Procedure for Making Portfolio Investment by Foreign Investors
Foreigner investors and the Non Resident Bangladeshis (NRBs) can make investment into our securities market from any corner of the world. To exercise the investment as NRBs/foreigners, one must enter into an agreement with a brokerage house of their choice along with anyone of the following institutions:
- Authorized Dealer of Foreign Exchange
- Custodian Bank
- Merchant Bank (Portfolio Manager)
All NRBs/foreigners for the purpose of making investment in our market have to have a Beneficiary Owners (BO) account and a client account opened with any of the brokerage house as well as entering into agreement with the Authorized Dealer or Custodian Bank or Portfolio Manager and thus maintain the investment activities from abroad. List of Brokers together with regular market scenario, fundamental status of the companies listed on the Exchanges and many other relevant necessary information would be available at the website of DSE (www.dsebd.org). List of Brokers of the Exchanges, Merchant Bankers or Custodian Banks would be available at the web page of SEC (www.secbd.org).
Opportunity for Foreign Investors
Bangladesh has adopted a very liberal industrial policy to attract foreign investment
- No limitations pertaining to equity participation i.e. up to 100 percent foreign private investment allowed.
- Except five reserve sectors, all industries are open for private investment. Industries earmarked for public sector investment are in the reserve sector namely :
(i) arms, ammunition and other defence equipment and machinery
(ii) Production of nuclear energy,
(iii) Forest plantation and mechanized extraction within the bounds of reserved forests,
(iv) Security printing (currency notes ) & minting and,
(v) Railways & air transportation (except certain domestic routes and air cargo)
- No permission of the government required to set up new industries.
- For obtaining industries facilities like procurement of land, electricity, gas and sewerage connection, importation of capital machinery and raw materials tax rebate, duty drawback facilities etc. industries need only to be registered with the board of investment (BOI) in a simple prescribed from.
Facilities for Non-Resident Bangladeshis
- Non-resident Bangladesh investors enjoy facilities similar to foreign investors
- Allowed to buy newly issued shares/debentures of Bangladeshi companies
- 10 percent reserved quota for non-resident Bangladeshis in primary shares (IPO)
- Foreign currency deposits in the Non-resident Foreign Currency (NFCD) account
- Foreign Private Investment (Promotion & Protection) Act1980 ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation.
- It also guarantees repatriation of capital and dividend and equitable treatment with local investors.
- Adequate protection is available for intellectual property rights, such as patents, designs & trademarks and copyrights.
FACILITIES AND INCENTIVES
- Tax holiday 5-10 years depending on location of Industries.
- 15 years tax holiday for private power generation companies.
- Facilities for repatriation of invested capital, profit & dividend.
- Exemption of tax on interest on foreign loan.
- Tax exemption on royalties, technical know- how & technical assistance fees.
- Avoidance of double taxation on the basis of bilateral agreements.
- Six month multiple