It is legal to trade Forex in South Africa as long as you abide by other financial laws such as money laundering and declaring taxes. There are brokers that are regulated by our own FSB and there are others that are regulated by other very diligent regulatory organizations around the world.
TradeForexSA has shortlisted brokers that we have worked, and who we believe are good to their customers. We do prefer that brokers are regulated by the FSB, but we will not stop recommending the leading international players if they are not. So, we keep a list of brokers that will start accounts for South Africans that are either unique, highly-reputable or have customer services that we feel reach beyond the rest.
The Deal with South African Trading
Funding a brokerage account is fairly straightforward in South Africa. It’s actually the broker that’s going to transfer and mix and match funds to keep everything as fluid as possible. For those looking to fund their Forex accounts directly, however, there are a few hoops to jump through.
Different countries will operate a slightly different than others – especially in terms of financial regulations. Although a booming nation in comparison to others sharing our continent, our financial regulations can sometimes get in the way when we try and fund international accounts from our South African banks or using local credit cards. This is happening less and less, but we are still hearing that this problem persists for certain smaller banks.
As of 2010, it became easier for South Africans to legally move more of their money to offshore accounts making funding a Forex account possible. But there is still a limit. Each South African citizen is only given an allowance of 4 million Rand for exchange. That is still a lot of money, though; about $490k USD. So it’s not as if the SA government is stifling investing on a personal level. Larger companies may have issues, but they also have the lobbying funds to get through some of the aforementioned workarounds.
Another way to get funds offshore is to apply individually for a discretionary foreign currency allowance, available in an amount up to 1 million Rand. This, along with the initial 4 million, must be cleared by the South African Revenue Service (SARS). Of course, this means filling out a lot of paperwork, like an MP 1423 form for the 1 million travel allowance, and making sure all your tax forms are up to date.
The real catch here is how you move the money; i.e. wire transfers, credit cards, etc. For a credit card transaction going offshore, the amount drastically cuts into that 4 million, only allowing 20,000 Rand per transaction.