The global trend of skills migration has resulted in many vacancies in South Africa. This means that foreigners with the desired skills are the next to move up the corporate ladder, making residency in South Africa much more attractive. The Home Office (âDHAâ) has also announced that it will open its doors to permanent residence permit (âPRPâ) applications from January 2022. If you are a qualified foreign national on assignment in South Africa , there has never been a better time to apply for your PRP.
Applying for permanent residence is an incredible undertaking. Because it affects not only the applicant but their entire family, it could be the biggest decision of their lives. It is important to understand the intricacies before applying for permanent residence.
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The advantages of becoming a permanent resident
As a PRP holder, you will be able to live and work permanently in South Africa without having to renew your visa each time it reaches its expiration date. You will have the right to do business, own property, study, travel within and outside South Africa, and do any activities that a citizen is authorized to do. You will also be able to apply for a South African National ID card, which is useful when you need to rent a property, buy a car, or open a bank account. Although a PRP does not have an expiration date, you must be resident or physically present in South Africa at least once every three years. A permanent residence permit will not jeopardize your citizenship in another country.
Unfortunately, being a permanent resident of South Africa does not entitle you to South African citizenship, which means you will not be able to vote in local elections. Citizenship is an entirely different application process with different requirements. You will also not be able to apply for a South African passport.
Types of permanent residence
There are many categories in which to apply for a PRP. As with any other permit, the applicant is subject to the conditions of the chosen category for which the permit was issued. For example, if you are granted permanent residence during your retirement, you must prove that you do not intend to work in South Africa. You will also need to prove that you are financially capable of retiring.
When are you eligible for permanent residence?
You must have lived in South Africa as a worker with five years of continuous work permit before applying for a PRP. It is important to note that you will never be automatically qualify for permanent residence after living in South Africa for five years.
Foreigners can claim direct residence in special circumstances when they:
- Possess critical skills or qualifications that are scarce in South Africa
- You want to open your own business or invest in an existing business in the country
- Wishes to retire and can prove that they are able to support themselves
- Obtaining a permanent job offer in South Africa
- Is financially independent and does not need to work for a living
Holders of an Essential Skills visa or a skill / qualification on the Essential Skills List, who also have a permanent job offer, have the advantage of seeking appropriate immigration advice. This will ensure that all necessary steps are taken to submit their PRP request by January 2022, thus avoiding long queues.
Spouses, dependents or close relatives
A direct permanent residence permit can be obtained for the spouse or life partner of a South African citizen or permanent resident. However, they would be required to prove that they have been in a relationship for at least five years, either by cohabitation or by a legal marriage certificate.
Legal dependents of a South African citizen or permanent resident, which include children under the age of 18, as well as parents meeting the first level of kinship, can apply for a PRP.
Permanent residence can only be obtained through a formal, and sometimes cumbersome, application process which can take 6 to 12 months to be approved. It should be noted that each request will be reviewed by the DHA. Applicants are vetted and treated impartially to determine whether they will contribute to the South African economy.
Approval is subject to the applicant meeting the criteria prescribed by the Immigration Act. If you are classified as a person banned or declared unwanted, you must submit a detailed motivation why you should not be denied approval. In the event that documents are missing or incomplete, the process may be further delayed.
There are many finer points to consider when applying for a residence permit. For example, it is advisable to be present in South Africa when applying for PRP. You should never apply for permanent residence when you are in South Africa on a temporary tourist visa.
South African taxation: warning
The South African tax system is a residency-based system, which means your tax obligations will be determined by your residency status. If you are considered a tax resident, you are liable to tax on your worldwide income, while non-residents are only subject to tax on South African source income.
You are considered a tax resident when you are an âordinary residentâ or have sufficient physical presence to trigger residence. Regarding the former, you will be considered a resident if you objectively consider that you are treating South Africa as your real and permanent domicile. The physical presence test is measured over a six-year period and applies if you are physically present in South Africa for more than 91 days in total in the sixth and five previous fiscal years and more than 915 days in total during the five preceding fiscal years. .
Importantly, if you apply for a PRP, you are effectively declaring that you intend to reside in South Africa permanently, which will trigger residency under the âordinary residentâ test. Therefore, while permanent residence may seem like a good idea from an entry point of view, it can be seen as a less favorable choice from a holistic planning perspective. An immigration specialist with a good understanding of South Africa tax aspects should be able to advise on tax planning as part of their service.
To avoid potential pitfalls when applying for a permanent residence permit, it is important to seek advice or assistance from an immigration specialist who is familiar with South African visa or permit application processes, as well as the system. South African tax.
Moeketsi Seboko – Immigration Manager at Xpatweb, Jean Du Toit, Tax Technical Manager at Tax Consulting South Africa.