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    Leaked Foreign Exchange Code Reveals New Changes to Foreign Currency Accounts, PayPal, and Cryptocurrency in Tunisia

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    A leaked presumed draft of the Foreign Exchange Code project has sparked heated controversy among both financial and economic experts and all economic stakeholders in Tunisia, who have seen it as a coercive code incapable of ensuring the revival of an economy in “standby” mode or restoring trust with the private sector or actors in the highly technological new economy and startups. The Ministry of Finance, the leader of the new exchange law, quickly denied the authenticity of the leaked document, asserting that it is not the real version of the project.

    Sihem Boughdiri Nemssia, Minister of Finance, intervened on Express FM outlining the main points of the new foreign exchange code. She stated that the government has taken into account the specifics of the current economic context and has involved all economic actors in its elaboration. She affirmed that the new foreign exchange code has taken into consideration the new economies as well as new means of payment, including digital transactions and international electronic payment systems.

    Additionally, the new foreign exchange code addresses the status of residents and non-residents. To benefit from it, one no longer needs to reside for 2 years, but rather for 6 continuous or discontinuous months and engage in economic activity.

    The principle of liberalization has been adopted within the framework of the new foreign exchange code, with authorization becoming an exception. Concerning legal entities, for a company to benefit from non-resident status in Tunisia, its head office must be located abroad, or if in Tunisia, it must obtain authorization. Eligible companies include those that are fully export-oriented, international trading companies, or companies providing services internationally.

    The minister assured that the articles of law in the new foreign exchange code encourage and support investment, whether from foreign investors or investments made by Tunisian operators abroad.

    As for foreign investments, the principle of total liberalization has been adopted. Now, no foreign investor is subject to authorization from the Central Bank of Tunisia when launching or financing their project under the Foreign Exchange Code. Moreover, they have complete freedom to repatriate their profits and, in case of liquidation, the corresponding amounts.

    Tunisian companies now have the right to transfer funds freely when investing abroad, provided they meet certain criteria. The minister did not explain what these criteria are or whether they may be restrictive or contradictory to the principle of total liberalization, which has been granted to foreigners. Tunisians would have to wait and see.

    Another innovation: Tunisian companies can now borrow from foreign financial institutions. Individuals and legal entities with strong currency accounts who invest these funds in Tunisia can now convert their profits into foreign currencies, as is the case for foreign investors. Companies engaging in activities involving transactions in foreign currencies can also open foreign currency accounts.

    Authorized exchange operators now have complete freedom to transfer currencies abroad for investment purposes. As for freelancers and startups, the minister indicated that they can now have strong currency or convertible dinar accounts and can use their income to cover expenses abroad.

    PayPal has also been included in the new code, allowing individuals and businesses to open payment accounts accepted by electronic payment systems in response to persistent demands from concerned parties regarding the use of their income in foreign currencies. They can now recover their dues by opening foreign currency accounts and can also use their foreign currency assets to cover expenses abroad.

    Individuals now have the possibility to open accounts abroad to cover their expenses for education, training, or work. Under the new foreign exchange code, individuals residing abroad, whether legal or physical, who enter into service contracts with foreign partners in Africa, Arab countries, or Europe, can open accounts on-site as part of their service contracts.

    Regarding cryptocurrency, it is now possible to conclude transactions using this mode of payment with prior authorization from the Central Bank of Tunisia for certain amounts and by committing to repatriate the profits resulting from the conversion of these assets into currency.

    As for penalties for exchange offenses under the Foreign Exchange Code, the penalties for the most serious offenses have been reduced from 5 to 3 years, accompanied by fines for failure to declare assets abroad or cryptographic assets, non-repayment of profits in Tunisia, or failure to deposit currency amounts with an intermediary, as well as those who carry out currency exchanges outside legal frameworks, and others. For other exchange offenses, penalties will be limited to fines whose amount will vary depending on the severity of the offense.

    These reforms mark a significant turning point in Tunisia’s exchange policy, with a shift towards liberalization and modernization to stimulate investment and foster a more dynamic and competitive economy.

    Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert. As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard.

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