BB simplifies share transfers, profit repatriation for foreign investors

In a major move to boost investor confidence, Bangladesh Bank has simplified the process for foreign investors to transfer shares and repatriate sale proceeds from non-listed public and private limited companies.

The central bank issued a comprehensive master circular (EID Circular No. 01), consolidating and updating regulations from 2018 and 2020 to create a more predictable, efficient, and transparent exit mechanism for non-resident investors.

Prashanta Kumar Mondal, Public Relations Officer of the Bangladesh Investment Development Authority (BIDA), shared the details in a press release on Monday.

Under the new guidelines, Authorized Dealer (AD) banks have been granted significantly more power to process transactions without seeking prior approval from the central bank.

Higher Transaction Limits: AD banks can now process share transfers and repatriations up to Tk 100 crore following prescribed valuation methods.

Joint Declarations: For transactions up to Tk 1 crore, transfers can be completed based on a joint declaration by the buyer and seller, bypassing the need for independent valuation.

Fixed Timelines: Once documentation is complete, share transfers must be finalized within 45 days, and the repatriation of sale proceeds must be processed within five working days.

Institutional Oversight: Every AD bank is required to form an internal committee led by senior management to review valuation and repatriation applications.

The reform package was finalized on November 19 last year by a high-level Capital Repatriation Committee, led by BIDA Executive Member Nahian Rahman Rochi and supported by Bangladesh Bank.

BIDA Executive Chairman Chowdhury Ashik Mahmud Bin Harun emphasized that a healthy environment for Foreign Direct Investment (FDI) relies on investors feeling confident at every stage of their journey—including the exit.

"By reducing approval complexities, allowing easier repatriation of sale proceeds, and simplifying valuation and documentation, Bangladesh is moving toward that goal," said the BIDA chief.

"These initiatives are the foundation of a reliable environment for foreign investment," he said.

Source: UNB