Transferring Money in and out of South Africa
South Africa has rules and regulations in place that govern the transfer of money in and out of South Africa, these rules are referred to as Exchange Control Regulations.
Exchange Control Regulations have been in place to some degree since 1939 and whether you are transferring money in or out of South Africa it is important you understand the following:
“Exchange Control regulations control the flow of money both in and out of South Africa and that they effect every transaction, no matter what amount gets transferred and who the sender or recipient of the money is.”
The recent relaxing of exchange control regulations has made the amounts you are able to transfer much higher, however permission is still needed to transfer out any funds.
For those who foresee a need to repatriate (transfer back out) funds introduced to South Africa, the paper trail is all important in determining if and how this can be done. In short how you bring your money into South Africa can have a profound effect on how and if you can take it out.
There are a number of alternatives for the movement of money in and out of South Africa, some of which are considered below:
Transferring money or bringing money into South Africa
- Exchanging foreign currency when arriving in South Africa – you are able to bring in an unlimited amount of foreign currency or travellers cheques to South Africa providing you declare them on entry. Whilst this method may appear to be the easiest solution you should be aware that apart from the security risk carrying cash obviously poses, with both cash and travellers cheques the exchange rate and associated fees may not be the most competitive. This option can be suited for short term visits such as a holiday or business trip.
- Bringing in Rand from outside of South Africa – this amount is limited it just R5, 000 so again would only really be suitable for short term stays.
- The use of ATM’s – many foreign cards do work in South Africa’s extensive network of ATM’s and this certainly helps negate any security risk for the short term visitor. Make yourself aware of the exchange rates and fees charged by your bank and remember that credit card withdrawals of cash tend to attract interest from day one.
- A high street bank – the advantages of a high street bank are that they are probably known to you and seen as trustworthy. For higher sums they are certainly an option but with the advent of currency specialists their set fees and commission can be high, resulting in less rand for your foreign currency.
- A currency specialist is very common place in the UK and USA and are now becoming much more prominent in other countries (including South Africa). Currency specialists still effect your transfer through a bank but act as a sort of middleman. Through a process of ‘bulking; they are able to often offer no fees and a much better exchange rate than banks can. In effect to you accessing a trade rate rather than retail rate. For larger sums you should always consider the benefits of using a currency specialist. For transfers to South Africa it is also extremely important that you select the services of a currency specialist who is well versed in the foreign exchange regulations and is also FSB (Financial Services Board) registered. Incompass Financial solutions (+ 27 (0) 21 424 2936 ) are able to provide you with advice and transfer services both in and out of South Africa, are FSB registered and knowledgeable around the various regulations.
Transferring money out of or sending money out of South Africa
- Taking rand abroad – similar to bringing rand into South Africa you are only allowed to take R5, 000 hard currency out. This method would therefore only be suitable for very short stays abroad.
- Travellers cheques or bank cards pre loaded with foreign currency, are also an option for short stays but be aware of the exchange rates and bank charges involved.
- A high street bank – for regular transfers and larger ones, banks could be considered. As per bringing money into South Africa in most cases you will find the banks charge and exchange rate are able to be bettered by a specialised currency company.
- It is advisable to always contact a currency specialist as they tend to have lower (if any) set charges, a better exchange rate and also (where versed) better knowledge of exchange control regulations and a corresponding service. Incompass offer free tax clearance and exchange control advice to its clients.
Transferring money to or from South Africa is very different to what many of are used to due to the Exchange Control Regulations. It is important therefore, that whether you use the services of a bank or currency specialist for larger or regular transfers that you ensure:
- They have knowledge of the exchange control regulations
- They able to assist you with both transfers in and out of South Africa
- They are registered with the Financial Services Board of South Africa
In addition to those point, above other guidelines include:
- Shopping around – higher fees and differing exchange rates can have a profound effect on the amount of currency that you end receiving.
- Service levels – are they easily accessible and what is the quality of their staff
- Credibility – are they licensed with all applicable institutions and regulators
Whilst travellers cheques, ATM’s and pre loaded debit cards are suited to the short stay traveller, regular and larger sums being transferred to and from South Africa are generally better dealt with via a bank or currency specialist.