Case Study | Internationally Mobile Entrepreneurs Relocating To South Africa

Internationally Mobile Entrepreneurs Relocating To South Africa

THE SITUATION

Two entrepreneurs and tax residents of the United Arab Emirates, with business interests spanning Ireland and Australia, sought advice on the South African tax implications of relocating to South Africa for extended periods over the next four years.

Although the couple intended spending approximately six to nine months per year in South Africa, they wished to retain their non-resident tax status whilst continuing to derive income from foreign companies through a combination of management fees, consulting fees, commission arrangements, and intellectual property interests.

In addition to their personal tax exposure, concerns arose regarding the potential South African corporate tax implications for their foreign businesses, including permanent establishment, place of effective management, and controlled foreign company considerations.

CONTACT BRONWIN FOR ASSISTANCE

WHAT WE ASSISTED WITH

South African Tax Residency Analysis

New Zealand Connection Analysis

Ordinarily Resident Test Assessment

Cross-Border Residency Advice

How We Helped

Our specialist cross-border tax team conducted a detailed residency review for both spouses, examining their historical emigration, foreign citizenship, family circumstances, lifestyle patterns, overseas economic interests and ongoing connections to New Zealand.

Particular consideration was given to the ordinarily resident test, the physical presence test and the implications of spending extended periods in South Africa while maintaining an established life abroad.

Outcome

Following a comprehensive legal analysis, we concluded that neither spouse had resumed South African tax residency despite spending significant periods of time in South Africa. Separate residency opinions were prepared and SARS applications submitted to formally confirm their South African tax status. SARS subsequently confirmed both spouses as non-residents for South African tax purposes and issued Notices of Non-Resident Tax Status, confirming their non-resident tax status effective from 2008. This provided the couple with certainty regarding their South African tax position and enabled them to continue their internationally mobile lifestyle with confidence.

Client Feedback

“The process of confirming our non-resident tax status seemed daunting at first. Delano and his team guided us through every step, explained the technical issues in a practical and understandable manner, and provided confidence throughout the process. We were delighted to ultimately receive confirmation from SARS recognising our non-resident status and greatly appreciate the support we received.” – Dual South African & New Zealand Citizens.

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