When it comes to banking in South Africa for expats and non-residents living abroad, a number of things have changed recently. If you’re a South African living abroad or you intend on relocating soon, you’ll need to educate yourself on these changes to ensure you know exactly what to expect when it comes to managing your money moves between two countries.

 

Banking in South Africa

• Cross-border banking in South Africa has changed, and no longer differentiates between resident and non-resident when moving money out of SA.

When South Africa’s National Treasury announced changes to individual taxation and exchange control rules and phased out the South African Reserve Bank process of formal emigration, restrictions on non-residents were lifted at the same time.

For cross-border transaction purposes, there is no longer a distinction made between residents and non-residents. This decision was taken to lessen the administrative burden on emigrants, in order to make international transactions less onerous while in transition. This means that there are no longer restrictions on South African non-residents in how they could invest, borrow, lend and transact because under the new system, natural person emigrants and natural person residents are treated identically.

 

• How to tell the difference between a South African resident and non-resident.

A South African resident is an individual who, for tax purposes, meets all the requirements of the ordinarily resident and/or physically present tests set down by the South African Revenue Service in the Income Tax Act. A non-resident is, accordingly, someone who does not meet those requirements. However, when it comes to moving money out of South Africa, both a resident and a non-resident will be subject to a tax verification process, whereby it must be shown that the individual is in good standing with the tax authority and can verify the source of the money to be transferred abroad.

Read more about the application of the ordinarily resident and physically present tests in determining tax residency here.

 

• You might need a non-resident bank account in South Africa even if you no longer live there.

Now that there is no longer a distinction between residents and non-residents for banking purposes, there are no longer as many restrictions on the types of accounts that non-residents can hold in South Africa. These accounts used to be called Blocked Rand Accounts and had limited transactional capabilities, but all this has changed. Now, non-residents can apply for transactional accounts that make it easy to handle banking back in South Africa, from anywhere in the world. Some banks have even made it easy for non-residents to save and invest with them while providing forex capabilities to easily move money across borders.

 

What is a non-resident bank account used for?

• Moving money out of South Africa will require a local bank account, and a non-resident bank account is the only legal vehicle through which funds can be transferred abroad.
• Individuals can only access and transfer financial assets from South Africa (like retirement annuities, pensions or provident funds) abroad through a non-resident bank account.
• Funds in this account can be used for transactional purposes in South Africa, for example, to pay for maintenance on immovable properties remaining in South Africa, or to fund return visits to see family.

So what’s the difference between a resident and a non-resident when it comes to opening an account in South Africa? It all boils down to paperwork.

 

How to open a non-resident bank account in South Africa

The requirements may vary bank to bank, but it’s safe to assume that you must be older than 18 years of age and you will need to provide:

• The minimum opening deposit
• A certified passport copy stamped by your overseas bank
• Bank statements for at least three months
• Proof of income

 

As a non-resident, you’ll also need to provide the following documentation:

• A valid passport.
• Address of your current residence.
• Three months’ bank statements from your previous country’s bank, showing the activity on the account.

 

Quick question: Where can I open a bank account online in South Africa?

You’ve come to the right place. FinGlobal can assist you with opening a non-resident bank account in South Africa, as we are a proud partner of Bidvest Bank. We provide a convenient banking facility for non-residents and expats, so you can manage your financial interests in SA from anywhere in the world. We are also financial and tax emigration specialists. Leave us your contact details, and we’ll be in touch to start the process.