The documents and process you need to follow to financially emigrate from South Africa

In 2008 the South African government amended legislation to allow financially emigrated South Africans to transfer their remaining financial assets overseas.

Emigration involves the process of applying for residency in another country and then physically moving there, whether it be short or long term. However, financial emigration will only occur once you’ve been granted permanent residency abroad, says Tim Powell, a director at immigration specialists Sable International.

“It is the process of informing and changing your residence status with the South African Reserve Bank (SARB). Financial emigration occurs solely for exchange control purposes and will not affect your current citizenship status in any way. I.e. You do not give up your SA passport.

“South African citizens who’ve been living abroad but have not officially emigrated via the SARB are still considered South African residents for exchange control purposes,” he said.

Powell has published a new guide for South Africans looking to financially emigrate out of the country and the steps that will need to be followed. These are outlined in more detail below.


What is the financial emigration process?

  • Fill out an MP336 form

The MP336 form is an emigration form that must be completed to apply for your foreign capital allowance.

“You will need to submit an original or certified copy of this form, along with your other supporting documents, to a South African commercial bank,” said Powell.

“If you no longer have a local bank account, you may submit it to any authorised commercial bank operating within South Africa.”

  • Apply for an emigration tax clearance certificate

After completing an MP336 form, taxpayers who have already emigrated and wish to transfer their remaining assets overseas will have to apply for an emigration tax clearance certificate with SARS, said Powell.

“These remaining assets were formerly known as “Blocked Funds” but are now called “Emigrant’s Remaining Assets”. This tax clearance application can be quite a process and will include showing SARS evidence of all remaining assets in South Africa.

“If you have no remaining assets in South Africa and have lived abroad for more than five years, you’ll be able to financially emigrate without obtaining a tax clearance certificate. This process is considerably simpler and quicker than a full emigration.”

  • Submit the application to the SARB

After your application has been approved, the proceeds of the sale of your remaining assets in South Africa will be deposited into an unblocked rand account. They can then be transferred abroad from this account.


What are the benefits of financial emigration?

Powell said that some of the main benefits of financial emigration include:

  • Access your South African retirement annuities early If you emigrate financially, you’ll be allowed to access your South African retirement annuities before you turn 55 without any penalties;
  • Transfer of South African inheritance funds – Once you’ve successfully completed the financial emigration process, you’ll be able to transfer your future South African inheritance funds out of the country without being subjected to the SA resident exchange control process;
  • Full tax compliance –  Financial emigration ensures that your taxes are wholly compliant and that your tax residency status can’t be withdrawn.

“Financial emigration will initiate a once-off capital gains tax liability on your worldwide assets excluding immovable property in South Africa, said Powell. This applies to your total assets in South Africa and abroad.

“A big change may be in the pipeline for South African expats who still have retirement funds in South Africa. The Draft Tax Law Amendment Bill plans to prohibit South Africans from withdrawing their retirement annuities until they have been non-tax resident for three years.

“This is expected to be implemented on 1 March 2020 and as a result, we are seeing many South Africans try to complete their Financial Emigration before the end of February 2021 to avoid being caught out by this change.”


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The documents and process you need to follow to financially emigrate from South Africa