STAR BUSINESS REPORT

Businesses in Bangladesh that are not over a decade old alongside Bangladeshi nationals can from now make investments of up to $10,000 abroad, albeit to solely establish legal entities, thanks to the relaxation of associated rules by Bangladesh Bank.

Earlier, businesses had to seek approval of the central bank to make any type of investment abroad.

Now no prior permission will be required when applying to banks to facilitate the fund transfer, on condition businesses stick to the investment limit and purpose, as per a notice issued by the central bank yesterday.

The permission has been granted under Foreign Exchange Regulation Act, 1947.

However, applicants must have innovative business ideas that enable future investments and earnings to be rerouted into Bangladesh.

The notice also stated that Bangladesh Bank will consider requests from companies in Bangladesh seeking to acquire shares of firms overseas, albeit solely in exchange for their own shares or securities.

No cash transactions will be allowed.

Relevant proposals will be assessed to ensure that the share or securities swap ratio is determined in accordance with global best practices, the notice added.

A central bank official mentioned that this is the first step toward opening up capital account transactions in response to changing economic conditions. Industry insiders believe that the new regulations will facilitate inward investment through companies established abroad.