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 or unauthorized funds in South Africa, thereby creating a” loop structure”. An exception to this however applied in that South African residents were permitted to individually or collectively acquire up to 40% equity and/or voting rights, whichever is the higher, in a foreign target entity, which may in turn hold investments and/or make loans into any Common Monetary Area (CMA) which consists of South Africa, Eswatini, Lesotho, Namibia and South Africa.