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.
Munya@immigrationspecialists.co.za
011 064 4875
074 337 0269