Banking, Money and Taxes in South Africa
South Africa's banking system is sophisticated. There are numerous international and local banks in South Africa and each of these offer expats various options and competitive rates for managing their finances.
Currency in South Africa
The currency in South Africa is the South African Rand, abbreviated as ZAR or R. The Rand is subdivided into 100 cents.
Retail stores won't have trouble giving customers whatever change they need, although street hawkers and small corner stores might battle to break large notes.
Notes: R10, R20, R50, R100, R200
Coins: 5c, 10c, 20c, 50c, R1, R2, R5
Banking in South Africa
The four major banks are ABSA (owned by Barclays Bank), First National Bank, Standard Bank and Nedbank. Private banks generally offer better service and more professional advice, and include Investec and Rand Merchant Bank (RMB). Banks are generally open from 8.30am to 3.30pm Monday to Friday, and till 11am on Saturdays, although those in airports often have extended hours. All four have good online and mobile banking systems for customers' day-to-day banking needs.
Visa and Mastercard are widely accepted in South Africa. American Express and Diner's Club are accepted in major centres and tourist spots but are often not accepted outside of these. Bureaux de change are also readily available in cities.
Opening a bank account
It's relatively easy to open a bank account if someone is over 18, can provide a proof of ID (usually a passport) and proof of address in South Africa. However, expats may find it difficult to open a credit account without a South African credit record. For this reason, most foreigners open an international bank account before they leave for South Africa.
If an expat's bank has an international presence, such as HSBC, Lloyds, NatWest or Barclays, it should be fairly easy to make the necessary arrangements. Some banks with an international presence, such as Investec and Old Mutual, are actually based in South Africa.
South Africa has currency control restrictions which an expat's bank should explain. All money transferred into South Africa can be repatriated, so it's important to keep a record of transactions.
Foreign citizens can also consult with their bank about offshore account options. Many expats choose to keep a bank account open at home for mortgages and other bills, open another account in South Africa for living expenses, and open a third offshore account for savings and for financial security.
ATMs and automatic tellers are plentiful throughout the country and all of the main banks have their own ATMs, although certain brands may be lacking in smaller towns. Customers can use any ATM no matter which bank they belong to, although fees will be slightly higher for withdrawals from other banks' ATMs. ATMs and tellers are used for both debit and credit cards, but most have a withdrawal limit of 2,000 ZAR to 4,000 ZAR per day – generally speaking, it's unwise to carry amounts larger than this around anyway.
All bank ATMs also have a drop-box facility for customers to drop in a cheque or cash, and their account will be credited accordingly. The four main banks also provide facilities to make some bill payments or cellphone airtime purchases at their ATMs.
Taxes in South Africa
For tax purposes, many expats remain as non-residents in South Africa. As a result of capital gains tax, any capital assets can be taxed as long as an expatriate is regarded as a resident, even if these assets are situated overseas and remain unsold. Residents are taxed on their worldwide income, whereas non-residents are only taxed on their South African-based income. This includes taxation on rent from property assets in South Africa, interest from loans used or applied for in South Africa, salaries and any compensation for services rendered within the country.
An expatriate will be taxed on their worldwide income if they are in South Africa for:
91 days or more on aggregate during the year of assessment, and
915 days or more in total during the preceding five years of assessment, and
91 days or more on aggregate in each of the preceding five years.
For the latest advice expats should consult with both a South African accountant and an accountant in their home country.