BB smoothens procedures for foreign investment

Bangladesh Bank will allow foreign investors to deposit their dividend with the foreign currency (FC) accounts maintained with banks in the country with certain conditions.

A Bangladesh Circular, issued on Tuesday (July 7) by Foreign Exchange Policy Department, said that to bring smooth operations relating to foreign investment in Bangladesh, it has been decided that dividend payable to foreign shareholders may be credited to their FC accounts maintained in Bangladesh, subject to observance of some instructions.

These include that the authorised dealers (AD) designated banks shall satisfy themselves that the fund in equivalent foreign currency to be credited in FC accounts on account of dividend has arrived in accordance with the Guidelines for Foreign Exchange Transactions (GFET) and its reporting has been made.

“While crediting FC accounts, the transactions shall be treated as outward remittances and accordingly TM Form procedures need to be followed," said the BB circular.

Encasement of balances held in FC accounts shall be treated as inward remittances for bonafide local disbursements, subject to Form-C procedures, said the circular.

BB said that purchase of shares out of fund held in FC accounts shall be treated as foreign investment, subject to compliance with the instructions of the GFET.

Declared dividend may be used, with treatment as inward remittances in accordance

with GFET, for reinvestment in Bangladesh through purchase of shares in existing companies and/or other companies subject to observance of following certain instructions.

The circular said that the investor companies shall, within 14 days on issuance of shares in accordance with regulatory norms, arrange to report with attachment of relevant documents through their designated ADs to Foreign Exchange Investment Department and Statistics Department of Bangladesh Bank.