TERMS AND CONDITIONS OF FOREIGN CURRENCY ACCOUNTS IN BHUTAN.

Transcription

1 TERMS AND CONDITIONS OF FOREIGN CURRENCY ACCOUNTS IN BHUTAN. The terms and conditions of the existing Foreign Currency Account is hereby amended and streamlined for effective implementation of the operation of foreign currency account in Bhutan. The RMA may from time to time amend and review the terms and conditions as and when deemed necessary. The revised terms and conditions will come into immediate effect and shall supersede all earlier terms and conditions. The new applicants, hereafter applying to open foreign currency account are required to complete in the respective foreign currency account forms (Application Form- FCA I, FCA II, FCA III) available with all the authorized banks in Bhutan and submit to any one of the authorized banks as per prescribed rules. Further, the RMA has introduced following two new foreign currency accounts:- I. Bhutanese Exporters and Individual Bhutanese citizens having earnings/remunerations in foreign exchange in Bhutan (FCA IV) II. Individual Non-Resident Bhutanese Citizens residing abroad (FCA V) The FCA IV is permitted to the Bhutanese exporter that has earnings in foreign exchange particularly by way of export of goods to third countries and the individual Bhutanese citizens employed by the office of international affiliation in Bhutan with remuneration in foreign exchange. On the other hand, FCA V is permitted to all Bhutanese citizens residing abroad mainly to facilitate and encourage individual Bhutanese to remit their earnings to Bhutan or to accumulate their savings in foreign exchange in Bhutan. The application forms for the FCA IV and V are also available with all the authorized banks and interested applicant can open account with any one of the authorized banks in Bhutan. 1. Definition Section A I. Foreign Currency Account: - A Bank account denominated in convertible currency II. Resident: - Foreign nationals who resides in Bhutan for more than six months. Non-Resident Bhutanese: - Bhutanese citizen who resides abroad for purpose of employment/carrying out on business or vocation outside Bhutan. Persons: includes an individual, a company, firm or anybody of persons, whether incorporated or not. V. Authorized Banks: - Commercial Bank licensed by the Royal Monetary Authority of Bhutan Page 1 of 8

2 Section B 2. Who can open Foreign Currency Account in Bhutan? A. Foreign Individuals/Entities I. Foreign Individuals. II. Foreign Individuals married to Bhutanese citizen. Foreign Individuals employed by firm/organization in Bhutan on contract or volunteers. Foreign Employees of embassies and missions in Bhutan. V. Foreign Employees of UN agencies and affiliated organization in Bhutan. VI. Projects financed by donor agencies. VII. Office of UN Agencies and its affiliated organization. V Embassies and Missions offices in Bhutan. B. Bhutanese Individual/Entities I. Individual Bhutanese Citizens having earnings/remunerations in foreign exchange in Bhutan. II. Bhutanese Exporters. Individual Non-Resident Bhutanese citizens residing abroad. NGOs in Bhutan. V. Foreign Direct Investment Companies in Bhutan. VI. Local Industries (Manufacturing and Service sector) that has earnings in foreign exchange. Five Categories of Foreign Currency Account:- I. FCA-I Foreign Currency Account for foreign Individuals. II. FCA-II Foreign Currency Account for Project, NGOs and International offices. FCA-III Foreign Currency Account for FDI and Local Industries. FCA-IV Foreign Currency Account for Bhutanese Exporters & Individual Bhutanese Citizens having earnings/ remunerations in foreign exchange in Bhutan. V. FCA-V Foreign Currency Account for Non-Resident Bhutanese Citizens Abroad. Page 2 of 8

3 Section C 3. General Information I. The account must be funded through inward remittances or income drawn in convertible currency in Bhutan. II. The account can be operated/funded in any of the convertible currencies as listed by the Royal Monetary Authority of Bhutan. The authorized Banks may directly approve the opening of foreign currency account of category FCA- I and FCA- II without reference to the RMA. However, the opening of foreign currency account of category FCA- III, FCA - IV and FCA- V shall be referred to the RMA for the approval. To ensure transparency in the operation of the foreign currency account, all account holders must abide by the terms and conditions of the foreign currency account. V. The applicant will be allowed to open only one foreign currency account, which can be with any one of the authorized banks in Bhutan. VI. VII. V IX. Payment of interest on Foreign Currency Account will be at the discretion of Banks. Cash deposit of convertible currencies into the account shall not be permitted. However, deposit by way of cheques and other instruments may be permitted. Foreign individuals who are in Bhutan for a period of less than six months shall not be eligible to open Foreign Currency Account. The Bhutanese Citizens traveling aboard for temporary visits like business, medical treatment or for studies outside Bhutan will be considered as Bhutanese Resident in Bhutan and they will not be entitled for Non Resident Foreign Currency Account. X. Persons availing foreign currency account under FCA-IV and FCA-V will not be eligible for Special Scheme facilities (ATS, STA, BTA, and MTA). XI. XII. Convertible Currency once converted into Ngultrum will not be permitted to be reconverted to Convertible Currency. The condition applies to all categories of foreign currency accounts listed under Section B. All billings, payments and receipts within Bhutan must be made in Ngultrum only. Page 3 of 8

4 Section D Documents Required For Opening Of Different Foreign Currency Account. I. FOREIGN CURRENCY ACCOUNT FOR FOREIGN INDIVIDUAL (FCA -I) a. Documents Required for FCA- I I. Application Form- FCA-I II. A Copy of Contract Agreement/Memorandum of Understanding (MoU) A Copy of Work permit & Passport A Copy of Marriage Certificate if married to Bhutanese National b. Terms and conditions for FCA I I. The banks shall not permit withdrawal of convertible currency in cash. Cash withdrawals must be in Ngultrums. II. The banks shall permit withdrawal of cash up to USD for travel anytime outside Bhutan. Above USD , the banks shall use other payment instruments. The travel must be supported by a copy of confirmed air-ticket and passport. Any conversion of convertible currency balances into local currency will be at the prevailing exchange rates. The bank must close the foreign currency account at the end of contract period and permit the account holder for encashment up to the limit of USD in cash and the balance amount by other payment instruments. V. The authorized officials of the RMA shall have direct access to information on foreign currency accounts. Page 4 of 8

5 II. FOREIGN CURRENCY ACCOUNT FOR PROJECTS, NGOs AND INTERNATIONAL OFFICES (FCA- II) a. Documents Required for FCA- II I. Application Form-FCA- II II. Contract Agreement in case of Projects A copy of approval letter for Projects approved by the RGoB A copy of Registration Certificate for NGOs b. Terms and conditions for FCA- II I. The account must be in the name of projects/firm and shall be used exclusively to facilitate the foreign exchange transactions for the project/firm. II. Firm/Project may be permitted to make payment of salary/wages and professional s fees in convertible currency to foreign nationals employed or hired by the firm/project. However, such payment must be made through account to account transaction. The banks shall not permit withdrawal of convertible currency in cash. Cash withdrawals must be in Ngultrums. The banks will permit withdrawal in cash up to USD per person for travel any- time outside country. Above USD , the banks shall use other payment instruments. The travel must be supported by a copy of confirmed air-ticket and passport. V. Any conversion of convertible currency balances into local currency will be at the prevailing exchange rates. VI. No support of foreign exchange shall be provided in case the balance in the account is not sufficient to meet the expenses. VII. When the entity ceases to operate the account must be closed and the balance may be transferred to account abroad at the prevailing exchange rate. V The authorized officials of the RMA shall have direct access to information on foreign currency account. Page 5 of 8

6 FOREIGN CURRENCY ACCOUNT FOR FDI AND LOCAL INDUSTRIES- (FCA- III) a. Documents Required for FCA- III I. Application Form- FCA-III II. A copy of project approval from Ministry of Economic Affairs. A copy of Information on Convertible Currency Sustainability, value addition and BTC heading particularly for local industries. A copy of license from Department of Civil Aviation in case of Airlines. b. Terms and conditions for FCA- III I. The account must be in the name of company/firm and shall be used exclusively to facilitate the foreign exchange transactions of the company/firm. II. Permissible credits into the foreign currency account:- a. Equity proceeds (FDI). b. Loan proceeds (external commercial borrowings). c. Export proceeds. d. Tour related remittances (FDI hotels and resorts). Permissible debits to the foreign currency account:- a. Payment related to the establishment s authorized line of business. b. Repatriation of FDI dividends/profits/capital on liquidation. c. Repayment of loan (principal and interest). d. Payment for import of goods and services. FDI/Local Industries may be permitted to make payment of salary/wages and professional s fees in convertible currency to foreign nationals employed or hired by them. However, such payments must be made through account to account transaction. V. The banks shall not permit withdrawal of convertible currency in cash. Cash withdrawals must be in Ngultrums. VI. VII. The banks shall permit withdrawal of cash up to USD per person for travel any time outside Bhutan. Above USD , the banks shall use other payment instruments. The travel must be supported by a copy of confirmed air-ticket and passport. Any conversion of convertible currency balances into local currency will be at the prevailing exchange rates. Page 6 of 8

7 V IX. Net balancing principle applies as follows:- a. Account funded by inflows of convertible currency b. All payment obligations must be met from the convertible currency inflows of the company. The FDI/Local Industries must submit to the RMA foreign exchange receipts and payments statement on a monthly basis. In addition, the company shall also submit any such reports and statements as may be required by the RMA. X. The authorized officials of the RMA shall inspect the books, accounts and other documents of the FDI/Local Industries to monitor the foreign exchange transaction. FOREIGN CURRENCY ACCOUNT FOR BHUTANESE EXPORTERS & INDIVIDUAL BHUTANESE CITIZENS HAVING EARNINGS/REMUNERATIONS IN FOREIGN EXCHANGE IN BHUTAN (FCA- IV) a. Documents required for FCA- IV I. Application Form- FCA- II. A copy of Export license and convertible currency earnings statement in case of Exporters. A copy of Terms of Reference (TOR) and Salary Statement from the concerned organization. b. Terms and conditions for FCA- IV I. Only 10% of convertible currency earnings will be allowed to be retained in foreign currency account. II. The balance 90% of the convertible currency earnings must be credited to Ngultrum account. The accumulated balance in the foreign currency account can be utilized for the following purposes without producing required documents :- a. Import of goods b. Travel to third country ( officials/business or holidays) c. Education expenses d. Medical expenses e. Others (gifts, subscription and fees) The use of the accumulated balances in the foreign currency account will be subject to Point VIII of Foreign Exchange Operational Guidelines for Commercial Banks August 2011 (Transactions Which Are Prohibited). V. The banks shall not permit withdrawal of convertible currency in cash. Cash withdrawals must be in Ngultrums. Page 7 of 8

8 VI. VII. The banks shall permit withdrawal in cash up to USD for travel anytime outside Bhutan. Above USD , the banks shall use other payment instruments. The travel must be supported by a copy of confirmed air-ticket and passport. The authorized officials of the RMA shall have direct access to information on foreign currency account. V. NON RESIDENT BHUTANESE FOREIGN CURRENCY ACCOUNT FOR BHUTANESE CITIZENS ABROAD (FCA -V) a. Documents Required for FCA- V I. A Copy of Passport II. A Copy of Citizenship Identity Card b. Terms and conditions for FCA- V I. Permissible Credits into the foreign currency account:- a. Inward remittances by way of salary/earnings through employment abroad. b. Pension and related benefits received from the employer abroad. c. Proceeds of life insurance/health insurance policy claims received from abroad. II. Permissible Debits to the foreign currency account a. Foreign currency can be utilized for meeting the cost of import of goods against import license/invoices. b. Expenses relating to Travel, studies, Business and medical treatment. The banks shall not permit withdrawal of convertible currency in cash. Cash withdrawals must be in Ngultrums. The banks shall permit withdrawal in cash up to USD for travel anytime outside Bhutan. Above USD , the banks shall use other payment instruments. The travel must be supported by a copy of confirmed air-ticket and passport. V. Account holder must close the Non-Resident Foreign Currency Account once he/she returns to country permanently. Upon the closing of the account, the balance in the account must be transferred to the local currency account maintained with any banks in Bhutan at the prevailing exchange rates. VI. The authorized officials of the RMA shall have direct access to information on foreign currency account. Page 8 of 8