If you are thinking of leaving South Africa, you’re probably already obsessing about the costs involved. The currency conversion already puts anyone emigrating from South Africa on the back foot, but what if you think you have all the expenses catered to and suddenly unexpected costs present themselves at the last minute? Will you be able to afford a series of unexpected costs? Your financial transition and overall emigration experience could turn into more than just a bumpy ride – it could turn into a financial nightmare.
That being said; there’s no need to think that your emigration plans are thwarted by the possibility of unexpected expenses. The trick is to have a thorough understanding of the financial implications of emigration before you begin the process at all. That’s what we’re here for; we are here to ensure that you’re able to make educated decisions regarding your future. If you aren’t entirely aware of the costs involved when moving overseas, you are about to learn about the costs that a lot of people tend to overlook.
Thinking of leaving South Africa?
Most people who get to the financial investigation stage of emigration planning have already decided it’s time to leave South Africa. While it’s a country with great promise, the reality of crime, high levels of unemployment, lack of safety, poor earning potential, and limited education often mean that people seek out greener pastures abroad. If you are part of the group looking to emigrate, you need to give some thought to the affordability of such a massive life change. Below are the top unexpected costs that people incur when moving abroad from South Africa.
- The Cost of Investigating a New Country
No, you aren’t going to have to hire an investigator. Instead, you will be the investigator. Chances are that you will want to pay a visit to the country you plan to move to before you actually take the plunge. This will cost you in terms of time off work, flights, visas, accommodation, and transport. While you are there, you will also have general expenses to cover such as meals, which can be high depending on the exchange rate at the time.
- The Sudden Unexpected Cost of a “Failed Emigration”
You might be thinking whoa, what’s a failed emigration. It’s certainly not something a lot of people think about, but it all comes down to understanding financial emigration and how Capital Gains Tax is tied to it. If you choose to financially emigrate from South Africa, you will need to dispose of your worldwide assets, excluding any fixed property of course. This is for Capital Gains Tax. In such situations, you may be liable for Capital Gains Tax on any assets you only plan to dispose of in the future. If you happen to return to South African within 5 years of financially emigrating the country, it is considered a “failed emigration” and suddenly you will be expected to pay all taxes that would have been payable in South Africa during the period away.
- The Cost of Buying a New Car & Getting Licensed
Of course, you are going to want to buy a new car when you arrive in your new country. The vehicle itself will cost money along with the actual registration and licensing too. You will need to ensure that your foreign driver’s license is valid in the new country or you may need to pay to convert it to a local license.
- The Cost of Registering for New Services & Utilities
When you arrive in a new country and find rented or fully paid-for accommodation, you will need to register for certain services and utilities such as heating and cooling, internet access, and even domestic cleaning.
- The Cost of Shipping & Storage of Personal Effects
While you might have no plans to take everything with you, there will undoubtedly be things that you want to take along. Clothing, small items, even some furniture are usually taken with when moving to new country. While the shipping itself will cost you, it will probably need to be stored for some time until you are ready to manage the actual move into a new home. Storage costs can be quite costly when you aren’t yet earning the country’s native currency.
- The Cost of Relocating Your Beloved Pets
Simply relocating your pets is going to cost you some money. Some airlines do allow pets to travel in the cabin but not many of these offer flights from South Africa. Alternatively, your pets can be sent as cargo and it’s often best to use a specialized pet relocation agency, which costs. In some countries there is a quarantine period that pets have to wait out before they can be reunited with you after arriving in the new country. Other expenses include vaccinations for your pet, import permits, and the cost of accommodation facilities that are provided during the quarantine period.
- The Cost of Finalising Your Financial Emigration Too Soon
Some soon-to-be expats don’t consider that financial emigration can cause inconvenience and increase their expenses in South Africa before leaving. When you choose to financially emigrate from the country, your tax residence status is cancelled by SARS along with your exchange control resident status. This means that if you get your financial emigration processed and finalised too soon, you may find yourself struggling with your usual banking functions. This could end up costing you.
Are You Financially Ready to Move Overseas From South Africa?
Do you already know what to do when emigrating from South Africa? Perhaps you are concerned that you might have overlooked some of the financial implications of relocating? Are you worried about what might happen to your accumulated funds in this country when you leave? If you feel flustered and a bit confused, don’t worry, it’s completely normal. It can be a little overwhelming if you aren’t familiar with the emigration process. If you would like to chat to one of our friendly and knowledgeable consultants at FinGlobal about the finer details of financial and tax emigration from South Africa, simply reach out to us. You can give us a call or send us an email at any time for further guidance and advice.
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