you. Wait. What? Here’s a simple explanation of how it works. It’s worth noting that all foreign currency transactions need to be declared to SARB – it doesn’t matter if you’re travelling, emigrating, investing, returning to South Africa, or importing and exporting goods or services.

What are the SARB exchange control allowances available to South African residents?

If you’re getting ready to transfer money out of South Africa, you’re going to want to pay attention to the applicable limits. There are two types of exchange control allowances that you can use to transfer money out of South Africa:

 First option: Single discretionary allowance –

  • This allows South African residents to transfer up to R1 million per calendar year, without a tax clearance certificate.
  • Children under the age of 18 years have an allowance of R200 000.

This allowance can be used for any purposes (hence “discretionary”), including:

  • Offshore investments: make international investments to diversify your risk portfolio and send money abroad.
  • Gifting: there’s no better way to celebrate than with a gift of cash!
  • Assistance: help out a friend or family member in need of funds.
  • Studying: pay for study fees with an international money transfer.
  • Child or spousal support: Pay child maintenance funds to your spouse or ex-spouse.
  • Overseas travel: pay for accommodation, tours and transport and reduce the amount of cash you need to carry when travelling.

TOP TIP: Double up on your annual single discretionary allowance

If you’re a South African citizen, and your spouse is a South African citizen, together you can transfer R2 million per calendar year. You can choose to send this in one lump sum or space the payments out over the year – doing it like this means less admin because you won’t need to get a tax clearance certificate beforehand. If you have children older than 18, you can transfer R1 million in each child’s name without needing to get a tax clearance.

Second option: Foreign capital/investment allowance –

In addition to the R1 million available in terms of the single discretionary allowance, South African residents may transfer money out of South Africa, up to R10 million per calendar year, but in order to do so they will require a tax clearance certificate for exchange control purposes.

For both of these allowances, you will need your green bar-coded South African ID document or a Smart ID card, and you will need to have at least 18 candles on your birthday cake.

FinGlobal: All the exchange control and tax expertise under one roof

FinGlobal offers a full suite of convenient services including exchange control, foreign exchange and international money transfers for South Africans across the globe. Choosing FinGlobal means choosing a cross-border financial services partner that is strictly regulated by the relevant authorities in South Africa – which should give you peace of mind knowing that your money is in safe hands.

It also means you can leverage our strong relationships with both the South African Revenue Services and Reserve Bank, as well as all major banks and financial institutions – all of which adds up to efficient, effective service. 

To make use of your exchange control allowances, contact us for your free and no obligation quote today.

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