Getting money to SA

[charlieharper]

Howzit guys.

So let me explain my situation.

I currently have an online business, registered in the United States, as most of my clients are situated abroad.
I also have a US bank account under my corporate name - that's where all the business transactions happen and in USD. I also have a US bank card that I use here in South Africa for my day to day expenses.
I don't have an SA bank account.

I currently live with my parents, so I fortunately don't have much expenses.

I'm considering getting my own flat at some point here close to the beach.
I suppose I would have to open a bank account in that case. However, as I'd prefer to keep most of what I have abroad, I'm thinking of just sending me roughly the exact amount needed to pay the bills, such as rent, water, lights and internet.

So lets say I send myself $1200 (+-R16,000) every month to my SA account, other than the bank fees and stuff, how much of that will actually make it to my SA Bank account? What's the deal with the SA Reserve bank, SARS, etc?

 

[Drone 42]

You can use something like https://transferwise.com

 

[mister]

If you don't have a bank account how are you paying SARS?

 

[epah]

If you don't have a bank account how are you paying SARS?

Wouldn't he pay taxes in the USA since his business is there?

 

[mister]

Wouldn't he pay taxes in the USA since his business is there?

No. He lives in ZA and pays tax in ZA.

South Africa has a residence-based tax system, which means residents are, subject to certain exclusions, taxed on their worldwide income, irrespective of where their income was earned

http://www.sars.gov.za/ClientSegmen...ages/Tax-and-Non-Residents/Pages/default.aspx

 

[Messugga]

No. He lives in ZA and doesn't pay tax in ZA.

FTFY

 

[mister]

FTFY

And he told the SARS spies on this forum his full name and location!

 

[epah]

No. He lives in ZA and pays tax in ZA.



http://www.sars.gov.za/ClientSegmen...ages/Tax-and-Non-Residents/Pages/default.aspx

Oh okay. Makes sense. You learn something new everyday. I guess this means I should be paying tax too. I also have a business in another country and I transfer money into my South African account every month to pay my bills etc.

 

[JayM]

Wouldn't he pay taxes in the USA since his business is there?

The business would pay tax there. If he earned a salary from that business, those earnings would be taxed here.

To further complicate things, the business in this case would fall under the "controlled foreign company" category, which would mean it's also liable to taxation here. OP you need a tax specialist, and pronto. You've made a bit of a mess here and it's going to cost a substantial amount of money to fix it.

 

[Tomtomtom]

Howzit guys.

So let me explain my situation.

I currently have an online business, registered in the United States, as most of my clients are situated abroad.

Congratulations - you're off to a pretty good start. Earning in US$, spending in ZAR, is a winning strategy.

Let me second the stuff about getting yourself a tax specialist. Sooner rather than later, because you are accumulating interest on your tax debt.

But your U.S. corporation makes the IRS possibly an even bigger threat than SARS. You need representation there too.

Until the IRS seizes your account, getting money here is the easy part. Expect to pay in the region of 3% in fees and forex costs.

BTW reserve bank / capital controls mean you are obliged to convert every USD to ZAR within 30 days of earning it (and before converting it back again, if you wish). Yes, it's insane. You can probably safely break this rule, since unlike tax, capital controls are going extinct... although your above-mentioned specialist might advise otherwise.

 

[charlieharper]

The business would pay tax there. If he earned a salary from that business, those earnings would be taxed here.

To further complicate things, the business in this case would fall under the "controlled foreign company" category, which would mean it's also liable to taxation here. OP you need a tax specialist, and pronto. You've made a bit of a mess here and it's going to cost a substantial amount of money to fix it.

Well, I mean, nothing is on my name at all. I basically have no money on my name.

And I don't even have to be in SA to operate - I'm just here because my family is here - I lived abroad for the last 5 years. My company pays taxes in the US, not me. I'm not liable for anything - that's the beauty of a Delaware LLC.

But by the sound of it, sounds like it will be easier just to go live in South America or Asia for 9 months of the year so I won't be an SA Resident.

 

[Tomtomtom]

But by the sound of it, sounds like it will be easier just to go live in South America or Asia for 9 months of the year so I won't be an SA Resident.

The digital nomad route is an option. But you're going to pay tax on your personal income in most countries of the world, so pick which tax authority you would prefer.

 

[Gtx Gaming]

BTC debit card will work for you.

 

[JayM]

Well, I mean, nothing is on my name at all. I basically have no money on my name.

And I don't even have to be in SA to operate - I'm just here because my family is here - I lived abroad for the last 5 years. My company pays taxes in the US, not me. I'm not liable for anything - that's the beauty of a Delaware LLC.

But by the sound of it, sounds like it will be easier just to go live in South America or Asia for 9 months of the year so I won't be an SA Resident.

Right now that strategy could work, but if you've seen the news lately they are trying to change that too. If you keep returning every year or two, they are still going to count you as tax resident. Considered going to live in the States?

 

[charlieharper]

The digital nomad route is an option. But you're going to pay tax on your personal income in most countries of the world, so pick which tax authority you would prefer.

Actually I'm not even trying to avoid tax or anything. Just trying to figure out how to budget for getting money this side and I'll pay where it's due, but your previous post made it sound like this 23 year old will be on the verge of loosing everything if I try to.

Of course all the numbers mentioned above is just in theory.

Yearly business income isn't even equivalent to the 2nd Individual SARS Tax Bracket yet, however I will never have that much money in a personal bank account at a time. Also spoke to someone in finance, as of current I haven't done anything wrong, as nothing is on my name and my personal expenses are practically nothing at the moment. So please don't get me anxious for no reason.

I purely asked here about the practical things.

The only reason I was thinking about this is that the official rentals in SA through estate agents wants all the money to be EFT'd from an SA bank account - Feels so backwards. In Asia I just paid my ±$450 rent in cash - sometimes they would even have card machines to make sure they get the money. :crylaugh: I'm all about convenience.

So ya, I basically just wanted to know what will happen if I transfer myself amount x from abroad and then directly forward it to your landlord or whatever.

Of course that's why I'm posting here cause I was hoping someone have done this before.

 

[Tomtomtom]

Actually I'm not even trying to avoid tax or anything. Just trying to figure out how to budget for getting money this side and I'll pay where it's due, but your previous post made it sound like this 23 year old will be on the verge of loosing everything if I try to.

You won't lose everything and it's not complicated:

1. Open a local bank account.
2. Use a company like https://transferwise.com or https://www.ofx.com to turn USD into ZAR and wire it in.
3. Register with SARS (provisional taxpayer) and prepare your first return.
4. Focus on making more USD.

With a bank account and tax registration you're good to go for investing as well. It's an opportunity cost to leave cash in a bank account, regardless of whether it's business or personal.

Nowadays you can easily open a foreign-currency account with the banks. You might skip step 2 and just wire USD to your local account. Then you can convert it to ZAR as needed using a local company. Not sure you will actually save money this way but it's worth a look.

 

[charlieharper]

You won't lose everything and it's not complicated:

1. Open a local bank account.
2. Use a company like https://transferwise.com or https://www.ofx.com to turn USD into ZAR and wire it in.
3. Register with SARS (provisional taxpayer) and prepare your first return.
4. Focus on making more USD.

With a bank account and tax registration you're good to go for investing as well. It's an opportunity cost to leave cash in a bank account, regardless of whether it's business or personal.

Nowadays you can easily open a foreign-currency account with the banks. You might skip step 2 and just wire USD to your local account. Then you can convert it to ZAR as needed using a local company. Not sure you will actually save money this way but it's worth a look.

I like this. Thanks for clearing it up. This is the kind of answer I was looking for.
I just wanted everything to be above board in legal terms, yet have the benefits of having an offshore account as well as not over complicating things when it comes to bringing money into SA.

Thank you.

 

[The_Traveller]

Alternatively, open up your South African bank account , then whatever amount of dollars you want to cash up, transfer the $'s to my US bank account, and you send me a "consultation invoice" , I pay you out in ZAR from my business to your (SA) account.

If you interested in this PM me ...