BoT unveils new foreign exchange regulations

TANZANIA: Tanzania’s Central Bank (BoT)  has released new foreign exchange (Bureau de Change) regulations superseding the 2019 regulations aimed at diversifying and expanding the foreign exchange market in the country.

Published under Government Notice No 730 of 2023, the new regulation has introduced three classes of Bureau de Change licences, Class A, Class B, and Class C.

Class A licence allows foreign and locally bureau de change owners to open branches anywhere in the country. Foreign-owned Class A operators require a minimum capital of 1bn while their locally-owned counterparts must maintain a minimum capital of 500m/-.

Also, Class A Bureau de Change establishments will be empowered to engage in a wide array of financial activities including spot buying and selling of foreign exchange, money remittance transactions, and acting as agents for banks, insurance companies, mobile network operators, and other financial activities approved by the Central Bank.

Class B is a bureau whose shareholding is supposed to be a hundred percent local shareholding and is licensed to deal with spot transactions, with a minimum capital requirement of Tshs. 200 million.

Class B Bureau de Change operators, with local shareholding, will be limited to a single outlet and are prohibited from opening branches. Their minimum capital requirement is set 200m/-.

Similar to Class A, they can conduct spot buying and selling of foreign exchange and act as agents for various financial entities as approved by BoT.

Class C Bureau de Change licenses will be exclusively granted to hotels or hotel owners, particularly those with a three-star rating or higher.

Notably, Class C establishments will not be burdened with a minimum capital requirement. They are poised to provide spot buying and selling of foreign exchange services exclusively to their hotel patrons.