Beyond The Break
Offshore Investing is More Accessible Than You Think
All South Africans are allowed to externalise a limited amount of rand each calendar year. This happens through two channels set by the South African Reserve Bank: the Single Discretionary Allowance (SDA) and the Foreign Investment Allowance (FIA).
When we say “externalising” money, we mean physically sending your money out of South Africa and holding it overseas in a foreign currency. This is different from buying, for example, a feeder fund or a rand-denominated offshore ETF which always stays in South Africa and in rand.
If you want to fund an offshore brokerage account and invest directly in global shares and ETFs, then these allowances are what make that possible (we assist you with the whole process).
The easiest allowance to use is the Single Discretionary Allowance as it requires no tax clearance, and every adult South African can send up to R2 million offshore each calendar year. For most ordinary South Africans, this allowance is more than enough for what they can invest offshore in a given year.
If someone does want to externalise more than R2 million in a year, they can make use of the Foreign Investment Allowance, which goes up to R10 million and requires SARS tax clearance. We can assist with this as well, but it applies to a small minority of people.
Technically, an individual can send up to R12 million offshore each year. But realistically, most South Africans will only ever use a portion of SDA each year. You don’t need to be wealthy to make use of the SDA and you don’t need to move large amounts. If you are serious about moving your money offshore, please reach out to us!
Disclaimer: The views expressed in this article are provided for general information and educational purposes only. They are not intended to constitute financial advice, investment recommendations, or an offer to transact in any financial product. Wealth Offshore (Pty) Ltd is an authorised financial services provider (FSP 55560). Investment decisions should be based on your personal objectives, financial circumstances, and risk profile. If you require advice that takes your specific situation into account, please contact Wealth Offshore directly or request a formal discretionary investment mandate.
Although information contained here is based on sources and data we consider reliable, no representation or warranty is made regarding its accuracy, completeness, or future performance. Past performance is not a guide to future returns. All investments carry risk, including the potential loss of capital. By reading this article, you acknowledge and accept that Wealth Offshore will not be liable for any loss, damage, or reliance costs arising from the use of the information contained herein.
