Avoiding common pitfalls when transferring funds abroad from South Africa

If you’re planning your financial transition out of South Africa, there are a number of important things you need to be aware of when it comes to the exchange control limits, the tax processes and the paperwork involved. Let’s take a look at what you need to know about international money transfers from South Africa, so you can avoid any potential mistakes that could cost you more time, and money than anticipated.

How much money can I send overseas from South Africa?

South African tax residents have two exchange control allowances available to send money overseas out of South Africa.

1. The Single Discretionary Allowance: Move up to R1 million offshore out of South Africa per year, without prior tax clearance.
2. The Foreign Capital/Investment Allowance: Move up to R10 million offshore out of South Africa, per year, with prior tax clearance from SARS.

You are considered a South African tax resident until you complete the process of tax emigration through SARS and your status is changed to non-resident, for tax purposes. As long as you are a tax resident, you can utilise these two allowances to transfer money out of South Africa.

If you are no longer a South African tax resident, there is no limit on how much money you can transfer out of South Africa, provided you successfully submit an Approval – International Transfer application to SARS first.

Read more: Limits on international money transfers out of South Africa – what you need to know.
Read more: How much money can I take out of South Africa when I emigrate and thereafter?

International money transfer from South Africa: How to send money overseas

Transferring funds out of South Africa can be a stressful process with its own unique set of challenges. To avoid making a mistake here that could potentially be expensive, you’re going to want to be aware of these common pitfalls when making international transfers out of South Africa:

• Exchange rate fluctuations: The South African Rand (ZAR) is a volatile currency, meaning its value can fluctuate significantly against other currencies, especially during times of economic uncertainty. This can impact the amount you receive at your destination, potentially affecting your plans.
• Transfer fees: Different platforms and methods for transferring funds will have varying fees. Banks often charge high transaction fees, while international money transfer services might have hidden charges or unfavourable exchange rates. Research and compare your options carefully before choosing a method.
• Exchange control regulations: South Africa has exchange control regulations in place to manage the flow of foreign currency. While individuals are generally allowed to transfer up to R1 million per year without prior approval, exceeding this limit can be a lengthy and cumbersome process. So, don’t leave it to the last minute.
• Scams and fraud: Unfortunately, scams targeting international money transfers are not uncommon. Be wary of unsolicited offers, platforms with suspiciously low fees, and requests for large upfront payments. Only use reputable service providers and double-check recipient details before finalising a transfer.
• Documentation errors: Incomplete or inaccurate information like beneficiary details, account numbers, or reference codes can delay or even block your transfer. Thoroughly examine all details prior to submission.

Read more: Top tips for international money transfers: How to choose the best FOREX provider.

Additional points to factor in when transferring money out of South Africa:
Certain types of accounts, like student accounts or savings accounts, might have their own limits on international transfers. Delays can occur due to various factors, like bank verification processes or security checks. Always read the how-to guides and FAQs involved, for any transactions you might be planning. This will provide you with a clearer understanding of what to anticipate. Exploring alternative options like peer-to-peer transfer platforms or foreign currency accounts might offer you more flexibility or cost-effectiveness.

By being aware of potential pitfalls and researching your options thoroughly, you can make informed decisions and avoid unnecessary headaches when transferring funds out of South Africa. Always bear in mind, if something seems too good to be true, it probably is.

Read more: Important documents and requirements for transferring money before and after leaving South Africa.

FinGlobal: foreign exchange and international money transfer specialists

Searching the internet for the best foreign exchange deal every time you need to make an international money transfer out of South Africa can be time-consuming and frustrating. That’s why you might want to consider outsourcing to the specialists. FinGlobal is ready to offer you secure, personalised service on every cross-border transaction, ensuring that you get highly competitive exchange rates (better than commercial bank rates) and fast turnaround with fully transparent fees.

To find out more about our convenient, reliable services, leave your contact details in the form below and we’ll be in touch to discuss how we can help.