Local and foreign institutions are moving rapidly to unveil a range of new offshore investment products timed to take advantage of the imminent easing of exchange controls that will allow individuals to invest a comparatively modest amount directly offshore.
Banking circles are speculating that the amount will be between R100 000 and R200 000.
In anticipation Standard Bank yesterday announced a range of offshore unit trusts that local investors will be able to access through the proposed "no strings attached" offshore investment allowances.
The dispensation to invest directly offshore will come with strings attached.
Deputy Minister of Finance, Gill Marcus, told Midweek Personal Finance that investors will have to be registered taxpayers in good standing before being able to take advantage of the offer.
Reserve Bank deputy governor, James Cross, also told Midweek Personal Finance that the amount would be a "once-off" but individuals need not take up the offer immediately. You will be able to take it up "as and when you wish".
The amount would be determined by the country's economic circumstances at the time when the dispensation is announced.
Cross said that other amounts could be available in future years for individuals to invest abroad but these decisions would be taken on a year-by-year basis.
Eric Pike, Reserve Bank general manager in charge of exchange control, said that foreign institutions will be allowed to offer offshore products on the local market but they would not be subject to local regulation.
"The decision making is the responsibility of the individual - let the buyer beware."
Pike said a meeting is to be held this week with local banks to discuss reporting mechanisms to the central bank. The Reserve Bank was not discussing what products financial institutions will make available to clients.
Also under consideration are plans to deal with the many billions of rands smuggled offshore illegally by South African residents.
Cross said discussions were already taking place on this issue but at the moment priority was being given to those South Africans who had not taken money offshore illegally.
Pike said an "amnesty or the like is the prerogative of the Minister of Finance in consultation with other interested parties".
By July 1 individual South Africans will be able to access foreign investments through a number of different routes.
Already they can invest in offshore endowment policies offered by local life assurance companies; and in locally managed "international" unit trusts which are currently rapidly increasing their offshore holdings through asset swaps.
The next step will be the introduction of the discretionary amounts which individuals will be permitted to hold in local "foreign currency accounts" or invest offshore.
Trevor van Heerden, Commissioner of Inland Revenue, said that a final decision still had to be made on how to ensure that people applying for both foreign travel allowances and for the discretionary investment amount would have to prove they are taxpayers in good standing.
He said the option was between individuals signing a declaration or having to apply to the tax authorities for a certificate of good standing, with the second being the better option. A decision would be made before July 1.