Questions asked by South African expats returning home

There are many South Africans working abroad who have made the decision to return to their home country. For many, the pandemic was the roll of the dice that sealed their fates. For others, the idea of being far away from extended family was the drawing card that tugged at their heart strings.

Regardless of the reason, repatriation on the back of a global pandemic can nudge you to re-evaluate certain financial aspects of your life.

Am I prepared for the shift back to South Africa?

Untangling yourself from a country where you have been living and working, then reinserting yourself into a country you have been absent from for a long time, can be a challenge. Terminating contracts, closing bank accounts, preparing an international move, and selling off assets like cars or houses, are some of the administrative tasks when leaving a country.

In kind, the undoing of these tasks in a host country, is met by the inverse thereof in South Africa.

International work experience makes you a sought-after asset to employers, especially large corporations with an international footprint. Employing a skilled South African with knowledge of foreign working environments and technological advancements, can also create employment opportunities for others.

Am I covered for emergencies?

Before moving, the most important question to ask yourself is whether you or your family are properly covered against unforeseen incidents in South Africa. It is best to have a policy with a company that understands the nuances of risk cover in the country where you reside. If you have international life cover, then engage with a financial advisor who understands the cover requirements for expatriates returning to South Africa.

The inescapable reality of death not only caused people to make changes to their lifestyles, but it also put a renewed focus on health and safety. This makes medical aid or hospital cover another tender topic to discuss with your partner. The public health system in other countries could vary a lot when compared with that of South Africa. At some point you must consider the difference in medical care and doctor’s fees between the two countries.

For expatriates in limbo, travel insurance can provide cover for you and your family while in transit, and even for the first couple of months back in the country.

This gives you and your advisor ample opportunity to navigate your way through the available risk cover options.

What must I do with my nest egg?

In many cases, those who return, do so with a small kitty of foreign-earned savings. If you put it into a bad investment or spend it recklessly, you could lose the bulk of the money you worked so hard to save for your retirement.

Returning home while keeping foreign assets in the form of offshore trusts, property or foreign investments, can be a great way to maintain a diversified portfolio or to do retirement planning. It is, however, important to understand the nature of each investment, as it could have tax implications or be exposed to volatile fluctuations in exchange rates and other unnecessary costs.

Expatriates are often set on investing in property when they return to South Africa. Buying a house will eliminate rental obligations and will give you a sense of certainty about your immediate future. While property is not a bad idea, it does not have to be your only investment option. A financial advisor or investment specialist can advise on a host of available options, both local and international, that could better suit your specific requirements.

Are my tax affairs in order?

Re-entering the local workforce, makes you liable for income tax to the South African Revenue Service (Sars). It is, therefore, important to know your tax residency status. Where you have been claiming relief under a double taxation agreement between South Africa and the host country, you must inform your adviser.

Assuming you remained tax compliant while abroad, there should be little to no concern when returning to South Africa.

If, for some reason, you failed to declare any foreign earnings or neglected to submit your tax returns, you may find yourself in a pickle with Sars. It is not as forgiving as it used to be.

Where your tax affairs have gotten behind, consult a professional tax practitioner with legal experience to help you with applying for relief under the Voluntary Disclosure Programme. It is always best to establish a clean slate with Sars before it contacts you for answers.

Chris Nel is an investment specialist at Africorp Advisory Services.