The long-awaited relaxation of the rules relating to 'loop
structures' has finally been announced and most South African
residents may now invest in these structures.
However, such investments may still be subject to some form of
supervision. It is also important to note that various tax measures
are currently being introduced to address potential tax leakage
arising as a result of the relaxation.
In his February 2020 budget speech, the Minister of Finance
announced various proposed relaxations to the existing exchange
control regime, including the relaxation of the rules relating to
loop structures.
A loop structure arises where a South African exchange control
resident (individual or company) has an interest in a foreign
structure and that foreign structure directly or indirectly owns
assets in the Common Monetary Area consisting of South Africa,
Eswatini, Lesotho, Namibia and South Africa.
