Whilst many foreigners dream of relocating or moving to South Africa, many foreigners are actually taking a chance and moving their families and lives to our beautiful country.
As this process can often be difficult and tedious, more so if you are not correctly informed prior to your immigration process, there are many aspects of relocating to South Africa that are required to be thought through before the new adventure can begin.
Many foreigners only realize the number of matters that have to be sorted through and arranged once they arrived in our stunning country.
There is no need to stress, if all information is at least known before arriving, this will save you many nights of worry and many more days to enjoy our sunshine, beaches, mountains, and beautiful flora and fauna with yourself or your family.
Transferring money, bank accounts, exchange control, taxation, and investments information
Transferring Money into South Africa
For a foreigner wanting to reside in South Africa, or even if a foreigner wants to invest in the country in one way or another, an agent or consultancy is always the best to approach for the finer details regarding best exchange rates when transferring money, investments, transferring of money and tax implications.
Bank Accounts in South Africa
Opening up of bank accounts is a simple process, provided the correct documentation is supplied to the relevant consultant. If a foreigner wants to obtain a personal/individual bank account (while on a visitors visa), a “non-resident” account can be opened for that person.
Whilst these accounts can have all the features of normal banking accounts, the “non-resident” accounts are restrictive in as much as they cannot generally receive deposits in Rands. Once on a temporary residence permit, these accounts are changed to “resident” accounts. It is best to speak to a Bank consultant to get the best possible service and views.
The foreigner’s closed corporation can obtain a business account, there would be no currency restrictions in terms of Rand deposits, as the closed corporation is viewed as a legal identity in its own right and in the foreigner’s case, is incorporated in South Africa. To receive the best service and required documentation, speak to a banking consultant or an agency that can assist with this nature of services.
Upon transferring money to the South a foreigner will be confronted with the exchange control regulations in South Africa.
South African Exchange Control Regulations are a set of laws controlling the in and outflow of money in South Africa. An authorized dealer in every major South African bank is required to make sure on behalf of the Reserve Bank that incoming and outgoing money complies with the regulations.
A foreigner can transfer an unlimited amount of money into South Africa. As long as the foreigner transfers the capital via a bank within South Africa, it will get registered with the Reserve Bank.
There are limitations in place when it comes to transferring capital out of South Africa. The rules and limitations for a foreigner depend on the status for exchange control purposes when the person arrives in South Africa.
The Reserve Bank distinguishes between foreign nationals, temporary residents, immigrants, and South African citizens.
Since the status of people relocating to South Africa varies according to the kind of permit they receive, individual advice is necessary.
It should be noted that it is not correct that foreigners relocating to South Africa cannot take any of the money they brought into the country out again. There are rules and regulations, but they do not permit the retransfer of capital introduced into South Africa.
South Africa has a residence-based tax system, which means that all tax residents are taxed on their worldwide income, irrespective of where it was earned.
Even in case, a foreigner is not classified as a tax resident in South Africa from the start, the foreigner will have to pay tax on income generated from a source within South Africa.
It is important that a person takes care that he or she is compliant with both Revenue Services, the one in South Africa and the one in his/her home country. South Africa has signed a double tax agreement with many countries to avoid a person paying tax for the same income in two countries at the same time.
A foreigner should seek expert advice to determine when they will be classified as a tax resident in South Africa and what consequences this status will have on your tax situation.