August 29, 2024
International Payments for Merchanting
Merchanting transactions are a key part of global trade, but they come with their own set of rules and regulations in South Africa.
What is a Merchanting Transaction for South African Companies?
Merchanting is when a South African company buys goods from a supplier in one foreign country and sells them to a buyer in another foreign country. The unique aspect of these transactions is that the goods never physically enter South Africa. The goods are delivered directly from the foreign supplier to the foreign buyer. This allows your South African business to act as a key player in international trade, facilitating the movement of goods across borders without handling them directly.
The South African Regulatory Landscape?
In South Africa, merchanting transactions are regulated by the South African Reserve Bank (SARB). These regulations are designed to prevent financial crimes like money laundering and tax evasion, while also protecting the stability of the South African economy. Compliance with these regulations is crucial for any business involved in merchanting.
Important Facts about Merchanting
- Payment from the foreign buyer can be received in foreign currency or Rand and must include the South African company’s profit.
- Merchanting transactions by South African companies are permissible provided that the time-lag between paying funds away to the foreign supplier and receiving funds from the foreign buyer will not exceed 60 days for trades with countries on the African continent and 30 days for trades with any other country.
- Documents required for a merchanting transaction:
- Invoice from the foreign seller to the South African company
- Invoice from the South African company to the foreign buyer
- Proof of payment from the foreign buyer to the South African company
Connect with Our Business Team
At Currency Partners, we specialise in helping businesses like yours navigate the complexities of SARB’s exchange control regulations. Our team manages foreign exchange risks, facilitates seamless cross-border payments, and provides strategic advice on currency conversion timing to optimise costs and ensure compliance. With our support, your international trade operations can be both compliant and profitable.
To discuss how we can support your merchanting transactions and overall forex needs, speak to an expert in our specialist business team, email enquiries@currencypartners.co.za or call us on +27 21 203 0081. Please don’t hesitate to contact us should you have any questions or would like assistance with your APN.
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