If your exchange control queries are not answered below, we suggest that you contact an exchange control or foreign exchange official at any Authorised Dealer or ADLA who will be able to assist you with your queries.
The Financial Surveillance Department of the SARB only accepts requests or applications submitted by an Authorised Dealer on behalf of its client.
Exchange controls aim to restrict the buying and selling of a national currency or to preserve foreign currency reserves. Controls may include a ban on the conversion of the proceeds of certain assets or by certain categories of person, an obligation to surrender foreign exchange proceeds to the central or local bank, authorisation requirements, quantitative limits or indirect methods. Exchange controls are commonly imposed because of concerns about outward flows of currency but they can also be imposed to restrict inward flows, if for example an influx of funds risks damaging an economy.
Exchange controls aim to:
An Authorised Dealer is a bank which has been registered in terms of the Banks Act, 1990 (Act No. 94 of 1990) as amended by the Financial Sector Regulation Act, 2017 (Act No. 9 of 2017) and authorised to deal in foreign exchange. A list of Authorised Dealers is available in section A.2(A) of the Currency and Exchanges Manual for Authorised Dealers.
Authorised Dealers in foreign exchange with limited authority (ADLAs), including bureaux de change, are authorised to deal in certain designated foreign exchange transactions, including travel-related transactions. A list of ADLAs is available in section A.2(A) of the Currency and Exchanges Manual for Authorised Dealers in foreign exchange with limited authority.
A Restricted Authorised Dealer is a person authorised by the Financial Surveillance Department to deal in foreign exchange utilising a locally issued credit card for permissible cross-border transactions.
All cross-border foreign exchange transactions carried out by Authorised Dealers, Restricted Authorised Dealers and Authorised Dealers in foreign exchange with limited authority, on behalf of their clients, irrespective of the value, are captured on the FinSurv Reporting System and reported to the Financial Surveillance Department on a daily basis.
Any request to the Financial Surveillance Department must be channelled through an Authorised Dealer or ADLA. You must, therefore, approach your banker or ADLA, who will be able to assist you further with exchange control queries and will submit an application to the department on your behalf if necessary.
The processing time for applications submitted to the Financial Surveillance Department is between two and four weeks, depending on the nature and complexity of the application. This excludes the time taken to process the application at the Authorised Dealer or ADLA prior to its submission.
The Financial Surveillance Department will generally respond to online queries and emails within four to six weeks. However, during certain times of the year, the department receives high volumes of queries and it can take longer to respond.
It is an allowance up to an overall limit of R1 million per calendar year, available to each South African adult resident (above 18 years old).
The single discretionary allowance may be used for any legal purpose abroad (including for investment). It may be utilised solely at the discretion of the resident, without a requirement for the resident to produce documentary evidence relating to the funds to be transferred to the Authorised Dealer, except for travel outside the Common Monetary Area (eSwatini, Lesotho, Namibia and South Africa). If the allowance is used for travel, a passenger ticket needs to be produced.
The resident must produce a valid green, bar-coded South African identity document or smart identification card at the Authorised Dealer when using the allowance. In turn, the Authorised Dealer must provide the resident’s identification number when reporting the transaction in terms of the FinSurv Reporting System.
Yes. Private individuals resident in South Africa may open a foreign currency account for permissible transactions.
Authorised Dealers may allow residents to export Krugerrand coins or the equivalent in fractional Krugerrand coins up to an amount of R30 000 as gifts for non-residents subject to the completion of the prescribed SARS Customs declaration.
Non-resident visitors may export up to 15 Krugerrand coins or the equivalent in fractional Krugerrand coins, supported by the prescribed SARS customs declaration, provided that they can prove that the coins were acquired with the proceeds of foreign currency brought into South Africa.
Visitors to South Africa and South African residents are only permitted to import or export SARB notes or banknotes of other CMA countries to the value of R25 000 per person.
Visitors to South Africa are entitled to bring foreign currency in any format into South Africa, which is convertible into rand at any Authorised Dealer or ADLA. Visitors should retain confirmation of this conversion in case they want to convert the rand back into foreign currency.
The Form MP 336(b) has been withdrawn with effect from 2021-03-01.
Kindly approach the South African Revenue Service (SARS) for assistance with formalising your tax residency status.
All applications are processed by SARS based on a new dispensation of confirming that the taxpayer has ceased to be a resident for tax purposes. All Assets and Liabilities of the taxpayer must be completed on the electronic SARS TCS application form. All individuals that cease to be a resident would have to request a TCS in respect of “emigration” from SARS before Authorised Dealers may be permitted to transfer any funds in this regard. This procedure will apply regardless of whether such an individual would be transferring any funds abroad at the time he/she ceases to be a resident for tax purposes.
All transfers of assets by private individuals that have ceased to be South African tax residents will be transferrable subject to tax compliance. South African non-tax residents who wish to transfer more than R10 million offshore are subject to a verification process by SARS as well as a subsequent approval process by the Financial Surveillance Department.
When South African residents cease to be residents for tax purposes in South Africa, payment of lump sum retirement benefits to individuals who are no longer South African tax residents per SARS’ definition, shall only be allowed by Authorised Dealers if the individual member has remained non-tax resident for at least three consecutive years and obtained the applicable Tax Compliance Status from SARS as well as documentation from the fund indicating/confirming the final amount paid out.
South African companies (excluding trusts and close corporations) can make bona fide new outward foreign direct investments into companies outside the Common Monetary Area (eSwatini, Lesotho, Namibia and South Africa) up to the value of R1 billion per company per calendar year through any Authorised Dealer.
In order to invest above this amount, the company must obtain at least 10% of the foreign target entity’s voting rights. The company’s Authorised Dealer is required to submit an application to the Financial Surveillance Department of the SARB for approval.
Non-residents may invest freely in South Africa, provided that the South African Authorised Dealer views suitable documentary evidence to ensure that the transactions are concluded at arm's length and at fair market-related prices, and are financed in an approved manner. Any income earned on the investment may be transferred abroad.
Approved financing includes the introduction of foreign currency, rand from a non-resident rand account in the name of the non-resident, and/or rand from a Vostro account held in the books of the Authorised Dealer.
Should a non-resident disinvest from South Africa, the local sale or redemption proceeds of non-resident-owned assets in the country would be freely transferable.
Yes. South African companies may invoice each other locally in foreign currency, but settlement must be in rand.
Yes. An Authorised Dealer must submit an application on the company's behalf to the Financial Surveillance Department for approval before local subsidiaries of overseas companies can make loans to the holding company. The local subsidiary will only be permitted to make these loans in lieu of dividends.
An inward foreign loan is when money is borrowed from abroad.
Any resident can borrow money from a non-resident abroad. This borrowing must be approved by an Authorised Dealer, subject to specific criteria and to the Authorised Dealer recording the loan through the Loan Reporting System.
You must approach your South African banker and provide them with full details of the loan.
The base lending rate, for exchange control purposes, is defined as the prime lending rate, i.e. the rate at which commercial banks lend money to the public.
A trade finance facility is a facility for financing current imports or exports for a period less than 12 months. This type of facility is normally used by South African residents when the overall effective covered cost of the facility is lower than that of local short-term rand finance.
The principal loan amount must be introduced within 12 months from the date of approval. Any extensions must be communicated to the Financial Surveillance Department through the borrower’s Authorised Dealer.
The capital portion of the foreign loan can only be repaid up to the amount that has been received in South Africa. Repayment must take place through an Authorised Dealer. Capital and interest payments must be reported separately by the Authorised Dealer on the FinSurv Reporting System.
It is the maximum amount of funds that institutional investors are allowed to invest in offshore foreign portfolio investments. This prudential limit is calculated as a percentage of the institution’s total retail assets under management. The foreign exposure of retail assets may not exceed 30% in the case of pension funds and the non-linked business, i.e. the underwritten policy business other than individual and fund investment-linked business of life insurers.
For discretionary financial services providers registered with the Financial Surveillance Department as institutional investors, CIS managers and the linked business, i.e. individual and fund investment linked business of life insurers, foreign exposure is restricted to 40% of total retail assets.
Institutional investors are allowed to invest an additional 10% of their total retail assets under management by acquiring foreign currency-denominated portfolio assets in Africa directly through foreign currency transfers from South Africa and/or indirectly, on application to the Financial Surveillance Department through an Authorised Dealer, by investments in instruments issued by African entities that are listed on non-African exchanges to raise funds earmarked for use in Africa or through a foreign registered fund mandated to invest at least 75% of funds under management into Africa.
Institutional assets refer to assets held or managed on behalf of other institutional investors as well as assets received indirectly from institutional investors through an intermediary, such as an administrative financial services provider, nominee company or a discretionary financial services provider not registered as an institutional investor with the Financial Surveillance Department. All assets sourced from an intermediary identified as institutional assets applicable to the underlying institutional investor should be included as institutional assets in the quarterly asset allocation report of the managing institutional investor.
Retail assets refer to assets received from individuals and other entities such as companies and trusts. This includes assets received indirectly from retail clients through an intermediary, such as an administrative financial services provider, nominee company or a discretionary financial services provider not registered as an institutional investor with the Financial Surveillance Department. All assets sourced from an intermediary identified as retail assets applicable to the underlying retail client should be included as retail assets in the quarterly asset allocation report of the reporting institutional investor.
All pension funds, life insurers, CIS managers and discretionary financial services providers registered as an institutional investor with the Financial Surveillance Department are treated as institutional investors for exchange control purposes.
Yes, if a discretionary financial services provider wishes to invest and/or manage funds offshore in respect of retail as well as institutional assets. To register with the Financial Surveillance Department as an institutional investor, a discretionary financial services provider must be registered with the Financial Sector Conduct Authority as a Category II and IIA financial services provider authorised in terms of the FAIS Act.
To register with the Financial Surveillance Department, a request, on the official letterhead of the discretionary financial services provider, should be emailed to SARBPORTFOLIO@resbank.co.za.
Applicants must submit proof of registration with the Financial Sector Conduct Authority as well as a manually completed quarterly asset allocation report reflecting its assets under management as at the last quarter-end or as date of application to the Financial Surveillance Department. The quarterly asset allocation report template can be downloaded from the South African Reserve Bank’s website: www.resbank.co.za, by following the links: Financial Surveillance>Sections>Institutional investors>Templates.
Refer to section B.2(H) of the Currency and Exchanges Manual for Authorised Dealers.
Non-resident entities, Authorised Dealers, South African exchanges and CIS managers registered under the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002) to administer collective investment schemes, can list these instruments on a South African exchange.
Until 2004, foreign entities were not allowed to list on a South African exchange. The Minister of Finance announced in his 2004 Budget Speech that, to allow South African investors to obtain foreign exposure through domestic channels, entities would be permitted to list on a South African exchange. This dispensation was further expanded to include derivative instruments.
Equity, debt and derivative instruments based on foreign referenced assets can be inward listed.
Approved inward listed shares, including exchange traded funds as well as debt and derivative instruments, traded and settled in Rand on a South African exchange, are classified as domestic.
South African institutional investors, Authorised Dealers, South African companies, trusts, partnerships and private individuals as well as emigrants, subject to adhering to the emigration policy as outlined in section B.2(J) of the Currency and Exchanges Manual for Authorised Dealers, may invest in inward listed instruments traded and settled in Rand on a South African exchange without restriction.
The entity must approach an Authorised Dealer with full details of the proposed transaction. The request will then be forwarded to the Financial Surveillance Department of the SARB for consideration.
The department monitors exports to ensure that exporters repatriate the proceeds in compliance with Exchange Control Regulations 6, 10 and 11.
The department uses an electronic monitoring system whereby the value of goods exported and declared to the South African Revenue Service’s Customs Division is matched with the export proceeds repatriated and reported by Authorised Dealers.
The SARS Customs Division transmits export data from customs declarations to the SARB. This data is compared with data on the flow of funds (export proceeds), which Authorised Dealers report to the Financial Surveillance Department through the FinSurv Reporting System.
Payment is effected through an Authorised Dealer on presentation of a commercial invoice from the overseas supplier together with the SARS customs clearance documentation evidencing the receipt of the goods in South Africa.
Yes. Authorised Dealers may provide foreign currency for advance payments on behalf of their clients to cover the cost of permissible imports against the presentation of an invoice. These imports exclude capital goods.
For payments exceeding R50 000, the importer must present the customs clearance documentation to the Authorised Dealer once the goods have been cleared through SARS Customs as proof of the use of the foreign exchange and receipt of the goods in South Africa.
These matters must be referred to the South African Diamond and Precious Metals Regulator.
ADLAs, including bureaux de change, are authorised by the Financial Surveillance Department to deal in certain designated foreign exchange transactions, including travel-related transactions. A list of ADLAs is available in section A.2(A) of the Currency and Exchanges Manual for Authorised Dealers in foreign exchange with limited authority.
The guidelines for submitting an application for authorisation to conduct the business of an ADLA can be found in section A.3(B) of the Currency and Exchanges Manual for Authorised Dealers in foreign exchange with limited authority.
An ADLA will be classified into the following four categories:
(i) Category one – An ADLA authorised to operate as a bureau de change.
(ii) Category two – An ADLA authorised to operate as a bureau de change, facilitate specific transactions under the single discretionary allowance limit of R1 million per applicant per calendar year and offer money remittance services in partnership with external money transfer operators.
(iii) Category three – An ADLA authorised to operate as an independent money transfer operator and/or value transfer service provider.
(iv) Category four – An ADLA authorised to:
Category one: R2 million
Category two: R3 million
Category three: R5 million
Category four: R8 million
No. The minimum unimpaired capital requirement cannot be used as capital or working capital in the business of the ADLA. The interest earned on the requirement can be used for the business, but the capital requirement must remain unencumbered and may not be ceded, pledged or used as collateral by the ADLA or any of its stakeholders.
The SARB does not currently oversee, supervise or regulate crypto assets, which were previously referred to as virtual currencies, but is continuing to monitor this evolving area. The SARB’s position on crypto assets remains as set out in the 2014 Position Paper on Virtual Currencies and is summarised below.
Crypto assets are not legal tender in South Africa, so any merchant or beneficiary may refuse them as a means of payment. These assets are not guaranteed or backed by SARB as they operate independently from the central bank and users are alerted to the potential risk of fluctuation in the value of crypto assets. There are currently no dedicated laws or regulations that specifically govern the use of crypto assets in South Africa and, therefore, no regulatory compliance requirements exist for local trading of these assets. Legal protection or recourse to users, traders or intermediaries of crypto assets therefore depends on general common law principles. Dealing in crypto assets is performed at the end-user’s sole and independent risk. Initial coin offerings are related to crypto assets and their use are also unregulated and unsupervised by the SARB.
Neither the Currency and Exchanges Manual for Authorised Dealers nor the Currency and Exchanges Manual for Authorised Dealers in foreign exchange with limited authority allow for cross-border or foreign exchange transfers for the explicit purpose of purchasing crypto assets. From an exchange control perspective, the Financial Surveillance Department is unable to approve any transactions of this nature.
Individuals may purchase crypto assets from abroad using their single discretionary allowance of up to R1 million and/or their individual foreign capital allowance of up to R10 million with a Compliance Status (TCS) PIN per calendar year, as outlined in the abovementioned manuals. In terms of the SARS TCS system, a TCS PIN letter will be issued to the taxpayer that will contain the tax number and TCS PIN. A local Authorised Dealer will be able to assist individuals with these allowances and will use the TCS PIN to verify the taxpayer's tax compliance status via SARS eFiling prior to effecting any transfers.
It should be noted that, when purchasing foreign exchange through an Authorised Dealer, a customer is required to sign a declaration, either physically or electronically, which includes the wording “I have been informed of the limit applicable to the above transaction and confirm that this limit will not be exceeded as a result of the conclusion of this transaction”. It follows that an individual is responsible for ensuring that he/she does not exceed the relative allowance applicable to the transaction i.e. R1 million or R10 million.
An individual may not use another individual’s single discretionary allowance or foreign capital allowance through the granting of a 'loan' or any other similar agreement. This is regarded as a simulated transaction to circumvent the provisions of the Exchange Control Regulations and therefore an illegal activity. In this regard, refer to Exchange Control Regulation 10(1)(c), read with Exchange Control Regulation 22.
The Exchange Control Regulations prohibit transactions where capital or the right to capital is, without permission from National Treasury, directly or indirectly exported from South Africa. This includes transactions where an individual purchases crypto assets in South Africa and uses them to externalise 'any right to capital'. Contravening these regulations is a criminal offence.
The repatriation of value to South Africa through crypto assets is not permitted as part of an individual’s single discretionary allowance and/or foreign capital allowance. This is because of the nature of the assets and because the transaction is currently not reportable on the FinSurv Reporting System. Similarly, non-residents who have introduced crypto assets to South Africa for local sale will not be able to transfer the sale proceeds abroad. The applicable exchange control policy is outlined in section G.(C)(i) of the Currency and Exchanges Manual for Authorised Dealers.
Kindly be advised that the Financial Surveillance Department cannot advise on how individuals or legal entities should comply with any other legislative requirements. Individuals and legal entities should seek independent legal advice to ensure compliance with all applicable legal and regulatory requirements. Enquiries may also be submitted to the Regulatory Guidance Unit of the Intergovernmental Fintech Working Group (IFWG) on its website at www.ifwg.co.za for a comprehensive opinion involving all the relevant regulatory bodies concerned.
The Intergovernmental Fintech Working Group (IFWG), a committee of South African financial regulators, launched an Innovation Hub to promote responsible financial sector innovation and respond to changing market dynamics. Kindly visit www.ifwg.co.za for further information in this regard.
Innovation Hub users have access to three avenues for assistance:
The Regulatory Guidance Unit exists to help market innovators resolve specific questions regarding the policy landscape and regulatory requirements. Financial sector innovators with questions on fintech or innovation-related financial sector regulation are encouraged to visit the IFWG website and submit an enquiry to the Regulatory Guidance Unit at https://www.ifwg.co.za/regulatory-guidance-unit/. Regulators will continue to assist queries through digital and virtual means, however, due to the pandemic, response times may depend on the volume and complexity of queries and will be provided on a best effort basis.
The Regulatory Sandbox provides financial sector innovators with an opportunity to test new products and services that push the boundaries of existing regulation, all under the responsible supervision of relevant regulators. Participants must apply to the Regulatory Sandbox, and the application can be downloaded at https://www.ifwg.co.za/regulatorysandbox/.
The Innovation Accelerator exists to provide a collaborative, exploratory environment for financial sector regulators to learn from and work with each other – and the broader financial sector ecosystem – on emerging innovations in the industry. Outcomes of these coordinated efforts will be shared on the IFWG Innovation Hub website, and the Innovation Hub’s latest reports can be accessed at https://www.ifwg.co.za/innovation-accelerator/.
There are three options for reporting suspicious activity or transactions to the SARB:
(i) You can email SARBFNSDept@resbank.co.za. If possible, the following information should be included in the email:
(iii) You can call the SARB's independent external hotline service (Deloitte Tip-Offs Anonymous) on 0800 ETHICL (384425). For more information regarding the tip off line, click here.
South African residents who did not apply for exchange control relief under the expired Special Voluntary Disclosure Programme (announced by the Minister of Finance during his 2016 Budget Speech) and who now wish to settle contraventions of the Exchange Control Regulations must make a full disclosure to the Financial Surveillance Department. They can do this by submitting an application through an Authorised Dealer or directly to SARBFNSDept@resbank.co.za (attention: Compliance and Enforcement Division). Anonymous applications will not be accepted.
Applicants may pay a settlement amount ranging from 10% to 40% of the amount involved in the contravention, at the discretion of the Financial Surveillance Department. The determination of the settlement will, inter alia, depend on whether the applicant elects to retain the funds abroad or repatriate them.
All applications submitted to the department must be accompanied by a frank and verifiable affidavit disclosing all relevant facts and supported by suitable documentary evidence. The department may refuse an application for regularisation if the relevant contraventions are the subject of a current audit or investigation.
When evaluating these applications, the department will consider relevant factors that may include the circumstances and involvement of the applicant in the contravention, and the nature, extent and seriousness of the contraventions.
South African residents with unauthorised foreign assets who do not voluntarily approach the department for assistance may face the full force of the law. Where appropriate, the department is mandated to recover the full amount of the contravention.