How To Use Your Offshore Bank Account To Maximum Benefit

South Africans are allowed offshore bank accounts – with benefits. Here's how to make the most of them.

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Unpacking the enigma around offshore starts with one simple certainty; nothing in the South African Income Tax or Reserve Bank regulations prohibits South Africans from opening a bank account offshore.


With all the complexity around moving wealth offshore, the real brainteaser for most is how to do it as effectively as possible.

Making and receiving foreign payments

With the rand volatility, the elections and the economy, South Africans are feeling understandably jittery, and international trust and structuring companies such as ours are seeing an increase in the use of offshore bank accounts as an alternative to foreign currency accounts to grow or maintain wealth.

As advisors and licensed service providers, Sovereign assists South Africans to make the most beneficial decisions in maintaining and growing their wealth through an offshore bank account.

We are finding that many South Africans have international transactional needs for both business and personal reasons, yet some are only aware of one-dimensional foreign currency accounts.

Related: Why South African Businesses Are Choosing to Operate From Mauritius

This type of account only allows the account holder to make and receive foreign currency payment from an online banking platform and access funds via credit or debit card.

The benefits of an offshore account

In comparison, the multiple benefits of having an offshore bank account enable South African accountholders to conveniently receive payment for work done outside of the country, make international payments, access international funds by way of a debit or credit card, and most importantly, diversify their assets and hedge against the volatile rand.

While there may not be any tax liability in the jurisdiction where the account is being held, accountholders will still be taxable in South Africa for any interest that is earned.

The interest and income earned needs to be reported to SARS and any offshore bank accounts need to be declared.

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The upside is that, although your details may not be confidential, your money will remain outside of South Africa and you'll never have to bring it back. In terms of de-risking wealth, it is a completely legal and acceptable solution to escape the volatility of the rand.

If the offshore bank account's tax authority has signed up for Common Reporting Standards (CRS), the account details, balances and interest earned will be automatically shared with South African tax authorities.

Balance your requirements

When exploring the benefits of opening an offshore bank account, the key is to choose your preferred offshore banking institution by taking into consideration the minimum balance requirements, fees, reputation and tax jurisdiction.

Some banks require face-to-face meetings with the account holder while others are comfortable to work through a licenced service provider, in which case, a face to face meeting might not be required.

Related: Tax Basics For Business Owners