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South Africa: National Budget Speech, 2023 – Exchange Control

22 February 2023
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The remaining capital flow and macroprudential measures were to consist of the following:

  • South African corporates will not be allowed to shift their primary domicile, except under exceptional circumstances approved by the Minister of Finance.
  • Approval conditions granted by the Minister of Finance for corporates with a primary listing offshore, including dual-listed structures, will be aligned to the current foreign direct investment criteria and/or conditions to level the playing field.
  • Cross-border foreign-exchange activities will continue to be conducted through dealers authorised and regulated by the Reserve Bank.
  • Prudential limits on South African banks and institutional investors will remain, but the limits will be reviewed regularly.
  • Banks’ unhedged foreign-currency exposures will remain limited to 10 % of liabilities (known as the net open foreign exchange position) and will remain regulated by the Prudential Authority of the Reserve Bank.
  • The domestic treasury management company policy, which allows South African companies to establish one subsidiary as a holding company for African and offshore operations without being subject to exchange control restrictions, will remain in place, as will the international headquarter company regime.
  • The export of intellectual property for fair value to non-related parties will not be subject to approval.
  • The current policy of certain loop structures, which relates to the acquisition by private individuals of equity and/or voting rights in a foreign company, will remain until tax amendments are implemented to address the risks.