Govt allows exporters to make overseas equity investments
Skip to main content
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
The Business Standard

Monday
January 30, 2023

Sign In
Subscribe
  • Home
  • Economy
    • Aviation
    • Bazaar
    • Budget
    • Industry
    • NBR
    • RMG
    • Corporates
  • Stocks
  • Analysis
  • World+Biz
  • Sports
  • Features
    • Book Review
    • Brands
    • Earth
    • Explorer
    • Fact Check
    • Family
    • Food
    • Game Reviews
    • Good Practices
    • Habitat
    • Humour
    • In Focus
    • Luxury
    • Mode
    • Panorama
    • Pursuit
    • Wealth
    • Wellbeing
    • Wheels
  • Epaper
  • More
    • Subscribe
    • Videos
    • Thoughts
    • Splash
    • Bangladesh
    • Supplement
    • Infograph
    • Archive
    • COVID-19
    • Games
    • Long Read
    • Interviews
    • Offbeat
    • Podcast
    • Quiz
    • Tech
    • Trial By Trivia
    • Magazine
  • বাংলা
MONDAY, JANUARY 30, 2023
Govt allows exporters to make overseas equity investments

Economy

TBS Report
27 January, 2022, 10:20 pm
Last modified: 27 January, 2022, 10:28 pm

Related News

  • Investment proposals rise in 2022
  • PM likely to open 25 projects in Rajshahi on Sunday
  • Pinnacle Bicycle to invest $21.96m to set up factory in Ctg
  • FBCCI invites Japan to build auto factories
  • Bangladeshi RMG plant to invest $ 6.05 million in BEPZA EZ

Govt allows exporters to make overseas equity investments

TBS Report
27 January, 2022, 10:20 pm
Last modified: 27 January, 2022, 10:28 pm
Govt allows exporters to make overseas equity investments

Bangladeshi exporters will be able to make overseas equity investments from now on, subject to an adequate balance in their export retention quota (ERQ) – a portion of export earnings they have saved as foreign currency.

Exporters will be able to invest, in the form of equity, the lowest amount that is between 20% of their five-year average annual export earnings and 25% of the net assets shown in their latest audited annual financial report, according to guidelines recently issued by the Financial Institutions Division. 

On Wednesday, the Foreign Exchange Investment Department of Bangladesh Bank (BB) sent a directive to all authorised dealers of foreign exchange transactions in this regard.

According to the directive, the Financial Institutions Division issued the Capital Account Transaction (Equity Investment Abroad) Rules, 2022 under Section 27 of the Foreign Exchange Regulation Act, 1947.

Under the rules, an applicant organisation has to apply to the Bangladesh Bank through its nominated authorised dealer bank along with the required documents, which will be scrutinised by a 15-member selection committee headed by the governor of the central bank. The dealer bank will be notified of the committee's decision and a copy of the letter will be sent to the applicant organisation.

The new guidelines have been largely welcomed by exporters. However, some have also expressed concern about scope for inappropriate use and abuse of the process.

This initiative will facilitate easy overseas investments. However, excessive investment abroad might have a negative impact on the country's economy, said Fazlee Shamim Ehsan, vice president of Bangladesh Knitwear Manufacturer & Exporters Association (BKMEA). 

"Also, it would not be right to invest in places that could challenge or increased competition for the country's exports. For instance, if Bangladeshi entrepreneurs set up a readymade garment factory in Ethiopia, it could create more competition for us, as they get duty-free export to the US market," Fazlee told The Business Standard.

But, he added, "If someone invests in an African country to produce cotton, or invest in the chemical industry of another country, it can benefit us without doing any harm."

Although the new rules set the standard amount for overseas equity investment at 25%, exporters can be permitted to invest more if the Bangladesh Bank committee responsible for scrutinising overseas investment applications, deems them eligible.

So far, the Bangladesh Bank has given 16 Bangladeshi companies the opportunity to invest abroad. Applications of six more organisations will be presented at the central bank's committee meeting on 2 February.

The new rules further state that receivables, including dividends, profits, interest, sales proceeds of shares, disinvestment proceeds, royalty, consultancy fees, commissions, etc, from companies formed abroad, need to be remitted to Bangladesh within 30 days of receipt.

Misuse of investment will be treated as money laundering under the Money Laundering Prevention Act.

Top News

Equity investment / overseas exporters / investment / exporters

Comments

While most comments will be posted if they are on-topic and not abusive, moderation decisions are subjective. Published comments are readers’ own views and The Business Standard does not endorse any of the readers’ comments.

Top Stories

  • Photo: Collected
    Economic slump drags down growth in VAT collection from big cos
  • It's corruption that bites business harder: CPD
    It's corruption that bites business harder: CPD
  • Import slowdown to affect economic growth: ADB country head
    Import slowdown to affect economic growth: ADB country head

MOST VIEWED

  • TBS file photo
    Z&Z Fabrics introduces Sorona fabric line
  • Top 20 defaulters owe Tk16,588 crore to lenders: Finance minister
    Top 20 defaulters owe Tk16,588 crore to lenders: Finance minister
  • Cry for dollar for Ramadan imports
    Cry for dollar for Ramadan imports
  • Manufacturers feel the pinch as consumers tighten belt
    Manufacturers feel the pinch as consumers tighten belt
  • Infograph: TBS
    State banks spend 80% of their forex for govt imports in H1
  • Photo: TBS
    Indian ship arrives in Ashuganj river port with 958 tonnes of rod

Related News

  • Investment proposals rise in 2022
  • PM likely to open 25 projects in Rajshahi on Sunday
  • Pinnacle Bicycle to invest $21.96m to set up factory in Ctg
  • FBCCI invites Japan to build auto factories
  • Bangladeshi RMG plant to invest $ 6.05 million in BEPZA EZ

Features

Nandita Sharmin's journey to give organic skincare a new identity

Nandita Sharmin's journey to give organic skincare a new identity

12h | Mode
Illustration: TBS

'The silver lining is that the worst is sort of behind us': Hamid Rashid, UN economist

15h | Panorama
Photo: Bloomberg

BuzzFeed and AI are a match made in fad city

14h | Panorama
Snipe in flight. Photo: Enam Ul Haque

Baikka Beel: 'A world where snipe work late'

1d | Panorama

More Videos from TBS

Sarika Sabrin is waiting for a good film

Sarika Sabrin is waiting for a good film

5h | TBS Entertainment
Take your football game to the next level at Next Level academy

Take your football game to the next level at Next Level academy

6h | TBS SPORTS
“Investments risky without consistent policy, reliable data”- SK Bashir Uddin

“Investments risky without consistent policy, reliable data”- SK Bashir Uddin

8h | TBS Round Table
What does Shahrukh has in his 770 million dollar property?

What does Shahrukh has in his 770 million dollar property?

1d | TBS Entertainment

Most Read

1
Picture: Collected
Bangladesh

US Embassy condemns recent incidents of visa fraud

2
Illustration: TBS
Banking

16 banks at risk of capital shortfall if top 3 borrowers default

3
Photo: Collected
Splash

Hansal Mehta responds as Twitter user calls him 'shameless' for making Faraaz

4
A frozen Beyond Burger plant-based patty. Photographer: AKIRA for Bloomberg Businessweek
Bloomberg Special

Fake meat was supposed to save the world. It became just another fad

5
Bapex calls candidates for job test 9 years after advert!
Bangladesh

Bapex calls candidates for job test 9 years after advert!

6
Representational Image
Banking

Cash-strapped Islami, Al-Arafah and National turn to Sonali Bank for costly fund

EMAIL US
contact@tbsnews.net
FOLLOW US
WHATSAPP
+880 1847416158
The Business Standard
  • About Us
  • Contact us
  • Sitemap
  • Privacy Policy
  • Comment Policy
Copyright © 2023
The Business Standard All rights reserved
Technical Partner: RSI Lab

Contact Us

The Business Standard

Main Office -4/A, Eskaton Garden, Dhaka- 1000

Phone: +8801847 416158 - 59

Send Opinion articles to - oped.tbs@gmail.com

For advertisement- sales@tbsnews.net