Repatriating dividends from Tunisia: the exchange-control guide for foreign investors

The question every foreign investor asks before setting up in Tunisia: "Will I be able to get my money out?" The answer is yes, for dividends, for the proceeds of a sale and for the repayment of shareholder loans, provided the investment was brought in and documented in the right way. The Tunisian exchange-control regime guarantees the transfer of income and proceeds of foreign investments made in foreign currency; the practical condition is the documentation. Here is how it works.

The principle

Tunisia applies exchange control: the dinar is not freely convertible for residents, and transfers abroad by a resident company go through an authorised bank that checks their basis. Foreign investments benefit from a guarantee of transfer of their income (dividends, profits) and of the proceeds of their liquidation or sale, in the currency of the original investment, when the investment was financed by an import of foreign currency and is documented as such.

What to do from day one

1. Bring the capital in foreign currency from abroad, through a Tunisian bank, onto the account opened for the company; the bank issues the documents evidencing the import of currency and its allocation to the capital.
2. Declare the investment with the competent bodies where required, and keep the investment certificate in the permanent file.
3. Document shareholder loans the same way (import of currency, loan agreement, registration where required): their repayment and interest follow the same logic.
4. Keep the file: bank certificates, investment declarations, capital increase documents, loan agreements, general meeting minutes. Missing documents are discovered too late, at the first transfer request.

The dividend transfer, step by step

• Approval of the accounts and decision of distribution by the general meeting, within the deadlines of the Commercial Companies Code;
• Payment of the withholding tax on dividends (10% domestic rate for non-residents, reduced where a double taxation treaty applies and a residence certificate is provided);
• Transfer request to the bank with the supporting file: minutes, financial statements, evidence of tax payment, documentation of the original investment;
• Transfer in foreign currency to the parent company.

Sale proceeds and liquidation

The same guarantee covers the proceeds of the sale of shares to another investor and the liquidation surplus, again in proportion to the documented foreign investment and after the applicable taxes on capital gains. Structuring the sale with the exchange-control file in mind avoids surprises at closing.

Common mistakes that block transfers

• Capital paid in dinars from a local source, or brought in cash, without bank documentation of the import of currency;
• Shareholder loans undocumented or not declared;
• A subsidiary created in the name of a local person "to simplify";
• Capital increases or reinvested profits not documented as foreign investment;
• Distributions decided without up-to-date accounts, approval or tax payment.

Intragroup payments

Management fees, royalties and interest follow their own rules: contract, arm's length pricing (transfer pricing), withholding tax and VAT on imported services, then transfer through the bank with the supporting documents. Treated together from the start, they pass without difficulty.

MGI BFC organises the exchange-control file of foreign investments from the first transfer, handles distributions and intragroup payments with the bank, and keeps the books and the tax compliance of the subsidiary. See setting up a subsidiary in Tunisia, tax advisory and our free subsidiary compliance check. A partner answers within 24 hours through the request for proposal.

General information article written by MGI BFC, chartered accountants in Tunis, member of MGI Worldwide. Exchange-control rules are set by the Central Bank of Tunisia and evolve through circulars; each situation is reviewed individually. It is not personalised advice.

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