When the time comes to seek out greener pastures in another country, there’s a process involved that calls for something we all dread: paperwork. Having the right documentation and following the correct process is absolutely essential if you want your emigration to go through without a hitch. Undoubtedly, when you do a bit of research into how to financially emigrate from South Africa, the procedure will come across as more than just a little overwhelming. The good news is that once you’re familiar with the process and have the helping hand of the right emigration professionals; it’s all smooth sailing.
Why Must Expats Financially Emigrate From South Africa?
Something that first-time expats often as is why financial emigration from South Africa is necessary. Why can’t they just continue the way things are? And that’s where legal requirements come in, for exchange control purposes. While initial emigration only involves moving yourself physically overseas, financial emigration takes things a step further. This only happens when you are granted permanent residency in another country and then it’s time to bid farewell to your personal ties in South Africa and transfer your assets and funds overseas (to your new country of permanent resident).
Financial emigration is a major process and many people find it quite daunting for good reason. The good news is that thousands of people have done it successfully before and if you are well-advised and prepared for the process, you really should have nothing to worry about.
For those who worry that financial emigration means giving up their SA passport, fear not! Financial emigration is done purely for exchange control purposes and will have absolutely no bearing or impact on your citizenship. If you have been living and working overseas, but have not officially financially emigrated via the South African Reserve Bank, you are still considered a South African resident. Once you become a permanent resident in another country, you can no longer be considered as such and your residency status must be changed. Again, this is for exchange control purposes and also shows your intention to live and work abroad on a permanent basis.
The process of financial emigration involves getting in touch with the South African Reserve Bank and informing them of your formal decision to change your residence status. And that’s where it all begins…
The Process Involved & Documents Required When Financially Emigrating From South Africa
If you’ve been granted permanent residency abroad and the time has come to financially emigrate, there’s a particular process and specific documentation that must be followed and completed in order for a successful financial emigration to be the outcome. This doesn’t have to be a process that gives you grey hairs. Below is a step by step guide on what to do and what is required – this should make things a bit easier to navigate.
- Apply for Foreign Capital Allowance
Before anything can be processed, you need to apply for foreign capital allowance. The MP336 form must be completed when financially emigrating from South Africa, so that’s the first form that you need to get your hands on. This is what is used to apply for your foreign capital allowance. It must be submitted as an original, along with any requested supporting documentation, to a commercial bank in South Africa. It is best to use your existing bank, but if you have subsequently closed your accounts, any bank in South Africa is just fine to use.
- Apply for a Tax Clearance Certificate with the South African Revenue Services
Before you can transfer your funds and assets overseas, you need to get the go-head from SARS. For some this is a little more grueling than for others. A tax clearance certificate in South Africa must be obtained from SARS and kept as proof of having your tax affairs in order. You cannot emigrate if your tax returns are behind, so make sure that you keep up with these in the lead up to your emigration. If you have remaining assets in the country, SARS will require evidence of all of your remaining assets in South Africa which can be quite an involved and lengthy process. The quickest and easiest way is to emigrate without a tax clearance certificate but this can only be done if you have no remaining assets in the country and have lived in a foreign country for 5 years or longer.
- On Approval From SARS & SARB, Transfer Your Funds
When your application is approved, the funds from the sale of your remaining assets is transferred into your emigration account which can then be transferred overseas.
Supporting Documentation Required When Emigrating From South Africa
During the financial emigration process, the South African Revenue Service and the South African Reserve Bank may ask for several supporting documents. The list of supporting documents is quite extensive and can be found on the SARS website.
Included in this list, applicants will need to supply a statement of assets and liabilities for a period of at least 3 years as well as disclose all of their investments, loans and other financial matters. It’s best to work with an authorized officer to ensure that all the documents are in place and that the process can run smoothly.
Have a Smooth-Sailing Financial Emigration Process with the Help of FinGlobal
If the concept of financial emigration overwhelms you, it’s time to consult with the professionals at FinGlobal. With almost a decade of experience behind us, we are well versed in the financial emigration process and have in fact helped thousands of South African expats across the globe. If you would like to chat to someone about your upcoming tax and financial emigration from South Africa, simply get in touch with us. You can give us a call or send us an email at any time. One of our professional consultants will assist you further with pleasure.