How Rich South Africans Protect Their Wealth and Pay Less Tax
Wealthy South Africans are increasingly moving money overseas to protect their wealth and lower their tax bills.
Dino Zuccollo of Westbrooke Alternative Asset Management says South Africans worry about keeping too much money invested locally, since the country makes up less than 1% of global markets—yet most locals keep over half their wealth here.
Every year, investors can legally send up to R11 million abroad. But often this money sits in low-interest accounts overseas, which don’t keep up with inflation.
To make better returns, investors usually turn to stocks, but these can be risky and volatile. Zuccollo suggests alternatives, like private debt, where private funds (instead of banks) lend money to businesses. These investments are less liquid (harder to cash out quickly) but can pay much more—up to 7–8% instead of the 3% from normal bank deposits.
A big advantage of these offshore alternatives is tax efficiency: after taxes, investors can sometimes earn three times more than with traditional investments.
Zuccollo also says the old investment rule—60% in shares and 40% in bonds—no longer works. Instead, investors should consider adding about 30% in alternative assets like private debt or property funds, which are less affected by global shocks.
In short, by investing offshore in private markets, wealthy South Africans can:
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Diversify away from local risks
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Earn higher returns than in overseas bank accounts
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Reduce taxes
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Protect wealth from global market swings
The key, he adds, is finding a skilled and trustworthy asset manager.
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