Companies can invest 25pc of asset offshore in Bangladesh
Seven core conditions are tied to the investment in foreign countries– an option big businesses of Bangladesh have long sought.
The fiscal institution’s division of the ministry of finance has published a review announcement on the’ Capital Account Deals (Overseas Equity Investment) Guidelines 2022′ detailing how to spread their bodies beyond borders.
“Interested overseas investors will have to take previous authorization from the government through central bank channel,” says one provision of the guidelines.
They will be allowed to make equity investment abroad over 20 percent of their average periodic income from exports during the last five times or 25 percent of net asset mentioned in the last audited fiscal report.
The government since 2013 has given authorization to eight companies to invest abroad. The enterprises are DBL Group, Mobil Jamuna, ACI Healthcare, Square Pharma, Incepta Pharmaceuticals, BSRM Steel, Spectrum Engineering, and Akij Group.
Also, Ha-Meem Group, Nitol-Niloy Group, Summit Group, Meghna Group, and Pran-RFL Group have expressed interest in making equity investments abroad.
Another condition laid down in the guidelines says an entrepreneur who wants to make an overseas investment has to be an exporter with an acceptable balance in its Exporters’Retention Quota (ERQ) account.
The entrepreneur needs to be financially sound according to audited accounts of his or her company the once five times, in line with the directives in the Financial Reporting Act 2015.
“No loan defaulters should be allowed to make investment abroad.”
The credit-standing grade of the entrepreneur has to be at least2.0 according to the mapping set in the Guidelines on Threat- Grounded Capital Adequacy, prepared by the central bank. The overseas investment offer for business exertion shall naturally be of analogous nature of the entrepreneur’s business engagement in the home country.
The equity-investment offer has to be proved economically feasible by the feasibility study.
Also, the offer should have the eventuality for unborn earnings of foreign exchange coupled with other advantages to the country, including raising exports from Bangladesh and employment openings for Bangladeshi citizens.
The aspirant company must have acceptable educated mortal coffers in running a transnational business, backing, and making investments.
A 15- member high-powered commission, comprising representatives from colorful ministries, divisions, and departments, led by the central bank governor, will scrutinize overseas equity- investment proffers and have decisions by consulting the government, says the investment guidebook.
The overseas equity investment will get precedence in countries where there are no restrictions on Bangladeshi citizens to work and repudiate their income to Bangladesh.
The countries with which Bangladesh has binary taxation- avoidance agreement, and where investment from Bangladesh and the extradition of capital including capital earnings, tips, and other permissible earnings including specialized know- style freights kingliness, consultancy freights, commission, or other entitlements are allowed will get precedence for investment.
Also, overseas equity investment will get precedence in countries with which Bangladesh has agreements on bilateral equity investment, development, expansion, and conservation.
Still, equity investment by Bangladeshi entrepreneurs would not be allowed in countries where warrants have been assessed by the United Nations, the European Union, the Office of Foreign Asset Control (OFAC), and the countries which aren’t compatible with the Financial Action Task Force (FATF) conditions.
Entrepreneurs also would not be allowed to make equity investments in countries with which Bangladesh has no political relations.
It’s further mentioned that the plutocrat for equity investment has to be transferred directly into the bank account of the attachment company abroad. However, the plutocrat has to be brought back incontinently, If any investment offer fails to materialize.
The guidelines say any abuse of the finances would be treated as an offense under the Plutocrat Laundering and Prevention Act. In similar cases, the proprietor, the directors, and the devisee possessors of the company shall be liable to corrective action under the law.
President of the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) Jasim Uddin ate the allocation of the guidelines paving a clear way of equity investment abroad.
“There are numerous Bangladeshi companies which have the capacity to invest abroad, which will cheer the country’s image,” he told the FE.
Still, he expressed reservation over the demand of taking previous authorization from the government for making investments.
The administrative director of the Policy Research Institute of Bangladesh Dr. Ahsan H Mansur told the FE Wednesday that prominent companies with a good track records can be allowed for overseas investment and the central bank has to keep a close eye on them.
“The top directors of the attachment companies abroad should go from then,” he says, pertaining to the styles followed by the transnational companies. Allowing overseas investment by Bangladeshi companies will expand the name and fame, he adds
