Is a tax-free lifestyle a possibility for South Africans? Can you earn an income or trade and invest in Equities, Bitcoin, Ethereum, Cardano, and the likes with absolute freedom and without having to pay any tax?
South Africans are subject to a high marginal tax rate at 45% with corporates being taxed at 28% along with various other taxes placing a stranglehold on citizens. It has also been formally stated that Cryptocurrency gains are to be taxed either as income or capital gains depending on the nature thereof.
As if this is not enough recent announcements indicated that it is illegal to acquire Crypto from offshore exchanges with your debit/credit card and if you wish to transfer Crypto abroad you are bound by the regulations of the Reserve Bank.
The world is moving forward, new opportunities avail themselves, and guess what? The South African government is stuck in neutral and once again we, the citizens of this country, are adversely affected by this.
If you are serious about building your wealth, investing, the blockchain, crypto, and various other opportunities then ignoring the possibility of divesting from South Africa is futile. You need an alternative, a proper strategy allowing you to earn, trade, and invest freely without the shadow and uncertainties imposed by the regulations, or lack thereof, from the South African government.
Ok, but if not South Africa then where? How can I as a South African resident be able to earn, trade, and invest freely and without paying any taxes?
Simple, Dubai! It levies no income tax on individuals or corporates. Ok, I can hear you utter in disbelief even screaming, “Not possible! South African citizens are taxed on their worldwide income how is this possible?”
Yes, but seriously maybe it is time you get with the times. Awake the true Nomad in you and realize that to go to the next level you and your thinking need to change. You have to become more nomadic and seize these types of opportunities.
The first step would be to obtain your Dubai residency. Sounds difficult? Not really. You can easily obtain your residence through a once-off investment in property or by registering a company and sponsoring your own Visa. Both options are very economical and will provide you with your residency and a Visa.
Now that you have your residency it is time to open a bank account with any of the major banks in the region. If Crypto is your thing then take one step further and open a Crypto account with one of the major regional Crypto exchanges. Link your bank account to your Crytop account and whallah most of your trading and investing admin has been taken care of.
Now, let us address the issue of taxes and more specifically being a South African resident and being taxed on your worldwide income. You as a South African have 3 options to ensuring that you are not taxed in South Africa:
- Cease to be an ordinary resident for taxation purposes, i.e. to emigrate;
- Cease to be a tax resident by way of the physical presence test; or
- Cease to be a tax resident by way of applying the Double Taxation Agreement between the two countries.
Each of these options would provide you with the opportunity to partake in a tax-free lifestyle. Assuming that you do not intend to follow the options requiring you to cease South African residency and emigrate, then the application of the Double Taxation Agreement between South Africa and Dubai would be your best option.
Stay a resident of South African but ensure that taxing rights are allocated to Dubai, and yes, you are correct again – no taxes in Dubai. The application of the Double Taxation Agreement does come with specific requirements for it to be effective. But, nothing worthwhile in life, such as paying no taxes, is easy and will require some effort and dedication.
If you are serious and willing to go the extra mile to secure your future and build your offshore wealth then this is a no-brainer.
Get in contact and let us discuss your options and how you can implement this strategy.