South Africa is the United Kingdom’s largest trade partner in Africa and the two also share strong historical, cultural, and linguistic ties. Trade relations between European Union member states and South Africa are governed by the 1999 Trade, Development, and Cooperation Agreement (TDCA). The South African rand is a free-floating currency, however, despite increased economic liberalization since the end of apartheid, there are still many restrictions that limit the ability to send money internationally, both to and from South Africa. When transferring money from the UK to South Africa, your best option is to enlist the services of a specialist currency broker.
South Africa is a former British colony and as a result of this relationship there are many South African nationals living in the UK as well as there are a large number of UK nationals or people of British descent living in South Africa. Currently, there are more than 300,000 British nationals living in South Africa.
UK nationals visiting South Africa for a period of 90 days or less do not need a visa. If travelling to South Africa from a country where yellow fever is a risk, you will be required to present a yellow fever certificate issued within 10 days of your arrival. Your passport should be valid for at least 30 days beyond the date you intend to leave South Africa. Beginning June 1, 2015, all minors (those under the age of 18) will be required to produce an unabridged birth certificate in addition to their passport in order to travel to South Africa.
To work in South Africa, UK nationals are required to obtain a work permit before beginning work within the country. Accompanying family members will need visas but can remain in the country on temporary residence permits until long term visas are retained. For more information on visas and requirements for travel, contact the South African Department of Home Affairs.
The South Africa Reserve Bank (SARB) places several restrictions on international currency transfers with the South African rand. Citizens and permanent residents of South Africa are allowed to transfer up to R1 million over the course of a one year period without having to receive clearance from the South African Revenue Service (SARS). This can be in the form of loans, foreign investments, business payments, or for the purchase of luxury items. An additional allowance of R4 million can be transferred for purposes of foreign investment. These transactions must be get approval from both the SARS and SARB, however.
Foreign exchange transfers into South Africa can be transferred back out of the country but the transfer of funds must be validated. It is therefore important to keep a record of any currency transfers into or out of South Africa. You must also provide additional documents if your funds are related to the purchase of a property in South Africa. UK nationals living in South Africa may temporarily transfer all funds related to the purchase or sale of property in South Africa, as well as any income earned through renting, though extra documentation is required. For very large forex transfers the exchange rate control department of the central bank may request a staggering of payments in order to maintain the stability of the exchange rate.
Purchasing property in South Africa as a foreigner can be complicated. It is advisable to enlist the help of a speculator as well as a specialized property lawyer with knowledge of local real estate law and processes. Those purchasing property in South Africa will be subject to taxes based on the cost of the particular property. For properties worth at least R600,000, the tax rate is 3%. These rates then increase up to a marginal rate of 8%. You should factor in these additional charges before you transfer money from the UK to South Africa.
South Africa has a sophisticated banking system. There are many local and international banks for UK expats to choose from, all of which offer a range of services and competitive rates. The top four banks in South Africa are First National Bank, ABSA (owned by Barclays), Nedbank, and Standard Bank. There are also private banks, such as Rand Merchant Bank and Investec. Opening a bank account in South Africa is fairly easy and requires a valid picture ID and proof of a local address in South Africa. A common practice for expats is to have an offshore account for savings and an account within South Africa to cover living expenses.
South African residents are usually taxed on all income they earn worldwide, whereas non-residents are taxed solely on income earned in South Africa. The UK and South Africa have a double taxation agreement, effective since January 1, 2003. More information can be found on the website of HM Revenue and Customs. It is advisable to engage the services of a tax agent to navigate the specifics of the South African system of taxation.
Since 2012, the UK remains one of the leading investors in South Africa. Precious stones, vehicles, mechanical products and machinery, mineral products, base metals, beverages and prepared food items, are the top exports from South Africa to the UK. Exports from the UK to South Africa are comprised mainly of mechanical appliances, turbo jets, vehicles (including vessels and aircraft), turbo propellers, electrical equipment, gas turbines, and chemicals. Trade between the UK and South Africa is expected to grow through 2015.
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