How do I invest offshore?

Steps to begin:

• Set clear investment goals (growth, income, protection)

• Choose an investment vehicle (unit trusts, ETFs, shares, property)

• Select a suitable jurisdiction (e.g., US, UK, Mauritius)

• Open an offshore investment account

• Transfer funds through approved channels

What is an offshore investment?

Offshore investment refers to placing your money in:

• International financial markets

• Foreign stocks, ETFs, mutual funds, bonds, or property

• Done to diversify, reduce risk, and access global opportunities

Is it a good idea to invest offshore?

Yes, offshore investing can:

• Diversify your portfolio

• Protect against local economic downturns

• Hedge against currency risk

• Provide access to high-growth global markets

Is offshore investment legal in South Africa?

Yes, as long as you:

• Comply with SARB (South African Reserve Bank) and SARS (South African Revenue Service) regulations

• Declare all foreign income

• Obtain tax clearance for investments over R1 million per year

What are the main risks of offshore investing?

• Currency fluctuations impacting returns

• Market volatility in foreign regions

• Regulatory and political risk abroad

• Liquidity risk for long-term or fixed investments

Can I hold offshore investments in rands?

• Yes, through Rand-denominated offshore funds offered by local providers

• Offers global exposure without converting to foreign currency

What is the safest way to invest offshore?

• Use regulated providers

• Diversify across:

  • Different markets

  • Various asset classes (stocks, bonds, funds)

• Choose low-risk options like ETFs and unit trusts

What are the tax implications of offshore investments?

You are taxed on:

• Foreign income (e.g., interest, dividends)

• Capital Gains Tax (CGT) on profits from offshore assets

• Withholding tax may apply in foreign countries

How much can I legally invest offshore from South Africa?

• R1 million/year without tax clearance

• Up to R10 million/year with SARS tax clearance certificate

What is Offshore Investing?

Offshore investing refers to placing your money in international financial markets outside your home country. This can include investing in foreign stocks, bonds, mutual funds, property, or unit trusts. Many investors do this to diversify their portfolios, protect against currency risk, and take advantage of global opportunities.

Why Should I Invest Offshore?

• Diversification – Reduces reliance on the local economy and spreads risk across global markets.
• Currency Hedging – Protects against local currency depreciation by holding assets in stronger foreign currencies.
• Access to Global Opportunities – Allows investment in leading global companies and markets.
• Political and Economic Stability – Some foreign markets may offer more economic or political stability than the investor’s home country.
• Potential for Higher Returns – Investing in fast-growing economies may provide better returns than local investments.

How Do I Start Offshore Investing?

• Determine your investment goals – Are you looking for growth, income, or wealth protection?
• Choose your investment vehicle – Options include offshore unit trusts, stocks, ETFs, bonds, and property.
• Select a jurisdiction – Popular offshore investment locations include the U.S., UK, Europe, Asia, and tax-friendly hubs like Mauritius or the Cayman Islands.
• Open an offshore investment account – Many local banks and investment firms offer offshore investment platforms.
• Transfer funds – Convert your local currency into foreign currency and start investing.

How Do I Open an Offshore Investment Account?

• Choose a licensed offshore investment provider
• Decide on an investment structure (unit trust, ETF, shares, etc.)
• Transfer funds via SARS-approved allowances

Offshore investing provides diversification, currency protection, and access to global opportunities, making it a key strategy for wealth preservation.

Can I Withdraw Money From My Offshore Investment Anytime?

Yes, but liquidity depends on the investment type—unit trusts and ETFs are easily accessible, while fixed-term investments may have restrictions.

How Do I Choose an Offshore Investment Provider?

Consider:

• Regulatory compliance in South Africa and internationally
• Track record and fund performance
• Fee structures and investment flexibility

Can I Invest Offshore With My Living Annuity?

Yes, some Living Annuities allow up to 100% offshore exposure, giving retirees global investment options.

Can I Use My Offshore Investment for Retirement?

Yes, many investors use offshore assets to secure international retirement income and protect against local economic instability.

How Long Should I Keep My Offshore Investment?

Offshore investments are best suited for long-term wealth growth, typically 5 years or longer to manage currency and market fluctuations.

What Happens to My Offshore Investments If I Emigrate?

Your offshore assets remain yours, but tax obligations may change depending on your new residency status.

What Are the Risks of Offshore Investing?

• Currency fluctuations impacting returns
• Regulatory risks in foreign markets
• Political and economic instability in certain regions

Can I Invest Offshore Through My Business?

Yes, businesses can invest offshore, but exchange control regulations and tax implications must be considered.

How Safe Are Offshore Investments?

Offshore investing carries market risk but can be safer than local-only investments due to economic diversification and currency stability.

What Is the Best Way to Invest Offshore?

Options include:

• Offshore Unit Trusts: Managed funds investing in global markets
• Foreign Currency Accounts: Holding money in USD, GBP, or EUR
• Direct Equity Investments: Buying international stocks
• Global ETFs: Low-cost, diversified market exposure

Can I Hold Offshore Investments in Rands?

Yes, some providers offer offshore funds priced in Rands, allowing you to invest globally without direct currency conversion.

Do I Pay Tax on Offshore Investments?

Yes, South African residents must declare and pay tax on foreign income and capital gains, depending on tax treaties and residency status.

How Much Can I Invest Offshore?

South Africans can invest up to R1 million annually without tax clearance and up to R10 million with tax clearance from SARS.

What Are the Benefits of Offshore Investing?

• Diversification: Reduce risk by spreading investments across global markets
• Currency Protection: Hedge against the weakening of the Rand
• Higher Growth Potential: Access international companies and industries
• Political & Economic Stability: Invest in more stable economies

Can I Invest Offshore Through My Retirement Fund?

Yes, Regulation 28-compliant retirement funds allow up to 45% offshore exposure, ensuring diversification while maintaining compliance with retirement savings regulations.

Can I Invest Offshore Without Converting My Rands?

Yes, some local investment firms offer Rand-denominated offshore funds, meaning you invest in global markets while keeping your money in Rands. However, currency fluctuations still affect your returns.

Should I Invest Offshore If I’m Close to Retirement?

• If you are close to retirement, offshore investing can help protect your wealth against local currency risks.
• However, it’s important to balance risk—equities may be volatile, while offshore income funds or bonds can provide more stability.

Are Offshore Investments Legal?

Yes, offshore investments are legal as long as they comply with South African Reserve Bank (SARB) regulations and tax laws. Investors must declare foreign income and assets to SARS to remain compliant.

How Can I Reduce the Risks of Offshore Investing?

• Diversify across multiple markets and asset classes.
• Invest gradually instead of moving all funds at once.
• Use a trusted financial advisor who specializes in offshore investing.
• Monitor exchange rate trends before transferring large amounts.

What Are the Best Countries for Offshore Investments?

• United States – Largest stock market with access to blue-chip companies and ETFs.
• United Kingdom & Europe – Stable economies with diverse investment opportunities.
• Singapore & Hong Kong – Strong financial hubs for growth investments.
• Mauritius & Cayman Islands – Tax-friendly jurisdictions for structured investments.
• Emerging Markets (China, India, Brazil) – High-growth opportunities but with higher risk.

What Is the Difference Between Direct Offshore Investment and Local Offshore Investment?

• Direct Offshore Investment – You send money abroad, invest in foreign assets, and are directly exposed to foreign regulations.
• Local Offshore Investment – You invest in Rand-denominated offshore funds managed by local institutions, without physically sending money abroad.

How Do I Transfer Money Offshore for Investment?

• Use your annual foreign investment allowance – South Africans can invest up to R1 million per year offshore without tax clearance.
• For amounts above R1 million, tax clearance from SARS is required, with a lifetime limit of R10 million per person per year.
• Funds are transferred via authorised financial institutions like banks or investment firms.

What Are the Best Offshore Investment Options?

• Offshore Unit Trusts & Mutual Funds – Professionally managed portfolios invested in global markets.
• Exchange-Traded Funds (ETFs) – Passive funds that track global stock indices like the S&P 500 or MSCI World Index.
• Direct Shares – Buy international stocks like Apple, Amazon, Microsoft.
• Foreign Bonds – Government and corporate bonds in stable economies.
• Offshore Property – Buy real estate in countries with strong markets like the UK, Europe, or the U.S.

Do I Pay Tax on Offshore Investments?

Yes, offshore investments are taxable in South Africa:

• Foreign income tax – Income earned from offshore investments (e.g., dividends, interest) is taxable in South Africa.
• Capital Gains Tax (CGT) – If you sell offshore assets at a profit, CGT applies.
• Withholding Tax – Some foreign countries deduct tax on dividends or interest before paying investors.

What Are the Risks of Offshore Investing?

• Currency Fluctuations – Exchange rate changes can affect your returns.
• Market Volatility – Foreign markets may be unpredictable.
• Regulatory Differences – Different countries have different tax and investment laws.
• Liquidity Risk – Some offshore investments, like property, may take time to sell.