In 2013, the Minister of Finance announced that listed entities on the Johannesburg Stock Exchange (JSE) will be allowed to establish special holding company subsidiaries to hold African and offshore operations which will receive beneficial exchange control treatment, including being allowed to freely transfer up to ZAR750 million in cross-border transactions.
In this Budget it was announced that the permissible amount would be increased from ZAR750 million to ZAR2 billion. Application can be made to the South African Reserve Bank to transfer abroad up to 25% of a listed company's market capitalisation. As in the case of the current Foreign Direct Investment (FDI) allowance, such applications are subject to the key consideration of being able to demonstrate ultimate benefits to the South African economy.
A further significant development which has been announced is the extension of this regime to unlisted companies. It is, however, subject to the same restrictions, but with the lower limit for permissible transfers being ZAR1 billion. This is a significant example of the further unwinding of exchange controls in South Africa.