Guide Emigration Process

Transcription

1 A simple how to guide to understand the documentation required when taking up residence in any country outside the CMA Guide Emigration Process

2 Contents Background... 2 Emigration Procedure... 2 Checklist... 3 COMPLETION OF FORM MP336(b)... 3 Page Section 1 Details of applicant/family unit emigrating... 3 Section 2 If the spouse is not emigrating provide the reason for this Section 3 The reply to question (d) must be yes or the person will not be emigrating. Details of permission must be quoted in this section Section 4 This section can be completed once the form and the net asset value has been ascertained Section 5 Self explanatory... 4 Page Section 7 Complete declaration of all assets held in the Common Monetary Area (South Africa, Lesotho, Swaziland and Namibia) Page Page Section 8 - Less: South African liabilities (including those in Lesotho, Swaziland and Namibia)... 9 Section 9 - Value of items to be exported...10 Section 10 - Declaration...11 Page Section 11. For completion by the Authorised Dealer...12 Extract from Currency and Exchanges Manual...13 Opening a Non-Resident account...17 Converting your existing account (if applicable)...18 Conclusion

3 Background The Financial Surveillance Department of the South African Reserve Bank (SARB) states that when individuals leave South Africa to take up permanent residence in any county outside the Common Monetary Area, i.e. Lesotho, Namibia, South Africa and Swaziland (CMA), they may apply to an Authorised Dealer to be accorded emigration facilities. Applications must be accompanied by a duly completed Form MP336(b) together with a Tax Clearance Certificate (emigration) obtained via the South African Revenue Service (SARS) Tax Compliance Status System. Emigration Procedure In order to place your emigration on record with the SARB, you are required to complete the application for emigration {Form MP336 (b)}, and return the original to us together with the following documents: Tax Clearance Certificate - Emigration Certificate of Citizenship/ Naturalisation or Permanent Residence permit in the Foreign Country (Please include spouse & children if they are South African residents as well) Certified copy of passport and Identity documents/birth Certificates of all individuals listed on the Form MP336(b) If there is any item of value listed of the Form MP336(b) we would require a copy of the document of title in support thereof. The original of title e.g. property title deeds etc. will need to be dispatched to the Non- Resident Centre to form part of the your South African blocked assets. The letter of confirmation needs to be signed by you and your spouse. All the documents must be couriered back to us via courier to the following address: Standard Bank Non-Resident Centre Exchange Control Department 6 Simmonds Street Fourth Floor Entrance 1, Blue Pillar 8, Johannesburg 2001 Our cost for submitting the application to the SARB is currently R (subject to change) for the initial process and R410 per hour thereafter. This can be paid prior to the application or it can be recovered from the proceeds of assets received before the funds are remitted abroad. We also attach herewith an extract from the Exchange Control Manual with respect to Emigrations. This is merely for information purposes. Alternatively, you may visit the SARB website Qs/Pages/Emigrants.aspx for more information relating to the emigration process. A reply is expected within 6-8 weeks from submission of the application and only once your application has been approved may Standard Bank remit funds abroad. 2

4 Checklist Below is a checklist for ease of reference for all the required documentation; Emigration Documents Checklist 1. Emigration: Application for foreign capital allowance (Form MP336(b) 2. Tax Clearance Certificate Emigration 3. Certified copy of valid passport 4. Certified copy of South African Identity Documents 5. Letter of Confirmation 6. Certificate of citizenship/naturalisation/ Permanent Residence 7. Documents of title pertaining to all assets in Lesotho, Namibia, South Africa and Swaziland. COMPLETION OF FORM MP336(b) Page 1 Section 1 Details of applicant/family unit emigrating The full names, marital status and Identity numbers of all parties in the family unit who will be emigrating must be inserted. Date of Birth is required if ID number is unknown. Section 2 If the spouse is not emigrating provide the reason for this. 3

5 Section 3 The reply to question (d) must be yes or the person will not be emigrating. Details of permission must be quoted in this section. Section 4 This section can be completed once the form and the net asset value has been ascertained. No local financial assistance may be utilised to facilitate this allowance. Should you have availed of the foreign capital allowance, during this calendar year, the amount must be deducted from the emigrant s capital allowance. There is no time restriction this can be taken any time after departure. Should the SARB increase the allowance, the emigration capital allowance can be topped up to the maximum limit at any stage. The SARB will, on application, consider the remittance of funds in excess of the applicable capital allowance. The discretionary allowance(travel) may be granted to the emigrant(s) up to 60 days prior to the date of permanent departure from South Africa and is over and above whatever allowance may already have been availed of in that calendar year. Section 5 Self explanatory Section 6 (a) to (d) are self-explanatory 4

6 Should you have been granted permanent residence in South Africa less than five years prior to emigrating, this will be dealt with as an Immigration that failed to materialise and must be placed on record with SARB by a Bureau de Change. Page 2 Section 7 Complete declaration of all assets held in the Common Monetary Area (South Africa, Lesotho, Swaziland and Namibia). 7.1 Fixed Property Only property(ies) which have not been sold will form part of the blocked assets and must be listed. Should you receive rental income, a copy of the rental agreement is required. Should there be any amendments to the agreement, a revised copy must be obtained. The title deeds of these properties must be taken in and be housed in safe custody. Should there be a bond over the property, this must be declared on page 3 under liabilities and the bondholder advised of the fact that the applicant has emigrated and that the property forms part of the capital assets. An application will need to be submitted in respect of Exemption from Exchange Control Regulation 3.1(f) 7.2 Stocks, shares, unit trust etc Listed investments 5

7 This relates to shares quoted on the JSE (Johannesburg Securities Exchange), RSA Bonds and Eskom Stock. The shares may be in certificate (paper) form or electronic form (dematerialised). If in paper form you must hand in all the original certificates for housing in safe custody. If dematerialised, provide the latest scrip account statement detailing the holdings and current market value. We will need to advise the scrip company that the holdings form part of the emigrant s remaining capital assets and no dealings are permitted without our prior approval, quoting the capital and income account numbers for the purchases/sales and income Unlisted Investments This refers to shares in companies/close corporations not listed on the JSE. Request the following documentation: - Original share certificate/certificate of member s interest Latest available financial statements of each entity. Page Insurance policies 6

8 Copy of policy schedules must be held by the Non Resident Centre as they form part of the emigrant s blocked assets. Endowment and Life policies quote the current surrender value Retirement annuities list the current death value Matured retirement annuity policies that are paying out - Obtain a copy of the policy schedule of the original annuity and the resultant annuity schedule that was purchased with the matured funds (paid out 1/3 capital and 2/3 annuity) i.e. letter/schedule from insurance company detailing the amount to be paid. - If the original policy was purchased with a single premium, the source of funding will be required. All policies falling outside of the abovementioned sections of the Currency and Exchanges Manual must be referred to the Financial Surveillance Department for approval. 7.4 Cash balances Only credit balances held in accounts must appear in this section. Should you hold accounts with other financial institutions, the accounts must be closed and the funds transferred to the accounts held at Standard Bank. Should the funds only mature after departure from South Africa, the financial institution must be informed of the client s emigration status and be requested to transfer the funds held to the credit of the emigrant s capital account. A letter of undertaking from the respective financial institution must be furnished. 7.5 Debtors These are loan accounts in companies/trusts and any funds owing to you. 7

9 Loan account in an unlisted entity not having any directly or indirectly relationship with the emigrant confirmation is required of the loan amount and terms on an entity s letterhead stating that the interest rate applicable will not exceed the South African prime lending rate plus five percent at any given time and that all capital repayments will be credited to the emigrant s capital account. Loan account in a trust a letter signed by the Trustees of the trust is required confirming the loan amount, terms and that interest payable will not exceed South African prime lending rate at any given time and that all capital repayments will be credited to the emigrant s capital account. Loan account due to the emigrant by an individual a letter must be signed by the borrower confirming the loan amount, terms and that interest payable will not exceed the South African prime lending rate plus five percent at any given time and that all capital repayments will be credited to the emigrant s capital account. 7.6 Interest in trusts (a) Inter Vivos Trust trust formed by living persons where the beneficiary/(ies) receive(s) benefit while the donor/funder is still alive. (b) Will Trust trust created in terms of the last will and testament of a deceased person. Should the beneficiaries have no fixed capital or income interest in the trust, it is termed a discretionary trust. In this instance, it is at the full discretion of the trustees which beneficiary will receive income/capital and the amount to be distributed. From an Exchange Control point of view such a trust is deemed to be an affected entity, i.e. 100% non-resident owned. Therefore, the full capital value of the trust as at date of completion must be inserted on the Form MP336(b). Should the beneficiary(ies) only have a specified percentage interest in the trust, the value of their percentage must be inserted. Documents required to be submitted to the SARB: - - Copy of original Trust Deed and all subsequent amendments. In the case of a Will/ Testamentary Trusts, the last will and testament. - Full names of all the beneficiaries of the trust, their domiciles and percentage interest and the date of their emigration - Audited financial statements of the trust for the past three years - Audited financial statements for the past three years for all the unlisted companies in which the trust has an interest as well as all the names, domiciles and percentage shareholding of all the shareholders. If emigrants from the Republic, the Bank and Branch who attended to their emigration formalities. - Full details of funding (loans/donations) made to the trust from date of inception. 8

10 - Full details of financing made available to the unlisted companies mentioned above, in which the Trust has an interest. - Full names of the Trustees and their domiciles. - Full details of any distributions to the emigrant client within 3 years prior to date of emigration. 7.7 Other assets assets not listed above and funds still to be received This section will include, inter alia, properties that have been sold, lump sum pension payments, sale proceeds of vehicles, household furniture, timeshare etc. as well as other assets in the emigrant s possession at the time of completion of the MP336(b). Assets remaining in the emigrant s name must have documents of title to be housed in safe custody, e.g. timeshare certificate, motor vehicle registration, valuation certificate for coin/stamp collections and artworks. Page 4 Section 8 - Less: South African liabilities (including those in Lesotho, Swaziland and Namibia) 9

11 This section will include, inter alia, taxes still to be paid, mortgage bonds, credit cards, shipment/relocation costs and estimated living costs prior to departure. In terms of Exchange Control policy, emigrants/non-residents may not avail of any local borrowings in excess of the value equivalent to their remaining assets at any specific point in time. In the event that there is an outstanding liability in excess of the value of the emigrant s remaining assets, full details thereof must be submitted to the SARB, requesting exemption from Exchange Control Regulation 3(1)(f) which could be granted for a period of one year when the matter must again be reviewed. Section 9 - Value of items to be exported Any household and personal effects, motor vehicles, caravans, trailers, motorcycles, stamp/coin collections (excluding coins that are legal tender in the Republic) per family unit or single person within the overall insured value of R2million. Prior approval must be obtained from the SARB for the export of the emigrant s household and personal effects in excess of R2million. Permission will, in general, be given, but where the value is unduly high or the goods have been recently purchased, some deduction from the capital allowance may be imposed. 10

12 Section 10 - Declaration (a) Gifts Discretion should be used as it is known that over a period of three years, with price increases, gifts can, in many cases, cost in excess of R (b) Trusts The information/documentation in terms of Item 7.6 must be submitted, irrespective of the fact that the trust may have been terminated. (c) Capital transfers provide details of capital transfers abroad in terms of the Currency and Exchanges Manual the amount(s) must be deducted from the emigrant s foreign capital allowance. Point out the terms and conditions of the declaration signed by the emigrants and explain the implications should they return to South Africa within a period of five years. Both parties must sign and date the declaration. Page 5 Declaration continued- clients must be made aware of the serious nature of the declaration. Request the client to initial next to each item confirming that they have read and understood the contents thereof. 11

13 Section 11 - For completion by the Authorised Dealer The assets/values inserted here must correspond with the net South African assets as reflected on Page 3 of the MP336(b). 12

14 Extract from Currency and Exchanges Manual Individuals regarded as residents by the Financial Surveillance Department who are leaving South Africa to take up permanent residence in any country outside the CMA may apply to an Authorised Dealer before departure to be accorded the facilities set out below. Applications must be accompanied by a duly completed Form MP336(b) signed by the applicant, together with a duly electronically completed Tax Clearance Certificate - Emigration obtained via the SARS Tax Compliance Status System. 4.2 Family units emigrating to any country outside the CMA will qualify, at the time of emigration and after all their assets have been brought under the administration of an Authorised Dealer, to be accorded the following facilities: (a) a foreign capital allowance of up to R20 million per calendar year after all liabilities including the cost of the relative passenger tickets and the applicable travel allowances in (b) below have been provided for; (b) in addition, a travel allowances applicable to each member of the family unit on the basis and subject to the prescribed limits; and (c) a widow or widower or a single parent with accompanying dependant(s) may also be regarded as a family unit. 4.3 Single persons may be accorded a foreign capital allowance of up to R10 million per calendar year after all liabilities including the cost of the relative passenger ticket and the applicable travel allowance, have been provided for. 4.4 Quoted and/or unquoted securities may be exported as part of or in lieu of the applicable foreign capital allowance based on the market value thereof at the time of availing of the applicable allowance. The relevant securities must, of course, be endorsed non-resident by the Authorised Dealer concerned. 4.5 Donations or gifts in excess of R received within three years or capital distributions from inter vivos trusts within three years, prior to the date of emigration, will be deducted by your Authorised Dealer prior to according the remaining foreign capital allowance. 4.6 Provided that the prescribed SARS Customs Declaration is completed any household and personal effects, motor vehicles, caravans, trailers, motorcycles, stamps, coins and minted gold bars (excluding coins that are legal tender in South Africa) per family unit or single person, within the overall insured value of R2 million, may be exported. 4.7 Emigrants may transfer the proceeds of claims lodged by them for the loss of or damage to household and personal effects, motor vehicles, caravans, trailers, motorcycles, stamps and coins (excluding coins that are legal tender in South Africa). 4.8 Persons who have already emigrated but who have not fully utilised the current authorised foreign capital allowance may be accorded additional capital transfers provided that the total amount availed of does not exceed the current limits. 4.9 South African insurance companies may be requested to transfer life policies (excluding singlepremium policies) from a register in South Africa to a register in any country outside the CMA, provided that: (a) they are satisfied that the insured has formally emigrated and has placed their emigration on record with the Authorised Dealer; 13

15 (b) in total the surrender values of the policies do not exceed R2 000 in respect of any one family unit; and (c) the relative transfer will not result in the beneficiaries receiving, on aggregate, assets with a value exceeding that of the applicable foreign capital allowance Upon receipt of confirmation of the emigrants departure from South Africa they will be re designated as resident in their new country, but the following procedures will apply in respect of assets held at the time of re designation: (a) any cash balances remaining after the appropriate facilities have been granted and all capital payments accruing thereafter to the emigrant, as well as the total proceeds of any asset subsequently sold, will require to be credited to an emigrant s capital account, i.e. current, savings or interest bearing deposit account with an Authorised Dealer. Such funds may be utilised locally for any purpose, including locally managed investment products that have foreign exposures, such as collective investment schemes and long-term insurance policies, subject to the following: (aa) where such funds are utilised for investment purposes, e.g. investment in unit certificates issued by companies registered under the Collective Investment Schemes Control Act, 2002 (Act No. 45 of 2002), Authorised Dealers must at all times be able to demonstrate that such investments are being held to their order; (bb) the proceeds of mortgage bonds and/or mortgage bond participations forming part of the emigrants remaining assets, may be reinvested in further bonds and/or participations; and (cc) all quoted and/or unquoted securities owned by the emigrants at the time of their departure or accruing to them thereafter, must also be deposited with an Authorised Dealer and may be released for switching purposes, without the specific authority of the Financial Surveillance Department. Unquoted securities, however, may only be switched into quoted securities; (b) emigrants may not record a non-resident address in respect of any securities that form part of their remaining assets on emigration and such securities must be restrictively endorsed; (c) any other South African assets belonging to the emigrants at the time of their departure or accruing to them thereafter must be brought under the administration of an Authorised Dealer. The Financial Surveillance Department will, on application via an Authorised Dealer, consider requests to transfer the emigrants remaining liquid assets or the export of quoted and/or unquoted securities in lieu of cash, exceeding the foreign capital allowance limit of R20 million per family unit or R10 million per single person. Emigrants wishing to avail of the aforementioned dispensation must obtain a duly electronically completed Tax Clearance Certificate Foreign Investment Allowance in the prescribed format, issued by SARS bearing the SARS logo and specific background watermark obtained via the SARS Tax Compliance Status System which must accompany their application to the Financial Surveillance Department, for consideration; and (d) the proceeds from insurance policies may be transferred directly to the emigrant abroad where the emigrant has no bank account in South Africa, provided that the foreign capital allowance limit will not be exceeded Income due to emigrants defined hereunder is normally transferrable and all applications for the transfer of any other form of income must be referred to the Financial Surveillance Department via an Authorised Dealer: (a) interest and profit; (b) dividends: the declaration of a dividend in specie or a special dividend for any purpose requires the prior written approval of the Financial Surveillance Department; (c) income distributions from close corporations; (d) directors fees or members fees; 14

16 (e) pension payments paid by registered funds only; (f) cash bonuses on insurance policies; (g) income received from a trust created in terms of a last will and testament; (h) income received from an inter vivos trust (subject to the provisions outlined in subsection 4.17 hereunder); (i) rentals on fixed property including rental pool agreements, provided that rentals are substantiated by the production of a copy of the rental or rental pool agreement; (j) the difference between the purchase consideration and maturity value of quoted gilts; (k) annuity payments where the annuity has been in existence for a period of five years prior to the date of emigration; (l) annuity payments where the annuity has been funded from a pension pay out from a previous employer; and (m) refunds in respect of income tax paid by emigrants on income earned subsequent to the date of emigration Only the Authorised Dealer holding the emigrant s remaining assets may allow the transfer of income earned in South Africa from the date of designation as an emigrant, provided that it can be established from the production of documentary evidence that: (a) the funds represent earned income from normal trading activities and do not include any element of a capital nature, e.g. the sale proceeds of assets or the revaluation of assets; (b) the funds do not represent future income; (c) where applicable the assets from which the income accrues are the sole property of the emigrant; (d) no third party has any interest therein; and (e) the emigrant has taken up permanent residence abroad Dividends, profit or income distributions received from non-quoted entities (excluding trusts) must be supported by an auditor s report and representation letter. The format is specified in the Authorised Dealer Manual. Dividend distributions from quoted entities in favour of emigrant beneficiaries are transferable Requests for the transfer of income to the emigrant beneficiaries of a trust created in terms of a Last Will and Testament must be supported by an auditor s report (Form MP1331 or Form MP1332) and representation letter (Form MP1330(a)). The wording and format may be accessed from the South African Reserve Bank s website: by following the links: Home>Regulation and supervision> Financial surveillance and exchange controls>auditors reports and representation letters As an exception, however, where the total net income earned by a will trust does not exceed R per annum, it is not necessary to submit a Form MP1331 or a Form MP1332 in support of requests for the transfer of income abroad. In this regard a Form MP1330(a) must be submitted to an Authorised Dealer In the case of interim transfers of income from will trusts to emigrant beneficiaries, an interim representation letter must be submitted. The wording and format may be accessed from the South African Reserve Bank s website: by following the links: Home>Regulation and supervision> Financial surveillance and exchange controls>auditors reports and representation letters. 15

17 4.17 All initial requests for the transfer of income derived from an inter vivos trust to emigrant beneficiaries are subject to certain conditions and must be referred to the Financial Surveillance Department via an Authorised Dealer Emigrants may be granted local financial assistance facilities in respect of bona fide foreign direct investment into South Africa without restrictions. However, where the funds are required for financial transactions and/or the acquisition of residential or commercial property in South Africa, a 1:1 borrowing ratio applies, i.e. for every R1 in cash or assets that a non-resident introduces or owns, such nonresident may borrow an equivalent amount in the local market. Financial transactions, inter alia, include the purchase and sale of any securities (listed or unlisted), hedging, securities lending, repurchase agreements and any derivative transactions on securities. If facilities are granted for the acquisition of fixed property, such facilities may not be increased at any stage based on a revaluation of the property in question. Local financial assistance granted to emigrants that utilise their remaining local Rand balances or Rand assets as collateral must comply with the 1:1 ratio irrespective of the nature of the transaction Emigrants who have been permanently resident outside the CMA for a period in excess of five years will on completion of the necessary immigration declaration and undertaking via an Authorised Dealer, be regarded as new immigrants to South Africa by the Financial Surveillance Department. 16

18 Opening a Non-Resident account Please refer to the terms and conditions and the pricing guides. There are exchange control restrictions that apply to a Non-Resident account and all credits and debits has to comply with the Currency and Exchanges Manual. We further advise that cash deposit may not be deposited into your Non-Resident Account. The pricing guide are for reference purposes and not to be returned to us. The minimum activation fee is R1000 for opening the account. We also offer the option to send the ATM / Debit card directly to you with additional cost alternative you can collect your card at any Standard Bank branch. N.B. The issued ATM/ Card cannot be utilized for withdrawals as this is a contravention of exchange control. We issue the cards as this is a requirement to setup internet banking. There are exchange control restrictions that apply to Non Resident account, where no cash deposit is allowed. The documents needed to apply for a non-resident account: Non-resident application form. Please take note that page 4 of the application form needs to be certified. Original certified copy of passport (Three Copies) Latest proof of residential address Indemnity form for card (if required) Replacement card (if required) FATCA Original Certificate of introduction from existing bank translated in English full names, passport number/ date of birth, your foreign address, length of relationship & the conduct of your account. Letter must be signed by the bank manager with his particulars and stamp. 3 months bank statements Only required if you are applying for an Elite Current Account. 17

19 Converting your existing account (if applicable) Account conversion involves designating your existing Standard Bank account as non-resident. The account will only be converted to emigrant s transferable/emigrant s capital upon receipt of a favourable response from the South African Reserve Bank. Please be advised that we require the below documents in order to convert the account to a nonresident account: - A valid certified passport copy (stamped and signed). - The fax and indemnity certified - Personal contact information form Documents need to be witnessed and stamped by either one of the following individuals: - Any foreign bank within a Financial Action Task Force (FATF) member country (FATF) - A Standard Bank correspondent bank, if outside FATF territories. - A Commissioner of Oaths - Lawyer or Notary Public, - Justice of the Peace, - Embassy, consulate or High Commission Office - A member of the judiciary or senior civil servant - Excluding the S.A Police and post office Conclusion A designated professional within the Exchange Control Department will be allocated to manage your emigration application from the beginning until your relationship ends with Standard Bank. 18