Unlock Your Travel Allowance: A South African’s Guide to Spending Abroad

South African residents traveling overseas for business or leisure often have questions about the foreign currency they can avail of to cover their travel expenses. This column addresses the Financial Surveillance (Exchange Control) conditions applicable to general holiday travel by South African residents and business travel by representatives of South African companies.

Travel Allowances for Leisure Travelers

When considering travel allowances for South African individuals, it is crucial to first understand the Single Discretionary Allowance (SDA) available to South African residents. Here are the key features:

1. SDA Overview: South African residents (18 years and older) are entitled to a single discretionary allowance of up to R1 million per calendar year. This allowance can be used for any legal purpose abroad, including travel, investment, or sending gift parcels (excluding gold and jewellery). No TCS PIN letter from SARS is required.
   

2. Documentation: For travel outside the Common Monetary Area (CMA)—Lesotho, Namibia, and eSwatini—a passenger ticket must be produced. Transfers of a capital nature must be converted to foreign currency through an authorized dealer.
   

3. Minors: Individuals under 18 years old are not eligible for the SDA but can obtain a travel allowance up to R200,000 per calendar year.
   

4. Travel Allowance Usage: The SDA can be used for travel expenses outside the CMA. Foreign currency can be obtained in various forms, including notes, and may also be transferred to the traveller’s or their spouse’s bank account abroad.
   

5. Cash Allowance: Travelers can carry up to R25,000 in cash when traveling outside the CMA.
   

6. Land Arrangements: Costs for foreign tours, hotel accommodation, and vehicle rentals, commonly referred to as 'Land Arrangements,' are deducted from the R1 million SDA. Payments to foreign entities via travel agents must be supported by documentary evidence.
   

Special Considerations

1. Air Tickets: The cost of international air tickets can be paid in Rand without deduction from the R1 million SDA limit. However, payment in Rand for tickets starting outside the CMA is not allowed without prior approval.
   

2. Unused Foreign Currency: Unused foreign currency must be resold to a bank or an authorized dealer within 30 days of returning to South Africa. Funds from the travel allowance cannot be retained offshore or used for investments.
   

3. Extensions and Next Year’s Allowance: If a trip extends into the following calendar year, foreign currency for the next year’s allowance can be obtained without returning to South Africa.
   

4. Study Abroad: Residents traveling for study purposes and their spouses are also entitled to the SDA limit of R1 million.
   

5. Lesotho, Namibia, and eSwatini Residents: Residents from these countries do not qualify for a South African travel allowance, with limited exceptions such as diplomats and students with a valid student card.
   

Summary for Leisure Travelers

• Adults (18+): Up to R1 million per calendar year.
  

• Minors (under 18): Up to R200,000 per calendar year.
  

• Forms of Foreign Exchange: Can be provided in any authorized form and transferred to personal accounts abroad.
  

• Restrictions: Foreign currency must be bought within 60 days before departure and used only for the declared purpose.
  

• Return Requirements: Unused foreign currency must be converted back to Rand within 30 days of returning to South Africa.

Omnibus Business Travel Facilities

Local businesses often need employees to travel overseas for business. To streamline foreign currency provision, the South African Reserve Bank allows businesses to apply for an “Omnibus” travel facility.

1. Omnibus Facility Overview: Businesses can apply to their bank for up to R20 million per calendar year for business travel. Applications must include the total amount requested, the purpose, the number of trips, and details of authorized employees.
   

2. Approval Process: The bank must receive an official letter authorizing each business trip, along with the traveller’s ticket and passport before issuing currency.
   

3. Usage: The omnibus facility is strictly for business purposes and cannot be used for foreign investments or deposited into foreign accounts.
   

4. Retention of Foreign Currency: Business travellers can retain unutilized foreign currency for up to 90 days if another business trip is planned within that period.
   

Key Takeaways for Business Travelers

• Annual Limit: Up to R20 million per calendar year, with higher amounts requiring approval from the Financial Surveillance Department.
  

• Personal Travel Allowance: Business representatives also qualify for a personal SDA limit of R1 million per year.
  

• Retention: Unused foreign currency can be retained for up to 90 days for subsequent trips.
  

These guidelines ensure that South African residents and businesses can efficiently manage their travel expenses while adhering to the country's exchange control regulations.