Frequently asked questions

• Reduce the risk of your overall portfolio. By diversifying your portfolio across countries and currencies, you minimize the risk of currency weakness or exposure to the economic and political stability of a single country.
• Increase your return potential. You get access to a much wider range of opportunities, including companies or industries that may not be available on the local market.

Anyone whose tax affairs are in good standing and who are older than 18 years of age may invest offshore. Persons or entities that are not allowed to invest offshore include clubs, foundations, legal entities, partnerships, trusts, and persons who are under the age of 18 years and/or whose tax affairs are not in good standing.

You can invest offshore in one of two ways:

	1. Directly in foreign currency	2. In a rand-denominated investment
How does it work?	You invest in foreign currency in an investment product that is registered offshore The returns are paid out in the foreign currency	You invest in rands in an offshore product registered in South Africa The returns are paid out in rands
Do you need to use your offshore allowance?	Yes, if you take money out of the country If you take money out of South Africa and convert your rands to invest, you must use your offshore allowance and apply for tax clearance No, not if you invest money that is already offshore If you invest money that is already outside South Africa, you do not use your off-shore allowance and do not need tax clearance	No, which means you also don’t have to apply for tax clearance because you’re not taking money out of the country

Maximum individual offshore allowance – R5 million per year.

• For investments of less than R1 million per year you don’t need to apply for tax clearance, but you must complete an Exchange Control Form at an authorised dealer bank (any of the major banks that have a foreign exchange department – check with your bank beforehand if you’re not sure).
• For investments larger than R1 million per year you must apply for a Tax Clearance Certificate from SARS. This certificate is required by the dealer bank to allow them to transfer your money to an offshore bank account.

• Contact SARS on 0800 00 7277 to request the ‘Foreign Investment Allowance for Individuals’ form (code FIA001). Alternatively, you can contact us to request the form.
• Submit the completed from and the following supporting documentation at your nearest SARS office:
  • A statement of your assets and liabilities
  • A copy of your bank statements that shows you have the available amount (SARS will only approve clearance on amounts available in your bank account)
  • A certified copy of your South African ID or Smart Card (if you have a Smart Card, please make sure you have a clear copy of both the back and the front of the card)
• It takes between two to four weeks to approve a Tax Clearance Certificate – the time it takes will depend on the specific SARS office and your tax status.
• The certificate is valid for a period of 12 months from the data of issue.

• If you are investing more than R1 million, please ensure that you have received your Tax Clearance Certificate from SARS before you go to the bank.
• In addition to the original Tax Clearance Certificate, you should also have the following supporting documentation ready:
  • Your South African ID document or Smart Card
  • The fund bank account details – this is shown in the relevant form under ‘Sanlam Universal Funds Plc bank accounts’ (make sure you reference the account with the correct currency)
• Visit the bank and complete the following two documents:
  • Application for an Overseas Bank Transfer of Funds (OTT form)
  • Original MP1423 form (this is issued by the SARS Exchange Control Department indicating a foreign investment by a person resident in South Africa)
• Submit these forms together with the supporting documents.