The rand has been performing phenomenally well since former President Jacob Zuma’s early exit and his Deputy President, Cyril Ramaphosa was sworn in as head of state on February 15 2018, which resulted in the rand reaching a three-year high of R11.67 to the American dollar. South Africans, both at home and abroad have welcomed the strength of the rand, as a stronger currency opens up many travel and investment opportunities.
Opening the door for financial emigration
For South African expats abroad now is the best time to consider financial emigration as their South African retirement annuities could be worth up to 20% or more. In fact, any rands that are exchanged into foreign currency will benefit from the rand’s increased strength.
Rating agencies are more positive
Even though consumers reacted negatively to the news of tax hikes in the Budget Speech, the rand responded positively and opened at a strong R11.55 on Monday the 26th of February with the “positive sentiment” following the Budget Speech being given as the main reason for the rand’s strength. Rating agencies have also been more positive, with analysts predicting an unchanged rating by Moody’s on March 23rd 2018. Fitch meanwhile has said that South Africa’s budget reverses some of last year’s fiscal deterioration, although it warned that poor finances of state owned companies remain a major risk to fiscal targets.
The strengthening of the South African Rand against the US Dollar since Cyril Ramaphosa was elected leader of the ANC on 18 December. pic.twitter.com/nVGEN4eYT1
— Dimitri Kapelianis (@kapelianis) February 15, 2018
Other developments, which helped boost the rand, included the change to the cabinet, which continued to bolster positive sentiment in the rand. Currently as of the 6th of March, the rand was comfortably sitting at R11.79 to the dollar – with dealers optimistically expecting to see a push below the R11.50 level.
The benefits of financial emigration
If you are living abroad or moving abroad and would like to take advantage of the strong rand, it’s important to know that the process of financial emigration does not affect your South African birth right, citizenship or your right to retain your South African passport. Instead, financial emigration is the process to conclude your financial affairs in South Africa and brings with it many benefits.
As a financial emigrant you may transfer offshore:
- The proceeds of your retirement annuity, even before age 55
- South African source inheritance
- The proceeds of assets declared in your emigration application
- Passive income, i.e. rent, dividends, director’s fees, salary for services rendered in South Africa and income from discretionary or vesting trusts
How to financially emigrate
At FinGlobal, we have assisted many South African expats over the last eight years to financially emigrate. In the majority of instances, the financial emigration was done retrospectively; meaning that most expats had left the country over the last 30 years and had never recorded their financial emigration at the time of their departure. For more information about this once-off process and how it establishes the free flow of your capital (and income) from South Africa, contact us today.
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