Investing Offshore

Invest Offshore with Beanstalk

What does it mean to invest offshore?

Investing offshore means that you invest some of your money in investment instruments (e.g. equities, bonds, cash etc.) managed outside the borders of South Africa. This means you use South African Rands to buy investments in foreign currencies such as the US$, £ Sterling, Japanese Yen, AUS$ etc.).

There are two principal ways of doing this:

  1. You send money overseas and invest directly in the offshore investment instrument; or
  2. You invest in the same offshore instruments via structures called Feeder Funds.

A Feeder Fund is a fund which is Rand-denominated but invests in assets held offshore. It is a far simpler investment option with the following benefits:

  • money can be deposited into a Rand-based bank account
  • the minimum investment amount is much lower than when investing directly offshore
  • typically the money is more quickly accessed locally

However, the downside to a Feeder Fund is that when you choose to sell your investment, the value is immediately calculated based on the current exchange rate between the fund currency and the Rand. This means you need to make two choices when you wish to withdraw money from the investment:

  1. Is the value of the investment at a suitable level to be sold; and
  2. Is the exchange rate favourable enough to be selling at this time.

Can I send any amount offshore?

South African permanent residents over the age of 18 investing offshore with South African Rands may invest up to R11 million offshore per calendar year.

The allowance is split into:

  1. R1.25 million Single Discretionary Allowance (SDA) where a South African Revenue Service (SARS) tax clearance certificate is not required unless the investor is living abroad temporarily.
  2. R10 million foreign investment allowance where a SARS tax clearance certificate is required. If the investor's money is already offshore, SARS approval is not required. However, it is the investor's responsibility to inform SARS of any offshore investments.

How much can I invest?

Minimum Investment Amounts for the Offshore Platform
Scenario Previous Minimum
(US$ or foreign currency equivalent)
New Minimum from 16 April 2018
(US$ or foreign currency equivalent)
Lump sum investment US$10 000 US$1 500
Lump sum per unit trust US$1 000 US$400
Additional contribution per unit trust US$1 000 US$400

What access do I have to my money?

You can request that we sell your offshore investment at any time. Each offshore fund has different trading processes and timelines but typically you can access your money in less than 14 working days.

What fees are payable?

There are no upfront fees!

Annual Fees are payable and these include an Investment Management Fee (which is charged by the investment funds in which you invest and varies from fund to fund), an Administration Fee (which is charged by Investec for managing your money), and finally a Beanstalk Fee (which is a low 0.50% + VAT (if applicable) per annum and includes fund screening, analysis and recommendations; back office support; as well as access to a CFP Qualified Financial Planner; ongoing advice, support, newsletters and fund and industry information). All fees are deducted by means of a unit reduction by Investec and paid across to the applicable service provider.

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What's on this page?

Additional information

What is the Single Discretionary Allowance (SDA)?

South African residents may use their R1.25 million SDA for investment purposes without having to obtain a SARS tax clearance certificate, however the investor must have a tax number. The R1.25 million allowance also applies to the following:

  • Monetary gifts and loans
  • Donations to missionaries
  • Maintenance transfers
  • Travel allowance
  • Study allowance

If the full SDA is used for investing offshore, no more money may be used for travel allowance, study leave, maintenance transfers etc. for the rest of that calendar year.

What is a SARS Tax Clearance Certificate?

This certificate is issued to ensure that an investor's tax affairs are in order and is valid for 12 months. During this 12-month period, investors can transfer part of their allowance back into South Africa and then the same amount back offshore without an additional tax clearance application, provided that the amount does not exceed the tax clearance amount. Investors must keep a copy of the certificate.

How can I get a Tax Clearance Certificate?
  1. Complete a 'FIA001' form (available from SARS) and submit directly to SARS.
  2. If your tax affairs are in order, it takes up to 10 days for SARS to issue the certificate.