ADs may open NRTA in the name of the proposed company/enterprise of foreign investors contemplating to invest in Bangladesh without prior approval of Bangladesh Bank. Such accounts may be credited with inward remittances received from abroad only. Upon registration/commencement of the business, a new account in the name of the company may be opened following usual procedure. However account opened previously should be closed immediately and balances lying therein shall be transferred to the new account.

If, under any circumstances, the proposed investment/incorporation does not take place, the balance of NRTA, after meeting the required expenses, is allowed to be repatriated without prior approval from Bangladesh Bank.

Investors can setup company (ies) addressing the formalities with Registrar of the Joint Stock Companies and Firms (RJSCF) as per provision of the Company Act, 1994.

The issuance/allotment/transfer of shares of companies not listed in the stock exchanges in favor of non-resident shall be intimated through the concern authorized dealer banks within 14 days to Foreign Exchange Investment Department (FEID), Bangladesh Bank. Besides, AD banks have to submit quarterly FDI data to the Statistics Department, Bangladesh Bank.

The required documents (Not limited to) are:

• a) Certificate of Incorporation, Memorandum of Association, Articles of Association, Return of Allotment (Form –XV) in case of issuance or transfer of shares.
• b) Instrument of share transfer (Form 117), valuation report if applicable and MOU for share sale purchase.
• c) Encashment Certificate or Bill of entry in case of share issued against capital machinery.
• d) Particulars of the Directors, Manager and Managing Agents and of any change therein (Form XII).
• e) Copy of import permit, invoice, bill of lading/air way bill and bill of entry for issue/transfer of share against capital machinery. Payment against such import must be made from abroad.
• f) Audited reports and financial statements of the target company.

Required documents of the target company to be submitted with application for repatriation of residual money payable to foreign shareholders in case of winding up.

• i. Certificate of Incorporation;
• ii. Memorandum & Articles of Association;
• iii. Return of Allotment (Form –XV);
• iv. Latest annual summary of share capital and list of shareholders directors (Schedule-X);
• v. Instrument of Transfer of Shares (Form –117);
• vi. Encashment Certificate in support of shares issued or transferred shares against freely convertible foreign exchange;
• vii. Authenticated copies of import permit, invoice, bill of lading/air way bill and bill of entry for issue of share against capital machinery. Payment against such import must be made from abroad;
• viii. Intimation regarding issuance/transfer of share as per Paragraph-2(A)(c) & 2(B), Chapter-9, Volume-I of Guidelines for Foreign Exchange Transactions-2018 or similar guidelines in force at the time of issuance/transfer of shares;
• ix. Latest audited financial statements;
• x. Certified copy(ies) of Form VIII evidencing special resolution passed for voluntary liquidation and the return of final meeting from the Registrar of Joint Stock Companies and Firms (RJSC);
• xi. Liquidator’s certificate to the effect that the winding up is in accordance with the provisions of the Companies Act in force;
• xii. Liquidator’s certificate confirming that all liabilities in Bangladesh including tax claims and other statutory payment obligations, have been fully paid;
• xiii. In case of winding up otherwise than by a Court, or subject to supervision of the Court a Liquidator’s certificate to the effect that there is no legal proceedings pending in any Court in Bangladesh against the company under liquidation and there is no legal impediment to permitting the remittance;
• xiv. Winding up documents in accordance with the Companies Act in force;
• xv. Liquidation proceeds/distributable realized value of asset supported by latest audited financial statements of the target company;
• xvi. Certification regarding overdue export proceeds and unmatched bill of entry, in case the target company is involved in export-import business;
• xvii. Tax clearance certificate
• xviii. CIB report;
• xix. List of non-resident shareholder(s) to whom liquidation proceed is payable;
• xx. Undertaking by the liquidator to the effect that in case of remittance of any ineligible amount, the amount so remitted will be repatriated to Bangladesh on demand by Bangladesh Bank/the ADs.

Prior approval from Bangladesh Bank is not necessary for remitting the sales proceeds of securities held by non-residents. In such cases, the repatriable amount must not exceed the market price of securities prevailing on the stock exchange on the date of sale.

Foreign investors holding units of AIF may sell, transfer, or redeem the units as per rules or directions issued by the Bangladesh Securities and Exchange Commission (BSEC).

The fair value of the sale proceeds of units is remittable abroad and/or may be credited to Non Resident Taka Account (NITA), subject to prior approval from Bangladesh Bank. A valuation report prepared by a merchant banker (licensed by the BSEC) or a chartered accountant experienced in valuation, along with a recommendation from the trusteeship of the AIF, is to be submitted with the application.

Balances held in NITAs by non-residents may be used to purchase units of open-end mutual funds as ‘over the counter (OTC) products’; subject to compliance with the instructions noted below:

• a) The funds shall have to be operated under authorization from the Bangladesh Securities and Exchange Commission (BSEC).
• b) Non-resident investors can invest in units of open-end mutual funds, the prospectus of which has duly been approved by BSEC.
• c) The Foreign Exchange Investment Department of Bangladesh Bank needs to be intimated within 14 days of the issuance of units of funds in favor of foreign investors, including NRBs.
• d) NITAs may be credited with the dividend income from mutual funds after deduction and payment of applicable taxes.
• e) NITAs may be credited with the sale proceeds of the units of funds upon receipt of approval from Bangladesh Bank. If the fund managers are irregular in their weekly public disclosure of NAV or the underlying investments in unlisted shares or securities are 30% or more of the total fund, an application along with a valuation report of the funds prepared by merchant bankers licensed by BSEC or chartered accountants experienced in fund valuation listed with Bangladesh Bank/BSEC and, in other cases, recommendation letters from trustees regarding the fair value of the funds shall be sent to the Foreign Exchange Investment Department, Bangladesh Bank, Head Office, Dhaka.
• f) The eligible amounts payable to NRBs as per (d) and (e) may be freely transferred to resident Bangladeshi nationals upon written prayers to fund managers by unit holders. In the case of (e) above, Bangladesh Bank needs to be intimated only.

Non-residents can invest in shares and securities listed with Stock Exchanges, Mutual Fund, Alternative Investment Fund (AIF) and Bangladesh Government Treasury Bond (BGTB).

Portfolio investment can be carried out as per following procedures:

• 1. To open an NITA with AD Bank
• 2. To credit fund into NITA with the remittance from abroad and transferring balance from FC account of investor.
• 3. To transfer funds to the brokerages/dealers account for buying shares and securities.
• 4. Sales proceeds of share & securities and dividend/interest credited into NITA the balance of which can be repatriated abroad freely and which can also be used for reinvestment.

As per the prescribed pro-forma (Appendix 5/92) of the Guidelines for Foreign Exchange Transactions-2018, ADs shall report monthly statements of transactions in NITA to the Foreign Exchange Investment Department, Bangladesh Bank.

Non-resident individuals/institutions can purchase Bangladesh Government Treasury Bond (BGTB) and Bangladesh Government Investment Sukuk (BGIS) from Primary and Secondary markets through Primary Dealers and other Banks in Bangladesh using funds deposited in their non Resident Foreign Currency Account (NFCA) or Non Resident Investor’s Taka Account (NITA) with a bank in Bangladesh in the name of purchaser.

The establishment, operation and reporting of activities are regulated by the followings Acts, Rules and Regulations-

• a. The Bangladesh Investment Development Authority (BIDA) Act, 2016.
• b. BIDA Guidelines.
• c. The Companies Act, 1994.
• d. Foreign Exchange Regulation Act, 1947.
• e. Guidelines for Foreign Exchange Transactions (GFET), 2018.
• f. Regulations and circulars there under.

If any company incorporated outside Bangladesh wants to establish a Branch, Liaison, Representative, Project Office or Joint Venture/Consortium/Association (JVCA) Office/any other place of business) in Bangladesh, it has to obtain registration from Bangladesh Investment Development Authority (BIDA). The registration of aforesaid offices is processed through One Stop Service (OSS) portal of BIDA and the list of required documents is available on the portal.

After getting BIDA’s approval, the branch/liaison/representative office shall have to bring initially at least USD 50,000.00 or equivalent foreign currency within 02 (two) months.

Branch/liaison/representative/project office shall report to Bangladesh Bank within 30 (thirty) days of obtaining permission from BIDA or other competent authorities.

All operational, functional and establishment costs including salaries of the foreign expatriate and local employees will be met on receipt of remittance from head office unless the specific condition is waived from BIDA. Funds to be brought for incurring any type of office expenses shall be credited to the bank account of the nominated AD bank.

A branch, liaison, or representative office is allowed to open bank accounts in both local and foreign currency; they can open a local currency account with any local bank branch, but a foreign currency account only with one nominated AD.

Branches of foreign firms and companies operating in Bangladesh are free to remit profits to their head offices. However, documents mentioned in paragraph 28, chapter 10 of the “Guidelines for Foreign Exchange Transactions-2018” are required to be submitted to Bangladesh Bank for post-facto checking within 30 days of profit remittance.

Branch/Liaison/Representative offices are allowed to repatriate the residual balance to respective head offices/parent companies subject to approval from Bangladesh Bank after closure of office.

Branch offices may avail interest-free working capital loans from local sources in Bangladesh (banks and companies) and, at the same time, from their head offices subject to post-facto reporting to Bangladesh Bank. Again Service output oriented branch offices may borrow from their head offices at maximum interest rate of 3% for not more than 6 years from the date of inception subject to post-facto reporting to Bangladesh Bank.

Branch offices can repatriate borrowings from their head office having approval from Bangladesh Bank.

Three types of special zones are functioning under different authorities in Bangladesh. They are:

Depending on ownership the following types of industrial enterprises are operating under special zone in Bangladesh:

• A-Type: 100% foreign owned enterprise/company including those owned by Bangladeshi nationals ordinarily resident abroad.
• B-Type: Joint venture projects between foreign and Bangladeshi entrepreneur resident in Bangladesh.
• C-Type: 100% Bangladeshi entrepreneur resident in Bangladesh.

The approving authorities for Medium and Long Term foreign loans to private sector industries in Bangladesh are:

• (1) Bangladesh Bank or
• (2) Bangladesh Investment Development Authority(BIDA).

In particular, to import capital machinery, equipment, and accessories that may be required for setting up new projects, expansion or modernization of existing projects, the following types of industrial enterprises are eligible to avail of a foreign loan or foreign currency loan:

• i) Export oriented
• ii) Deemed exporter
• iii) Import Substitute

No prior permission is required to get a short-term foreign loan or foreign currency loan. In this case, general authorization is given in the Guidelines for Foreign Exchange Transactions-2018 and the FE Circular.

Foreign-owned or controlled companies engaged in manufacturing or service output activities in Bangladesh for three years or longer can avail of Taka-term loans from the domestic market. This is to mention here that the total debt of the firm or company does not exceed the 50:50 debt-to-equity ratio.

Foreign-owned or controlled industrial enterprises engaged in manufacturing or service activities are free to access short-term working capital loans (interest-free or interest-bearing) from parent companies or shareholders. Such loan is also admissible with interest at 3% for those companies within 6 years from the inception of manufacturing or service output activities.

Companies having foreign investment can avail trade financing facilities in foreign currency and supplier/buyer credit at the rate stipulated by Bangladesh Bank from time to time, currently fixed up to SOFR + 4 per annum or the same spread with other reference rates.

Usually, a debt-to-equity ratio of 70:30 based on the latest audited financial statements is considered in the matter of foreign loans.

Bangladesh Bank authorizes the borrowing company to repay the foreign loans without prior permission.

Foreign investor/NRBs can open Bank Account with Bangladeshi Bank from abroad through OSS portal of BIDA. Commercial Banks already completed integration process with BIDAs’ portal.