The new Minister of Finance in South Africa, Mr Pravin Ghordan, has just announced some meaningful relaxation of Exchange Controls in his first Medium Term Budget Speech. Of interest generally will be the following:
- The R2 million investment allowance has been increased to R4 million;
- The annual discretionary allowance has been increased to R750,000;
- The limit for processing of outward investments by banks has increased to R500 million, from R50 million;
- Allowing for advance payments on imports (where a R250,000 limit previously existed); and
- Allowing SA companies to open foreign bank accounts.
The Rand is at the time of writing approximately 9% overvalued; this may be the perfect time to take some funds offshore. To discuss this further contact us, and to find out more about what to do with your funds offshore, contact Craig Field in the USA by clicking here.
We invite anyone who wants to To read an extract of the Minister's speech, relevant to this topic, click here...
To read the full South African Reserve Bank's announcement, click here...
In the speech he discusses various aspects of the economy and prospects under a worsening deficit and lower than expected GDP, but he also announced further relaxation of exchange controls. This we believe is to be welcomed not only because exchange controls are antiquated and destructive to economic progress, but because it further encourages international investment and development in South Africa which is the surest way to a prosperous future for the country. It is only by adopting this sort of expansive economic policy that South Africa can encourages the growth needed to absorb the huge numbers of unemployed and attract desperately needed skilled labour.
