Foreign investment and tax clearance

Foreign investment and tax clearance

Foreign Investment

“A PENNY SAVED IS A PENNY EARNED” - Benjamin Franklin

Foreign currency payments can be time-consuming especially with uncertainty in volatile markets. We can make the process easier by giving you access to better pricing terms and give you more control over the timing of your transfers so you can save money and have greater certainty with your payments.

Investing Offshore?

We’ll help you maximise the foreign currency you’ll have available to invest by giving you access to the best pricing available in the market from our select panel of banking partners. We typically save our clients between 1% and up to 3% on the retail exchange rates from their bank with our premium Private Client FX solution.

How Currencies Can Benefit Portfolios

Currency effects can help increase the diversification of a portfolio. If we define diversification as a reduced correlation between assets, investing in a currency other than the U.S. dollar will likely increase the diversification of a U.S.-centric portfolio. The benefits of diversification are well-documented with empirical evidence, and foreign exchange rate exposure does not necessarily lead to higher investment risk.

Allowances

Transfers to externalise funds from South Africa are also subject to Exchange Control regulations and the annual allowances granted by the South African Reserve Bank (SARB) for this purpose. As such, each South African resident taxpayer may avail themselves of their single Discretionary Allowance (of up to R1 million) and/or of their individual Foreign Capital Allowance (of up to R10 million) each calendar year (ending 31 December) for the purposes of direct offshore investment in foreign currency denominated assets.

Single Discretionary
Allowance (DA)

The annual single Discretionary Allowance can be used for any legal purpose offshore and should include any travel spend from South Africa in foreign currency, such as your credit card expenditure, whilst traveling internationally. The allowance is up to R1 million per calendar year (ending 31 December), for which tax clearance from SARS is required.

Individual Foreign Capital Allowance (FCA)

The allowance is up to R10 million per calendar year (ending 31 December) and a Foreign Tax Clearance Certificate (FTCC) issued is required by SAR. These certificates can be applied for with SARS and are valid for 12 months. The specialist expert team can assist with the application (at no additional charge) for you.

Special Approval
Applications

A special approval application must be made to externalize amounts greater than the annual allowances, and a “Letter of Compliance” from SARS. The application must be made to the SARB for the special approval to be granted before transacting the balance of funds. There is no limit on the value of these approval applications, no restriction on the number of applications that can be made and there is no exit levy or penalty payable.

Tax Clearance

We can assist with the process of obtaining your Foreign Tax Clearance Certificate from SARS (at no additional charge) required for transfers under the annual individual Foreign Capital Allowance of up to R10 million per calendar year (ending 31 December). After obtaining your foreign tax clearance, we can then purchase the foreign currency you require at highly competitive preferential exchange rates, so you can save money on the retail rates from your bank.

How It Works

Register Online

Take 5 minutes to complete our online form. No obligation.

Contact Us Directly

Or contact us directly by email at michael@helfin.co.za or call on 012 346 3001.

Enjoy the benefits

Save time and money on all your currency transfers with our preferential prices and premium Private Client FX solutions.

Contact Form Demo (#34)

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