South African residents can buy shares on international stock exchanges through local brokerages, international trading platforms, or rand-denominated funds that hold foreign assets. The process involves choosing a platform, staying within exchange control limits set by the South African Reserve Bank, and understanding your tax obligations on any returns. Here’s how each piece works.
Choose a Trading Platform
You have two broad routes: use a South African brokerage that offers offshore trading, or open an account directly with an international broker.
Several major South African banks and stockbrokers now provide direct access to global markets. Standard Bank’s Webtrader platform, for example, lets you trade shares, ETFs, exchange-traded commodities, and contracts for difference (CFDs) across multiple international exchanges from a single online account. Other local brokerages and fintech platforms offer similar services, often with slightly different fee structures and market access. The advantage of going through a local provider is that the currency conversion and regulatory paperwork are typically handled for you.
Opening an account with an international broker (such as Interactive Brokers or Saxo) is also possible. You’ll fund the account by transferring rands abroad, and you’ll generally get access to a wider range of markets and instruments. The trade-off is that you manage more of the process yourself, including currency conversion and ensuring you stay compliant with South African exchange control rules.
Whichever route you pick, compare brokerage commissions, platform fees, and the range of exchanges available before committing. Some platforms charge an administration fee on your trading account, and services related to offshore equities may also attract VAT.
Understand Exchange Control Limits
South Africa’s exchange controls cap how much money you can move out of the country each year. Two allowances apply to individual residents aged 18 and older:
- Single Discretionary Allowance (SDA): R2 million per calendar year. You can use this without obtaining tax clearance from SARS. It covers any outward transfer, whether for travel, gifts, or investment.
- Foreign Capital Allowance (FIA): R10 million per calendar year. This is available on top of the SDA, but using it requires a tax clearance certificate from SARS (more on that below).
Combined, a single individual can move up to R12 million offshore in a calendar year. If you’re investing a modest amount, the R2 million SDA is the simplest path because it avoids the tax clearance step entirely. Your bank or broker will verify your identity and process the transfer under this allowance with minimal paperwork.
Get Tax Clearance for Larger Transfers
If you want to invest more than R2 million in a year, you need an Approval for International Transfers (AIT) from SARS before your bank will release the funds. The process starts with completing the AIT TCR01 application form on SARS eFiling, selecting the correct international investment type.
SARS will ask you to demonstrate where the money came from. You’ll need to submit:
- Bank statements issued no more than 14 days before your application date, along with documentation proving the origin of the funds.
- A statement of assets and liabilities for the previous three tax years, covering all investments, loan accounts, and distributions from local and foreign companies or trusts.
- If the funds come from a trust distribution, a copy of the trust deed, the latest Letters of Authority from the Master of the High Court, and a resolution from the trustees authorising the distribution.
- A Power of Attorney if someone else submits the application on your behalf.
Processing times vary, but delays are common when supporting documents are incomplete. Having your tax affairs fully up to date before you apply speeds things up considerably.
Know the Tax Rules on Foreign Returns
South Africa taxes residents on worldwide income, so any gains or income from your offshore shares must be reported to SARS. The main categories to watch are dividends, interest, and capital gains.
Foreign dividends received by individuals who hold less than 10% of the foreign company are taxable at a maximum effective rate of 20%. No deductions for expenses are allowed against that dividend income. If the country where the company is listed also withholds tax on dividends, you can generally claim a credit against your South African tax liability to avoid being taxed twice on the same income. The credit is limited to the South African tax due on that dividend, so if the foreign withholding rate is lower than 20%, you’ll owe SARS the difference.
Capital gains tax applies when you sell offshore shares at a profit. Only a portion of the gain (called the “inclusion rate”) is added to your taxable income and taxed at your marginal rate. Interest earned on foreign currency accounts is taxed as normal income, though an annual exemption applies.
You report all of this on your annual income tax return. Keep records of every purchase price, sale price, dividend received, and foreign tax withheld. Working in multiple currencies means you’ll also need to track the rand value at the date of each transaction, because exchange rate movements affect your taxable gain.
Factor In Currency and Transfer Costs
Every time you move rands offshore, you’re converting currency, and that comes with costs. These show up in two ways: the exchange rate spread (the difference between the buy and sell rate your bank quotes) and explicit fees.
Transfer fees vary between providers. As a reference point, Capitec charges a flat R175 to send an international payment and R50 to receive one. Other banks charge differently, sometimes as a percentage of the transfer amount or with tiered fee schedules. If you’re investing regularly, these fees compound, so it’s worth comparing options. Some offshore trading platforms funded through local brokerages bundle the conversion into the trade, which can make it harder to see exactly what the currency spread costs you.
Beyond transfer fees, look out for annual custody fees (charged for holding your shares), inactivity fees on some international platforms, and any charges when you eventually bring money back to South Africa. Converting foreign currency back into rands incurs another spread, so the round-trip cost of investing and later repatriating can eat into returns on smaller portfolios.
A Simpler Alternative: Rand-Denominated Offshore Funds
If managing currency transfers and foreign tax credits feels like too much admin, you can get offshore exposure without actually moving money out of the country. South African unit trust companies and ETF providers offer funds that invest in international shares but are bought and sold in rands on the JSE. These are sometimes called “feeder funds” or rand-denominated offshore funds.
With these products, the fund manager handles the currency conversion and exchange control compliance. You buy units through your existing local brokerage account just like any other JSE-listed investment. The downside is you’re limited to the specific markets and strategies the fund offers, and you’ll pay the fund’s management fee on top of any brokerage costs. But for investors who want broad international diversification without the complexity of holding shares directly on a foreign exchange, this route is significantly easier to manage.
Steps to Get Started
Putting this all together, the practical sequence looks like this:
- Decide on your approach: Direct offshore share purchases give you full control and access to individual stocks. Rand-denominated funds on the JSE are simpler but less flexible.
- Pick a platform: Compare local brokerages with offshore access and international brokers that accept South African residents. Look at fees, available markets, and ease of funding.
- Check your allowance: If you’re investing under R2 million in a calendar year, the SDA keeps things straightforward. Above that, apply for your AIT tax clearance through SARS eFiling before attempting the transfer.
- Fund your account: Instruct your bank to make the international payment. Have your ID, proof of source of funds, and (if needed) your AIT pin reference ready.
- Place your trades: Buy shares, ETFs, or other instruments on the foreign exchange through your platform.
- Track everything for tax: Record purchase dates, prices in the foreign currency, the rand exchange rate on each transaction date, dividends received, and any foreign tax withheld. You’ll need all of this at tax season.