If you’re one of those people who likes to plan every single detail of every move you make, financial emigration is one of those things you’re likely to ponder over if you’re relocating overseas, or you’ve already been living abroad for some time. So what is financial emigration and when should you do it? How do you record your financial emigration if you’re an ABSA Bank client? Should you handle your own financial emigration, or should you call in the experts? All your burning questions and more, answered below.
What you need to know about ABSA’s financial emigration:
Whether you’re an ABSA client or not, financial emigration means the same thing. It is the process by which you give formal notice to the South African Reserve Bank that you are changing your status from resident to non-resident for exchange control purposes. Nothing more, nothing less. You’re not required to give up your passport to emigrate financially – you’re still a South African citizen, even after financial emigration.
When should you emigrate financially?
Because financial emigration concludes your financial affairs from a South African point of view, most financial emigrations happen after the fact. In other words, it makes sense to have left the country before you record your financial emigration. Even if you left South Africa a few years ago, it’s still possible to undergo financial emigration as long as you’re in good tax standing with the South African Revenue Service.
Are there advantages to financial emigration?
Once you are a financial emigrant (and thus a non-resident for exchange control purposes) it becomes easier for you to move your money out of the country. Remember when we said that financial emigration was purely for exchange control purposes? What this means is that the Reserve Bank will no longer apply the same exchange control rules to you, as they would to ordinary South African residents.
As such, you’ll find that financial emigration makes it easier for you to transfer your money out of South Africa (both capital and income) and that it is a strong move that will protect your South African savings from the constantly fluctuating Rand.
The biggest advantage to financial emigration? It’s the fact that financial emigration gives you access to your retirement annuity fund, which you are then able to withdraw and transfer abroad – before the official retirement age. Once you’ve withdrawn these funds, they can be used for any purpose. You’re not obliged to reinvest them in any pension or retirement savings, so you could use the funds to travel, study further, invest in property – your options are endless.
Additionally, once you’ve completed financial emigration it becomes a lot easier to transfer any South African source inheritance abroad, as well as any passive income you may earn, for example rent, dividends, director’s fees or the proceeds of any assets that you have declared in your emigration application.
What do you need to know before you start financial emigration?
Regardless of which institution you bank with, whether ABSA or not, you’ll need to be aware of a couple of important things before you make the decision to emigrate financially.
- Your South African income tax affairs must be up to date and in order.
- To show you’re in good standing with the tax man, you’ll need a tax clearance certificate from SARS.
- Once you have completed the process of financial emigration, your account with ABSA is converted into a non-resident bank account, also known as an emigrant’s capital account subject to exchange control in SA.
Once you have emigrated financially, the assets that you leave behind in South Africa will be administered by the bank that holds your non-resident account, in your case, ABSA Bank, according to local exchange control regulations.
How do you financially emigrate if you bank with ABSA?
Taking up permanent residence outside the Common Monetary Area (South Africa, Lesotho, Namibia and Swaziland) means you’ll be considered an emigrant. As your bank, ABSA can help by ensuring that you have correctly completed all formalities to comply with exchange control regulations. You can complete your financial emigration through any of ABSA Bank’s foreign exchange branches, and for exchange control purposes your ABSA bank account then becomes subject to regulatory restrictions.
Should you DIY your financial emigration, or should you call in the experts?
Foreign exchange advisories at ABSA Bank might be able to give you a clearer indication of financial emigration timelines, but it has been our experience that the entire process from document submission through to accessing funds, can take as long as six months if you go it alone.
Relocating to a new country and getting a grip on job hunting and settling into new schools and new routines can be stressful enough without having to deal with an assortment of South African bureaucracies back home. Call in the right professionals, and you’ll find it worth every penny in saved time and averted headaches. There are a lot of rules, regulations and requirements to meet at every stage in order to ensure a successful financial emigration, and that’s not something you should wing on your own.
FinGlobal: Financial and Tax Emigration specialists
FinGlobal has created a name as the financial emigration specialist of choice in South Africa for expats all over the world, and we’re here to help you every step of the way – just like we’ve done for more than 60 000 clients since 2011.
Reasons to choose FinGlobal as your financial emigration partner:
- Optimal payouts over a shorter period than other providers
- Better exchange rates than commercial banks
- Tailored solutions to suit your exact requirements
- Using our services means you’ll have your funds faster
- No upfront payment required, transparent costs and fees
- 100% compliant as a licensed financial services provider
- 100% hassle-free as a SARB approved foreign exchange intermediary
- 100% confidential: your personal information and finances remain private
Most importantly, we provide convenience to our clients. All of our services can be delivered remotely, and we take care of everything on your behalf, providing you with signature-ready, completed documentation and hustling the paperwork flow every step of the way. We’re also big on value, providing highly competitive exchange rates and expert advice, as well as exceptional efficiency with a 100% success rate in everything we do – from financial emigration to retirement annuity withdrawal, pension income, foreign exchange, tax exits and so much more.
Still have questions about financial emigration? There’s a FinGlobal expert waiting to walk you through your personal financial emigration plan. All it takes is a free, no-obligation financial emigration assessment to get started. Leave your contact details and we’ll call you back.