Invest Globally, Prosper Locally: Offshore Strategies for SA Investors

Ruvan J Grobler • July 1, 2025

In an increasingly interconnected global economy, South African investors are finding compelling reasons to look beyond local borders when building long-term wealth. Offshore investing offers access to broader, more resilient markets, particularly in developed economies with stronger currencies and more stable political environments. Given South Africa’s constrained economic growth, fiscal uncertainty, and the rand’s vulnerability as an emerging market currency, allocating a portion of your portfolio offshore can serve as both a growth engine and a hedge.


Investing offshore provides exposure to world-leading companies, industries, and fund managers that are often unavailable in the local market. It allows investors to participate in innovation-led growth in sectors like technology, healthcare, and clean energy, which are typically underrepresented on the JSE. Most importantly, it supports diversification—not just across asset classes, but across geographies, currencies, and economic cycles—reducing concentration risk tied to the South African economy.


Key Reasons to Invest Offshore:

  • Diversification: Reduce reliance on South African markets and benefit from a broader global opportunity set.
  • Currency Hedge: Protect your wealth against rand depreciation by investing in hard currencies.
  • Global Access: Gain exposure to top-tier international asset managers and world-class investments.
  • Growth Potential: Participate in faster-growing economies and industries driving global expansion.


Important Considerations for South African Tax Residents

Before investing offshore, it’s essential to evaluate how your investment aligns with your broader financial planning, particularly around access, succession, taxation, and estate planning:

  • Flexibility: Will you have access to your funds when needed? What types of investments can you hold?
  • Succession Planning: Can your investment be transferred to your heirs? Will Capital Gains Tax (CGT) apply?
  • Tax Compliance: Is the structure tax-efficient, and what must be declared on your tax return?
  • Estate Structuring: Will your investment attract foreign estate duties? Is an offshore executor required?


An Efficient Offshore Solution: The Offshore Wrapper

A tailored offshore wrapper can simplify many of these complexities, offering a cost-effective and administratively streamlined solution. Key benefits include:

  • No exposure to offshore estate duties
  • No South African executor fees on death
  • No inheritance tax in the offshore jurisdiction
  • Ability to nominate beneficiaries directly for smooth succession
  • Creditor protection for assets held within the structure
  • Consolidation of various investments (e.g., share portfolios, funds) under one structure
  • Minimum investment from $25,000


Tax Treatment

The offshore wrapper also provides significant tax efficiency:

  • Taxes are calculated and settled annually by the platform—no action required by the investor
  • CGT is capped at 12%, and income tax at 30%
  • Taxes are applied to USD returns, meaning rand depreciation is not taxed


Reach out to me at ruvan@bovest.co.za for more information.

 

Ruvan J Grobler RFP™ (PGDip Financial Planning)

SA Trusts can now distribute to offshore trusts

By PJ Botha • September 4, 2025
For a long time, the South African Reserve Bank (SARB) prohibited money from being transferred directly from local trusts to offshore trusts. You may have had offshore exposure in your local trust through asset swops and other investment vehicles, but if you want to distribute to overseas beneficiaries, you must first withdraw funds from the trust and then transfer to them through the SARB. This recently changed. SARS declared that beginning August 1, 2023, it will evaluate and possibly approve petitions to transfer funds from South African trusts to offshore trusts. This adjustment coincides with the South African Reserve Bank's (SARB) recent relaxation of several currency control regulations. While this new alternative provides numerous prospects, there are tight criteria and a thorough application process. If you are an investor or trustee, you must understand these requirements. There is certainly no one-size-fits-all answer, and the drawbacks and benefits should be examined while deciding. Drawbacks: 1. Complex Regulatory Requirements. • Strict compliance required: The procedure is extensive, necessitating meticulous documentation and adherence to both SARS and SARB regulations. • Long approval process: Each application is assessed individually, which can take weeks or even months. 2. Cost • Legal, tax, and accounting assistance can be costly. • Administrative burden: Extensive documentation and regular reporting increase management time and expenses. 3. Tax obligations • The South African trust must pay all relevant taxes (capital gains, dividends, etc.) before distribution, preventing tax deferral to the recipient. Money held in a trust is often taxed at a higher rate than money held in the name of a company or individual. 4. Uncertainty and Evolving Practice • New regulations may impact future distributions and compliance needs. • Disputes: Failure to meet SARS or SARB rules may result in delayed or refused distributions. Benefits: 1. Global Wealth Diversification. Offshore trusts may provide superior asset protection during political or economic volatility in South Africa. 2. Succession and Estate Planning • Multi-Jurisdictional Estate Planning: This allows families with members living in different countries to structure their affairs more efficiently. • Offshore trusts facilitate the transfer of money to beneficiaries outside South Africa, simplifying inheritance processes. 3. Tax preparation • Offshore trusts can optimise worldwide tax positions with proper preparation and professional counsel, but must follow all applicable requirements. 4. Regulatory Clarity • Official Approval: SARS and SARB now provide clear protocols for trustees and investors, eliminating legal risks. The ability to transfer money from a South African trust to an offshore trust is a useful tool for global estate and investment planning. Professional guidance is essential to maximise benefits and avoid pitfalls.

AFGETREDENES EN MEDIESE KOSTES

By Riaan Botha • September 4, 2025
’n Nuwe denke oor ouderdom. ‘n Positiewe benadering oor verouderdom word gevorm as gevolg van die ontwikkeling van tegnologie en die mediese wetenskap. Statistieke wys dat die mens langer neem om te verouder en op ’n hoër ouderdom afsterf. Met veroudering word nuwe perspektiewe oor verhoudings met familie en vriende gevorm. ’n Groter dringendheid bestaan om beplanning uit te voer. Daar is ’n besef dat die tyd aanstap en dat elke oomblik geniet moet word. Die gewoonte om uit te stel en eers later belangrike momente in jou lewe te wil ervaar, verander. Daar is ’n besef dat die liggaam verouder maar dat die innerlike self steeds wil vernuwe. Laasgenoemde kan aangehelp word deur positiewe denke en gewoontes soos om terug te gee aan die plaaslike gemeenskap, om kennis te deel deur om te skryf of om onderrig te gee. Daar kan selfs oorweeg word om ’n nuwe vaardigheid aan te leer. Een van ons kliente wat ’n afgetrede predikant is, het na aftrede begin om klavierlesse te neem terwyl ander persone ’n nuwe plaaslike taal aangeleer het. Mediese kostes  Volgens Stats SA se verslag “Profile of older persons in SA” wat in 2023 gepubliseer is, het die gedeelte van die SA bevolking wat ouer as 60 jaar is, verhoog van 7,0% in 1996 tot 9,8% in 2022. Wanneer die bevolking per groep ontleed word, maak die 60 jaar en ouer gedeelte van die betrokke groep die volgende uit: Blankes ongeveer 29%, Indiërs/Asiate 16,5%, Kleurlinge 10,9% en Swartes 7,8%. Hiervan gebruik ongeveer 50% kroniese medisyne, 20% gebruik brille, 10% dra gehoortoestelle en 5% is in rolstoele.Hierdie ondersteunende toestelle is duur en word nie altyd ten volle deur mediese fondse betaal nie. Die verslag noem ook dat meer as 50% van persone ouer as 60 leef in huishoudings wat uitgebreide families huisves. Mediese uitgawes is seker een van die belangrikste items in ’n afgetredene se begroting. Dit is ’n ongelukkige verskynsel dat mediese kostes met ouderdom verhoog. Die koste van ’n mediese fonds verhoog jaarliks met 3% tot 5% meer as die inflasiekoers en sal ’n al groter persentasie van ons persoonlike uitgawes vereis. Om die regte mediese fonds volgens persoonlike mediese kondisies te kies, speel ’n belangrike rol om deurlopende mediese uitgawes te beperk. Gap Cover kan ’n belangrike rol speel wanneer mediese fondsvoordele nie al die werklike mediese uitgawes dek nie. ’n Versekeringsproduk wat sal uitbetaal wanneer een van die gevreesde siekte opgedoen word, kan ook help om onverwagte mediese uitgawes te dek. RIAAN BOTHA