Emigration is a word being spoken about more and more across dinner tables and meeting rooms. The recent decision of the South African Revenue Service (SARS) to tax South African Tax Residents on their foreign employment income as of the 1st March 2020 has led to an increase in the number of South Africans choosing to emigrate from South Africa and give up theirs South African tax residency.
A decision to emigrate is not an easy one, we at First Wave Tax Services are here to assist you in formalizing your tax emigration as well as your financial emigration with the South African Reserve Bank. These two are mutually exclusive and not everyone needs to do a financial emigration , however its always best to obtain the opinion of an expert in this field to determine if you should or should not apply for financial emigration.
Financial emigration is when a South African resident changes his/her status with the South African Reserve Bank (SARB) to that of being a non-resident. There are various benefits of formalizing financial emigration, one of which is that retirement savings and annuities can be withdrawn and transferred offshore, even if the person is below the age of 55 and it enables the use of previously unavailable capital to a person emigrating from South Africa. Hence you are not bound by the capital transfer rules applicable to a South African resident.
Once you have been successful in your application to the South African Reserve Bank for financial emigration, you will need to open a non-resident bank account with a bank in South Africa who is also has to be an approved authorised dealer.
A common misconception is that you need to give up your South African citizenship when you financially emigrate, this is not correct. You can emigrate for tax purposes and Reserve Bank purposes but still keep your South African citizenship.
Financial emigration is a complicated process that requires a thorough knowledge of the South African Reserve Bank rules and regulations as well as the Income Tax Act. At First Wave Tax Services we have the required expertise to make this process as simple and seamless as possible.