FX Capital Blog
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FX Capital is a registered financial services company that is established since 2004 and specialises in foreign exchange, foreign payments and currency risk management.Our clients include companies and private individuals and we are able to offer expert advice and service in addition to excellent savings on exchange rates and bank fees due to the large volumes we do with our partner banks.
Services to Companies include:
Currency risk management
Hedging strategies
Treasury management
Services to Private Individuals include:
Foreign Investment Allowances – families qualify for R4 million per adult per annum
Discretionary allowance – R1m per adult and R200k per child allowed per annum – used for foreign investment, travel, gifts, study
Emigration allowances
Foreign loan repayments
Forward cover and hedging facilities for the discerning client
SARS tax clearance applications
FXstreet.com (San Francisco) - ZAR is by far the best performing currency on the day rising 1.7% following news that South African bonds may be included in a major global bond index on October 1.
“In light of the news, we are forced to suspend our negative view on ZAR in favour of a reluctantly positive stance – at least for the short term, we no longer expect ZAR to underperform,” Ilan Solot, EM Strategist at Brown Brothers Harriman.
Technically speaking, “USD/ZAR has broken below the 100-day MA on the positive news and looks set to test the 200-day MA just below the 7.72 level should global conditions remain favourable,” he says.
Source: FXstreet.com
South Africans are entitled to an annual foreign investment allowance of R4 million per person per annum.
The South African Reserve Bank relaxed exchange controls in November 2010 by increasing the once in a life-time allowance of R4 million to R4 million per annum.
South Africans wishing to utilise this allowance need to have a green bar coded identity document and require tax clearance from SARS. Note this tax clearance must be for foreign investment allowance and will always denote an amount. The tax clearance certificate will be valid for 12 months from date of issue.
FX Capital can assist with tax clearance applications and foreign payments using foreign investment allowance.
Contact us for more information on how to apply for foreign investment allowance tax clearance and make payments using your foreign investment allowance.
South African Residents are entitled to a discretionary allowance of R1 million per adult and R200,000 per child under 18 years of age.
Travel allowance, gift payments, loans, overseas student fees and alimony all form part of the annual discretionary allowance.
FX Capital can assist South Africans wanting to use their discretionary allowance to make foreign payments.
Many South African leave South Africa to live in Australia, New Zealand, United Kingdom, Canada etc but do not formally emigrate. From a South African Reserve Bank point of view a South African has either emigrated and therefore made application to SARB, or is what is known as South African Resident Temporarily Abroad.
FX Capital works with some expert tax and emigration consultants.
South African Residents can make use of either their foreign investment allowance of R4 million or their travel allowance of R1 million per annum.
Non-resident individuals living in South Africa and wanting to transfer money out of South Africa can do so but do not have the use of the above allowances. In most instances it is a matter of proving the funds were sent into the country and then remitting them out again with any capital gains or accrued gains.
FX Capital can assist South Africans that are emigrating to Australia, or South Africans currently living in Australia with transferring money to Australia.
The South African Reserve Bank has set exchange control limits which differ depending on whether you’re emigrating or temporarily living abroad.
When you’re sending money to Australia, the following allowances are available:
- Discretionary allowance of R1 million per adult and R200,000 per child under 18 years of age, per annum – the discretionary allowance can be used for travel, foreign investment, gifts, loans, study and alimony
- Foreign Investment Allowance of R4 million per adult per annu
- Emigration Allowance
FX Capital can advise on available allowances and assist with SARS tax clearance applications and South African Reserve Bank applications.
The South African Rand treaded water most of last week trading in a tight range of R7.5250 to R7.59 for the first part of the week. On Thursday it finally got some direction as the issues in Greece continue do be drawn out and political leaders there having to further satisfy lenders of the bailout with increased austerity measures. The Rand traded up to about R7.67 on this increased uncertainty in Greece, and then on Friday the SA Reserve Bank said it was making a special announcement on Saturday which spooked the markets as there were immediate concerns about changes to monetary policy or leadership while markets were closed. Instead the announcement was a commemorative and one where Nelson Mandela's picture is to appear on SA bank notes to commemorate his release from prison. The Rand weakened to R7.78 in late Friday trade, but has already recovered to 7.67 on Monday morning.
Expect continued volatility as the powers that be in the EU have to approve the lates Greek plan, and as one commentator put is the Euro is "skittish and rumour driven".
After a strong week last week where the Rand registered gains against all major currencies, reaching highs of 7.76 to USD, 12.18 to GBP and 10.21 to EUR, we are seeing some consolidation this week ahead of the next Greek bailout of Euro 130 Bn being approved. The last time the Rand was below 7.70 to the USD was 29 Oct 2011 – 3 months ago!
We've seen some good importer demand and private clients sending funds offshore using their foreign investment allowances.
We have read so much bad news of late, much of which has been priced into the markets, that we shouldn’t be surprised to see some sort of a rally after this period of consolidation should news out of Europe this week be as expected i.e. Greece get their next bailout package, they comply with the conditions and Europe seems to be putting a cohesive plan together to tackle the problem…de ja vu…we’ve read this story somewhere before…and how many times will we read it again.
All of this, coupled with possible further quantitative easing in the US to stimulate growth, could lead to more positive sentiment in the short-term and could result in the carry-trade risk on flows that we saw in 2010, early 2011.
That said, the Rand is still not performing particularly well against its EM counterparts. Take for E.g. the AUD which is trading about 1.06 against USD and only 4 cents off its high of last year i.e. less than 4%. Comparatively the Rand at 7.75 is R1.15 off its best levels of 2011 when it touched 6.60 which is 17% away from these levels. The Rand still has some hurdles to overcome for the international investor especially at home, but for the short-term these may once again be ignored if we see some short-term resurgence in carry trade.
Rand should remain range bound between 7.72 and 7.90 until some further news causes activity on either side of these ranges. Balance of probabilities for now is for further strength all things going as expected…which doesn’t always happen when little countries like Greece need EU 130 Bn to meet their quarterly debt obligations. The difficulty in this game is knowing what’s priced in and what isn’t.
South Africans are entitled to an annual foreign investment allowance of R4 million.
The South African Reserve Bank relaxed exchange controls in November 2010 by increasing the once in a life-time allowance of R4 million to R4 million per annum.
South Africans wishing to utilise this allowance need to have a green bar coded identity document and require tax clearance from SARS. Note this tax clearance must be for foreign investment allowance and will always denote an amount. The tax clearance certificate will be valid for 12 months from date of issue.
FX Capital can assist with tax clearance applications and foreign payments using foreign investment allowance.
FX Capital can assist with spot currency purchases, obtaining forward exchange facilities, forward exchange contracts and hedging strategies to manage our client's exposure to fluctuations in exchange rates.
Contact us for a no obligation currency audit and we will demonstrate how we can save your business money and assist in your currency purchase procedures and currency risk management.