South Africa has published draft regulations proposing the most far-reaching overhaul of its exchange control framework in over six decades, replacing rules rooted in the apartheid era with a modern capital flow management system designed to draw global investment and reclaim ground lost to rival African financial centres.
National Treasury published the draft Capital Flow Management Regulations of 2026 in the Government Gazette on April 17, replacing the Exchange Control Regulations of 1961, which were themselves grounded in the Currency and Exchanges Act of 1933. Public comments are due by June 10, 2026.
The Johannesburg Stock Exchange (JSE) has estimated that the reforms could attract at least 10 trillion rand, equivalent to approximately $608 billion, in investment over time. Vukile Davidson, deputy director-general of financial policy at National Treasury, told Reuters the original legislation served purposes well beyond its stated remit. “At the time, exchange control was principally used to deal with a wide range of issues beyond just capital flows management,” Davidson said. “It was used to manage the domestic revenue base, to manage illicit flows, to ensure the stability of the financial sector.”
The amendments signal South Africa’s readiness to modernise and adopt a “positive bias” approach to managing cross-border capital flows, through fewer transaction pre-approvals, a focus on reporting, the surveillance of high-impact and high-risk cross-border transactions, and the combating of illicit financial flows.
A central structural reform targets a competitive disadvantage that has pushed financial firms and expertise offshore. Under current rules, asset managers running funds denominated in foreign currencies such as the US dollar are required to legally domicile those funds outside South Africa, even when they are managed locally. The proposed changes would, for the first time, allow such non-rand funds to be legally based in South Africa. Davidson pointed to the competitive pressure from Mauritius, Kenya, Kigali, and Dubai as cities that have drawn South African financial firms in recent years.
The single discretionary offshore allowance for individuals has already been doubled from one million rand to two million rand, allowing South African couples to transfer up to four million rand offshore annually without Reserve Bank approval or a tax clearance certificate, though financial sector analysts have said deeper structural reform is still needed to drive meaningful change.
The draft regulations would also bring crypto assets formally within the exchange control framework for the first time, classifying them as “capital.” Crypto trading above a yet-to-be-determined threshold would be permitted only through a new class of licensed intermediaries, with mandatory declaration of holdings and significant cross-border transactions to National Treasury.
Fintechs Ozow and MoneyBadger welcomed the crypto provisions, describing the move as a decisive step toward greater regulatory clarity for digital assets, particularly in relation to cross-border payments and reporting standards.
Davidson said the timing of the reforms was also shaped by global geopolitical shifts that are creating fresh opportunities for South Africa to position itself as a destination for redirected capital flows.
