investing offshore from South Africa

Mercury International offers international money transfers for both individuals and businesses alike, at bank-beating rates, zero fees and are on hand to give you an excellent and personalised service. No need to wait in queues. They deal with the banks for you.

How much can I transfer?
In some cases a tax clearance certificate from the South African Reserve Bank (SARB) will be required depending on how much you intend to transfer overseas in a calendar year and whether or not you live in South Africa.

Topline:

You can transfer a total of R11 million per calendar year:

– R1 million individual discretionary allowance (no tax clearance required)
– R10 million foreign investment allowance (tax clearance is required from SARS)

Only tax-payers over the age of 18 who are South African residents are eligible for this allowance. It is mandatory to have a tax clearance certificate that is valid for 12 months to take advantage of the R10 million allowance.

Mercury International will assist you in obtaining SARS tax clearances as and when you require them.

If you are looking to exceed the amounts above, you will need to apply to the SARB for a special dispensation. These applications can be complex, but our team can guide you through the process.

Individual Discretionary Allowance of up to R1 million per calendar year

This allowance can be used for any legal purposes overseas and includes any travel expenses abroad billed from South Africa in a foreign currency (e.g. credit card use while travelling overseas). No foreign tax clearance required.

Individual Foreign Capital/Investment Allowance of up to R10 million per calendar year

A Foreign Tax Clearance Certificate (FTCC) must be obtained from SARS for transfers under the FCA/FIA. FTCCs for amounts up to R10 million per calendar year can be applied for with SARS and once issued, the certificate is valid for 12 months.

SARB Special Approval Applications

In order to move more than R10 million, one must apply for a letter of compliance from SARS. Once this letter is received, an application must be made to the SARB for special approval to be granted before being able to move the amount(s) that exceed(s) the annual allowance. There is no restriction on the number of applications that can be made or on the size of the approval needed (no exit levies or penalties are payable).

Emigration Allowances

This is currently set at R20 million per family unit.

Non-resident transfers

Mercury FX can assist with Non-Resident Accounts and any exchange control applications for our clients who live outside of South Africa.

More information can be found here on the SARB website.

After your account is approved the process for booking a trade is:

1. Deposit the estimated Rand amount of your OMBA fund subscription into the Mercantile Bank account;
2. Email or call the Mercury FX team for a quote which you can choose to either accept or decline;
3. Once the FX trade has settled (trade date + 2 days for spot trades) at the agreed rate, the foreign currency will be sent directly to the Prescient offshore client money account and then further invested into the fund.

It is possible for smaller subscription amounts (below USD, EUR or GBP 20,000) to agree the FX rate with Mercury FX in advance of making the Rand payment into the Mercantile Bank Account. To ensure a swift transfer and no settlement or trade issues we suggest depositing the funds in your MFX Mercantile Account in advance of booking your FX rate.
Once received your foreign currency funds will be invested into the selected Omba fund and share class you selected at the time of your application.

Foreign Currency (FX) trades can be done with Mercury FX between the hours of 08:30 – 17:00 South Africa time.

The cut-off time for making same day transfers/ payments of foreign currency is 11:00 South Africa time.

Mercury FX can provide for scenarios where clients wish to take advantage of favourable exchange rates but may not be ready to invest offshore and deploy their funds. Mercury FX can set clients up with a Foreign Currency Account (FCA) with Mercantile Bank. This account can be set up for all major currencies in a couple of hours without any further documentation requirements. The converted funds can remain in the FCA account until such time as the client is ready to move the funds offshore.
It must however be noted that due to low global interest rates no interest is earned on the FCA account so it should generally not be used as a long term savings product.

Should you already have foreign currency funds in an offshore account then depending on the amount you could still invest directly into the Omba fund. Or if you intend to transfer more Rands offshore and top up a direct fund investment then you could complete the Mercury online application.

Investment Options

>£$€100,000 as a one off investment; you could invest directly into the Omba fund by completing the Application form. This would not open a Mercury or Mercantile account for you and thus not enable further Rand transfers via this channel.

>£$€10,000 as an initial investment and subsequent investment transfers from Rands; you can complete the Mercury Prescient signup process which will open you a Mercury FX, Mercantile and Prescient account. You can then transfer the lump sum directly from your existing offshore account to the Prescient client money account for the initial fund investment and then use your Mercury/Mercantile account to facilitate further Rand transfers to the fund as you require.

>£$€10,000 < $€100,000 as a one off investment; we would recommend investing in the Omba fund via an offshore bank or a fund platform such as AJ Bell in the UK. The fund has already been listed with a number of overseas global banks so all you need to do is ask your offshore bank to make the investment on your behalf (like you would for any other fund you hold in an offshore bank account).

Yes, if you just want to use Mercury FX to move money into and out of South Africa then you can just signup using the standard Mercury FX process for a Personal or Business account.

This will open you a Mercury FX and Mercantile Bank account for you. You will need to specify the external bank for your foreign currency transfer(s). This process will not open you a Prescient account for you or invest directly into the Omba fund.