What are Exchange Controls?
Exchange controls regulate the flow of money in and out of South Africa and apply to both individuals and companies.
These regulations are governed by the South African Reserve Bank (SARB) and apply to all foreign exchange payments.
As such, all international payments need to be declared to the SARB. These include import & export payments, emigration transfers and offshore investments for example.
Understanding South African Exchange Controls
Most South Africans believe exchange controls are restrictive.
This is because they determine how much money an individual or business can transfer out of South Africa at any point in time.
Even though this is frustrating for South African residents and business owners,
It doesn’t mean you can’t transfer money overseas.
In fact, you can transfer as much money as you like,
Providing you follow the correct procedures, can demonstrate source of funds and demonstrate that you are tax compliant.
How much money can you transfer out of South Africa?
If you’re a South African residents wanting to transfer money,
You need to understand the regulations and how they apply to you.
As it stands,
Taxpayers over the age of 18,
Who are South African residents,
Are eligible for the following allowances:
R 1 Million
R1 million Single Discretionary Allowance.
Your single discretionary allowance can be used for any legal purpose abroad (including travel, emigration, and investment). It is referred to as a discretionary allowance as you can transfer money out of South Africa without a tax clearance certificate or any supporting documentation.
Tax clearance is not required
R 10 Million
R10 million Foreign Investment Allowance.
This allowance can be used for offshore investment, property investment or emigration. You will require a tax clearance certificate from SARS for anything over R 1M. If you need to transfer larger amounts, we can guide you through the process and help you obtain a tax clearance certificates.
Tax clearance is required from SARS
Transfer larger amounts out of South Africa
To transfer more than R 11 Million, you will need to obtain a tax clearance certificate for the amount you would like to move and submit an application to the SARB requesting special dispensation.
The application process is fairly straightforward. We can assist you in preparing your application. You will need to motivate your application and explain why you would like to transfer more than the prescribed limits.