Page 38 - Nexia Cape Town 2018 TG Digital

EXCHANGE CONTROL: NON-RESIDENTS

Non-residents may invest in the Republic, provided that suitable documentary
evidence is received in order to ensure that such transactions are concluded
at arm’s length, at fair market-related prices, and are financed in an approved
manner�

Financial assistance in South Africa
■ Emigrants: local financial assistance made available to emigrants is subject
to the 1:1 ratio�
■ Non-residents: authorised dealers may grant or authorise local financial
assistance facilities to non-residents in respect of bona fide foreign
direct investments into South Africa without restrictions� Where the funds
are required for the acquisition of residential property or other financial
transactions, the 1:1 ratio will apply�
■ Affected persons (i�e� where non-residents directly or indirectly own 75%
or more of an entity): there is no restriction on the amount that could
be borrowed locally in instances where an affected person wishes to
borrow locally to finance a foreign direct investment into South Africa or
for domestic working capital requirements� Wholly non-resident owned
subsidiaries may borrow locally up to 100% of the total shareholders’
investment, in respect of the acquisition of residential property and or
other financial transactions� The effect of local participation in non-resident
controlled entities is to make the abovementioned norms more liberal the
greater the local participation, i�e� the ability to borrow locally increases� This
is based on a formula�
Loans from non-resident shareholders to residents
Applications for proposed borrowing abroad by residents must be referred to the
Financial Surveillance Department for approval�

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