An investment into a foreign entity that develops into an investment loop (as a result of money coming back into the country through a loan and/or an investment from this foreign entity) creates a loop structure. This loop structure could possibly contravene South African exchange control regulations. It is important to know about loop structures and understand the South African law surrounding this. Those who lack insight on loop structures could experience untoward penaltie

We all know about South African exchange control regulations. There are not many countries which operate a similar system like it anywhere in the world. South Africans sending funds abroad, or non-residents holding funds in South Africa have likely become well aware of the many regulations imposed by the South African Reserve Bank ("SARB") which seeks to control the flowing of capital into and out of South Africa. For example, a South African exchange control resident may not