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# South Africa wants to manage trillions in offshore savings from home, and the money never has to move
- URL: https://www.businessbagel.com/south-africa-wants-to-manage-trillions-in-offshore-savings-from-home-and-the-money-never-has-to-move/
- Published: 2026-10-27T03:45:00.000Z
- Updated: 2026-10-27T03:44:59.000Z
- Description: Draft Reserve Bank rules would let approved local firms run South Africans' foreign portfolios from here, bringing home the fees and the jobs rather than the money itself.
- Author: Christian Maidman
- Tags: Policy, Business Bagel News, #big

South Africans have built up a rather impressive piggy bank overseas. Over the decades, their holdings of international shares, bonds and funds have grown to an estimated R5 trillion, and some estimates put the figure as high as R10 trillion. It is not only wealthy individuals with money parked abroad, either. A big part of it belongs to pension funds and to ordinary people saving for retirement.

The money belongs to South Africans. Much of the business of managing it does not. Somebody is paid every year to run those portfolios, and most of the time that fee goes to a firm abroad. Reserve Bank balance of payments figures show South Africans paid R21.7 billion to overseas providers of financial and insurance services in 2025\. Not all of that is management fees, but part of it is, and Moneyweb reckons a large portion of that part could be won back under the right rules.

## A financial centre with no building

On 21 October the Reserve Bank published draft rules for what Treasury calls a synthetic financial centre. There is no new tower and no special zone, only a set of rules. Approved local firms could manage foreign portfolios from South Africa while the investments themselves stay exactly where they are. The shares can stay American and the bonds European, and the people running them could sit in Sandton or Cape Town.

Firms licensed by the Financial Sector Conduct Authority or the Prudential Authority could apply, with the offshore business kept on separate, ring-fenced books and reported to the Reserve Bank every quarter. If the managers come home, the fees, the skilled jobs and the tax on both come home with them.

## The rules that sent the business away

The irony is that South Africa's own rules helped push this business offshore. Exchange control, the rules that limit money leaving the country, made it hard for local firms to manage some international investments from home, so many opened offices abroad instead.

It is a textbook case of jurisdictional arbitrage, where businesses go wherever the rules suit them best. Some South African firms set up in places like Mauritius, and the draft would put South Africa in direct competition with the financial centres already running there. Valdene Reddy, the JSE's chief executive, chairs Operation Phumelela, the industry task force that designed the plan with Treasury and the Reserve Bank. South Africa "should be competing for this business, not watching it move elsewhere", Reddy said. Firms that have already built offices abroad are unlikely to pack up overnight.

## What it means for your retirement fund

For an ordinary saver, the limits stay put. Retirement funds can still hold no more than 45% of their money offshore, and anything run through the new centre counts towards that same ceiling. Individuals keep their own offshore allowances.

What savers could get, eventually, is more firms competing for their money, which means more choice and possibly lower fees. In British and European fund markets, fees have tended to come down over time as competition and regulators pushed on them. Whether firms here would pass any saving on to customers is less certain.

The draft is open for public comment until 30 November, and the first phase is expected to be in place before the end of the year. A second phase, letting companies raise money and list shares here in foreign currencies, is still subject to "further regulatory assessment".