South Africa is home to more high-net-worth individuals (HNWIs) than any other African nation, with its 41,100 US dollar millionaires making up roughly 34% of Africa's total HNWI population. Egypt comes next with 14,800 millionaires, followed by Morocco, Nigeria and Kenya.
According to Henley & Partners' Africa Wealth Report 2025, the number of HNWIs on the continent will grow by 65% over the next decade. 'The investment migration sector is now working both ways, with African investors seeking greater global mobility and diversification while international investors are increasingly identifying Africa as a destination for long-term, stable capital deployment,' Dominic Volek, group head of private clients at Henley & Partners, says in the report.
‘HNW families need accountants who can serve as strategic partners'
Evolving landscape
In South Africa, the wealth management sector faces a number of challenges, both locally and globally.
HNWIs are operating in an increasingly complex financial landscape, which is fundamentally reshaping wealth management, according to Morné Janse van Rensburg, managing director at Hobbs Sinclair Advisory. At the heart of this is greater scrutiny by the South African Revenue Service (SARS) around offshore structures, foreign income, provisional taxes and trusts.
The global transparency shift has also increased the complexity of managing crossborder wealth. ‘Historically “safe” offshore structures are now subject to automatic reporting and beneficial ownership disclosures,’ Janse van Rensburg says.
Shifting advisory needs
In addition, many family-owned businesses in South Africa face significant succession challenges and need clear governance or succession plans.
Amid these challenges, the type of advice HNWIs require has markedly shifted over the past three to five years, says Janse van Rensburg, with wealthy clients increasingly looking for integrated approaches to retirement, tax and investment planning. This includes multi-jurisdictional planning, asset location strategies and long-term cashflow projections, he says: ‘HNW families now need accountants who can serve as strategic partners, coordinating global structures, navigating crossborder rules and offering forward-looking planning.’
Clients need robust, evidence-based tax strategies, he continues, emphasising the importance of clear source-of-funds trails and annual reviews of offshore entities to withstand audit-level scrutiny.
Advisory services now place more emphasis on detailed modelling
Advisory services now place more emphasis on detailed modelling of estate duty, capital gains tax (CGT) on death, trust distributions and business succession planning. In addition, the rise of global reporting frameworks such as the Automatic Exchange of Information has made compliance and transparency mandatory, stressing the need for thorough know-your-customer protocols and annual wealth structure reviews.
Smooth exit
Another complex – and common – issue for many practitioners is emigration; Henley & Partners’ Private Wealth Migration Report 2025 notes that this year South Africa lost 250 millionaires, worth a total of US$1.6bn, to emigration.
In Janse van Rensburg's experience, tax practitioners now deal with more complex work in deemed disposals, unwinding foreign controlled companies and the consequences of ceasing South African tax residency.
Financial emigration – formalising the cessation of tax residency with SARS – is critical. Without it, emigrants are taxed on their global income, explains Jashwin Baijoo, associate director at Tax Consulting SA. On ceasing tax residency, emigrants are deemed to have sold their assets (other than immovable property and local retirement annuities), triggering CGT – known as ‘exit tax’. This process should be finalised promptly to avoid penalties and back-dating. But many emigrants aren’t aware of the need for financial emigration until their non-compliance catches up with them, he says.
'It becomes highly complex when we need to backdate financial emigration'
‘We see this situation often,' says Baijoo. 'It becomes highly complex when we need to backdate financial emigration, considering a plethora of factors.’ The backdated calculation must then be disclosed to SARS, via a voluntary disclosure application or a request for additional assessment, and the tax settled.
In October the South African Reserve Bank introduced stricter operational rules for banks, which may no longer remit dividends offshore without validation of the client’s tax compliance and non-residence status. This makes the need for formal tax cessation an imperative for emigrants with South Africa-sourced income.
Offshore issues
Meanwhile, offshore trusts are often a preferred strategy for South African HNWIs looking to optimise tax and protect wealth, particularly in recent years, says Baijoo. Structures in jurisdictions like the Cayman Islands remain attractive due to their favourable tax environments and strong asset protection laws.
Mauritius is also a popular choice due to its relative proximity, cost-effectiveness and lack of exchange controls, he says. However, more complex jurisdictions, like the Channel Islands, may have better tax benefits for ultra-HNWIs.
While offshore trusts provide tax advantages, they must be structured correctly
Baijoo notes that while offshore trusts provide significant tax advantages, they must be structured correctly – particularly for estate planning. Trust structures require the right checks and balances, distributions, mitigative measures and proper continuity.
Janse van Rensburg also notes that the rise of global transparency means ownership information for companies and trusts, both locally and internationally, is more readily accessible to tax authorities. Thus structures need ‘real economic substance’: active trustees, real decision-making processes and proper governance. This has become even more pertinent since 2023, when South Africa was added to the Financial Action Task Force's 'grey' list of jurisdictions under increased monitoring, and remains so even though the country was recently removed from the list.
Complex future
Practitioners must adapt to the evolving landscape. Janse van Rensburg suggests expanding expertise to include foreign controlled-entity rules, situs tax, trust reporting and multi-jurisdictional estate planning.
'As HNWIs are increasingly exposed to cryptocurrencies, tokenised assets and offshore digital exchanges, accounting professionals must stay ahead as regulations tighten around these assets.'
