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With
the exception of a few reserved sectors, foreign investors are free to
make investments in Bangladesh in industrial enterprise. An industrial
entity may be set up in collaboration with local investors or may even
be wholly owned by the foreign investors. No permission is needed to set
up such enterprises if the entrepreneurs use their own funds. However,
to avail of facilities and institutional suport provided by the
government, entrepreneurs/sponsors are advised to apply for registration
with the Board of Investment (BOI). For items in the control list, the
office of the Chief Controller of Imports & Exports (CCI & E)
prescribes the basis and conditions of import entitlement.
Shares
may be issued in favour of foreign investors against capital machinery
brought into Bangladesh. For issuance of shares against foreign
investment in the form of capital machinery, the exchange control copy
of bill of entry evidencing clearance of the capital machinery from the
Custom Authorities, copies of the relative import permit, invoice and
bill of lading are required. |
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a)
Non-residents are free to invest in shares / securities quoted in
the stock exchanges, with foreign
exchange sent or brought into Bangladesh. |
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b) They may also invest in new, yet-to-be-listed public issues of
Bangladeshi shares/securities. In such cases investors are not required
to transact through any
registered broker/member of stock exchange.
5%
shares of Initial Public Offering (IPO) of a company is reserved for
Non-Resident Bangladeshi (NRB). Non-Resident Bangladeshi (NRB) can
purchase/subscribe securities in foreign currency through
"Foreign Currency Account for IPO" opened for the purpose
only by the issuing company. Over subscription can be repatriated
after completion of formalities. |
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c) Permission of Bangladesh Bank is not required for issue and
transfer of shares in favour of non-residents against their investments
in joint ventures in Bangladesh. |
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d) Non-resident share holders can freely transfer their shares to
other non-residents. |
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Branches
of foreign firms/companies including foreign banks, insurance companies
and financial institutions are free to remit their post-tax profits to
their head offices through banks authorized to deal in foreign exchange
(Authorized Dealers) without prior approval of Bangladesh Bank. |
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Prior permission of Bangladesh Bank is not required for :
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remittance of dividend income to non-residents in respect to
their investments in Bangladesh;
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remittance of dividend declared out of previous year's
accumulated reserves; and
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dividend and sale proceeds (including capital gains) of shares of
companies listed in a Stock Exchange in Bangladesh. Such
remittance may be effected prior to actual payment of taxes provided
that the amount payable to the tax authorities at the applicable tax
rate is withheld by the company. Remittance of sale proceeds of shares
of companies not listed in Stock Exchange requires prior Bangladesh Bank
permission, which is accorded for amounts not exceeding the net asset
values of the shares. |
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Expatriates
working in Bangladesh with the
approval of the Government
may remit through an Authorized Dealer (AD) 50% of salary and 100% of
leave salary as also actual savings and admissible pension benefits. No
prior Bangladesh Bank
approval is necessary for such remittances. |
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Industrial enterprises may enter into agreements for payment of
royalties, technical know-how/technical assistance fees abroad without
prior permission if the total
fees and other expenses connected with technology transfer do not exceed
(a) 6% of the
previous year’s sales
of the enterprises as declared in their tax returns, or (b) 6% of the
cost of imported machinery in
the case of new projects. These agreements, however, need to be
registered with the Board of Investment (BOI). Agreements not in
conformity with these general guidelines require prior permission of the
BOI. ADs may remit the royalties, technical know-how/technical
assistance fees payable as per agreements
registered with/approved by
BOI, without prior approval of Bangladesh Bank. |
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Industrial enterprises producing for the local market may remit through
ADs up to 1% of their sales as declared in their previous year's tax
returns for the purpose of training and consultancy services without
prior approval of Bangladesh Bank. |
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Foreign shipping lines, airlines and courier
service companies may send abroad, through an AD, funds collected in
Bangladesh towards freight and passage, after adjustment of local costs
and taxes, if any. |
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Industrial enterprises in Bangladesh (local, foreign or joint venture)
may borrow abroad with prior Board of Investment (BOI) approval.
Remittances towards payment of interest and repayment of principal as
per terms of BOI approved borrowing may be made through ADs without
prior Bangladesh Bank approval. |
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Banks in Bangladesh may extend working capital loans or term loans in
local currency to foreign-controlled or foreign-owned firms/companies
(manufacturing or non-manufacturing) operating in Bangladesh on the
basis of normal banker-customer relationship, without reference to
Bangladesh Bank
Banks
in Bangladesh are free to grant local currency loans to joint venture
industries in EPZ up to the amount of short term foreign currency loans
obtained from abroad. |
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Bangladesh
Taka is fully convertible for settlements of trade related transactions.
Import licence is not required for import of items not in the control list. An importer has automatic access to
foreign exchange for import
of all items outside the control list, and also for import of control
list items as per general or specific authorization of the office of the
Chief Controller of Imports and Exports. |
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Annual foreign exchange quota for business travel abroad
for new exporters has been set at US $ 6000. Bonafide requirement beyond
US $ 6000 is accommodated by Bangladesh Bank upon written request
submitted with supporting documentation. |
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Merchandise
exporters may retain up to 50% of realised FOB value of their exports in
foreign currency accounts in US$, Euro, Japanese Yen. For export items
with high import contents (such as naptha, furnace oil, bitumen,
readymade garments etc.), the retention quota is 10%. The computer
software and data entry/processing service exporters may also retain up
to 50% of realised export proceeds in foreign currency accounts. Funds
from these accounts may be used to meet bonafide business expenses, such
as business visits abroad, participation in export fairs and seminars,
import of raw materials, machineries and spares etc. Funds from these
accounts may also be used to set up offices abroad without prior
permission of Bangladesh Bank. Exporters may, at their option, retain
the foreign currency in interest bearing renewable term deposit accounts
in Bangladesh with a minimum amount of USD 2,000 or Pound Sterling 1,500
equivalent. |
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Service exporters may retain 5% of their repatriated income in foreign
currency accounts. Funds may be drawn from these accounts to meet
expenses for bonafide business expenses abroad. This quota may also be
kept in interest bearing renewable term deposit accounts. However,
foreign exchange earnings on account of indenting commission or agency
commission for export from Bangladesh may not be credited to such
accounts since these incomes originate from Bangladesh sources. |
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passengers may bring in amount of foreign exchange with declaration on
form FMJ at the time of arrival. No declaration is necessary for amounts
up to US$ 3,000. For non-residents, the entire amount brought in with
declaration, or up to US$ 3,000 brought in without declaration may be
freely taken out at the at the time of departure. Up to US$ 3,000
brought in without declaration may also be retained and taken out freely
by a person ordinarily resident in Bangladesh. |
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Non-resident Foreign Currency Deposit (NFCD)
accounts may now be maintained as long as the account holders desire.
Amounts brought in by non-resident Bangladeshis can be deposited in
foreign currency account any time after return to Bangladesh
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Foreign currency accounts opened
in Bangladesh in the names of Bangladesh nationals or persons of
Bangladesh origin working or self employed
abroad can now be maintained as long as the account holders'
desire. |
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Persons ordinarily resident in Bangladesh may
maintain foreign currency accounts with foreign exchange brought in at
the time of their return to Bangladesh
from visits abroad. These accounts are termed as Resident Foreign
Currency Deposit (RFCD) accounts. The amount brought in with declaration
to customs authorities on form FMJ and up to US $ 5000 brought in
without declaration may be credited to this account. However, proceeds
of export of goods or services from Bangladesh and commission earnings
arising from business deals in Bangladesh
cannot be credited to such accounts. Balances of such accounts
are freely remittable abroad. Balances of RFCD accounts may also be used
by the accounts holders for their travel abroad in the usual manner.
RFCD accounts may be opened in US Dollar, Euro, Pound Sterling, Deutsche
Mark or Japanese Yen and may be maintained as long as the account
holders desire. Interest may
be paid on these deposits if these are for a term of not less than one
month and the balance is not less than US $ 1000 or Pound Sterling 500
equivalent. |
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ADs do not require prior permission of Bangladesh Bank for
opening of foreign currency accounts of : -non-resident foreign persons/firms;
-diplomatic missions in Bangladesh and their expatriates;
-diplomatic bonded warehouses (duty free shops);
-local and joint venture contracting firms employed to execute
projects financed by foreign donors/international donor agencies;
-Bangladesh nationals working in the international bodies
in Bangladesh and drawing pay and allowances in foreign
currency. |
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Bank accounts outside Bangladesh opened by Bangladesh nationals while
working abroad may now be maintained even after their return to
Bangladesh. |
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No Bangladesh Bank approval is needed for booking of passage
for Bangladesh nationals against payment in
Taka. Prepaid Ticket Advice
(PTA) in favour of foreign guests invited by Government,
Semi-Government, autonomous organizations or bodies affiliated with UN
agencies or other internationally recognized agencies
may be issued without prior approval of Bangladesh Bank. Air
tickets may be issued against payment
in Taka to foreigners working
in Bangladesh if they draw salaries in Bangladesh Taka or if the cost of
the ticket is to be borne by the employer, as per terms of the work
permits approved by Bangladesh Government. |
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Annual travel quota entitlement of Bangladesh nationals is
US$ 1000 per person for visits to SAARC member countries and Myanmar
(US$ 500 for overland visits), and US$ 3000 per person for visits to
other countries. Bonafide requirements beyond these limits are
accommodated by Bangladesh Bank on written request supported by
satisfactory documentation. International credit cards may also be
issued against such travel entitlements. Release of foreign exchange in
excess of US$ 200, requires valid visa |
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i)
Subject to an annual upper limit of US $ 5000, importers are
entitled to business travel quotas @ 1% of their imports settled during
the previous financial year.
ii) Subject to an annual upper limit of US $ 5000, non-exporting
producers are entitled to business travel quotas @ 1% of their turnover
of the preceding financial year as declared in their tax returns.
The
same business organisation engaged in imports as well as production
shall, however, draw business travel entitlement only on one count. |
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Prior permission of Bangladesh Bank is not required for releasing
foreign exchange in favour/on behalf of Bangladesh students studying
abroad or intending to proceed abroad for studies. Remittances may be
made through Authorised Dealers (ADs) for all regular courses. |
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ADS may release allowance not exceeding US$
200 per day for countries in the SAARC region and Myanmar and not
exceeding US$ 250 per day for all other countries to private sector
participants for attending seminars, conferences and workshops arranged
by recognized bodies |
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ADs may release foreign exchange up to US$ 10000 for
medical treatment abroad on the basis of recommendation of Medical Board
constituted by the Health Directorate or on the basis of the need
established through recommendation of appropriate medical specialists
and the cost estimate from a foreign medical institution. Bonafide
requirements in excess of US$ 10000 are accommodated by Bangladesh Bank
on written request alongwith satisfactory documentation supporting the
bonafides of the expenses. |
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Incoming/outgoing passengers may bring in/take out up to Taka 500 per person in Bangladesh currency. |
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Incoming/outgoing adult female passengers may take out/bring in any
quantity of personal jewellery worn on their person or as part of their
personal baggage. |
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ADs may remit membership fees of foreign professional, scientific
institutions and fees for application, registration, admission,
examination (TOEFL, SAT etc.) in connection with admission into foreign
educational institutions as per estimate of the concerned institution. |
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ADs may remit evaluation and visa processing fee on behalf of
Bangladeshis desiring immigration to foreign countries, as per demand
note of the foreign immigration authorities. |
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Intending travellers may send visa fees through ADs to the embassies of
countries that do not have consular offices in Bangladesh.
Consular/visa
fees collected by foreign embassies in Bangladesh Taka may be remitted
abroad by the ADs without prior approval of Bangladesh Bank. |
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Remittance of moderate amounts of foreign exchange for maintenance
abroad of family members (spouse, children, parents) of Bangladesh
nationals are allowed by Bangladesh Bank, on written request supported
by certificates from the Bangladesh mission in the concerned country. |
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-opening back-to-back import LCs on account of
manufacture-exporters for their input imports as per prescribed
input-output coefficients;
-issue of bank guarantee/performance bond on account of the
merchandise exporters of Bangladesh in favour of foreign buyers;
-remittance on account of short weight, quality claim, partial
shipment etc. upto 10% of realised export proceeds.
-payment of discount not exceeding 10% of the invoice value at the
request of the exporter where foreign importers refuse to clear goods
due to discrepant documents etc.,
-remittance of premia on foreign currency policies taken by
Bangladesh nationals while residing abroad,
-remittance of premia on account of re-insurance,
-remittance of “General Average” collected from consignees in
Bangladesh,
-remittance of pre-shipment inspection fees,
-remittance of bonafide expenses incurred by Bangladesh Biman and
Bangladesh Shipping Corporation in foreign ports/stations,
-remittance on account of charter hire of foreign ships,
-remittance of purchase price of ships acquired by private
firms/companies,
-remittance of royalty/honoraria/fees to non-residents including
foreign news agencies for features, articles etc. subscribed by local
newspapers/magazines,
-advertising of Bangladeshi commodities in mass media abroad. |
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of hotel bills of foreign guests may be accepted in local currency. |
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- Funds from non-resident Taka accounts can be freely withdrawn
regardless of the amounts involved.
- Declaration in Form C is not required in case of remittances sent
by Bangladesh nationals working abroad. However, persons other than
Bangladesh nationals are required to declare in Form C if the inward
remittance is US $ 2000 or above. |
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Bangladesh
Bank has taken the following steps to help stimulate/activate the
interbank foreign exchange market:
1)Bangladesh Bank has stopped sales and purchases with ADs of any
currency other than the US Dollar, to encourage interbank cross currency
transactions.
2)To encourage inter-bank deals and to dissuade frequent
recourse to transactions with the central bank, Bangladesh Bank has
raised its transaction threshold to US$ 50,000 with values in multiples
of US$ 10,000, for its deal with ADs. The exchange rates for the
Bangladesh Bank's spot purchase and sales transactions of US Dollars
with ADs is decided on a case to case basis, Bangladesh Bank does not
undertake any forward transaction with ADs. The ADs are free to quote
their own spot and forward exchange rates for inter-bank transactions
and for transactions with non-bank customers.
3)To provide greater flexibility in the foreign exchange
transactions of ADs, Bangladesh Bank has abolished their foreign
exchange holding limits; they are, however, required to be within the
open position limits prescribed by Bangladesh Bank in respect of
exposure to exchange rate fluctuation risk.
4)Bangladesh Foreign Exchange Dealers Association (BAFEDA) has been
formed and a “Code of Conduct” for treasury operations and interbank
foreign exchange market has been formulated.
5)
ADs have been allowed to maintain with Bangladesh Bank FC
Clearing Accounts in Euro, Japanese Yen, as well as US Dollar &
Pound Sterling. |