JOHANNESBURG — When it comes to moving your money offshore, there are several options. But each option needs to be considered seriously as it triggers off allowance and tax clearance rules. Missing a step could mean that you’d have to repatriate your funds back to South Africa and, at worse, possibly pay penalties. In this podcast, Esmerie Pienaar — a certified financial planner at Brenthurst Wealth Management — runs through several of the options and the rules thereof. It’s key advice for anybody looking to move money abroad. – Gareth van Zyl

This special podcast is brought to you by Brenthurst Wealth Management. With me on the line is Esmerie Pienaar, a certified financial planner at Brenthurst Wealth. Esmerie, now amid the current slump in the South African economy, many South Africans will be looking to move their wealth offshore. On what basis can a SA resident transfer funds?

Good day Gareth, thanks for taking the time for our interview. Obviously, there’s a few bases upon which you can take out funds. Individual SA residents are allowed two types of allowances that they can effectively take their funds out on. You have your single discretionary allowance that is limited to R1m per calendar year. That is available to all SA residents who are 18 years and older, and in possession of a valid green bar-coded SA ID document or a Smart ID document card. This dispensation may be used for any legitimate purposes, at the discretion of the individual without any documentary evidence. Meaning you don’t have to apply for approval through the SARS, effectively.

Then you also have a R10m allowance per calendar year, of which you need SARS approval through a tax clearance for that R10m. You also have, for example, your travel allowances, your study allowances. In terms of travel allowances, which form part of your single discretionary allowance, you also have the option for people who are under the age of 18. They will have a travel allowance not exceeding R200 000 per calendar year. But when you use your travel allowance, you have to provide documentation showing that you are, in fact, travelling and that travel allowance may not be availed for more than 60 days prior to your departure. So, those are effectively, the ways in which you can transfer. Then you also have your immigration allowance, but that involves a whole set of rules and procedures.

Have you found that that there’s been an uptick from clients who are looking to utilise some of these allowances?

Yes, we have a lot of clients because we’re in the investment industry. We obviously, have a lot of clients predominantly taking funds out for investment purposes but I also deal with clients that are moving abroad temporarily. They use their allowance to move funds to their personal bank accounts obviously for ...

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Having an offshore bank account — or two… or three — is an important step in planting flags around the world. As we often discuss, the actual opening of an account is relatively easy, and you don’t need a lot of money.

In my guide, The Best Offshore Banks, we discuss 55 banks that will open offshore accounts for anyone with as little as $500 to deposit. In some cases, you won’t even have to leave your living room, as a number of Caribbean and even European banks allow for remote account opening.

However, the bigger challenge for offshore banking newbies is how to move money offshore; precisely, how to get your onshore funds into your new offshore account.

To make things clear, this article is NOT about how to hide money offshore. While the media loves to do gotcha pieces about how easy it is to move money overseas, the reality is that playing by the rules is a lot better way to go.

In the era of FATCA, mutual legal assistance policies among governments, and offshore bank account reporting requirements, you don’t want to play hide and seek. When used legally, offshore bank accounts are an excellent asset protection tool to protect you from bankrupt governments.

If you don’t have an offshore bank account yet, you can learn more about how to get one here. However, if you do have an account but are confused about how to move money into it, here are several strategies for funding your offshore bank account.

International wire transfer

The most common and straightforward method is to simply wire the money from your onshore account (or your existing offshore account) to the new offshore account. Wire transfers work well because there is often no limit to the amount you can send, making it the most practical option for large transfers.

In some countries, sending a wire transfer is extremely simple and affordable. My Hong Kong bank charges about $11 to send money almost anywhere. The only problem is when the transfer gets rejected for some reason by the receiving party and I’m charged a large return fee. This shouldn’t be an issue, however, if you’re wiring money to yourself.

The downside to sending a wire is that it could take a while to arrive in some smaller banking jurisdictions, like Belize, that involve “correspondent banks” that are often in the US or Germany.

In countries where bankers tend to freak out about international wire transfers (see: the United States), you may need to go into a branch to initiate the wire. I know people who have had their US bank accounts restricted for daring to send an international wire transfer to themselves, so be careful. Then again, isn’t that why you wanted to move money offshore to begin with?

Transferwise...

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