Moving Foreign Funds

Moving Foreign Funds

Your reason for buying overseas property will have a direct influence on everything from your budget, how you move your funds to the type of property you invest in. You must also understand the value of local currency and exchange rates. If you send money from South Africa, you will need to consider local exchange control regulations. Whilst an individual can now send R10 million offshore for investment purposes, South African Revenue Service (SARS) have yet to adjust their systems to this recent relaxation. The delays, as a result, can materially prejudice your ability to complete a property purchase transaction resulting in heavy penalties.

You must always bear in mind when investing offshore the effect of currency fluctuations. Take for instance a South African investor, who took a US$ based mortgage in 2011, and relied on his South African income to service the shortfall between his offshore rental income and the offshore mortgage repayment. When the Rand weakened dramatically against the Dollar, he found it difficult to make ends meet.

The need for offshore finance and funding is a far more challenging exercise, due to the fact that it will be subject to international laws and based in a local currency. To continue reading click here…




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