South Africa’s financial landscape has shifted for non-residents seeking to transfer local earnings abroad.
With recent updates from the South African Reserve Bank (SARB), individuals receiving dividends, trust distributions, rental income, or directors’ fees must be aware of new compliance steps that can affect how—and when—funds are remitted internationally.
Understanding these changes up front can help you avoid unnecessary headaches and keep your plans on track.
South African Reserve Bank news: What’s different about transfers now?
Recent SARB guidance means banks now require proof of South African tax compliance before certain income types can be transferred offshore.
Previously, banks could process these payments for non-residents with minimal involvement from the South African Revenue Service (SARS). Now, the scope has expanded, and several income categories have come under stricter controls, including:
- Dividends, directors’ fees and royalties paid by South African entities
- Distributions from testamentary and inter vivos trusts
- Rental income from South African property holdings
Fortunately, not all income streams are affected by the new rules. The following income streams can still generally move more freely across borders:
- Interest payments,
- Salaries for work performed, and
- Pensions or annuities (now requiring IRP5/IT3(a) documentation and no longer requiring a TCS Good Standing, as previously)
However, the selective application of these measures has created some confusion—particularly for investors who receive income from multiple local sources.
Navigating the process
Your best path forward depends on how SARS sees you:
- Registered non-resident taxpayers must apply directly to SARS for a Tax Compliance Status (TCS) PIN under the AIT (Approval for International Transfers) process.
- If you are not registered with SARS—a common situation for many foreign shareholders or beneficiaries—a Manual Letter of Compliance must be requested, typically via SARS’s dedicated channel.
Regardless of the process, thorough preparation is essential. Required documents include proof of your non-residency, complete details about the income’s source, recent bank statements, and a clear summary of your South African assets and liabilities covering the past three years.
Timelines are a key concern. Although SARS indicates a 21-business-day timeframe for approvals, real-world experience shows that payments may be held up if the necessary documentary proof is not submitted.
The bigger picture: Implications for investors and the JSE
These changes have arrived at a time when foreign capital is vital to South Africa’s economy and market stability. Non-resident investors play a central role in supporting the liquidity of the JSE and broader financial system.
The additional documentation and waiting periods may appear daunting and could, understandably, influence the decisions of global investors. For those invested in South African shares or with trust interests, the need to secure approval for each payment introduces new operational burdens. This is particularly challenging for companies and trustees overseeing distributions to large numbers of non-resident beneficiaries or shareholders.
Another issue is equity. Residents are entitled to transfer up to R1 million offshore each year without tax clearance. No equivalent threshold is available to non-residents—meaning even small dividend payments face a full compliance process. This discrepancy adds to the administrative load for foreign investors.
What this means for you
If you’re earning SA-sourced income and live outside South Africa, these practical steps will help smooth your transactions:
- Allow ample time: Begin planning transfers early, since application processes may now take significantly longer than before.
- Gather documentation upfront: Maintain updated records—including proof of non-residency, details of income origins, recent bank statements, and an overview of assets and liabilities.
- Confirm your SARS status: Ensure that SARS’s records accurately reflect your status as a non-resident to reduce the risk of transfer delays.
- Review trusts and companies: Trustees, company directors, and anyone managing complex structures should ensure their entities can support the new compliance regime.
- Stay in touch with your bank: Early engagement with your South African banker provides clarity on specific requirements and can prevent bottlenecks.
- Build in flexibility: Given the risk of delays, integrate a buffer into your cash flow and planning to avoid surprises or disruptions.
FinGlobal: Support for South African expats abroad
When executing international money transfers, it is essential to choose a forex service provider that fully understands the implications of tax, legal, and exchange control.
For the AIT process, you’ll need your SARS Non-Resident Confirmation Letter and a Non-Resident Bank Account. FinGlobal can assist you with all the above.
Ensure you know the paperwork requirements when making an international money transfer from South Africa.
If the idea of handling all of this by yourself as a non-resident is overwhelming, FinGlobal can handle the hassle on your behalf. Our dedicated team of tax experts and financial specialists are ready to streamline the migration of your finances out of South Africa from start to finish. We can even help you with tax emigration, tax clearance, retirement annuity withdrawal, and forex.
Do you have questions about banking as a non-resident or need some expat tax guidance? We’re here to help! Just leave your contact details below, and we’ll contact you.
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