In the 2017 South African Budget Review, specific statements
were made from a tax and exchange control perspective in relation
to fund managers. We briefly consider below whether these
statements constitute a relaxation of the exchange control
restrictions applicable to South African residents, and the taxes
to be considered.
The first statement in the Budget Review entitled "Tax
treatment of foreign member funds" reads as follows:
"The South African government will be establishing foreign
member funds to enable local and foreign fund managers to establish
and manage funds targeted for investments into the rest of Africa
and the world. To make foreign member funds attractive, they will
benefit from a special tax dispensation. Foreign investors
investing in the funds for onward investment into the rest of
Africa or elsewhere will be exempt from withholding tax on
interest. However, fees earned by local asset managers and
collective investment scheme managers for
