Moving Money Overseas? Know the Rules Before You Send It!

Thinking about sending money from South Africa to another country?

Maybe you want to invest offshore, buy property overseas, travel, make a gift, or move money that you are legally entitled to take out of South Africa.

Before you transfer the money, it is important to understand South Africa’s exchange-control rules.

The good news is that you do not necessarily need special permission every time you send money overseas. But there are limits, conditions and reporting requirements you need to know about.

What Is Exchange Control?

In simple terms, exchange control is the set of rules governing certain transfers of money and other forms of capital between South Africa and other countries.

The South African Reserve Bank’s Financial Surveillance Department (FinSurv) oversees South Africa’s exchange-control framework, while Authorised Dealers, such as authorised banks, handle many foreign-exchange transactions with their customers.

So, in practice, you will normally deal with your bank or another authorised financial institution rather than approaching the Reserve Bank yourself.

Can I Send Money Overseas Without Special Approval?

Yes — in certain circumstances.

For individuals who are South African residents and are 18 or older, the Single Discretionary Allowance (SDA) allows up to R2 million per calendar year to be taken or transferred abroad, subject to the applicable rules.

Importantly, using the SDA does not generally require you to obtain a SARS Tax Compliance Status PIN before making the transfer.

The SDA can cover permitted transactions such as foreign travel and certain other legitimate foreign-exchange transactions. Your Authorised Dealer will determine whether the particular transaction qualifies and will process it in accordance with the applicable rules.

The R10 Million Foreign Capital Allowance

There is also a foreign capital allowance of up to R10 million per calendar year for an individual who is 18 or older and meets the applicable requirements.

This is particularly relevant when you want to make an investment outside the Common Monetary Area.

Unlike the SDA, this allowance requires a SARS tax-compliance verification process.

SARS uses the Approval International Transfer (AIT) process for this purpose. If the requirements are met, SARS issues a Tax Compliance Status PIN, which the Authorised Dealer can verify before the transfer is made.

What Is an AIT PIN?

AIT stands for Approval International Transfer.

When you apply to SARS for the relevant tax-compliance status, SARS may require information and supporting documents before issuing the TCS PIN.

This can include information showing where the money came from, as well as financial information such as statements of assets and liabilities.

So an AIT PIN is not simply a certificate saying that your money is “legitimate”. It forms part of the SARS tax-compliance and international-transfer process.

What If I Want to Send More Than R10 Million?

The R10 million foreign capital allowance is not an unlimited annual right to transfer money offshore.

If you want to transfer more than the applicable allowance, additional approval may be required.

The Authorised Dealer can submit an application to the SARB’s Financial Surveillance Department, with the required SARS tax-compliance information and supporting documentation.

In other words, don’t simply instruct your bank to send an amount above the applicable allowance and assume it will go through. Ask the bank or authorised foreign-exchange provider what approval is required before making the transaction.

What About an Inheritance or Money From Selling Property?

This is where things can become more complicated.

Receiving an inheritance, selling a South African property, disposing of an investment or transferring other assets does not automatically mean that the money can simply be sent overseas because you have an R2 million or R10 million allowance.

Different transactions can have different exchange-control, tax and reporting requirements.

For example, the source of the money may need to be established and supporting documents may be required. Depending on the circumstances, SARS and/or SARB requirements may apply.

If you are dealing with a substantial inheritance, property sale or other large amount, it is sensible to speak to your Authorised Dealer and, where appropriate, a tax or legal professional before the transaction takes place.

What About Intellectual Property?

Exchange-control rules can also apply to transactions involving assets and rights, not simply cash.

For example, certain transactions involving intellectual property, investments, loans and other capital can have exchange-control implications when a South African resident transfers value to a non-resident.

The rules are transaction-specific, so it is not safe to assume that an overseas transfer involving intellectual property is automatically covered by the normal individual allowances.

Don’t Try to Get Around the Rules

You should not try to avoid exchange control by disguising a transaction, splitting transactions artificially, using another person’s allowance, or creating a sham arrangement to move capital offshore.

South Africa’s exchange-control framework contains rules dealing with attempts to circumvent the applicable requirements.

The SARB specifically warns that an individual cannot simply use another person’s allowance by having that person provide a “loan” or similar arrangement to get around the limits.

What Happens If You Get It Wrong?

A transaction that does not comply with the applicable exchange-control requirements may not be permitted and can have legal and financial consequences.

Depending on the circumstances, a transaction may require additional approval, supporting documentation or regularisation.

The safest approach is simple: talk to your Authorised Dealer before moving a large amount of money offshore, particularly if the transaction involves an inheritance, property, an offshore investment, a company, a trust or intellectual property.

The Numbers at a Glance

For an individual aged 18 or older:

Single Discretionary Allowance:
Up to R2 million per calendar year, subject to the applicable rules.

Foreign Capital Allowance:
Up to R10 million per calendar year, subject to the applicable SARS tax-compliance requirements and the rules governing the particular transaction.

And remember: these are calendar-year allowances. The applicable annual limits cannot simply be exceeded because you have not used the full amount in a previous year.

The Bottom Line

Moving money overseas from South Africa is perfectly possible, but “I have the money, so I can simply send it overseas” isn’t always how the system works.

For many ordinary transactions, your Authorised Dealer can guide you through the process.

For larger or more complicated transactions, you may need SARS tax-compliance approval and, in some circumstances, approval from the SARB’s Financial Surveillance Department.

The best way to avoid an expensive headache is to check the rules before the money moves — not after it has already left South Africa.

Need Help Navigating the Rules?

Don’t go it alone! If you’re unsure about exchange control regulations or need assistance with a specific transaction, contact BBP Law Attorneys. We’ll guide you through the process and ensure your money transfer goes smoothly.

Remember, knowledge is power! Understanding exchange control regulations can save you time, money, and a whole lot of stress.