Offshore investments are often worthwhile and the main reason someone would consider investing abroad is to spread the risk of investments between a number of countries. Many South Africans regard South Africa as a very risky place to invest and want to invest some of their money (or all of it) abroad. However, the SARB (South African Reserve Bank) does not permit individuals to take everything they own out of the country. This control over a person’s possessions is called exchange control. This means that an individual may take only certain assets and/or amounts of money out of the country, irrespective of the reason for the visit abroad (holiday, research, permanent residence or emigration).
If you are considering offshore investments, the return on your investing (income such as interest or dividends) would not be the primary consideration. The intention would be to lower the risk of having all your investments in one country (or the wrong country – a country whose currency is weak or has a low value relative to other countries) by transferring your assets to another, “safer” country.
The SARB has, however, stipulated that two forms must be completed by South African investors that confirm that all income tax has been paid and nothing is outstanding before they can move money abroad to make investments in foreign assets.
Do not give money to just anybody to invest abroad for you. First do the necessary research yourself and then talk to expert investors. Only then should you consider making a foreign investment. If in doubt, consult an expert before deciding to jump head first into offshore investments.