New Exchange Control Rule Adds Extra Admin for Non-Resident Clients
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A key update to South Africa’s exchange control rules means more red tape when helping non-residents get their money out of the country. On 22 October 2025, the South African Reserve Bank quietly updated the Currency and Exchanges Manual for Authorised Dealers. This change affects how non-residents receive local income like dividends, rent, trust distributions, director fees, and pensions, especially if they’re not registered with SARS.
What’s changed?
If your non-resident client receives income from a South African source and is not registered on the SARS database, they’ll now need a SARS Manual Letter of Compliance – International Transfer. Without it, banks (Authorised Dealers) won’t release the funds for transfer overseas. This rule now applies to:
Dividends
Rental income
Trust distributions
Director fees
Pension fund payments.
How Non-Residents Can Get a Manual Letter of Compliance (MLC) to Transfer Funds Offshore
If your client is a non-resident who isn’t registered on the SARS database, they cannot apply for a standard Tax Compliance Status (TCS). Instead, they must request a Manual Letter of Compliance (MLC) to transfer funds out of South Africa.
The process of requesting the MLC is as follows:
📧 Email the application and all supporting documents to: MLCA@sars.gov.za, including the following documents for non-residents:
Power of attorney (if someone is applying on their behalf)
Full name and date of birth
Previous SA tax number (if available)
South African ID (if available)
Date they ceased being a SA tax resident
Current country of residence and proof of address
Proof of non-residency (e.g. passport, residency certificate, utility bill)
Amount and proof of funds they want to transfer
Statement of SA assets and liabilities for the last 3 years.
There are some exemptions that apply for non-residents. No Manual Letter of Compliance is needed when a non-resident:
Is no longer active on the SARS system, and
Has inherited funds or received life insurance (excluding retirement lump sums),
And the amount is below R10 million. Anything above R10 million? The MLC is mandatory.
Find out more on the SARS website.
What you should do now
This is a big compliance shift, and it’s your job as a tax practitioner to help your clients understand and manage it. Even if a client is not liable for tax in South Africa, this new requirement creates an admin hurdle that could delay international payments.
✅ Identify non-resident clients who are due to receive local income
✅ Check their SARS registration status immediately
✅ Assist them in applying for the SARS Manual Letter of Compliance, if they’re unregistered
✅ Prepare for delays — obtaining the letter may take time, especially with increased demand
If you’re managing offshore trusts, family wealth structures, or clients who’ve emigrated and left assets behind, this rule directly impacts you.
