Content provided by Last updated: 28/01 - 14:40
The long-anticipated relaxation of the South African Exchange Control Rules relating to “loop” structures and investment was released on the 4
th of January 2021 by the South African Reserve Bank under Exchange Control Circular No. 1/2021. The “loop” structure and investments restriction were lifted to promote inward investments into South Africa, subject to the normal criteria applying to inward investments and reporting to the Financial Surveillance Department (FinSurv).
What is a “loop” structure?
In simple terms a “loop” structure are generally created by a South African resident individual, trust or company transferring authorized or unauthorized funds from South Africa to, for example, set up a foreign trust or foreign company. The foreign trust or company would then directly or indirectly (via another offshore entity) invest the authorized o
Chido Pamela Mafongoya, Legal Intern
The long-awaited trading within the African Continental Free Trade Area (AfCFTA) finally began on 1 January 2021, marking a very important milestone for African trade. The AfCFTA creates a single continental market for goods and services, with the aim of increasing intra-African trade by reducing tariffs by approximately 90 percent [1] and harmonising trading rules at a continental level. The AfCFTA has the potential to increase intra-African trade by 52.3% by 2022 [2].
The COVID-19 pandemic has inevitably delayed the implementation of the AfCFTA, in a time when harmonisation couldn’t be more important as the world clubs together to fight the novel Corona virus. Despite various regulations put in place by African governments to try and manage the spread of the disease, the pandemic continues spread across the continent. According to the World Health Organization (WHO) cases in the African region (which excludes Morocco, Tunisia, Libya, Egypt,