What is the Difference between Emigration and Immigration?
Emigrate means to leave one's country to live in another. Immigrate is to come into another country to live permanently.
The choice between emigrate, immigrate, and migrate depends on the sentence's point of view. Emigrate is to immigrate as go is to come. If the sentence is looking at the point of departure, use emigrate. The point of arrival? Immigrate. Talking about the actual process of moving? Use migrate.
Emigrate means you are exiting your current homeland.
Immigrate means you are coming in to a country to live.
What is the difference between immigrate and emigrate?
Emigrate means to “leave one's country of residence to move to another,” whereas immigrate means to “enter a country intending to live there.” The difference between these two words lies in context and perspective; if the focus is the departure point, use “emigrate.” But if it's the arrival point, use “immigrate.”
What is the Financial Emigration process?
Fill out an MP336 form
The MP336 form is a departure document required to request your overseas capital allowance. An original or authenticated copy of this form, together with your additional supporting documents, must be submitted to a commercial bank in South Africa. If you don't possess a local bank account anymore, you can submit it to any approved commercial bank functioning within South Africa.
Apply for an emigration tax clearance certificate
Upon filling out an MP336 form, taxpayers who have already relocated abroad and desire to move their residual assets overseas must request an emigration tax clearance certificate from SARS. These residual assets, previously referred to as "Blocked Funds", are now termed "Emigrant's Remaining Assets". The process of applying for this tax clearance can be somewhat complex and will necessitate providing SARS with proof of all remaining assets in SA.
Should you possess no further assets in South Africa and have resided overseas for over five years, you can undergo financial emigration without the need for a tax clearance certificate. This procedure is notably easier and faster compared to complete emigration.
Submit the application to the SARB
Once your application gets the green light, the revenue from selling your remaining assets in South Africa will be placed into an unblocked rand account. From this account, you can then move the funds overseas.
What are the benefits of Financial Emigration?
Access your SA retirement annuities early
If you financially migrate, you can access your South African retirement annuities prior to reaching 55 without incurring any penalties.
Transfer of SA inheritance funds
After successfully finalizing your financial emigration, you can move your prospective inheritance funds from South Africa abroad without having to go through the exchange control process for SA residents.
Full tax compliance
Financial emigration guarantees full compliance with your taxes and ensures that your tax residency status is irrevocable.
Initiating financial emigration will trigger a one-time capital gains tax obligation on your global assets, excluding real estate in South Africa. This is applicable to all your assets, both within South Africa and overseas.
A significant shift could be on the horizon for South African expatriates who still hold retirement funds in South Africa. The proposed Tax Law Amendment Bill intends to prevent South Africans from accessing their retirement annuities until they have been non-tax residents for three years. This is anticipated to take effect on 1 March 2020, and consequently, numerous South Africans are rushing to finalize their Financial Emigration before February 2021 ends to evade being affected by this alteration.
The process of financial emigration can be intricate with numerous possible obstacles and complexities. Hence, it is always advisable to obtain expert help.
Our expertise lies in facilitating the financial emigration procedure for South Africans residing overseas, mainly for the purpose of tax planning and adherence to tax laws. Financial Emigration (“FE”) ends your tax residency with the South African Revenue Service (“SARS”). It officially closes your accounts with SARS. You will receive a Tax Clearance Certificate for Emigration. You will also have a Section 9H deemed disposal, which is known as your “exit tax.”
This process allows you to:
a) Provide evidence to fulfill your burden of proof that you have stopped being a tax resident of South Africa;
b) eliminate any uncertainty from a regulatory standpoint, and
c) demonstrates your personal intent to stay overseas as per our legal precedents when handling SARS cases.
The FE procedure does not require you to give up your citizenship. You do not need to surrender your passport. You also do not have to sell your property. There is no need to end your financial accounts or investments.
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