Tonga’s National Reserve
Bank has issued a set of commonly asked questions regarding the new Foreign
Exchange Control Act.
This is an edited summary
of the main points.
What is exchange control and how does it affect me?
Exchange control involves
measures to control or influence the movement of foreign exchange over Tonga’s
borders. The FEC Act controls the purchase and sale of foreign currency. These
rules apply when travelling, giving cash as a gift to someone outside of Tonga,
paying for goods ordered from outside of Tonga, or investing offshore.
Why are exchange controls necessary?
Exchange controls are used
to manage the national demand for foreign currency in order to protect the
country’s foreign exchange reserves and allocate available foreign currency in
the best interest of the country.
What are these key aspects of the old Act and regulations
that are incorporated into the new FEC Act?
- Acquiring property overseas – Under the regulations of the old Act, anybody who wants to acquire property outside Tonga requires the consent of the NRBT.
- Returning proceeds of export to Tonga – Under the regulations of the old Act, a person in Tonga was required to return to Tonga through an authorised bank, foreign exchange dealer or money changer.
Who are the authorised banks
or dealers Person in Exchange in Tonga?
Banks
- Australia
and New Zealand Banking Group Ltd
- Bank
of South Pacific Limited
Foreign Exchange Dealers – Type A (outward/payment &
inward/receipts)
Foreign Exchange Dealers – Type B (inward/receipts only)
- Digicel Mobile Money
- Manatu ‘Ofa Money Transfer
- Fietokoni Financial Services
Money Changers – Type C
If I have investments offshore that were acquired prior to
the new FEC Act (1 November 2018), am I affected by the new FEC Act?
No. Any
offshore investments made prior to November1, 2018 are not affected by the new Act.
Are residents allowed to invest offshore?
Yes,
up to a limit of TP$100,000. Investments over this limit must be approved by the Reserve Bank.
How much travel allowance can I take when travelling
overseas?
Maximum
of TP$20K per person per travel.
What is the permissible cash that each traveller is allowed
to hand carry when travelling overseas?
A
traveller can hand carry or take a total amount in foreign currency or Tongan
paánga notes or coins equivalent to up to TP$10K. If more than TP$10K the
traveller must seek the approval of the NRBT three business days prior to the
anticipated departure date.
How much foreign currency in cash or otherwise are people
allowed to bring into Tonga?
There
is no limit on foreign currency, but travellers must declare the money in their
possession at the point of entry into or exit from Tonga if the total amount of
cash is equivalent to TP$10,000 or more.
How much foreign currency in cash can I hold?
Tongan
residents can hold up to TP$20K equivalent in foreign currency.
What must I do with any surplus foreign currency?
You
are required to sell such currency above TP$20K.
Can I hold a foreign currency account overseas?
Yes.
Payments from Tonga to foreign currency accounts must be approved by the NRBT.
Can I hold a foreign currency account in Tonga?
Yes,
subject to the approval of the NRBT.