If you’re in the process of wrapping up your financial affairs in South Africa, and one of the things on your to-do list is “close SA bank account”, you might want to hang tight on that one. There are a number of reasons why an expat might still need an account back home, so let’s take a look at what banking looks like for a South African living abroad.
The exchange control rules have changed, which basically means that there is no longer a distinction made between a resident and a non-resident when it comes to moving money out of South Africa. Both a resident and a non-resident will be subjected to a tax verification process, whereby it must be shown that you are in good standing with the tax authority and you can verify the source of the money you wish to transfer abroad.
What is a non-resident bank account in South Africa?
Banking is no longer as complicated or as restricted as it previously was for non-residents. Accounts for non-residents used to be called “blocked rand accounts” but these are now known as non-resident bank accounts.
What is a non-resident bank account used for?
When sending money from South Africa, a local bank account is required for the receipt of funds, which means that this type of account is the only legal means by which you can move money abroad. Through a non-resident bank account, you will be able to access and transfer your financial assets, like retirement annuities, pension or provident funds. You’ll be able to use this account to transfer the proceeds from assets left behind, such as policies, unit trusts or a property, once you have ceased to be a tax resident. Additionally, funds in this account can be used in South Africa. If you are receiving an income in South Africa (for example, a pension income or rental income from a property), you can use this account to access the funds and transfer it abroad, as long as you can verify the source of such income for tax purposes.
Why do you need a non-resident bank account in South Africa?
Even though you might be settled abroad, keeping an account back home makes practical sense. You’ll need a non-resident bank account if you have plans to:
- Relocate your assets: Private individuals cannot move assets abroad without properly declaring them, for tax purposes.
- Retain assets in South Africa: If you still have a property etc. back home, you’ll only be able to manage the asset (and receive income there from) if you have a non-resident bank account.
How to open a non-resident bank account in South Africa
The requirements may vary bank to bank, but generally speaking, when opening a non-resident bank account, you will need to be over 18 years of age.
FinGlobal: financial services for South African expats
As a proud Bidvest partner, FinGlobal is ideally positioned to take care of all your cross-border financial and tax requirements. We can assist you with everything, from opening a Non-resident Bank Account online, to obtaining tax clearance from the South African Revenue Service, or facilitating tax refunds. When it comes to choosing a partner to assist you with your finances, it makes sense that you want to know that you’re choosing someone you can trust. FinGlobal has a 100% success record, and we’ve been helping South Africans with their international money moves since 2009.
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