20 April 2018
Investment"
Banking and investing for the global citizen
Travel, information at the touch of a button, and 24/7 news has made the world a smaller place. South Africa is no longer a million miles from New York or Beijing and we no longer see ourselves as just citizens of a single country. As our identities have transcended geographies and political borders, so too have our banking and investment requirements changed. Today we have, and in fact demand, the freedom to cross borders and transact anywhere in the world.
But where to start?
"When articulating the freedom that individuals now have, we talk about global citizens, and this encompasses a varied audience with different needs," explains Chantal Robertson, Head: Global Wealth Solutions at RMB Private Bank. "Some are young professionals who are starting their journey, while others are established business owners who are seasoned travellers with different requirements. Global Wealth Solutions is a complete offering comprising the best that the FirstRand Group has from a foreign exchange (forex), banking and foreign investment perspective. It caters for the first time international investor to the seasoned pro by providing an end-to-end cross-border solution that can be tailored to suit your specific needs."
What that means in practice is an offshore investment solution that encompasses forex online, a variety of offshore saving options, tax clearance assistance, and ongoing advice and expertise. "Our role is to deliver a customised solution based on your personal circumstances and investment goals, whether you are looking to invest offshore for your child's tuition at an international institution, if you wish to acquire an apartment in London, New York or Berlin, or you are simply looking to hold a portfolio of foreign equites," explains Robertson.
When transacting across borders each rung of the ladder invites more questions and requires specific expertise. Often the initial conversation starts with a discussion around forex and the annual allowances, and the question 'what can I do and how?' arises. In some cases the single discretionary allowance of R1 million per South African resident of 18 years and older is sufficient, while some clients require assistance with tax clearances to take advantage of the annual Foreign Investment Allowance of R10 million.
Once a client has made the decision as to which foreign currency to move into, then the conversation becomes: 'But I don't have an offshore bank account, how can I open one?' Here RMB Private Bank has two options on the table: the Global Account or a Channel Islands account.
What is the difference between the two accounts? And which one do you need?
The Global Account, explains Robertson, is a simple currency account that can be opened online within a few minutes. "You can see your Global Account on your RMB Private Bank banking profile and it is easy to fund." For a first-time offshore investor this is the best way to start and it allows for monthly amounts to be accumulated in your chosen offshore currency. "Should you be using the Single Discretionary Allowance, no tax clearance would be required," notes Robertson.
Your Global Account is extremely beneficial when you are travelling, as you can fund your Multi-currency Cash Passport from this account using the RMB Private Bank Online Banking platform. When it comes to investing, this account can also be regarded as a stepping stone to foreign currency exposure.
If you have built up a tidy balance then it makes sense to use these funds to fund a new Channel Islands account or, if you are looking to shift from one fund to another then your Global Account can serve as a handy investment clearing account; allowing you to move foreign funds without having to switch back into rands and out again.
FNB Channel Islands is a branch of the FirstRand Group, based in Guernsey. It is regulated in the Channel Islands, and provides all the benefits that one would expect from an offshore bank account, including online banking and a debit card. In addition, you can link your Channel Islands account to your RMB Private Bank profile in order to keep an eye on your funds, but you cannot transact due to the different jurisdictions. For that you have access to online banking via the Channel Islands website as well as the Channel Islands team, who are fully versed on the regulatory environment and saving options available.
An excellent benefit is that your Channel Islands account will not attract any fees, provided that you have a minimum balance of R2,500.
When you have acquired sufficient offshore change, then the next question becomes: 'What now?' And, again, Global Wealth Solutions can seamlessly step in with a FirstRand-tailored solution courtesy of FNB Securities or Ashburton Investments. With the help of skilled experts you take advantage of the market-leading advice of FNB Securities, voted Intellidex's Top Advice Broker in 2017, or buy directly offshore funds such as the Ashburton Global Growth Fund or the Ashburton Chindia Equity Fund, a repeat winner of the prestigious Raging Bull Award. Or ask for advice on investing in other third-party funds.
"Being a global citizen is no longer in question, but it is a different journey for each one of us," says Robertson. And Global Wealth Solutions puts you in the offshore driving seat each step of the way.
Remember that South African residents over the age of 18 can take funds offshore using the following allowances for 2018:
But where to start?
"When articulating the freedom that individuals now have, we talk about global citizens, and this encompasses a varied audience with different needs," explains Chantal Robertson, Head: Global Wealth Solutions at RMB Private Bank. "Some are young professionals who are starting their journey, while others are established business owners who are seasoned travellers with different requirements. Global Wealth Solutions is a complete offering comprising the best that the FirstRand Group has from a foreign exchange (forex), banking and foreign investment perspective. It caters for the first time international investor to the seasoned pro by providing an end-to-end cross-border solution that can be tailored to suit your specific needs."
What that means in practice is an offshore investment solution that encompasses forex online, a variety of offshore saving options, tax clearance assistance, and ongoing advice and expertise. "Our role is to deliver a customised solution based on your personal circumstances and investment goals, whether you are looking to invest offshore for your child's tuition at an international institution, if you wish to acquire an apartment in London, New York or Berlin, or you are simply looking to hold a portfolio of foreign equites," explains Robertson.
When transacting across borders each rung of the ladder invites more questions and requires specific expertise. Often the initial conversation starts with a discussion around forex and the annual allowances, and the question 'what can I do and how?' arises. In some cases the single discretionary allowance of R1 million per South African resident of 18 years and older is sufficient, while some clients require assistance with tax clearances to take advantage of the annual Foreign Investment Allowance of R10 million.
Once a client has made the decision as to which foreign currency to move into, then the conversation becomes: 'But I don't have an offshore bank account, how can I open one?' Here RMB Private Bank has two options on the table: the Global Account or a Channel Islands account.
The Global Account, explains Robertson, is a simple currency account that can be opened online within a few minutes. "You can see your Global Account on your RMB Private Bank banking profile and it is easy to fund." For a first-time offshore investor this is the best way to start and it allows for monthly amounts to be accumulated in your chosen offshore currency. "Should you be using the Single Discretionary Allowance, no tax clearance would be required," notes Robertson.
Your Global Account is extremely beneficial when you are travelling, as you can fund your Multi-currency Cash Passport from this account using the RMB Private Bank Online Banking platform. When it comes to investing, this account can also be regarded as a stepping stone to foreign currency exposure.
If you have built up a tidy balance then it makes sense to use these funds to fund a new Channel Islands account or, if you are looking to shift from one fund to another then your Global Account can serve as a handy investment clearing account; allowing you to move foreign funds without having to switch back into rands and out again.
FNB Channel Islands is a branch of the FirstRand Group, based in Guernsey. It is regulated in the Channel Islands, and provides all the benefits that one would expect from an offshore bank account, including online banking and a debit card. In addition, you can link your Channel Islands account to your RMB Private Bank profile in order to keep an eye on your funds, but you cannot transact due to the different jurisdictions. For that you have access to online banking via the Channel Islands website as well as the Channel Islands team, who are fully versed on the regulatory environment and saving options available.
An excellent benefit is that your Channel Islands account will not attract any fees, provided that you have a minimum balance of R2,500.
When you have acquired sufficient offshore change, then the next question becomes: 'What now?' And, again, Global Wealth Solutions can seamlessly step in with a FirstRand-tailored solution courtesy of FNB Securities or Ashburton Investments. With the help of skilled experts you take advantage of the market-leading advice of FNB Securities, voted Intellidex's Top Advice Broker in 2017, or buy directly offshore funds such as the Ashburton Global Growth Fund or the Ashburton Chindia Equity Fund, a repeat winner of the prestigious Raging Bull Award. Or ask for advice on investing in other third-party funds.
"Being a global citizen is no longer in question, but it is a different journey for each one of us," says Robertson. And Global Wealth Solutions puts you in the offshore driving seat each step of the way.
- Single Discretionary Allowance of R1 million: Individuals can use this for travel, gifting or foreign investment and no tax clearance is needed. But be careful not to exceed the R1 million limit. And remember that if you wish to use any part of this allowance for foreign investment, you must be registered for tax purposes.
- Foreign Investment Allowance of R10 million: You will require tax clearance to take advantage of this allowance, but once received you can invest the funds in any foreign asset and can also make use of offshore trusts or companies to invest. We have an experienced team who can assist you with your tax clearance application.
- Foreign investment in excess of R10 million: This process requires approval from both the South African Revenue Service (SARS) and the South African Reserve Bank (SARB), and can take from four to six months as it entails a full SARS audit. In addition, the SARB imposes certain conditions on the proposed investments and the holding thereof. While we cannot assist with the SARS process, RMB Private Bank can provide guidance on and the submission of the SARB application.