BB eases wiring proceeds from share sales abroad

The central bank has relaxed regulations allowing non-resident investors to repatriate sales proceeds of their shares in non-listed companies aiming to attract foreign direct investment or FDI in Bangladesh.

Under the rules, authorised dealer or AD banks are allowed to remit sales proceeds of shares regardless of the amount.

Fair value of the amount is determined by the management of the companies through net asset value approach based on latest audited financial statements submitted together with tax returns.

Besides, the dealer banks will not require approval from the central bank for such truncations, according to a notice issued by the Bangladesh Bank or BB), on Thursday.

It also said that no permission from the central bank is required to repatriate sales proceeds of shares up to Tk 10 million equivalent foreign currencies without the valuation reports from independent valuers.

The banks are permitted to remit between Tk 10 million and Tk 100 million abroad, based on fair value determined in terms of prescribed valuation methods, officials said.

"We've relaxed our regulations on repatriating disinvestment proceeds abroad to attract FDI in Bangladesh," a BB senior official told the FE while explaining the main objective of the notifice.

He also said such relaxations will help Bangladesh attract investments from foreign companies operating mainly in China, which are seeking to relocate as the fallout of the COVID-19 pandemic.

In 2014, the central bank adopted internationally-acceptable valuation methods to consider the applications for repatriation of sales proceeds.

The procedures were further relaxed in 2018 in view of changing situation, the BB official added.

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