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BB allows firms to issue preference shares to foreign investors
Daily Sun Report, Dhaka
Published: 04 Nov 2026, 12:00 AM
The Bangladesh Bank has allowed resident companies in the manufacturing and service sectors to issue preference shares to non-resident investors, aiming to facilitate foreign investment and provide businesses with an alternative source of financing.
Under the new guidelines, companies can issue preference shares to foreign investors in compliance with the Companies Act, 1994, applicable Bangladesh Securities and Exchange Commission (BSEC) regulations, and their respective Memorandum and Articles of Association.
The central bank issued the guidelines on the issuance, conversion and redemption of preference shares, and repatriation of dividends through a circular issued by its Foreign Exchange Investment Department (FEID).
According to the circular, preference shares must be issued against foreign currency remitted to Bangladesh through official banking channels.
A subscription agreement between the resident company and the non-resident investor must also be executed, subject to Bangladesh Bank’s authorisation where required.
The agreement must clearly specify the number of shares, their face value and issue price in Bangladeshi taka, dividend rate, tenure, and terms and conditions for redemption and conversion.
Previously, under Paragraph 2(A), Chapter 9 of the Guidelines for Foreign Exchange Transactions (GFET), 2018, and subsequent FEID circulars, the issuance and transfer of shares to non-residents had to be reported to the central bank’s FEID.
The latest circular sets out specific provisions for preference shares, recognising their distinctive features compared with ordinary shares. It covers their issuance, redemption and conversion, as well as dividend repatriation to foreign investors.
The new framework is expected to provide greater clarity to local companies seeking foreign investment and overseas investors interested in Bangladesh’s manufacturing and service sectors.