Tue. Aug 20th, 2019

Frozen in the bank: Debunking the myth about foreigners and banking

 

By Pias Murinye

Following the debate that ensued on many of our Proudly263Global platforms in the past weeks, I decided to shade a few points that can help our community.

This is a very emotive matter, and it is important that our members and followers have got good relationships with banks.

I will discuss the following topics in this article:

Banking for foreign nationals
Non Resident personal bank accounts
Non Resident business accounts
Why banks Ask for Source of Income

1. Banking for Foreign Nationals
Foreign nationals leaving is SA are by law expected to have documents that allows them to live and stay in the country.
These documents include, Asylum permits, Work permits, Work visas, permanent resident permits and identity books or cards.
When you open a bank account in the Republic, you will be asked to produce any one of the above mentioned documents.
This is a resident bank accounts which allows you to freely transact in any lawful transactions in the republic.
If you are opening a personal account, most banks will ask for a payslip, meaning that it is not easy to open a personal account when not formally employed.
If you are opening a business account, you will be asked to produce a company registration certificate over and above one of the earlier mentioned documents
The company must be registered in SA.

2. Non-resident personal bank accounts
This is an account opened by foreign nationals with a temporary visa, in the case of Zimbabweans, that is just a stamp in your passport.
This account has a lot of limitations.
The fact that they don’t ask for your payslip means they do not expect you to earn a salary in the Republic.
I really do not see the benefit of this type of account, since the holder will not be in SA for a longer period.
The problem comes when undocumented foreign nationals try to open this type of an account.
The moment you start getting regular payments or a salary into this account, the bank will start to doubt your “Visitor status”.
To make matters worse, these account will be active throughout the year when as a visitor from Zim, you are only allowed 90 days in the country.
So my advice on this one is please do not open a non-resident account if you intend to stay in SA for more than 90 days, and don’t blame the bank when they freeze your accounts, they will be acting within the law.

3. Non-resident business account
This account is usually meant for cross border traders.
To open this account, one must register a company in SA using a passport
With your company documents and your stamped passport you are good to open this account.
This account allows you to receive and spend money in SA without a lot of questions asked, however when you start to receive big sums of money as defined by a particular bank, the bank may ask for invoices to support the revenue. This must not be a problem if you are a genuine business person.

4. Why Banks ask for source of income
Banks are used by the government and SARS to prevent money laundering
All banks in SA have a right to know the source your income coming through your account.
Cash deposits are usually questionable if they exceed a certain amount.
Bank transfers are usually not questioned because they can be easily traced.
Depending on the type of your account, some transactions will attract the attention of the bank and SARS. We also need to know that SARS also has access to any bank account in the republic of SA .
Finally we need to know that an income earned by a resident of south Africa is subject to tax, and non-compliance is an offence.

For advice on any tax issues please contact the writer on 0710870824 or email pias@helbon.co.za. Murinye is CEO of Helbon Business Solutions, and is a registered business consultant.

 

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