Everything you need to know about moving money out of South Africa

Sable International’s Forex Director, Tim Powell, has over 25 years of experience in the financial services industry. He answers some of the most common questions that South Africans have when transferring money out of South Africa.  

How much money can I transfer out of South Africa? 

A South African resident can send up to R11 million offshore each calendar year. The first R1 million uses what’s known as the Single Discretionary Allowance (SDA) and this amount does not require tax clearance. They can move up to a further R10 million using a Foreign Investment Allowance (FIA), which requires a tax clearance certificate from SARS. 

For the purposes of exchange control, a South African resident is defined as anyone with a South African ID book or South African ID card, whether living in SA or overseas, who has not financially emigrated via the South African Reserve Bank.

Can I open an offshore bank account without emigrating? 

Yes, you can open an offshore account while you are still in South Africa. There are a few factors to consider:

• If you’re looking at opening such an account for pure foreign investment purposes, you would open an offshore account in a place like the Isle of Man or Jersey, where you can open a USD, GBP and/or EUR account and have internet banking and debit card functionality
• If you’re moving to Australia or the UK, it is possible to open an account in one of these countries from South Africa. However, in most instances you can transfer money to this account before you leave, but you cannot access this money until you physically present yourself in that country. 

Sable International Forex can assist clients with opening USD accounts to deposit USD in South Africa for ultimate transfer overseas once they have decided where they wish to invest these funds.

How do I know if I need to financially emigrate? 

Financial emigration is a process that changes your status with the South African Reserve Bank (SARB) from resident to non-resident. 

It is not necessary for all expats. However, it is currently the only way you may access your South African retirement annuities before age 55. Other reasons to financially emigrate include being able to transfer future inheritance funds out of the country without being subjected to the South African resident exchange control process and tidying up financial affairs within South Africa. This can, in most instances, be done once you have left SA and have settled in your new country of residence.

In the February National Budget, it was announced that the financial emigration process of having to open a blocked Rand account would be replaced by a tax verification process. No further clarity has been forthcoming, however, and one would suspect that the COVID-19 crisis may have put some of these considerations and the details on the back burner. We all await further clarity on the required process from March 2021, but for now the requirements remain the same.

Can I leave my South African bank account open when I move overseas? 

Yes, you can. Banks will often tell you to financially emigrate, but this is not always necessary. The most common reason to keep a South African account open is if you still have financial commitments in SA e.g. direct debits, receiving rent, other income and expenses that you want to keep paying in SA.

How do I go about selling assets left behind in South Africa? 

Many clients leave South Africa and still have assets remaining in the country. Property, retirement annuity, pensions and businesses are the most common. It is very feasible to transfer these funds as and when they become available, even while living overseas, without having to return to South Africa. It is actually quite straightforward, provided one retains one’s green barcoded South African ID book or South African ID card, which then ensures that both the R1 million SDA and R10 million FIA are available to make use of.

How can I move my inheritance out of South Africa? 

There is always a solution to getting funds including inheritance out of South Africa. The inheritance specifically is dependent on a few factors, e.g. the amount the beneficiary is receiving, whether they have a green barcoded SA ID book and, if not, whether they have any other assets remaining in South Africa. In essence the options are to either: 

1. Use their R1 million single discretionary allowance, 
2. Use their R10 million foreign investment allowance (with tax clearance) or 
3. Financially emigrate.

How much will it cost to transfer my money to my new country of residence? 

The cost of a money transfer is made up of three elements, all of which are a function of an individual’s banking facility and sometimes their relationship with their bank:

1. The SWIFT fee – this can range from R250 to R1,500.
2. Commission – this can range from 0% to 1% of the value of the transfer.
3. The exchange rate – this is often the biggest hidden cost and it is important for clients to determine the percentage “spread” on the exchange rate e.g. some banks can add as much as 2% or 3% on the exchange rate, and it is difficult for their client to truly assess the real “cost” in the exchange rate. 

That is why using a foreign exchange company like Sable International can help to reduce this cost, offering much better and more transparent exchange rates than the commercial banks.

For over 20 years we’ve been helping individuals and businesses make international transfers out of South Africa. Our expert consultants ensure that you get the most out of your Rands. Send us a mail at saforex@sableinternational.com or give one of our brokers a call on +27 (0) 21 657 2153 to get started.