South Africa is one of the few countries that still applies fairly strictexchange control regulations to the movement of foreign currency in and out of the country. To this end, exporters are expected to make a declaration to the SA Reserve Bank (not directly, but through the normal commercial banking system) when they enter into an agreement with a foreign buyer.Essentially, they declare that they will pay across to their local bank any foreign exchange that they receive as a result of the export within a given period of time. The declaration needs to be completed before the export can take place as this document is one of the key documents that will need to be presented to the Customs authorities at the time that the goods are exported (at the border crossing at the airport or at the harbour).The forms used to make this declaration are discussed below.
The Cross Border Foreign Exchange Transaction Reporting System
The SA Reserve Bank recently introduced the Cross Border Foreign Exchange Transaction (CBFET) reporting system. This is essentially an electronic reporting system developed by each Authorised Dealer (such as a bank authorised to deal in foreign exchange), in order to report on cross border transactions to the South African Reserve Bank. The Reserve Bank provided some guidance in the development of the CBFET reporting systems.
The CBFET is indirectly associated with the SAD500 Customs document. Information captured on the SAD500 is reported to the SARB by Customs. Once payment is received for the goods exported, your bankers will advise you of the funds received and request you to complete the appropriate Balance of Payment (BOP) form with the required information, i.e. details of the payment. This information is reported by your bankers to SARB via the CBFET system. Thus, you as an exporter have very little to do with the CBFET; instead, you work with the BOP form which is where you record the details pertaining to the receipt of foreign exchange for the export goods or services you have supplied to a foreign importer.
At this point the SARB would compare the remittance details with what was declared on the SAD500. This process thus serves as a control mechanism for exchange control purposes.
The Balance of Payment (BOP) form (Integrated Form)
The SARB requires that all exporters and individuals receiving monies from abroad complete either a hard copy form or one in electronic format with details of the relevant transfer. This form is referred to as the Balance of Payment (BOP) form (integrated Form). The information on this BOP form is then captured by your bank and reported to the Reserve Bank via the CBFET system. The BOP form also serves as a legal document and payment instruction on which an exporter instructs his/her bankers to credit his/her account.
The purpose of the BOP and CBFET are essentially still the same as with the old Form E and that is to record the repatriation of foreign exchange received from abroad. As far as the BOP form is concerned, each individual commercial bank has its own version of the form, but which generally captures similar information.Click hereto view an example of the BOP form.
Balance of Payments reporting
The BOP form is called this because it is used to capture foreign exchange transfer details which are used by the Reserve Bank to keep track of the country’s Balance of Payments (an economic concept used to record the in- and outflow of income, foreign currencies, as well as goods and services within a country). You will see that the BOP form has several different categories on the form to enable you to specify the nature of the income you have received. A BOP form may also be required to be completed when a company makes a payment (say, to pay for an import).
What does this mean for exporters?
The above explanation is really just to provide you with an overview of the roles of the BOP form and CBFET system in the context of South Africa’s exchange control environment. Ultimately, every exporter will still need to obtain a SAD500 form from Customs and approach their local bank to, (a) get their F178 form attested at the start of the export process, and (b) to complete the bank’s BOP form when receiving funds from abroad. You really do not need to know how this system works; your bank will advise you what you need to do. If you intend exporting regularly, try to establish a good working relationship with your bank from day one – this is crucial!
Forms for Exchange Control
- Form MP79(a)– Exchange Control Questionnaire. Exemption from Reg 3(1)e and/or 3(1)(f).
- Form NEP– Declaration i.r.o. Goods leaving the (Common Monetary Area – CMA) without accrual of foreign exchange.
- Exchange Control Manual– The South African Reserve Bank provides a complete downloadable Exchange Control Manual.
- Example of the BOP form
- Procedures for import/export transactions– The Exchange Control Department of the South African Reserve Bank provides procedures for the import and export transactions of corporates. PDF document.
FAQs
Acceptable Identification: South African Passport, Foreign Passport along with South African Bar Coded ID. Additional Documentary Evidence: flight ticket (e-ticket), should you be travelling overland then your vehicle registration number.
How many Krugerrands can I travel with? ›
Non-resident visitors may export up to 15 Krugerrand coins or the equivalent in fractional Krugerrand coins, supported by the prescribed SARS customs declaration, provided that they can prove that the coins were acquired with the proceeds of foreign currency brought into South Africa.
What are the exchange control restrictions in South Africa? ›
The Exchange Control Regulations prohibit transactions where capital or the right to capital is, without permission from National Treasury, directly or indirectly exported from South Africa.
How much foreign currency can I carry out of South Africa? ›
A person may take out of South Africa up to USD 10,000 in cash foreign notes without declaring it to customs. Any amount of cash foreign notes in excess of USD 10,000 must be declared to customs upon arrival or departure from South Africa.
What can you not bring into South Africa? ›
Prohibited Goods
- Narcotic and habit-forming drugs in any form.
- Fully automatic, military and unnumbered weapons.
- Explosives and fireworks.
- Poison and other toxic substances.
- Cigarettes with a mass of more than 2kg per 1 000.
Objectives of Foreign Exchange Control
The main objective of introducing exchange control regulations is to correct the balance of payments equilibrium. The BOP needs realignment when it is sliding to the deficit side due to greater imports than exports.
Is it legal to own Krugerrands in USA? ›
Ultimately, the United States banned the import of Krugerrands in 1985. Many investors misunderstood this ban and thought that Krugerrands were illegal to own in the U.S. (the import ban has been lifted, so it is now legal to import Krugerrands again.)
Do I need to declare my gold? ›
However, it is important to note that you must still declare the items to Customs and Border Protection (CBP) Officers. If you are travelling with more than $10,000 worth of gold coins (or silver coins), you will need to fill in a FinCEN 105 declaration form. Transparency is of the utmost importance here.
How much gold can I bring into South Africa? ›
Currency Allowances:
South African bank notes in excess of R25 000; foreign currency above $10 000; gold coins, coin and stamp collections, and unprocessed gold above $10,000 in value.
How much cash can you legally keep at home in South Africa? ›
How much cash can you legally keep at home South Africa? As much as you want, if it is in the local currency Rands. You just need to be able to prove it is proceeds from legal activities, because they can confiscate it if it is proceeds of crime.
How much money can I send to South Africa? With various limits on money being sent out of South Africa, fortunately, there are no limits to the amount of money you can transfer into South Africa.
How much money can you take out of South Africa when emigrating? ›
As long as you can verify the legitimacy of the source of your funds, there is no limit to the amount of money you can move out of South Africa as a non-resident. However, where the amount exceeds the Foreign Capital Allowance of R10 million, you will require prior approval from the South African Reserve Bank.
Can you invoice in USD in South Africa? ›
So if you live and pay tax in South Africa, your base currency should be ZAR (Rands). This does not restrict the currency you use on your invoices or payment links, you will be able to set these to whatever currency you choose on each invoice so you can still serve your international customers.
Will I be taxed if I receive money from overseas in South Africa? ›
You may be wondering if that income you receive from a foreign country is taxable in South Africa and whether you should declare it in your South African tax return. The short answer is yes: foreign income is taxable in South Africa.
Is it illegal to hold foreign currency in South Africa? ›
Q: Is it legal to have foreign currency in your possession in SA as a private citizen? A: It is illegal for any South African to have foreign currency in their possession, unless there is a good reason for it, for more than 30 days.
What are the rules for forex in South Africa? ›
Travel forex rules:
you will have to present a valid air ticket, showing the departure date, when applying for forex. any unused foreign currency must be exchanged within 30 days of returning to South Africa. using your credit card while travelling abroad is part of your travel allowance.
What are the guidelines for foreign exchange? ›
Documents to be submitted:
- Passport.
- Memorandum of Association (MOA)
- Company Pan Card.
- Company Registration documents.
- Letter from MD/CFO giving details of authorized signatories.
- Foreign Currency request letter signed by authorized person from the company.
The main foreign exchange bureaus in South Africa are:
- Inter Africa Bureau de Change.
- American Express.
- Bidvest.
- Travelex.
