Offshore Investing: What Your R2 Million Allowance Actually Buys You

Ruvan J Grobler • July 24, 2026

Is investing offshore just for people who've given up on South Africa? I get some version of this question a lot, and the honest answer is no. It's really just about not keeping all your eggs in one rand-denominated basket. And it got a lot more relevant this year, because in April 2026 the Reserve Bank doubled the Single Discretionary Allowance from R1 million to R2 million per person, per year. That's a meaningful jump, and it's worth understanding properly before you use it.

Here's how the allowance system actually works. Every South African resident over 18 gets a Single Discretionary Allowance of R2 million a year. No SARS approval, no tax clearance, you just instruct your bank and off it goes, for travel, gifts, or offshore investing. On top of that sits the Foreign Investment Allowance, up to another R10 million a year, but that one needs a SARS Approval for International Transfer first, which comes off your tax compliance status on eFiling. Between the two, that's R12 million per person, per year, without needing special Reserve Bank sign-off. A couple, or a family with adult kids, can add that up quickly.

 

Worth knowing too, this is different from the rand-denominated offshore funds most people already hold through their local platforms. Those use asset swap or feeder structures, and your allowance never actually leaves the country. Direct offshore investing means the money physically converts to dollars, pounds or euros and sits in an account in your own name, offshore. Different animal, different mechanics.

 

Side note: if you've got a retirement annuity, you already have some offshore exposure, Regulation 28 lets retirement funds hold up to 45% offshore. That's real diversification, but it's locked inside a retirement structure with its own rules on access and estate treatment. Using your personal allowance is a completely separate lever, money you actually hold in your own name, offshore, that you can access, restructure or leave to whoever you want without waiting for retirement age.

 

Who actually uses this in practice? Families with kids studying or working abroad. People planning to retire partly offshore, or just wanting a foreign currency buffer for when they travel. Business owners who've built most of their wealth locally and want a real counterweight sitting outside the country. It's rarely about chasing better returns, it's about not having every asset you own exposed to the same risks at the same time.

So why bother with the direct route? Two reasons come up in almost every conversation I have about this: currency, and geography.

On currency, if your salary is in rand, your house is in rand and your whole portfolio is in rand, your entire financial life rises and falls with one currency. Holding some of your wealth in hard currency doesn't mean you think the rand is doomed, it just means you're not betting your whole future on one outcome either way.

On geography, the JSE makes up less than 1% of total global stock market value. Some of the biggest growth stories in the world right now, in tech, in healthcare, aren't listed here at all. Investing offshore isn't a vote against South Africa, it's just access to the other 99%.

 

Now here's a case worth knowing about, because it shows how badly this can go if someone tries to get clever with the rules instead of just following them.

In Singh v South African Reserve Bank, decided by the Pretoria High Court in 2023, an attorney and businessman moved R80 million between local accounts, with about R20 million of it headed for a UK bank account. The problem wasn't the amount, it was how it moved, in R1 million chunks, each one apparently using someone else's Single Discretionary Allowance instead of his own. His bank picked it up and reported it to the Reserve Bank, who placed a blocking order on the remaining R40 million sitting in his account back home. He went to court arguing his bank had approved the transfers, so it must have been fine. The court didn't agree. A bank can't lawfully approve something that breaches exchange control in the first place, and the blocking order stood.

 

If you genuinely need to move more than R2 million a year, that's exactly what the Foreign Investment Allowance is for. It just takes proper paperwork, not creativity.

A few practical things that catch people out:

  1. Your allowance resets every calendar year, it doesn't carry over if you don't use it.
  2. A clean SARS record matters. Outstanding returns or disputes will delay your approval, and it can take up to three weeks even when everything's in order.
  3. Financial institutions want proof of where the money actually came from, especially as the amount grows.
  4. Moving a big amount in one go means you're stuck with whatever the exchange rate happens to be that day, that's a separate risk from the compliance side, and worth thinking through.

 

One more thing, since estate planning is where I spend most of my time. Assets held directly offshore, in your own name, usually fall under the estate administration rules of wherever they're held, not just South Africa's. That can mean your executor needs a foreign grant of probate before anything can be dealt with, on top of the local process. It doesn't mean don't do it. It just means the structure deserves as much thought as the decision to invest offshore in the first place.

 

This is general information, not advice tailored to your situation.

 

Ruvan J Grobler FSA® PGDip (Financial planning)

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Protecting wealth is as important as building it

By Bovest • October 15, 2026
Most of us spend years working out how to grow our wealth, and far less time asking what could put it at risk. We plan as though good health, stable markets and steady momentum will always hold. But wealth can look secure right up until the thing you never planned for happens. Think of how quickly things can change. A pandemic upends your industry. Technology makes your role obsolete. A market slump tempts you into an emotional decision that undoes years of discipline. Each of these begs a simple question: what happens to your wealth-building machine if one of its assumptions fails? Wealth protection vs income protection The two are closely linked, but they are not the same thing. Cover such as disability or severe illness insurance protects your earning power. Wealth protection looks at what that income has built, and what happens to it if you’re no longer around to manage it. "The financial history of the world shows that families have always played a central role in wealth creation." — Riaan Botha, author of Welvaartskeppers The wealth you build, and hope to leave to your children, rests on two things: your ability to earn, and your ability to protect the assets you’ve built. Illness, disability, a market downturn or an unexpected death can threaten both at once. Making money builds wealth. Protecting it helps you keep it for the people you built it for. What are the key forms of wealth protection? Here’s a look at four key forms of wealth protection, what they do and the role they can play: Insurance Replaces your income if something happens to you, so your family can meet their obligations and maintain their lifestyle. Your will Stipulates who receives what. A will only works if it is valid and can be found when it’s needed. Trusts Holds and manages assets for beneficiaries who can’t legally (or otherwise) manage them yet. Trusts can help structure your assets during your lifetime and beneficiaries may typically include minor children. It is important to note that trusts come with their owns costs, tax treatment and administration, so they work best when set up for a clear purpose, guided by professional advice. Estate planning Ensures that your estate has enough cash to settle what it owes without forcing a sale of your assets. Four questions to test your wealth protection plan Use the following questions as an initial reality check to see where your wealth protection plan stands, and where the gaps might be: Would your family have adequate financial support if something happened to you? Bond repayments, school fees and medical aid contributions keep coming whatever happens to your income. Check that your life, disability and severe illness cover is measured against your actual debts, your dependents and how long they would need support, and that it hasn’t gone stale since your circumstances changed. Are your beneficiaries up to date? Marriages, divorces, births and deaths all change who should benefit. Still, often nominations on policies and retirement funds are often set once and forgotten. When nominations and your will contradict each other, the result can be delays, disputes and money reaching the wrong person. Retirement fund trustees must also consider all your dependents, so your nomination guides them rather than binding them. Is your will valid, accessible, and structured correctly? A will must meet certain formalities, including the signatures of the testator and two competent witnesses. If the requirements aren't met, the will may not be accepted as valid, which could affect how the estate is distributed. It is also important that the executor can locate the original will. Where minor children are beneficiaries, a will can provide for a testamentary trust to hold their inheritance rather than it being paid into the Guardian's Fund. Will your estate have enough cash when you pass away? Before anything is distributed, an estate must pay executor's and Master's Office fees, debts, funeral costs, capital gains tax and, where applicable, estate duty. When wealth is tied up in property or a business, the executor may have to sell at the wrong time and the wrong price. Compare your liquid assets against likely costs and plan for any shortfall. Protecting your wealth: What’s next? If the four questions above exposed a gap, that’s a great place to start. Gaps are far easier to close while life is calm than having to rely on someone to sort things out on your behalf. Of course, you don’t need to fix everything at once. Start with the question that made you hesitate. Think of it as the foundation under everything else you’re building. Nobody admires it from the outside, but every decision about growing your wealth rests on it. "The key to successful wealth creation is knowledge. Only those who first learn to increase their income and then invest their surplus effectively as capital achieve long-term financial success.” — Riaan Botha, author of Welvaartskeppers There is no single miracle solution that guarantees success, but the principles behind it can be learned. Meet the South Africans who did it on Welvaartskeppers. One conversation has the power to change a life At Bovest, we believe money is ultimately a tool for buying something far more valuable: time. A sound financial plan gives you the structure, clarity and peace of mind to spend that time on the life you are building rather than worrying about it. Ready to build your life vision? Share your details and we’ll be in touch , no obligation. This article is general information and does not constitute financial, legal or tax advice. Speak to a qualified adviser about your own circumstances.