July 27, 2022
Foreign Currency Account (FCA)
The Financial Surveillance Department of the South African Reserve Bank allows a South African resident (natural persons and institutional investors) and non-residents to operate a foreign denominated currency account(s) with a local Authorised Dealer.
These accounts are commonly referred to as a Foreign Currency Account (FCA) and are locally domiciled. The funds are held in foreign currency and are externalised according to the exchange control regulation.
An individual’s Foreign Currency Account may be funded via the following means:
- Their own R1m Single Discretionary Allowance
- Their own R10m Foreign Investment Allowance
- Gifts received from a South African resident or non-resident individual’s offshore account
- Donations received from a bona fide non-resident
- Disinvestment from an investment account in their own name
- Growth or income received on previously transferred funds where such income was retained abroad
- Proceeds from a sale of property
- Disinvestment of an offshore pension account in their own name
- Own income earned abroad (while living abroad) from a foreign employer after 01 July 1997, and either retained abroad or remitted to South Africa
- Foreign inheritances from a non-resident source
- Other amounts if specific approval has been obtained from the SARB
An individual may remit funds abroad from their Foreign Currency Account for the below purposes:
- Transfer of funds to an offshore account in their own name
- Transfer a monetary gift to a South African resident individuals’ offshore banking account
- Payments for alimony
- Tuition fees
- Transfer of funds to an offshore investment account in their own name or a third party
- Payments for travel purposes
- Annual contributions
- Purchase of property
- Offshore pension payments
Please be advised that certain payments may require supporting documentation, and that each bank can use their discretion on what they permit FCAs to be used for.
Residents who lend or dispose of authorised foreign assets to other South African residents are subject to local tax disclosure and compliance.
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