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.
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:
- Arms, ammunition and other defence equipment and machinery
- Production of nuclear energy
- Forest plantation and mechanized extraction within reserved forests
- Security printing (currency notes) & minting
- Railways & air transportation (except certain domestic routes and air cargo)
No permission of the government required to set up new industries.
For obtaining facilities like land, electricity, gas, and tax rebates, industries need only to be registered with the Board of Investment (BOI).
Facilities for Non-Resident Bangladeshis
- Facilities similar to foreign investors
- Allowed to buy newly issued shares
- 10% reserved quota in primary shares (IPO)
- Foreign currency deposits in NFCD account
Investment Guarantee
The Foreign Private Investment (Promotion & Protection) Act 1980 ensures legal protection against nationalization and expropriation. It guarantees repatriation of capital and dividend and equitable treatment with local investors. Adequate protection is available for intellectual property rights.
Facilities and Incentives
- Tax holiday 5-10 years based on location.
- 15 years tax holiday for private power.
- Full repatriation of capital & profit.
- Exemption of tax on foreign loan interest.
- Tax exemption on royalties & technical fees.
- Avoidance of double taxation (Bilateral).
