Central Bank of Tunisia Circular to Approved Intermediaries No. 2018-14 dated December 26, 2018

Tunis, December 26, 2018
CIRCULAR TO APPROVED INTERMEDIARIES NO. 2018-14 OBJECT: Foreign Currency Investments by Non-Residents in Tunisia.

The Governor of the Central Bank of Tunisia,
Having regard to the Foreign Exchange and External Trade Code, promulgated by Law No. 76-18 of January 21, 1976, consolidating and codifying foreign exchange and external trade legislation governing relations between Tunisia and foreign countries, as amended by subsequent texts, notably Decree-Law No. 2011-98 of October 24, 2011; Having regard to the Collective Investment Undertakings Code, promulgated by Law No. 2001-83 of July 24, 2001; Having regard to Law No. 2016-35 of April 25, 2016, establishing the status of the Central Bank of Tunisia; Having regard to Law No. 2016-48 of July 11, 2016, on banks and financial institutions; Having regard to Law No. 2016-71 of September 30, 2016, on investment; Having regard to Decree No. 77-608 of July 27, 1977, setting the application conditions for Law No. 76-18 above, as amended by subsequent texts, notably Decree No. 2017-393 of March 28, 2017; Having regard to Circular to Approved Intermediaries No. 93-05 of April 5, 1993, on foreign currency investment forms; Having regard to Circular to Approved Intermediaries No. 93-14 of September 15, 1993, on the conditions for opening and operating professional accounts in foreign currency or convertible dinars, as amended by subsequent texts; Having regard to Circular to Approved Intermediaries No. 93-17 of October 13, 1993, on the distribution and transfer of profits, profit shares, beneficiary share remuneration, and attendance fees due to non-residents; Having regard to Circular No. 94-13 of September 7, 1994, on the importation, transfer, reconversion, and re-exportation of foreign currency by travelers, as amended by subsequent texts; Having regard to Opinion No. 2018-11 of the Control and Compliance Committee dated December 11, 2018, as provided for in Article 42 of Law No. 2016-35 of April 25, 2016 establishing the statutes of the Central Bank of Tunisia.

Decides:
Article 1: This circular aims to establish the procedures and conditions for foreign currency investments by non-residents subject to declaration to the Central Bank of Tunisia, as well as the procedures for transferring related revenues and proceeds from sale and liquidation.

Section 1: General Provisions
Article 2: Investments governed by this circular are foreign currency investments by non-residents carried out in one of the following forms:

• acquisition of equity during initial establishment or capital increase of a company established in Tunisia, whether resident or non-resident;
• acquisition of shares or partnership interests in a company established in Tunisia, whether resident or non-resident;
• participation in a collective investment undertaking (OPC) in Tunisia;
• acquisition of immovable property in Tunisia.

Article 3: Investments carried out by non-residents in Tunisia must be financed through the importation of foreign currency, effected by transfer from abroad, by debit to a foreign or convertible dinar account opened in Tunisia, or by importation of foreign banknotes duly declared to customs in accordance with prevailing regulations.
Any participation by a non-resident in the capital of a company established in Tunisia through a contribution other than foreign currency is subject to prior authorization from the Central Bank of Tunisia.

Article 4: Non-resident investors may freely subscribe to capital increases in companies established in Tunisia by converting partial or total current account advances granted to such companies, provided all of the following conditions are met:

1. The advance was contracted in accordance with prevailing foreign exchange regulations;
2. The advance was financed in foreign currency, justified by an investment form;
3. The advance is certain, liquid, and due;
4. The conversion applies exclusively to the principal amount of the advance;
5. Capital increase participation via conversion of current account advances must be carried out in accordance with the legislation governing the company's sector of activity.

Section 2: Procedures and Conditions for Declaration to the Central Bank of Tunisia
Article 5: Foreign currency investments by non-residents covered by this circular must be declared to the Central Bank of Tunisia via an Investment Form or a Digital Bank Investment Attestation, in accordance with the following provisions.

Article 6: The non-resident investor or their representative must, within two months from the date of realization of the investment covered by this circular, complete an Investment Form via the non-resident investments platform hosted on the Central Bank of Tunisia website "fiche-invest.bct.gov.tn/FichInvest", in accordance with the user manual freely downloadable from this site.
For this purpose, the date of investment realization corresponds to:

• registration in the commercial register of the created company and in which the non-resident holds a participation, or registration of the capital increase to which the non-resident participated;
• stock exchange registration certificate or execution advice for share acquisitions;
• registration at the tax office of the contract by which the non-resident acquires partnership interests;
• registration at the tax office of the contract by which the non-resident acquires unregistered immovable property, or registration of the acquisition at the Land Property Conservation for registered properties.

Article 7: The domiciliary approved intermediary must, within one month from the date of declaration by the non-resident investor on the platform referred to in the preceding article, validate the Investment Form completed by the latter, following the procedure indicated in the platform's user manual.
For this purpose, the approved intermediary must verify all information provided by the investor on said form against the information and documents in their possession.

Article 8: Approved intermediaries must declare the following operations to the Central Bank of Tunisia via the non-resident investments platform, using a Bank Investment Attestation established in accordance with the platform's user manual:

1. Acquisition by non-residents of partnership interests or shares through inheritance;
2. Acquisition by non-residents of partnership interests or shares via free allocation during a capital increase through incorporation of reserves, proportional to their rights in the company;
3. Acquisition by non-residents of partnership interests or shares via subscription during a capital increase, through conversion of current account advances;
4. Acquisition, upon payment of the corresponding price abroad, of shares or partnership interests of resident companies exercising an activity in Tunisia in accordance with governing legislation, by a foreign-national natural or legal person from another foreign-national natural or legal person.
   For this purpose, the concerned company must inform the domiciliary approved intermediary of the aforementioned acquisition operations upon their realization and transmit to them the documents specified in Annex No. 1 to this circular, enabling the establishment of the Bank Investment Attestation. The Bank Investment Attestation referred to in this article shall serve, among other things, as proof for transferring revenues or proceeds from the sale and liquidation of investments subject to these operations.

Article 9: Before establishing the Bank Investment Attestation concerning the acquisition of partnership interests or shares via subscription during a capital increase, through conversion of current account advances, the domiciliary approved intermediary must verify that the amount of the converted current account advance has not given rise to any prior reimbursement.

Section 3: Procedures for Transferring Investment Revenues and Proceeds from Sale and Liquidation
Article 10: Approved intermediaries are authorized to transfer profits and dividends due to non-resident partners and shareholders, as well as attendance fees and similar allowances1 allocated to non-resident administrators, based on the documents specified in Annex No. 2 to this circular.
Transfers under this provision must be carried out by a single Approved Intermediary with whom the company must domicile its file in this matter.

Article 11: Approved intermediaries are authorized to transfer, to the benefit of non-resident beneficiaries, the actual net proceeds from the sale of partnership interests and shares, the sale and redemption of collective investment undertaking (OPC) shares, as well as the actual net proceeds from the liquidation of companies established in Tunisia, based on the documents specified in Annex No. 3 to this circular.

Article 12: Approved intermediaries must verify, upon carrying out the aforementioned transfers, the regularity of the company's establishment and the non-resident investor beneficiary's capital participation.

Article 13: Approved intermediaries must notify the Central Bank of Tunisia of transfers carried out by them under Articles 10 and 11 of this circular, in accordance with procedures provided by Circular to Approved Intermediaries No. 97-02 of January 24, 1997, on information forms.
Furthermore, domiciliary intermediaries for the transfers covered by this circular must submit to the Central Bank of Tunisia via the SED (Data Exchange System), no later than 20 days after the end of each quarter, a statement of transfers executed during said quarter. 1 Attendance fees include remuneration allocated to administrators for their participation in company committees in their capacity as administrators. These declarations must be made to the Central Bank of Tunisia in accordance with the technical guide made available to them, freely downloadable via the SED.

Section 4: Final and Transitional Provisions
Article 14: Approved intermediaries must retain all documents required by this circular in accessible files for control purposes.

Article 15: During a six-month trial period from the date of publication of this circular, approved intermediaries may declare investments covered by Article 2:

• either on paper support, in accordance with the model provided by Circular to Approved Intermediaries No. 93-05 of April 5, 1993, on foreign currency investment forms;
• or via the non-resident investments platform, in accordance with the provisions of this circular.
  Upon expiration of the trial period specified in the first paragraph of this article, provisions of Circular No. 93-05 above that are contrary or duplicate with this circular shall be repealed, and investment operations covered by Article 2 must be declared obligatorily by approved intermediaries via the non-resident investments platform.

Article 16: Investment Forms established in accordance with Circular No. 93-05 above must be integrated into the non-resident investments platform, starting from the expiration of the trial period provided in the first paragraph of Article 15 above. For this purpose, approved intermediaries must, upon the first transfer following said date, regarding revenues or proceeds from sale or liquidation of investments that gave rise to an Investment Form under Circular No. 93-05, digitize said form in the non-resident investments platform, in accordance with the user manual of the aforementioned platform.
Investment operations indicated in Article 2, carried out before this circular's entry into force and for which no investment forms were established, must be declared to the Central Bank of Tunisia via Investment Forms issued as regularization through the non-resident investments platform, based on any document from a bank established in Tunisia attesting to foreign currency importation and its allocation to financing the concerned investment, or a specific authorization from the Central Bank of Tunisia.

Article 17: Circular to Approved Intermediaries No. 93-17 of October 13, 1993, on the distribution and transfer of profits, profit shares, beneficiary share remuneration, and attendance fees due to non-residents is hereby repealed.

The Governor
MAROUANE El ABBASSI

Annex No. 1 to Circular No. 2018-14 of December 26, 2018
Required Documents for Establishing the Bank Investment Attestation
I. Upon acquisition by non-residents of partnership interests or shares through inheritance:
Updated list of partners or shareholders indicating their place of residence and each's share in the capital, duly countersigned by the company's general management or manager.
II. Upon acquisition by non-residents of shares or partnership interests via free allocation during a capital increase through incorporation of reserves:

• Minutes of the Extraordinary General Meeting deciding the company's capital increase, duly registered;
• Updated list of partners or shareholders indicating their place of residence and each's share in the capital, duly countersigned by the company's general management or manager.
  III. Acquisition via subscription during a capital increase, through conversion of current account advances:
• All documents justifying, in accordance with prevailing regulations, the non-resident status of the fund beneficiary at the time of transfer realization, such as:
  • for natural persons: full copy of passport, foreign residence permit, etc.
  • for non-resident legal persons established in Tunisia: copy of registered statutes, investment forms justifying foreign participation financing to their capital, deposit declaration attestation, etc.
  • for legal persons established abroad: extract from the commercial register, etc.
• Minutes of the Extraordinary General Meeting deciding the company's capital increase, duly registered;
• Updated list of partners or shareholders indicating their place of residence and each's share in the capital, duly countersigned by the company's general management or manager;
• Any document from competent authorities, where applicable, authorizing the increase of foreign non-resident participation rate in capital;
• Special report by the statutory auditor regarding the contemplated capital increase operation certifying the certain, liquid, and due nature of the converted advance amount, for companies subject to appointing a statutory auditor;
• Current account advance agreement subject to conversion accompanied by the Investment Form justifying its foreign currency financing.
  IV. Acquisition, upon payment of the corresponding price abroad, of shares or partnership interests:
• Updated list of partners or shareholders indicating their place of residence and each's share in the capital, duly countersigned by the company's general management or manager;
• Stock exchange registration certificate or execution advice for share acquisitions;
• Where applicable, minutes of the partners' meeting approving the acquisition operation, duly registered.

Annex No. 2 to Circular No. 2018-14 of December 26, 2018
Required Documents for Transferring Attendance Fees and Similar Allowances, Profits, and Dividues Due to Non-Residents
I. Attendance Fees and Similar Allowances:

• Minutes of the General Meeting fixing the amount of attendance fees and similar allowances;
• List of non-resident administrators duly signed by the company's competent bodies;
• Distribution table per administrator of attendance fees and similar allowances;
• Tax compliance or exemption attestation for revenues established in the name of the fund beneficiary, in accordance with Article 112 of the Tax Code and Procedures, for any foreign currency settlement in Tunisia or abroad in favor of non-residents.
  II. Profits and Dividends:
• Investment Form and/or Bank Investment Attestation;
• Tax compliance or exemption attestation for revenues established in the name of the fund beneficiary, in accordance with Article 112 of the Tax Code and Procedures, for any foreign currency settlement in Tunisia or abroad in favor of non-residents;
• All documents justifying, in accordance with prevailing regulations, the non-resident status of the fund beneficiary at the time of transfer realization, such as:
  • for natural persons: full copy of passport, foreign residence permit, etc.
  • for non-resident legal persons established in Tunisia: copy of registered statutes, investment forms justifying foreign participation financing to their capital, deposit declaration attestation, etc.
  • for legal persons established abroad: extract from the commercial register, etc.
• Minutes of the general meeting or collective partners' decisions ruling on the allocation of the fiscal year's results, duly signed by the company's competent bodies and registered at the tax office;
• Updated list of partners or shareholders indicating their place of residence and each's share in the capital, duly countersigned by the company's general management or manager;
• A statement of distribution of dividends allocated to non-resident beneficiaries;
• Financial statements for the concerned fiscal year duly prepared in accordance with prevailing regulations;
• A tax declaration regarding the fiscal year in question, duly countersigned by the Tax Administration.

Annex No. 3 to Circular No. 2018-14 of December 26, 2018
Required Documents for Transferring the Actual Net Proceeds from Sale of Partnership Interests and Shares, Sale and Redemption of Collective Investment Undertaking (OPC) Shares, and Liquidation of Companies
I. For transfers regarding all aforementioned operations:

• Investment Form and/or Bank Investment Attestation;
• Tax compliance or exemption attestation for revenues established in the name of the fund beneficiary, in accordance with Article 112 of the Tax Code and Procedures, for any foreign currency settlement in Tunisia or abroad in favor of non-residents;
• All documents justifying, in accordance with prevailing regulations, the non-resident status of fund beneficiaries at the time of transfer realization, such as:
  • for natural persons: full copy of passport, residence permit, etc.
  • for non-resident legal persons established in Tunisia: copy of registered statutes, investment forms justifying foreign participation financing to their capital, deposit declaration attestation, etc.
  • for legal persons established abroad: extract from the commercial register.
    II. For transfers regarding actual net proceeds from sale of partnership interests and shares:
• Company statutes, registered; tax identification card; extract from commercial register;
• Share/partnership transfer contract duly registered or stock exchange registration certificate/execution advice for share operations;
• Minutes of the partners' meeting approving the transfer operation, duly registered;
• Financial statements for the last closed fiscal year preceding the transfer operation, prepared and certified in accordance with prevailing legislation.
  III. For transfers regarding actual net proceeds from sale and redemption of Collective Investment Undertaking (OPC) shares:
• Approval certificate for the OPC issued by the Financial Market Council (CMF);
• Internal regulations of the OPC;
• Net asset value attestation issued by the depositary or statutory auditor;
• All documents from the management company attesting to all subscription and redemption movements of the share due to the beneficiary, as well as the amount to be transferred, net of all fees and taxes.
  IV. For transfers regarding actual net proceeds from company liquidation:
• Minutes of the partners' meeting deciding the company's dissolution, duly registered or court judgment in case of judicial liquidation;
• Minutes of the partners' meeting approving the closure of liquidation works, granting full discharge to the liquidator and distributing the liquidation proceeds, duly registered;
• Liquidation report and balance sheet duly countersigned by the Tax Administration.