Investing in South Africa and offshore

Money held offshore is spread across other currencies and markets, and it suits money you may spend abroad. Offshore investing has its own costs. It also carries currency risk, because the rand can gain as well as fall. The right amount depends on what the money is for, when you will need it and where you will spend it. Retirement funds can hold up to 45% offshore by law. Money you invest outside retirement funds has no such percentage limit, although moving it abroad counts towards the yearly offshore allowances described below.

Each adult can move up to R2 million a calendar year abroad under the single discretionary allowance, without SARS approval. Above that, the foreign investment allowance lets you move up to R10 million more a year with a SARS tax compliance PIN. We will help you with the paperwork and the currency transfer.

No. You can also buy offshore funds in rand, through a local unit trust or investment platform. Your money stays in South Africa on paper, but it follows offshore markets. Each route has different costs, tax and paperwork, so we compare them with you before you choose.

An endowment is a policy that wraps around your investments. The tax is paid inside the policy at set rates, which can suit people on a high tax rate. You can name beneficiaries, which can help your family get the money sooner. The downside is that access is limited for the first five years.

A unit trust, run by a professional fund manager, pools money from many investors and spreads it across shares, bonds, property or cash. A share portfolio holds individual companies directly, in your name. It can hold South African shares, international shares or both. Many people use unit trusts and shares side by side.

Every year. Your goals, your family and the markets change, so we check each year that your mix of South African and offshore investments still fits what the money is for. We also check that you have used your tax allowances.

Investing has three kinds of cost: the fund, the platform that holds it, and the advice. We will show you every fee in writing, in rand and as a percentage, before you decide anything.