Opening a South African bank account after tax emigrating: What you need to know

Many South African residents living overseas may be wondering if they are still allowed to open or conduct a bank account in South Africa once they have completed the tax emigration process.

Am I allowed a non-resident bank account in South Africa?

Previously, formal emigration completed via the South African Reserve Bank resulted in your existing bank accounts being blocked or closed altogether. Fortunately, that is no longer the case for non-tax residents. Once you have successfully concluded your tax emigration from South Africa, you can manage your banking transactions through what is now known as a South African non-resident account.

A non-resident account: Why do I need one?

A bank account is necessary for you to be able to move money from South Africa. A non-resident account is the only legal way in which you can transfer funds abroad as a tax emigrant. Even if you’ve fully financially separated yourself from South Africa, chances are that you may still have some assets in the country, such as property, retirement annuities or a pension income. A non-resident account must be used for accessing and transferring these funds as required. Furthermore, if you’re visiting South Africa and require funds to spend locally, you can use your non-resident account for this purpose too.

How to open a non-resident account

The rules for opening non-resident accounts vary from bank to bank, however there are some similarities. For instance, you must be over 18 years old and provide a certified copy of your passport as well as proof of address with your name and current residential address. Furthermore, if you already have an existing account in South Africa that was opened before you tax emigrated, then you need to inform your banking institution of this and they can then convert it into a non-resident account. Additionally, you are allowed to have more than one non-resident account with different banking institutions in South Africa.

Do non-resident accounts have any restrictions?

There are still restrictions in place to transfer money out of South Africa from such an account. According to the South African Reserve Bank, offshore transfers fall into two categories, namely transfer of funds from either an income or a capital source. For transferring income abroad (for example rental income), you need to provide your bank with an updated Good Standing Tax Clearance Certificate every year. To transfer funds of a capital nature (for example the sale proceeds of a property), you will have to apply for an Approval of International Transfer (AIT) Tax Clearance Certificate from SARS.

Non-resident bank account in South Africa: The final thought

Tax emigration doesn’t have to mean losing out on banking services in South Africa. All non-residents are allowed to open non-resident accounts that can be used for managing their funds. It is important to remember, however, that there are restrictions as to how money can be transferred out of the country from such an account. The good news is that with proper documentation and guidance you should have no trouble managing your financial transactions in South Africa.

Expert advice at FinGlobal

FinGlobal is perfectly positioned to assist with all your money matters, from obtaining the required tax clearances to opening of a non-resident account. We will provide you with a comprehensive overview of your options as well as advice on navigating the banking and exchange control regulations in South Africa.