Non-resident persons and companies in which non-residents have an interest of 75% or more face local borrowing restrictions in respect of the acquisition of residential and/or commercial properties, as well as any other financial transaction, including, inter alia, the purchase and sale of any securities (listed or unlisted), repurchase agreements and any derivative transactions on securities. Authorised borrowing amounts must comply with a 1:1 ratio, i.e. for every R1 in cash or assets that a non-resident introduces or owns, such non-resident may borrow an equivalent amount in the local market. Local borrowing by companies in which non-residents have an interest of 75% or more is not restricted in respect of normal trade and working capital financing operations.
"A.1 Definitions
In the Currency and Exchanges Manual for Authorised Dealers, unless the context indicates otherwise: [...]
Affected person means a body corporate, foundation, trust or partnership operating in South Africa, or an estate, in respect of which:
(i) 75 per cent or more of the capital, assets or earnings thereof may be utilised for payment to, or to the benefit in any manner of, any person who is not resident in South Africa; or
(ii) 75 per cent or more of the voting securities, voting power, power of control, capital, assets or earnings thereof, are directly or indirectly vested in, or controlled by or on behalf of, any person who is not resident in South Africa.
[...]
I.1 Local financial assistance to affected persons and non-residents
(A) Introduction
(i) Regulation 3(1)(e) and (f) prohibits the granting of local financial assistance to, as well as the acceptance of collateral from, affected persons and non-residents.
(B) General
(i) The lender is obliged to obtain exemption from the provisions of Regulation 3(1)(f). It is therefore the lender's responsibility to establish whether or not a prospective borrower is an affected person or a non-resident.
(ii) For ease of administration, any application for exemption from the aforementioned Regulation must be submitted in the name of the borrower.
(C) Affected persons availing of local financial assistance in respect of transactions other than financial transactions and the acquisition of residential property
(i) Authorised Dealers are exempted from the provisions of Regulation 3(1)(e) and (f) and may grant or authorise local financial assistance facilities to affected persons without restriction.
(D) Affected persons availing of local financial assistance in respect of financial transactions and the acquisition of residential property
(i) Authorised Dealers are exempted from the provisions of Regulation 3(1)(e) and (f) and may grant or authorise local financial assistance facilities to affected persons where the funds to be borrowed are required for financial transactions and/or the acquisition of residential property in South Africa, provided the 1:1 ratio applies, i.e. for every R1 in cash or assets that a non-resident introduces or owns, such non-resident may borrow an equivalent amount in the local market.
(ii) Financial transactions include, inter alia, the purchase and sale of any securities (listed or unlisted), repurchase agreements and any derivative transactions on securities.
(E) Non-residents
(i) Authorised Dealers may grant or authorise local financial assistance facilities to non-residents in respect of bona fide foreign direct investment in South Africa without restrictions, except where the funds are required for financial transactions and/or the acquisition of residential or commercial property in South Africa, the 1:1 ratio will apply.
(ii) As an exception to (i) above, Authorised Dealers may grant or authorise local financial assistance facilities to non-residents living and working in South Africa in respect of the acquisition of residential property, subject to normal lending criteria.
(iii) Any facility being made available to a non-resident party must be secured by an unencumbered Rand deposit or Rand based asset of equal or higher value. In addition, any facility accorded to the non-resident in respect of the aforementioned may not cause the borrower to exceed 100 per cent of the Rand value of funds introduced from abroad and invested locally.
(iv) If facilities are granted for the acquisition of fixed property, such facilities may not be increased at any stage based on a revaluation of the property in question.[...]" (Currency and Exchanges Manual for Authorised Dealers, 2022-04-25)
Currency and Exchanges Manual for Authorised Dealers, 2022-04-25
[<a href="https://www.resbank.co.za/content/dam/sarb/what-we-do/financial-surveillance/financial-surveillance-documents/2020/Currency%20and%20Exchanges%20Manual%20for%20Authorised%20Dealers.pdf">Manual</a>]