Foreign (US Dollars) Receipt into SA

[SSS100]

Hi All,
I have an opportunity to receive fund in US Dollars from offshore associates
I need to decide on the best possible option for the transfer from the following:

1. Receive the fund via my company account as capital investment from the associates
2. Receive the funds in my personal capacity, transfered into my pesronal bank account

What are the requirements and tax implications on the above cases?

[Dave A]

2. Receive the funds in my personal capacity, transfered into my pesronal bank account

And for what given reason would that be?

[SSS100]

I initially met this guys in Bordeaux, France in 2010 and we had a good chat about opportunities in SA and France
Then we kept in touch and grew the association even further, in general and now at a point where they have agreed to "give" me something to see how i can develop the opportunities

They are not specific in terms of me putting the funds in my company or personal account
So far, it's a longshot in terms of what I think can be done...hence they are willing to put something to help me explore more

[Just Gone]

How about ................. my account ............... if you are really concerned ......... and I will explore some more opportunities for you

[SSS100]

Depends what opportunities you come up with

For now, i need to a way to handle the scenario and they need an answer from me

[Just Gone]

Depends what opportunities you come up with

I can think of quite a few ............ but obvisouly not over an open forum .....

[SSS100]

k, send ur details

And is there any opinion on the matter

[Dave A]

If they're investing in the company, I'd suggest they pay into the company account rather than your personal account.

What are the requirements and tax implications on the above cases?

It's not really driven by which account it goes into. A reason for the receipt of funds will be asked for and must be given. If it's a capital investment, I'm not aware that there is a tax implication at that point.

[SSS100]

Thanks Dave, maybe capital or loan is better...we still not sure of the success of the project, possibilities are huge but it may or may not work. business is not easy these days
The French are willing to draw a formal agreement/ arrnagement once we see the direction it will go, for now they trust me and they know they will have proof of transfer as evidence. And we have had good relationship in the past, thats a very impottant thing to them i have come to realise that

[Justloadit]

I would suggest you declare it as foreign capital investment, so that in the case it does work out, then there is no difficulty in informing the SARB, that the outgoing payment is for repayment of the capital investment, and for profits.

Placing it into your personal account may draw unnecessary inspection into your private affairs, as the concern is with the reason that you are receiving these funds in your personal name. it will also create difficulty in repayment of the investment and profits if it does bear fruit to SARB when the time comes for the repayment.

It may be a good idea to get an agreement in place, with the terms and conditions, and depending on the amounts involved, may require SARB approval first, and with the agreement in place, it shows that this is a business deal, and not some other kind of deal.

[Blurock]

If they're investing in the company, I'd suggest they pay into the company account rather than your personal account.

I agree with Dave, do things right the first time, then you do not have to explain yourself at a later stage. I like to sleep peacefully at night. No skeletons to keep me awake.

You only get taxed on your profits. There may be set up costs and other tax deductible expenses that you can claim once you start earning a revenue from the business. Very hard to prove if everything goes through your private account.

[SSS100]

Noted, thanks guys