In the South African 2022 Budget Speech, the minister of Finance announced that the criteria for South African resident individuals who wish to invest abroad, have been expanded upon.
The changes as published in Exchange Control Circular No. 8/2022 came into effect on 23 February 2022 in South Africa and will now allow tax compliant South African resident individuals to invest authorized foreign capital in excess of their R10 million annual allowance into different asset classes offshore, subject to special approval.
Applications by private individuals may be submitted via authorised dealers to the Financial Surveillance Department at the South African Reserve Bank (SARB) for consideration. If approved, these investments may be facilitated through foreign domiciled and registered trusts.
These foreign investments are still subject to the current tax application and reporting requirements.
The private individuals who would like to make use of this investment route, should approach the South African Revenue Service (SARS) in order to obtain a tax compliant status (TCS) PIN letter. Authorised dealers are required to verify the taxpayers compliance status via SARS eFiling, using the TCS PIN before any transfers may be effected.