Exchange Control

Frequently Asked Questions

Exchange Control

Almost all persons are affected by Foreign Exchange Control Act 2018 (the FEC Act) and Exchange Control Directive (the EC Directive) in one way or another. Here are a few tips on how to comply with such regulations.

1. What is Exchange Control and how does it affect me?

Exchange control involves measures to directly control or influence the movement of foreign exchange (inflows and outflows) over Tonga’s borders. The FEC Act and EC Directive prescribe limits on the purchase and sale of foreign currency by persons in Tonga.

A person would be affected by the controls when travelling, giving cash as a gift to someone outside of Tonga, wishing to pay for something ordered from outside of Tonga, e.g. machineries, cars etc., or investing offshore. A complete list is detailed in the EC Directive (page 12 – 17).

2. Why are Exchange Controls Necessary?

Exchange Control is not only used to manage the national demand for foreign currency in order to protect the country’s foreign exchange reserves, but also to allocate available foreign currency in the best interest of the country as a whole. Exchange controls warrant Tonga’s macroeconomic stability by making sure the country’s level of foreign reserves are sufficient to settle the country’s overseas payment obligations e.g. payment of imports, loan repayments and other foreign obligations.

3. Who is responsible for the Administration of Exchange Control in Tonga?

The National Reserve Bank of Tonga (the NRBT) has been tasked by law to regulate the movements of foreign exchange in order to support and maintain the Kingdom’s foreign reserves at minimum level equivalent to at least 3 months of the country’s imports of goods and services. Exchange Control is therefore the responsibility of the NRBT. The NRBT has, in turn, delegated several of these functions to the Authorised Person. The major function of the Authorised Person that are, commercial banks and foreign exchange dealers authorised to deal in foreign currency, is to assist the NRBT with the administration of exchange controls.

All requests/applications for foreign exchange have to be made through the Authorised Person or directly to the NRBT.

The regulatory structure of exchange control therefore comprises of the Exchange Control Unit of the NRBT and the Authorised Person.

4. Why is there a new FEC Act?

The Foreign Exchange Act CAP 103 (promulgated in 1963, now repealed) gave the NRBT broad and unrestricted authority to regulate Tonga’s foreign exchange resources. The NRBT developed the new FEC Act to provide clear boundaries in the national interest and transparency in its process and enforcement.

The new FEC Act enhances the ability of the country to ensure the foreign exchange that is due to Tonga and its residents, are returned back to Tonga to contribute to the country’s economic development and sustainability.

5. How does the new FEC Act differ from the old Act?

The old Act and new FEC Act are similar in its intent and purpose. The key aspects of the old Act were promulgated through its regulations. These key aspects of the old Act and regulations were incorporated into the new FEC Act.

6. What are these key aspects of the old Act and regulations that are incorporated into the new FEC Act?

  1. Acquiring property overseas – Under the regulations of the old Act, any person that wished to acquire property outside Tonga required the consent of the NRBT.
  2. 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 person proceeds from exports of goods or services.

7. Can the NRBT under the new FEC Act give exemptions to section 5 (holding, taking, sending or transferring of gold, foreign exchange etc.) and section 8 (repatriation of export proceeds)?

Yes, under section 9 of the new FEC Act, the NRBT can prescribe exemptions up to a certain limit as it sees in the best interest of the country through EC Directive.

8. Who are the Authorised Person in Exchange in Tonga?

There are currently 16 namely:-

1. Banks

- Australia and New Zealand Banking Group Ltd
- Bank of South Pacific Limited
- MBf Bank Ltd
- Tonga Development Bank

2. Foreign Exchange Dealers – Type A (outward/payment & inward/receipts)

- Fexco (Tonga) Ltd
- Klickex Ltd
- Rowena Finance Services
- SAV Money Transfer
- T&T Money Transfer

3. Foreign Exchange Dealers – Type B (inward/receipts only)

- Digicel Mobile Money
- Frank Money Transfer
- Tonga Post Ltd
- Manatu ‘Ofa Money Transfer
- Fietokoni Financial Services
- Island Flexi Tonga

4. Money Changers – Type C

- Jones Travel Ltd

9. What are the normal procedures to be followed when a person wants to make payment/transfer abroad?

The following are the procedures:

  • Individuals must approach an Authorised Person of their choice for all foreign exchange related needs. Government issued identification in the form of Passport or Identity Document must be presented when dealing in foreign exchange transactions. Where required, suitable documentary evidences e.g. invoice must be submitted in support of foreign exchange sales or purchases. Dealings in foreign currency must only be done at Authorised Person.
  • Payments or Transfers that are not delegated to authorised persons or fall outside the delegated authority limits must be referred to the Reserve Bank together with the relevant documentation for processing.
  • In terms of section 4 of the FEC Act, it is illegal for unauthorised person to buy or sell foreign currency in Tonga.

10. Are there limits to how much I can transfer overseas?

Yes, the EC Directive limits different types of payments or transfer overseas. Please refer to page 12 – 17 of the EC Directive for the details.

11. If I have investments offshore that were acquired prior to the new FEC Act (1 November 2018), am I impacted by the new FEC Act?

No. The NRBT Press Release dated 8th November 2018 directs that any offshore investments made prior to 1 November 2018 is not affected by the new FEC Act 2018.

12. Are residents allowed to invest offshore?

Yes.

Authorised persons may approve applications for offshore investment by business entities, Retirement Funds, Individuals or any other applicant, up to the delegated limit of T$100,000 per application.

All applications outside of the delegated limit must be approved by the Reserve Bank. Applications for the Reserve Bank’s approval must complete Form E on Attachment 2 of the EC Directive (page 23).All applications are to be accompanied by details of the proposed investment offshore, evidence of source of fund and other relevant supporting documents.

13. How much travel allowance can I take when travelling overseas?

Maximum of TOP$20K per person per travel.

14. 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 TOP$10K. If more than TOP10K then the traveller must seek the approval of the NRBT 3 business days prior to the anticipated departure date.

15. What documentation needs to be presented to the authorised person when applying for my travel allowance?

You are required to present your valid passport and air ticket confirming the journey to be undertaken. The Authorised Person is required to sight the passport, stamp the ticket and retain a copy.

16. How much Foreign Currency in Cash or Otherwise are persons allowed to bring into Tonga?

Persons are permitted to bring into Tonga without limit foreign currency.

In terms of Exchange Control and Customs Regulations persons are required to 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 TOP$10,000 or above.

17. How much foreign currency in cash can I hold?

As a resident in Tonga, you’re permitted to hold up to TOP$20K equivalent pa’anga in foreign currency.

18. What must I do with any surplus foreign currency?

You are required to sell such currency above TOP$20K back to the Authorised Person.

19. Can I hold a foreign currency account overseas?

Yes. Payments from Tonga to that foreign currency account are subject to the approval of the NRBT.

20. Can I hold a foreign currency account in Tonga?

Yes, subject to the approval of the NRBT.

21. What is the penalty for violating Exchange Controls?

In terms of FEC Act and EC Directive, every person who contravenes or fails to comply with any provision of these shall be guilty of an offence and liable upon conviction to a fine not exceeding 3 years imprisonment or fine not exceeding $20,000 or both for an individual. If the offence is a continuing one then the person is liable to a fine not exceeding $1,000 for every day of the offence. In the case of a body corporate a fine not exceeding $200,000 and if the offence is a continuing one, to a fine not exceeding $2,000 for every day of the offence.

22. What if I have any further questions or concerns about exchange controls?

If you have any further questions on exchange controls, please do not hesitate to contact Ms. ‘Ana Soakai Takai on 24-057 or This email address is being protected from spambots. You need JavaScript enabled to view it..

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