South African Exchange Control
Category Finance
Should you be purchasing a property in Mauritius and subsequently needing to transfer the proceeds from South Africa, you may well be entering into areas of exchange control you have not previously encountered. The purpose of this guide is to introduce you to exchange control and provide you with some 'need to know' information about how it works and how it affects you.
As long as you adhere to the exchange control requirements you should have no issues transferring your funds to Mauritius. It's a simple case of following a few best practices and ensuring you partner with the right currency company.
What is Exchange Control?
You may not be too familiar with exchange control if you've never had to transfer substantial amounts of money abroad. Exchange control is a legislative way of controlling the flow of money in and out of South Africa. As an example, because you're a South African resident, exchange control legislation restricts how much you can transfer and under what circumstances this may happen.
Best Practices
South Africa has relaxed the requirements on exchange control massively over the last decade, but there still remain some very important requirements you have to meet: Every South African has the right to transfer money abroad, but there are certain limits and processes you must adhere to. It's not as simple as clicking 'transfer' when doing your online banking. There are various annual allowances you can utilise and each one comes with a set of criteria:
- Single Discretionary Allowance:
- Amount: ZAR 1 million
- For: Adults over 18 years of age
- Requirement: Barcoded SA ID book, income tax number, declaration
- Capital Allowance
- Amount: ZAR 10 million
- For: Adults over 18 years of age
- Requirement: Barcoded SA ID book, tax clearance certificate in respect of foreign investment from SARS
- ZAR 10 million plus
- For: Adults over 18 years of age
- Requirement: Special reserve bank clearance
Dealing with the right currency provider
In using a South African currency service provider, you will be better placed to ensure that you meet the requirements of the Exchange Control Act. You'll also access rates and fees which are generally more favourable than those of South African banks.
Currency Exchange companies are also able to offer you access to:
- Free exchange control advice.
- Free tax clearance certificate application.
- Free financial emigration advice.
Contact us for more information on exchange control and let us put you in touch with a currency exchange company that can assist you in transferring your funds with ease.
Author: Incompass