The Foreign Exchange Regulations, 2022

The Government of Tanzania through the Governor of Bank of Tanzania ( BOT) has published the Foreign Exchange Regulations of 2022 revoking the Foreign Exchange Regulations of 1998 and the Foreign Exchange (Listed Securities) Regulations, 2003. The Regulations:  Restriction on buying, borrowing, selling, lending, holding or otherwise dealing in gold are reinforced.  All remittances outside of Tanzania are subject to specified restrictions and must be done through authorised/licenced banks or financial institutions in Tanzania.  Banks and financial institutions are obligated to undertake due diligence before remitting any funds outside of Tanzania.

Be ready for additional documentation to be provided to justify such remittances, including proof of payment of relevant taxes for remittances of dividends.  Loans with a tenure exceeding 365 days is compulsorily registrable by the Bank of Tanzania (the BOT) within 14 days of the loan being approved. Note that a penalty of TZS 1 million (approx.. USD 450) will be imposed by the BOT for each day the loan remains unregistered.  Travellers shall not travel with an amount exceeding USD. 10,000.

Note it’s illegal to remit Tanzanian Shillings currency outside of Tanzania borders.  Loans where the foreign lender pays the supplier directly without first remitting the funds into the Tanzania based bank account of the Tanzania borrower will be penalized.  Prohibition of residents of Tanzania from opening or maintaining bank accounts outside of Tanzania except for settlement of securities within the EA or SADC regions. Note the use of the word ‘resident’ which includes foreigners who have consecutively lived in Tanzania for 12 months or more.

This poses a challenge for expatriates who have bank accounts in their home countries and are currently residing in Tanzania for 12 months and above.  Residents in Tanzania may now remit funds within EA and SADC regions for purchase of real estate or investment in real assets.  Offsetting of financial claims between affiliates is now restricted.  Non-residents engaged in direct investment in Tanzania to remit funds through a bank or financial institution within Tanzania.  Funds remitted for foreign direct investment in the form of equity shall not be converted into loan.  No lender shall obligate a borrower in Tanzania to open a foreign currency account outside of Tanzania.  All residents in Tanzania looking for financial accommodation from a nonresident are obliged to carry out such transaction through resident banks and financial institutions.

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