Financial emigration for South Africans: Everything you need to know

Many South Africans choose to emigrate, yet the process of financial emigration is often confused with physical emigration.


South Africans who have relocated abroad, or are thinking of doing so, can benefit from tidying up their financial affairs in the Republic by undergoing the process of financial emigration. We unpack the process, clear up common misconceptions and explain the benefits of becoming a non-resident.

What is the difference between emigration and financial emigration?

Despite sharing a common word, these are two very different processes. Emigration is the physical act of moving from one country to another – packing up your belongings and starting a new life elsewhere, in the UK or Australia for example.

Financial emigration is the process of informing the South African Reserve Bank (SARB) that you have permanently left South Africa. This changes your status from a permanent resident (or resident living temporarily abroad) to that of a non-resident of South Africa. This does not happen automatically, even if you have physically emigrated from South Africa.

Many people confuse the change of residence status with relinquishing their South African citizenship, but this is not the case. Informing the SARB that you are no longer a permanent resident in South Africa does not affect your citizenship status. The only thing that affects this would be if you apply for citizenship in another country, in which case you would need to apply for dual citizenship.

Should I financially emigrate?

Financial emigration is not necessarily for all expats. Whether it is right for you will depend on what kind of retirement savings and assets you hold. All South Africans have the annual R1 million single discretionary allowance and R10 million foreign investment allowance (which requires SARS tax clearance). Both of these can be used for foreign investment and asset transfer without having to financially emigrate. However, if you have a retirement annuity that you would like to cash in before retirement age, then financial emigration is the only option.

The benefits of financial emigration

If you choose to financially emigrate. You can access and transfer the following out of South Africa:

  • Proceeds from your South African retirement annuities before retirement age
  • Future inheritance funds
  • Passive income from rentals, dividends, directors’ fees or a salary
  • Proceeds from a third-party life policy

Financial emigration is not required to move the proceeds of other assets, such as bank accounts, discretionary funds, living annuities, pension and provident funds, proceeds from the sale of property and life insurance policies. These funds can still be transferred using the R1 million and R10 million foreign investment allowances.

The initial and ongoing tax treatment may differ significantly between different assets, so it is important that you get the correct tax advice before making any decisions or applications. This will ensure that you make an informed decision and do not face repercussions down the line.

What’s more, with the changes to the tax laws promulgated for the 2020 tax year, many South Africans working abroad are financially emigrating to ensure that they are not seen as a tax resident, and therefore taxed on their foreign income earned while working overseas.

How can I start financial emigration?

The process of financial emigration is complex and each situation is unique, so it’s always a good idea to get in touch with a South African financial emigration specialist. They can carefully consider your personal circumstances and advise you on the best course of action.

There are potential tax implications when financially emigrating, as well as opportunities to implement tax-efficient plans. Seeking the advice of someone who has cross-border financial and tax planning experience will ensure that you make the right decisions.

How long does financial emigration take?

On average, the turnaround time to complete a financial emigration is three months, barring any particularly complex circumstances. If you’re thinking about financially emigrating, it’s advisable to use a credible financial services provider who is properly licensed by the Financial Services Conduct Authority. A provider with good working relationships with SARS and the SARB and will ensure that your application is completed as efficiently as possible.

Sable International’s financial emigration specialists assist South Africans to successfully financially emigrate, quickly and at the best possible rate. Simply fill in their online assessment questionnaire to begin your complimentary financial emigration assessment.