South Africa Individual Tax Guide

South Africa

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Executive and immigration contacts

Emile du Toit (Tax and +27 (11) 772-3000

Private Client Services) Email: emile.dutoit@za.ey.com

Michelle Kotze (Immigration) +27 (11) 772-5692 Email: michelle.kotze@za.ey.com

This chapter reflects the revised tax rates and thresholds announced in the 2021/2022 budget speech for the period of 1 March 2021 through 28 February 2022.

A. Income tax

Who is liable. Individuals resident in South Africa are subject to tax on their worldwide income. Nonresidents are subject to tax on income from a South African source.

The source of remuneration is linked to services rendered and where those services are rendered. In practice, short-term visits of fewer than three weeks do not generally result in South African tax liability if the individual’s presence in South Africa is inci dental to continuing employment elsewhere and if the income earned falls below the annual tax threshold. Under domestic law, income tax is payable if an individual earns more than ZAR87,300 per year (below the age of 65); ZAR135,150 (ages 65 to 74) and ZAR151,100 (ages 75 and over).

An individual is regarded as a resident for tax purposes under either the ordinarily resident rule or the physical presence rule. Under the ordinarily resident rule, an individual is regarded as resident in South Africa if South Africa is the place, considering all personal and financial circumstances, to which the individual would naturally return from his or her travels, and that is the individual’s real home.

The physical presence rule applies if the individual is not ordinarily resident at any time during a particular year, but is physically present for more than 91 days in the relevant year and is physi cally present for an aggregate of more than 915 days in the pre ceding 5 tax years (that is, effectively an average of 183 days per year) and for a de minimis period of more than 91 days in each of those preceding years). For purposes of determining the 91-day and 915-day periods, a partial day counts as a full day.

If an individual is physically outside South Africa for a continu ous period of at least 330 full days after the day of last physical presence, under the physical presence rule that person is not resident for the entire period of continuous absence.

A person cannot be treated as a South African resident for tax purposes if he or she is considered to be a resident of another country under the “tiebreaker” rules of a double tax treaty appli cable to the relevant income item.

Income subject to tax. The taxation of various types of income is described below.

Employment income. The basis of employee taxation is remu neration, which consists of salary, leave pay, allowances, wages, overtime pay, bonuses, gratuities, pensions, superannuation allowances, retirement allowances and stipends, whether in cash or otherwise. These payments, together with the cash value of any fringe benefits received, form part of the gross income of an employee. Fringe benefits are taxed in accordance with a sched ule of valuations.

Remuneration from employment on extended absences outside South Africa is exempt from tax if the employee is outside South Africa for an aggregate of more than 183 full days in any 12-month period and for at least one continuous period exceed ing 60 full days during the same 12-month period.

Effective from 1 March 2020, only the first ZAR1.25 million of remuneration with respect to foreign services rendered will be exempt from tax under the foreign employment income exemp tion. A foreign tax credit can be claimed for foreign taxes paid on foreign employment income in excess of ZAR1.25 million.

Effective 1 March 2017, residents do not qualify for an exemp tion where a lump sum, pension or annuity is received or accrues from a South African retirement fund, regardless of whether services are rendered outside South Africa. In order for such income to qualify for the exemption, the resident must have rendered services outside South Africa and the lump sum, pension or annu ity must be received or accrued from a foreign retirement fund.

Self-employment and business income. Professional fees paid to nonresidents are subject to employees’ tax withholding (if from a South African source), even if the nonresident is an independent contractor.

Investment income. Foreign dividends on holdings of less than 10% that are paid to residents are taxable, subject to the provi sions of an applicable double tax treaty. Credit for foreign tax paid may be available. Foreign dividends paid on greater hold ings are exempt. A portion of the foreign dividend is exempt. The exempt portion of the dividend is determined by multiplying the dividend by a factor that results in a maximum tax rate of 20%, thereby providing a result similar to that produced by the local dividends tax.

Domestic dividends are subject to a final withholding tax of 20%. Royalties paid to nonresidents are subject to a final 15% withholding tax.

For residents, South African-source interest only up to a cumula tive ZAR23,800 (ZAR34,500 for individuals older than 65 years of age) is exempt from normal income tax (general interest exemption). Interest derived from investments in qualifying TaxFree Savings Accounts is exempt from normal income tax.

Capital gains realized with respect to Tax-Free Savings Accounts are not subject to capital gains tax (CGT). Foreign-source interest is subject to income tax.

Nonresidents qualify for a specific exemption from normal income tax on their South African-source interest if they are physically absent from South Africa for a period exceeding 183 days during the 12-month period preceding the date on which on which the interest is received by or accrued to that person.

A final withholding tax of 15% is imposed on South Africasource interest paid to nonresidents, subject to a reduction in the rate in accordance with double tax treaties. Anti-avoidance legis lation restricts spouses from splitting their investment income to reduce their tax burden.

Taxation of employer-provided stock options and other incentive plans. The difference between the market value of shares and similar rights as of the date of vesting for tax purposes and the consideration given by the employee is taxed in South Africa if, in the case of nonresidents, the incentive is related to services rendered in South Africa. Vesting for tax purposes differs from vesting for plan purposes. Vesting for tax purposes occurs when all restrictions on the equity instrument have been lifted or cease to have effect.

Residents are taxable on the entire gain, regardless of source, unless they are exempt under the foreign employment income exemption. Any subsequent gain on actual disposal is generally subject to CGT. However, if the resident is classified as a share dealer, the gain is subject to income tax instead of CGT.

Nonresidents are subject to income tax on that part of the gain that relates to the period of South African service. Nonresidents are generally not subject to CGT on any subsequent gain on actual disposal. However, if a nonresident employee is classified as a share dealer, the gain is subject to income tax.

Deductions

Deductible expenses. Expenses not of a capital nature that are incurred in the production of income are generally deductible. However, restrictions apply in the case of employment income. Donations to public benefit organizations are deductible by indi viduals up to 10% of taxable income, before medical expenses and donations. Donations in excess of 10% may be carried for ward to the following year to be deducted as part of the 10% limit for such year.

Employer contributions to South African-registered pension, provident and retirement annuity funds are included in an indi vidual’s taxable income as a taxable fringe benefit and deemed to be a contribution made by the individual.

For defined contribution funds, the value of the fringe benefit equals the actual employer contribution. For funds other than defined contribution funds, the value of the fringe benefit is calculated in accordance with a formula.

Individuals are allowed to claim a deduction for contributions to pension, provident and retirement annuity funds. The deduction is limited to the lesser of ZAR350,000 or 27.5% of the higher of

“remuneration” (as defined in the legislation) or “taxable income” (as defined in the legislation).

The tax treatment of employer contributions and individual deductions apply only to approved retirement funds in South Africa. Currently, employer contributions to foreign funds are not treated as a taxable benefit in the hands of the employee, and the employee may not claim a deduction with respect to any such contributions, unless it is specifically provided in a double tax treaty and approval is obtained from the authorities.

Mortgage interest paid is not deductible for tax purposes unless the individual leases the mortgaged property for trade purposes.

Individuals may claim medical scheme tax credits (that is, for set off against tax calculated on taxable income) for contributions (personal and those of their employers) toward private or state medical benefit funds (medical aid), subject to the following maximum amounts for the 2021-22 tax year:

• ZAR332 each per month for the fund member and his or her spouse

• A further ZAR224 per month for each additional dependent

Additional relief for the excess medical contributions and quali fying medical expenses incurred is available, subject to stringent limitations based on the taxpayer’s age and disabilities.

With the exception of taxpayers who retired from employment as a result of old age, ill health or infirmity, employer contributions toward medical aid are considered to be taxable fringe benefits, but the medical tax rebate referred to above applies.

Personal tax rebates and thresholds. For the 2021-22 tax year, a primary rebate of ZAR15,714 is deducted from tax payable on taxable income. An additional rebate for individuals who are at least 65 years old and under 75 years old is ZAR8,613. A further tertiary rebate of ZAR2,871 is for individuals who are age 75 or older.

Individuals younger than 65 years old who have taxable income of less than ZAR87,300 are not subject to tax. For individuals who are at least 65 years old and under 75 years old, the threshold is ZAR135,150. For individuals who are age 75 or older, the threshold is ZAR151,100.

Rates. All individuals are taxed at the same rates. The rates for the 2021-22 tax year are presented in the following table.

on lower Rate on Exceeding Not exceeding amount excess ZAR ZAR ZAR

Taxable income

Relief for losses. Business losses of a self-employed person may be carried forward

the trade is continued. No loss

B. Other taxes

Capital gains tax. Capital gains are taxable in South Africa. Capital gains tax (CGT) is imposed through the income tax sys tem by including a portion of the calculated gain in taxable in come. For residents, CGT applies to capital gains derived from the disposal of worldwide tangible and intangible assets. Nonresidents are subject to CGT on capital gains derived from the disposal of real estate held directly by the nonresident or indirectly through a company or trust (if 80% of the value is attributable to real estate), or the assets of a permanent establishment in South Africa. A deemed capital gain arises on the loss of tax resident status.

For individuals, a ZAR40,000 annual exemption of capital gains or reduction in capital losses is allowed. Only 40% of capital gains (after the exemption) is taken into account for CGT pur poses. Consequently, the effective CGT rate for an individual taxed at the highest marginal income tax rate of 45% is 18% (40% x 45%).

CGT applies only to increases in value occurring on or after 1 October 2001 and a formula calculation or a formal valuation is used to determine the base value at that date. Inflation indexing of base cost is not allowed. Rollover relief is available in certain circumstances, including the destruction or scrapping of assets. A gain derived from the sale of an individual’s primary residence is not subject to CGT unless the amount of the gain exceeds ZAR2 million.

Capital losses, other than those incurred on the disposal of personal-use assets (assets used primarily for purposes other than the carrying on of a trade), may offset capital gains. However, net capital losses may not be offset against regular taxable income. Excess losses may be carried forward indefinitely to offset future gains (subject to the ZAR40,000 annual reduction, which is dis cussed above).

Estate duty and donations tax. Estate duty and donations tax are levied at a flat rate of 20% on net assets at death and all capital transfers concluded for no consideration or for inadequate con sideration.

Effective from 1 March 2018, a rate of 25% applies to donations exceeding ZAR30 million and on estates for which the dutiable amount is more than ZAR30 million.

Exemptions from donations tax are granted for donations of up to ZAR100,000 made each year during a person’s lifetime. A deceased’s estate is subject to duty only to the extent that the net value exceeds ZAR3,500,000 (ZAR7 million for a married cou ple).

Residents are subject to estate duty and donations tax on world wide assets, except offshore assets acquired by inheritance or do nation from a nonresident or owned prior to becoming resident. Nonresidents are subject to estate duty on assets located in South Africa only and are exempt from donations tax.

To prevent double taxation, South Africa has entered into estate tax treaties with the following jurisdictions.

Botswana Lesotho United States

Eswatini United Kingdom Zimbabwe

Transfer duty. Transfer duty is levied on the acquisition of fixed property with a value exceeding ZAR1 million. The rate of the duty on property with a value exceeding ZAR1 million depends on the purchase price of the property; the maximum rate is 13% which applies to property with a value exceeding ZAR11 million. If the purchase price is less than the property’s fair value, the tax authorities may calculate the amount of transfer duty payable based on the fair value.

C. Social security

South Africa does not have a social security system per se. However, South Africa does have contributions that are similar to social security contributions, such as Unemployment Insurance Fund contributions, Skills Development Levy and Compensation Commission contributions.

Limited unemployment insurance and accident or illness benefits are provided.

The Unemployment Insurance Fund provides benefits to unemployed people and to dependents of deceased contributors. Employers and employees each contribute to the fund at a rate of 1% of the employee’s remuneration up to a remuneration limit of ZAR17,712 per month (effective 1 June 2021). Both local and foreign national employees are required to contribute to this fund.

Employers are required to contribute to the Skills Development Levy fund, which was set up to encourage learning and develop ment in South Africa. They contribute 1% of the employer’s sal ary bill. The funds are used to develop and improve skills of employees.

Employers are also required to make contributions to the Compensation Fund, which was created under the Compensation for Injuries and Diseases Act to insure employees against indus trial accidents or illnesses that result in death or disability. The Compensation Commissioner determines the amount of the con tributions after the employer reports the annual total remunera tion of employees.

Contributions to the Compensation Fund are payable on annual remuneration of up to ZAR506,473 for the period of 1 March 2021 through 28 February 2022.

D. Tax filing and payment procedures

The year of assessment in South Africa is from 1 March to 28 (or 29) February. Nonresidents are subject to the same requirements for filing tax returns as residents. If an individual (resident or nonresident) earns less than ZAR500,000 during a tax year, he or she is not required to file a tax return (subject to certain conditions).

Employees. Under the Pay-As-You-Earn (PAYE) system, resident employers or agents for nonresident employers must deduct tax monthly from the remuneration of their employees and must pay these amounts to the South African Revenue Service (SARS). If

a nonresident employer does not have a place of business in South Africa or an agent who is authorized to pay remuneration, no PAYE liability is likely to arise. However, the foreign employ er effectively has an obligation to pay the statutory contributions described above. Annual tax returns must be submitted to the Commissioner for SARS within the period specified in the annual “Notice to Furnish Returns” (this deadline is confirmed annually by the SARS).

Provisional taxpayers. Persons deriving income, excluding exempt income, of ZAR30,000 or more a year from sources other than remuneration or having taxable income in excess of the tax threshold are considered provisional taxpayers and are required to make provisional tax payments each year on 31 August (first payment) and in the following year on 28 February (second pay ment) and 30 September (third payment). The second provisional tax estimate must be at least 80% of the taxpayer’s actual income (90% if less than ZAR1 million) for the year to avoid penalties. The third payment must bring the total amount paid to 100% of actual liability, to avoid an interest penalty.

E. Double tax relief and tax treaties

In the absence of treaty provisions, unilateral relief (in certain circumstances) is available on foreign-source income in the form of a credit for foreign taxes paid, limited to the lesser of the actual foreign tax liability and the South African tax payable on the foreign income.

South Africa has entered into double tax treaties with the follow ing jurisdictions.

Algeria Hungary Qatar Australia India Romania Austria Indonesia Russian Belarus Iran Federation Belgium Ireland Rwanda Botswana Israel Saudi Arabia Brazil Italy Seychelles Bulgaria Japan Sierra Leone Cameroon Kenya Singapore Canada Korea (South) Slovak Chile Kuwait Republic China Mainland Lesotho Spain Congo (Democratic Luxembourg Sweden Republic of)

Malawi Switzerland

Croatia Malaysia Taiwan Cyprus Malta Tanzania Czech Republic Mauritius Thailand

Denmark Mexico Tunisia Egypt Mozambique Turkey

Eswatini Namibia Uganda

Ethiopia Netherlands Ukraine Finland New Zealand United Arab

France Nigeria Emirates

Germany Norway United Kingdom

Ghana Oman United States

Greece Pakistan Zambia

Grenada Poland Zimbabwe

Hong Kong Portugal

South Africa is also negotiating tax treaties with the following jurisdictions.

Cuba (a)

Senegal (a)

Syria (a) Gabon (b)

Sri Lanka (a) Vietnam (a) Morocco (a)

Sudan (b)

(a) This treaty is under negotiation, but it is not yet finalized. (b) This treaty has been ratified or signed by South Africa, but it is not yet effec tive.

In addition, many treaties are being renegotiated by way of pro tocol to deal with South Africa’s new dividend and interest with holding tax regimes.

F. Visitors’ visas

Under Section 11(1) of the Immigration Act No. 13 of 2002, as amended (the Immigration Act), visitors’ visas are for interna tional travelers (citizens of other countries) who have permanent residence outside South Africa and who wish to visit the country on a temporary basis for tourism for a period of 90 days or less. The Department of Home Affairs does allow an international traveler who travels to South Africa on a Section 11(1) visitor’s visa (tourist visa) to attend limited business meetings or attend a conference or seminar on this visa type.

A visa indicates that an individual’s application has been reviewed at a South African embassy, mission or consulate and that the consular officer has determined that the individual is eligible to enter the country (via the dedicated ports of entry) for a specific purpose.

The visa allows an individual to travel to a South African port of entry where an immigration official then determines if the indi vidual is allowed to enter South Africa and how long the indi vidual can stay for that particular visit. Visitors are restricted to the activity or reason for which their visas were issued.

To obtain a visitor’s visa for recreational purposes only, proof of sufficient financial means and a return air, boat or bus ticket must be submitted. Individuals who have traveled or who intend to travel through a yellow fever area must produce a yellow fever vaccination certificate. This requirement excludes direct transit through yellow fever areas. Proof of guardianship and custody is required with respect to minor dependent children together with consent from the other parent when traveling with only one parent.

A visitor’s visa may be renewed only once for a maximum period equal to the original visa. Thereafter, the visitor must depart from the country.

The holder of a passport of certain jurisdictions (subject to change without notice) may be issued a visitor’s visa at the port of entry if the intended stay is 90 days or fewer or if the individual is in transit and a return air or other travel ticket is shown.

The holders of a passport from certain jurisdictions (subject to change without notice) are visa-exempt.

The latest list of the visa-exempt nationals can be found on the South Africa Department of Home Affairs website (dha.gov.za).

Nationals from jurisdictions not listed must obtain a visa before traveling to South Africa by contacting the nearest South African mission abroad.

On arrival, a visitor must present his or her passport. The pass port must be valid for at least 30 days after the intended departure date. The visitor may need to satisfy the immigration authorities that the visitor has no criminal record, no communicable diseases and sufficient funds to support himself or herself for a reasonable period after arrival. The visitor must also produce a valid return air ticket.

A visitor’s visa under Section 11(2) of the Immigration Act, with endorsement to conduct short-term work-related activities (up to 90 days) may be issued to international travelers who are required in South Africa for short-term project work for up to a period of 90 days.

Certain activities need to be approved in advance by applying for the appropriate permission before departure for South Africa for all international travelers applying for a visitor’s visa under Section 11(1) or Section 11(2) of the Immigration Act. This ap plies equally to citizens of visa and non-visa exempt countries. Holders of these visitors’ visas may not change the status or condition of their visas while in South Africa and will be required to return to their country of usual residence or origin and apply for a different type of visa abroad. The activities referred to above for these two visa types in this category include the following:

• Visiting South Africa for short-term project work

• Attending short courses at educational institutions

• Performing voluntary or charitable activities

• Conducting research

G. Work visas

Types of work visas. Work visas fall into the following four cate gories:

• Critical skills work visas

• General work visas

• Intracompany transfer work visas

• Corporate work visas

Critical skills work visas. Subject to any prescribed requirements, a critical skills work visas may be issued to individuals possess ing such skills or qualifications determined to be critical for South Africa as per a notice in the Government Gazette. The applicant’s foreign tertiary qualifications need to be certified by the South African Qualifications Authority The purpose of the evaluation function is the recognition of foreign qualifications in terms of the South African National Qualifications Framework (NQF). Registration with the relevant professional body is also required. A critical skills work visa is issued for a period not exceeding five years.

General work visas. General work visas are issued to individuals who do not fall in a critical skills category. The South African employer needs to prove through advertisements and interviews that a suitably skilled or experienced South African citizen or permanent resident could not be found to fill the position offered. The applicant’s foreign tertiary qualifications need to be certified

by the South African Qualifications Authority. The purpose of the evaluation function is the recognition of foreign qualifications in terms of the South African NQF. It is also required that the Department of Labour issue a certificate confirming the following:

• Despite a diligent search, the prospective employer has been unable to find a suitable citizen or permanent resident with qualifications or skills and experience equivalent to those of the applicant.

• The applicant has qualifications or proven skills and experience in line with the job offer.

• The salary and benefits of the applicant are not inferior to the average salary and benefits of citizens or permanent residents occupying similar positions in South Africa.

• The fixed-term employment contract for a period of five years (in line with the issuance of the visa) stipulating the conditions of employment that is signed by both the employer and the applicant is in line with the labor standards in South Africa and is conditioned on the general work visa being approved.

Registration with the relevant professional body is required in some cases. A general work visa is issued for a period not exceeding five years.

Intracompany transfer work visas. Intracompany transfer work visas are issued if an employee is seconded from his or her place of employment abroad to an affiliated company, branch or sub sidiary in South Africa for a period of up to four years only and if the foreigner’s employment contract with the company abroad is valid for a period of not less than six months before transfer. These types of visas are nonrenewable and may be issued for a period of four years. The intent of this visa category is that the expatriate transfer his or her skills to South African employees and leave South Africa at the end of the four-year secondment. A plan must be developed for the transfer of skills to a South African citizen or permanent resident. The employer’s skills transfer plan must accompany the application.

Corporate work visas. Corporate work visas may be issued to a corporate applicant to employ foreigners to conduct work for the applicant in South Africa. No corporate visa may be issued or renewed with respect to any business undertaking that is listed as “undesirable” by the Minister of Home Affairs. The corporate work visa application requires a certificate from the Department of Labour confirming the following:

• Despite a diligent search, the prospective employer has been unable to find a suitable citizen or permanent resident with qualifications or skills and experience equivalent to those of the applicant.

• The job description and proposed remuneration for each for eigner.

• The salary and benefits of any foreigner employed by the corporate applicant is not inferior to the average salary and benefits of citizens or permanent residents occupying similar positions in South Africa.

An applicant for a corporate visa must provide proof that at least 60% of the total staff employed in the operations of the business is citizens or permanent residents employed permanently in

various positions. This proof is also required during the duration of the visa.

To qualify, the corporate applicant must conduct business in certain sectors, as published in the Government Gazette.

The immigration authorities determine, in consultation with pre scribed departments, the maximum number of foreigners to be employed under a corporate visa.

The corporate applicant must undertake that it will take pre scribed measures to ensure that foreign employees comply with the provisions of immigration legislation and the conditions of the corporate visa. In certain circumstances, the corporate ap plicant may be required to post financial guarantees to defray deportation or other costs in the event that the corporate visa is withdrawn.

A foreigner employed under the terms of a corporate visa must work only for the holder of that corporate visa.

Other requirements. Expatriates may not change employers or terms of employment without prior approval from the immigra tion authorities. If an expatriate does not comply with the condi tions of his or her visa or if he or she contravenes the immigration legislation, the expatriate is classified as an undesirable person.

Employers must make a good faith effort to ascertain that no illegal foreigner is employed by them and to ascertain the status of the visa or citizenship of individuals employed by them.

Employers must keep prescribed records relating to employment up to two years after the termination of a foreigner’s employment. The employer must report to the immigration authorities termina tion of a foreigner’s employment and a breach by a foreigner of his or her status.

If an illegal foreigner is found on any premises where a business is conducted, the legislation presumes that the foreigner was employed by the person who has control over the premises, unless evidence to the contrary is provided. Stiff penalties in the form of fines and imprisonment can be imposed on both the employer and employee.

H. Self-employment

A business visa may be issued to a foreigner who intends to establish a business or invest in a business that is not yet estab lished in South Africa.

Appropriate visas are issued to family members accompanying the business owner.

A business visa requires a minimum capital investment of ZAR5 million derived from abroad that is invested and retained in the book value of the business.

The business must comply with any relevant registration requirements of the SARS, Unemployment Insurance Fund, Compensation Fund for Occupational Injuries and Diseases, Companies and Intellectual Properties Commission and any

relevant professional body, board or council recognized by South African Qualifications Authority.

The applicant must make an undertaking that at least 60% of the total staff to be employed in the operations of the business will be South African citizens or permanent residents employed per manently in various positions and submit proof of compliance with this undertaking within 12 months of issuance of the visa.

Confirmation of continued compliance with immigration legislation is required on a biannual basis.

A business visa may be issued for a period not exceeding three years at a time.

I. Other temporary residence visas

The following temporary residence visas may be issued:

• Study visa for individuals wishing to study in South Africa

• Dependent visa (visitor’s visa) for a spouse and minor children of an assignee who holds a valid work or business visa to accompany the assignee

• Treaty visa for individuals participating in a program estab lished under a treaty

• Medical visa for individuals wishing to obtain medical treat ment in South Africa

• Crew visa for officers or members of the crew of a public con veyance in transit in South Africa

• Relatives’ visa for individuals intending to visit relatives within the first step of kinship for up to 24 months (work not permitted)

• Spouse visa (Section 11(6) visitor’s visa) for a spouse of a South African citizen or permanent residence holder

• Retired persons’ visa for individuals intending to spend part or all of their retirement in South Africa (work not permitted)

• Exchange visa for individuals who are taking part in an ex change program of a public higher educational institution and for persons under the age of 25 who have completed their stud ies and intend to spend one year in South Africa to gain work experience in their field of study

• Asylum transit visa for individuals seeking asylum

• Cross-border visa for individuals regularly crossing the border at a port of entry

J. Permanent residence

Permanent residence may be granted to the following individuals:

• Individuals possessing such skills or qualifications determined to be critical for South Africa as per a notice in the Government Gazette

• Individuals who have been married to, or living with, a South African citizen or resident for a minimum of five years

• Children under the age of 21 of a South African resident

• Children of a South African citizen

• Individuals who have held a South African work visa for five continuous years and have received an offer of permanent employment

• Individuals who intend to establish or have established a business

• Individuals who wish to spend their retirement in South Africa

• Individuals who have a net worth of at least ZAR12 million and pay a fee to the Department of Home Affairs of ZAR120,000 on approval of the application

• Individuals who derive an income of at least ZAR37,000 per month from a pension, irrevocable annuity or retirement account

• Individuals who are refugees referred to in Section 27(c) of the Refugees Act

• Individuals who hold a combination of assets realizing an income of ZAR37,000 per month

• Individuals who are relatives of a South African citizen or resi dent within the first step of kinship

A permanent residence permit may be withdrawn if the holder is convicted of specified offenses or fails to comply with the require ments of the permanent residence permit. Absence from South Africa of more than three uninterrupted years causes the perma nent residence permit to be withdrawn.

K. Undesirable persons

An individual is declared undesirable when he or she overstays the validity of a current permit and leaves South Africa.

An individual who overstays for the first time for a period not exceeding 30 days is declared undesirable for a period of 12 months. An individual who overstays for the second time within a period of 24 months is declared undesirable for a period of two years. An individual who overstays for more than 30 days is declared undesirable for a period of 5 years.

L. Family and personal considerations

Marital property regime. Couples who solemnize their marriages in South Africa are subject to a community property regime that applies to all property. A prenuptial agreement may be concluded if a couple wishes to elect out of the community property regime.

The regime does not apply to couples who do not solemnize their marriages in South Africa or to couples with a non-South African husband, unless they establish a marital domicile in South Africa by seeking a Supreme Court confirmation subjecting the couple to South African marriage legislation.

Forced heirship. South Africa does not have forced heirship rules.