Speaker 0:
joining me now in this boutiques connect Annabella Faron FX, business consultant at Currency Partners. Welcome back, Annabella.

Speaker 1:
Thank you. It's great to be here. So, Annabella,

Speaker 0:
perhaps we can start off with what defines a foreign loan in terms of exchange control.

Speaker 1:
So a foreign loan in in the South African context is when a South African company borrows funds from a non-resident source that could be a non-resident entity or non-resident individual.

Speaker 1:
But, yeah, it's when a South African company would get a loan from a non-resident, um, business.

Speaker 0:
So who can borrow money from abroad? And are there different types of of of foreign loans?

Speaker 1:
So there's no restrictions on who can get a foreign loan so any South African entity can can approach the offshore market for a foreign loan. Um, there's various types of classifications for that loan, and it's quite important to classify it correctly. So as an example, it can be classified as a third party, uh, foreign loan. Or it can be classified as a non-resident shareholders loan.

Speaker 1:
And then there's trade finance loans as well where that can also be a shareholders trade finance loan or a third party trade finance loan. So what are the South African

Speaker 0:
Reserve Bank requirements, then? For an entity that receives a loan from

Speaker 1:
abroad? So it's very important that companies that are looking for offshore funding

Speaker 1:
it's very important that they are aware that there are reserve bank regulations around it. And the South African Reserve Bank states that a company introducing offshore funds as loans needs prior approval before those before those funds are introduced into South Africa.