Financial emigration to Australia – what you need to know
You wake up to an email from the Department of Immigration with your Australian visa grant. All the hard work has paid off – and you’re finally cleared for emigration. But what about your money?
After your visa is granted, top of the admin list is generally to start liquidating your assets – and to decide on when and how to transfer your wealth offshore.
You can open an Aussie Bank account
Much like South Africa, there are four big retail banks in Australia. These are the Commonwealth Bank of Australia (CBA); Westpac Banking Corporation (Westpac); Australia and New Zealand Banking Group (ANZ); and National Australia Bank (NAB).
Each of these banks offers what is known as a migrant banking account to South Africans that are moving to Australia – and you can open one online. When you arrive in Australia, you can go into your nominated branch to activate your account and pick up your bank cards.
You can transfer funds to Australia before you leave
Exchange control regulations govern the amount you can transfer to Australia, and there are a number of exchange control allowances you can use for this purpose.
The two allowances that are most relevant to South African migrants (and ex-pats) are the Single Discretionary Allowance and the Foreign Investment Allowance.
The Single Discretionary Allowance permits individuals over 18 years of age to transfer up to R1m per calendar year. The Foreign Investment Allowance permits taxpayers that are in good standing to transfer a further R10m per calendar year and requires clearance from SARS.
You don’t have to use your bank
You can choose to transfer funds to Australia through your bank, or you can use a financial services / money service business – like MyGlobalCFO.
These businesses provide a value-added service to help you transfer funds efficiently, without having to go into a branch. They can provide expert advice on how to utilise your allowances, and some are able to offer better AUD rates than commercial banks.
If you plan to use one, make sure they are a Registered South African Financial Services Provider (you can check on the Financial Services Board website).
Beware the “free” transfer
At the moment, there are no charities which offer FX transfer services. Unfortunately, what this means is that there is no such thing as a free transfer.
Many FX transfer businesses advertise these, so before moving funds – make sure you are comfortable with how they make their money, and more importantly that your transfer is secure.
What is formal financial emigration?
Financial emigration is the process of changing your exchange control / banking status from resident to non-resident.
You may consider yourself to have emigrated permanently, but if you haven’t notified SARS and the South African Reserve Bank – you are still considered a ‘South African temporarily abroad’ from their perspective.
Financial emigration may become relevant if you still have a retirement annuity in South Africa. You might want to redeem it to incorporate the proceeds into your Super fund and/or protect against Rand depreciation, but your Assurer may not release your funds unless you financially emigrate.
Who is MyGlobalCFO and how can they help?
MyGlobalCFO assists South African clients with the transfer of their wealth offshore (Services include FX Transfer, Financial Emigration, and Offshore Investment Management).
You’ll deal with a foreign exchange and investment professional from day one, who will get your funds to Australia securely, keep you exchange control compliant, and execute your transfers at highly competitive AUD rates.
Kyle Sonderup is the head of MyGlobalCFO.
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