You have 1 of 2 options.
Option 1 – Physically take you money offshore
Offshore Investment South Africa based allows a person to take a maximum of R10 million a year offshore subject to SARS tax clearance and a maximum of R1 million without tax clearance, however this amount needs to be registered with the SARB (South African Reserve Bank) and placed through an authorised dealer, such as most of our South African banks.
Once the money is offshore, you may do with it as you please. Keep it in your bank account or invest it. If you have invested overseas, your investment will still form part of your estate and you will be liable for estate duty in the jurisdiction in which you invest.
Option 2 – Foreign rand-denominated funds.
In South Africa most asset managers offer offshore unit trust funds or ETF'S (exchange traded funds) which are funds priced in rands which does not require a SARS tax clearance, but your capital invested offshore, which is made in rands and paid out in rands on disinvestment in South Africa gives you the global diversification and foreign currency exposure you want.
Note that Living annuities, pension/provident funds and/or retirement annuities may have offshore exposure in your underlying investment choice. Regulation 28 which governs how pension funds are to be invested stipulates that a maximum of 25% of your capital can be invested offshore.
What should you consider?
If political risk is one of your main concerns, you need to consider Option 1 and actually move your capital offshore. Investing this way means you never have to repatriate or convert the investment back into rands unless this is your choice.
If you don't have a large lump sum, but still want a rand hedge investment option then Option 2 is the way to go.
Hofland is one of the leading Investment Consulting Firms In South Africa who are proud providers of cost effective Retirement Investment Options and we are experts in how to utilize your hard earned income by minimizing your tax liabilities to ensure more funds are saved for Retirement.
We will kindly advise you on the best Offshore Investment options. For Investment Consulting Firms In South Africa contact us on 082 570 3629.