Circular No. 10 dated 21 June 2023 issued by the Foreign Exchange Policy Department of the Bangladesh Bank on “Maintenance of Foreign Currency Accounts for Foreign Investment”July 4, 2023
Aiming to facilitate foreign exchange transactions related to foreign investments in Bangladesh, the Bangladesh Bank has decided that authorized dealers (ADs) are permitted to retain foreign currency received from foreign investors. ADs can open foreign currency (FC) accounts in the names of local companies, which will issue shares in compliance with regulatory instructions.
Under the new guidelines, ADs can now open temporary FC accounts in the names of proposed companies or enterprises of foreign investors. These temporary accounts will be used to hold funds remitted from abroad for equity purposes. Once a company is registered and business operations commence, the funds held in the temporary FC account can be transferred to a newly-opened FC account in the names of the company.
The operational procedures for both types of accounts are as follows:
- ADs will issue certificates to support the inward remittances.
- The funds held in the FC accounts can only be utilized for permissible outward payments related to capital expenditures, including conversion into BDT.
- The tenure of FC accounts will be one year from the date of opening, and the accounts will be closed immediately upon expiration of the specified period, after encashment of any remaining funds held in the accounts.
Other instructions related to foreign investment in Bangladesh, as mentioned in relevant paragraphs of Chapter 9 of the Guidelines for Foreign Exchange Transactions will remain unchanged.