The thought of financial emigration fills many people with utter dread. After all, it seems to be one of those big and final steps that severs your ties with your place of birth. Indeed, it is the finality of it that fills your legs with lead and prompts you not to take that next step.

For most, emigrating financially is not even a consideration. The annual Discretionary and Foreign Investment allowances of R1 million and R 10 million respectively, usually caters for expats’ offshore financial needs. But for some, financial emigration simply makes more sense.

Financial emigration refers to the act of exiting your home country financially. This process does not impact your South African birth-right, citizenship or the right to retain your South African passport. It is more of an abstract concept that affect the way your finances from your home country are transferred and the amounts you are eligible to transfer.

Financial emigrant

As a financial emigrant you will surrender some of the liberties of those who have chosen not to emigrate. This includes access to internet banking and accounts at multiple institutions. All your financial matters will be consolidated under one roof – a blocked bank account managed by the institution processing your financial emigration. But, of course, financial emigration offers you significant benefits, including:

  • transferring the full capital value of your retirement annuity proceeds offshore, before age 55
  • offshore payment of inheritance without exchange control approval; essentially clever estate planning
  • paying passive income such as rent, dividends, directors’ fees, salary for services rendered in South Africa and income from discretionary or vesting trusts, offshore
  • paying the proceeds from a third party life policy offshore
  • concluding your financial affairs with the South African authorities, such as SARS and SARB

Choosing which route is right for you, however, is not always that easy. Either route has its benefits, but your personal circumstances alone can determine which is right for you. Luckily, this is right up our alley. A free cashkows.com consultation may just save you a ton of money not to mention eliminate all the cumbersome administrative complications. Agreed? Let us call you!

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