BIDA eases outward remittance process

Bangladesh Investment Development Authority has eased the process of paying fees to foreign companies for receiving five types of services.

The services are royalty, franchise, technical knowledge, technical know-how, and technical assistance.

As a result, BIDA’s approval will not be needed to make each payment of such kinds, said a circular issued on Thursday.

The circular said that only the first agreement between the local and foreign company has to be approved and signed by BIDA.

However, a memorandum of understanding (MoU) will not be accepted.

Also, any renewal, amendment, addition, modification or extension of the contract will have to be approved again from BIDA.

After approval, the company receiving such services will be able to send 6 per cent of the total annual sales to a foreign company without prior permission.

Moreover, new companies will be able to remit 6 per cent of the total C&F (Cost and Freight) value of their imported capital equipment directly abroad through AD (Authorised Dealer) bank without BIDA’s approval.

Moreover, businesses in the process of starting commercial activities will be able to remit advance fee for acquiring the five services.

Once commercial activities commence, the advance fee has to be adjusted within one year and a fee of Tk 50,000 per year has to be paid for the approval of the contract. In case of any amendment in the contract, a fee will have to be paid at the same rate.

Regarding franchises, businesses can remit in instalments for amount more than $1 lakh. BIDA will charge Tk 1 lakh for franchise fee of Tk 1-5 crore, Tk 2 lakh for Tk 5-10 crore and a Tk 5 lakh for above Tk 10 crore.

BIDA Executive Chairman Md Sirazul Islam told The Business Post that the decision was taken to further accelerate Ease of Doing Business in Bangladesh.

“BIDA is trying to bring more transparency with this decision. However, authorised dealer banks must ensure that fees are paid properly,” he added.

Formed in 2016, BIDA approves outward remittances from Bangladesh. However, there were no specific guidelines these payments. Last March, BIDA first issued a guideline on outward remittance.