Page 29 - Nexia SAB&T Property and Tax Guide 2025

EXCHANGE CONTROL

ACQUISITION OF FIXED PROPERTY BY NON-RESIDENTS
Non-residents may invest in the Republic (including the acquisition of fixed property),
provided that suitable documentary evidence is received in order to ensure that such
transactions are concluded at arms’ length, at fair market-related prices, and are
financed in an approved manner. The following provisions relate to 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 (including the acquisition of commercial property),
without restrictions. Where the funds are required for the acquisition of residential
property (or other financial transactions) in South Africa the 1:1 ratio will apply.
◆ Affected persons (i.e.where non-residents directly or indirectly owns 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 (including the acquisition
of commercial property), 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) in South Africa.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.
DISPOSAL OF FIXED PROPERTY BY NON-RESIDENTS
Proceeds from the sale of assets, including immovable property by non-residents in
South Africa may be remitted abroad, with submission of proof (records) that foreign
funds were brought into South Africa in order to purchase the property. A non-resident
who brings funds into South Africa in order to purchase property, and who obtains either
permanent or temporary residency in South Africa, may remit the proceeds of the sale
of the property abroad (with proof) asif he or she was a non-resident, within 5 years of
becoming a permanent or temporary resident, however, after 5 years has passed, will be
treated as a South African resident for these purposes. Where there is a lack of proof, a
special application to the Reserve Bank can be made. Proceeds on the sale of assets,
including immovable property in South Africa by Emigrants will be subject to the blocked
account provisions, and withholding tax.
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