This means offshore transfers will now be blocked unless both SARS and SARB requirements are satisfied, in the precise sequence required by law. The message for former South Africans is clear: you may have emigrated years ago, but unless your documentation aligns with the new regime, your funds may not leave South Africa.
SARS is Now the Gatekeeper
Under the new operational rules, Authorised Dealers may not remit any dividends offshore until SARS has validated the individual’s non-resident status and tax compliance. This SARS approval takes one of two forms, depending on whether the individual remains on the SARS database:
- If the non-resident shareholder is still registered with SARS, they must obtain:
- A SARS Notice of Non-Resident Tax Status to confirm they have ceased South African tax residency; and
- A Tax Compliance Status – Approval for International Transfer (AIT) PIN, confirming that their tax affairs are up to date.
The AIT process was introduced by SARS in April 2023 to streamline the verification of compliance before transferring funds abroad. The most recent procedural update now aligns the SARB Exchange Control Manual with the SARS process.
- Where the individual is no longer registered on the SARS database, they must apply for a Manual Letter of Compliance (MLC – International Transfer). This is effectively the substitute clearance process for non-resident individuals who do not have an active SARS profile. The essence of the new regime is that banks must be satisfied that the non-resident is tax compliant before they are legally permitted to remit any funds offshore.
The above requirement extends well beyond dividends. It also applies to other South African-sourced income such as rental income and director’s fees. It remains uncertain whether SARS will issue a once-off MLC or whether a new clearance will be required per transaction. Different banks may also interpret the requirements differently.
SARB’s Authority Remains Intact: The Endorsed Share Certificate
For many non-resident shareholders, the new process creates a higher administrative burden. Even where share certificates are endorsed as “non-resident”, an MLC or AIT PIN will still be required before any dividend can be externalised. Previously, dividends could be remitted offshore solely on the strength of a non-resident endorsed share certificate, without additional SARS clearance.
Even once SARS has approved the transfer, the bank may not release funds unless the underlying asset (the shares) complies with South African exchange control rules. Under Regulation 14 of the Exchange Control Regulations, shares belonging to non-residents must be endorsed by an Authorised Dealer as “non-resident”. This endorsement is the only official evidence that the shares are recognised as non-resident assets.
Without it, the shares remain treated as “resident” for exchange control purposes, and the bank is legally prohibited from remitting dividends offshore, even if SARS tax clearance is in place.
Why This Matters Now
Despite public messaging since 2020 that exchange control restrictions were being relaxed, the recent changes prove the opposite. SARS and SARB are now operating in a synchronised, compliance-driven environment, and banks must enforce every procedural safeguard.
In practice we see that for many non-resident shareholders:
- non-resident share endorsements are missing;
- SARS residency records are incorrect; and
- banks are refusing transfers pending updated documentation.
The risk is simple: your dividends or other income may sit in South Africa indefinitely unless both compliance legs are satisfied. With SARS’s December closure period fast approaching, any delays in lodging applications for clearance could result in funds being trapped until well into the new year. Non-resident shareholders expecting year-end dividends should begin the clearance process immediately to avoid missing the window for offshore transfer.
Is SARS’ Extended Purview a By-Product of South Africa Exiting the FATF Grey List?
South Africa’s formal removal from the Financial Action Task Force (FATF) Grey List on 24 October 2025 marks a significant milestone for the country’s financial reputation and global credibility. However, the delisting does not mean that funds can now move freely in and out of South Africa without oversight. On the contrary, regulatory compliance remains a central pillar for cross-border transactions and the timing of the procedural shifts implemented by SARS and SARB points to this.
In the wake of FATF scrutiny, financial institutions have tightened their compliance obligations, and regulations have enhanced coordination to ensure ongoing adherence to international standards.
A Sharper Enforcement Environment
SARS’ growing enforcement drive underscores the importance of compliance. In a 7 November 2025 media release, SARS announced progress in its litigation against Sasfin Bank Limited, where it seeks to hold the bank liable for allegedly facilitating the unlawful export of undeclared funds.
While certain exceptions were upheld, the High Court confirmed that SARS has a statutory right of action under section 278 of the Financial Sector Regulation Act for losses caused by contraventions of financial sector laws by banks and other institutions.
This ruling reinforces SARS’ commitment to combat illicit financial flows and signals heightened scrutiny of all offshore transfers, particularly those processed through Authorised Dealers. Commissioner Kieswetter has cautioned financial institutions to “go beyond a narrow compliance response” and actively manage the substantive risks associated with questionable transactions.
The Compliance Burden Is Real
The process is now substantially more onerous. Even if you emigrated years ago, you should expect:
- a full SARS residency verification;
- a tax compliance review before SARS will issue an AIT PIN or MLC; and
- a review of every historic share certificate for SARB endorsement compliance.
Given the complexity of SARS’ current non-resident processes and the strict reporting obligations imposed on banks, it is important to engage with professionals to facilitate compliant offshore remittance of dividends and other payments.
If you are a non-resident South African receiving dividends or other local income, it is advisable to confirm your SARS and SARB compliance before your next distribution to avoid delays or rejection by your bank.
