South African Residence through financial Independence

The Retired person  visa  or perhaps more appropriately the  financial independent visa is found in section 20 of the Immigration Act.  The primary basis of the Visa is that  a foreigner who  has a prescribed minimum net worth or a right to an irrevocable annuity  can retire in South Africa.  Many would assume that reference  to Retired Person  means that  there is an age requirement attached to this  Visa ,however as we explore this immigration gem  we will show that age has  nothing to do with it and  how  simple a visa it is to apply for.

Minimum Net Worth  or Right to  an Irrevocable Annuity

There are two tests that  need to be satisfied  when determining whether  or not a foreigner  qualifies for this visa.  Satisfying one of the two tests  is sufficient  for a  person  to qualify for the Visa.

The first  test is couched  in  20(1)(a) and it provides that  a foreigner who  has a right to a  pension or an irrevocable annuity  or retirement account which will give such foreigner a prescribed  minimum payment  for the rest of  his or her life  from the  country of  his or her origin  may apply for the  visa. This section  is the source of the name Retired Person  Visa and it is straight forward.  The applicant must have a right  to a pension  or irrevocable annuity.  This means that the person must already be entitled to receiving the the pension  into his or her bank account.  Future rights are not considered when applying for the visa. Another  interesting point is that  the accounts must be originating from the  persons  country of origin. The  Minister has published  the prescribed  minimum  payment for the  pension or irrevocable annuity as R37 000.  This means that  if you a pension paying this amount you can  apply for the visa.

The second test is  in section 20(1)(b) and it  applies  to the  younger generation . The Act provides that  a foreigner  who has  a minimum prescribed net worth  may apply. Again this is straight forward, a foreigner with the  prescribed  net worth of assets  can apply for the visa.  There is no further indication of acceptable assets however it is accepted in practice  that  immovable assets and  investments  are what the legislator had in mind when crafting this  subsection. We get a  better indication of what the legislator had in mind below.

The prescribed  Net Worth  shall be combination of assets realising ,per month an amount of R37 000. The figure is estimated  to  be a net worth  around R2 million , we arrive at this figure  by calculating the monthly payment of R37 000 and the  number of  years  available on the visa.  ( 48 months in  4 years ) 37 000 = R1.7 million.  A practical example would be  a foreigner  who owns properties and earns a rental income of R37 000 in total will therefore have a net worth  realising the prescribed monthly  amount. The value of the property as  well as the monthly rental  will form part of the total net worth.

Benefits of the Retired  Person Visa

Perhaps the most crucial of  advantages  of this visa is that one need  not wait for set number of years to qualify for permanent residence.  Once the above requirements are satisfied a foreigner may also apply for permanent  residence  on the strength of the same documents in terms of  section 27(e) of the Act.

Another  important benefit is that the holder of the visa may apply  apply to  the Director General for authorisation to conduct  work under terms and conditions deemed fit by the Department.  The type of work  that can be undertaken  is not specified and is subject to the discretion of the  Director General. It is doubtful that  one can take up full time employment with Retired person  visa as it goes against the essence  of the visa itself however given that  not further clarification is  given on this matter  it is  not  inconceivable.

Another benefit is that the members of the immediate family can accompany the applicant on this  visa and permanent residence as  accompanying  family members .

By Munyaradzi  Nkomo

Managing Director and Immigration Specialist.

011 064 4875

074 337 0269