With the South African economy currently in recession, lessening the effects of Rand volatility is a top priority for many people at the moment. Many expatriates have retirement funds and other assets in South Africa that they would like to withdraw and transfer offshore. This is known as the process of financial emigration. SAFFA.com had a look at the most common questions about this process below.

What exactly is financial emigration?

Financial emigration is the process of officially changing your status with the South African Reserve Bank (SARB) from a permanent resident, or resident living temporarily abroad, to that of a non-resident of South Africa. This means that you have permanently left South Africa and relocated abroad.

The process of financial emigration is daunting and admin-heavy. The average turnaround time to complete the entire process is three months. We recommend using an experienced, certified South African financial emigration specialist to complete the process for you and advise you of any tax implications or opportunities.

Can I keep my South African citizenship if I financially emigrate?

Many people confuse the financial aspect of emigration with relinquishing their South African citizenship. If you financially emigrate, this will only change your status with the South African Reserve Bank to that of a non-resident for exchange control purposes. You will not have to give up your South African citizenship and/or passport.

When I apply to the SARB, what do I need to declare?

When you apply to the SARB, you must disclose all your remaining assets and liabilities remaining in South Africa. Assets must include everything you own, will benefit from, or have invested in South Africa. Assets include property, shares, investments, insurance policies, cash, debtors, interests in trusts, timeshares, bank accounts and more.

You must also include all liabilities in your application. Bonds, personal loans and credit cards are some of the most common liabilities. When you declare these, you will also need to explain to the SARB how you intend to settle these debts.

How can I get my South African inheritance paid out to me overseas?

Once you have financially emigrated, an authorised dealer can open a non-resident bank account for your inheritance funds to be paid into and then transferred to your overseas bank account. The type of inheritance you are receiving will also need to be taken into consideration (for example, whether it is directly from a will or from a trust).

If you have not financially emigrated, you are considered a resident temporarily abroad and will be subject to the same laws and regulations as South African residents. You can, however, transfer your inheritance funds using your R10 million foreign investment allowance. This requires a tax clearance certificate from SARS. A reputable South African forex service provider will be able to assist you through this process.

Should I financially emigrate?

Whether or not financial emigration is right for you will depend on the type of retirement savings you hold. You can make use of the annual foreign investment allowances if you wish to do so, however, if you have a retirement annuity that you would like to withdraw and transfer, then financial emigration is the only option.

There are tax implications to take into consideration as well as opportunities to implement tax planning. Sable International’s financial emigration specialists can assist you throughout the process, as well as offer cross-border financial and tax planning services. Simply fill in their free financial emigration assessment to get started.