Draft policy prepared for allowing investment abroad

Sohel Hossain Patwary

19 April, 2021 12:00 AM printer

The government has prepared the draft of a policy to allow Bangladeshi investors to invest in other countries.

The draft policy titled ‘Bangladeshis Foreign Investment Abroad-2021’ will allow only the local export-oriented businesses to invest in similar businesses in other countries.

According to the draft policy, export-oriented businesses can invest overseas in the form of equity investment. They can invest up to 25 per cent of their net annual export of the past five years as an. Loan defaulters will not get eligible for this opportunity.

The investors will have to bring in the country their receivables profit, dividends, salaries, royalties, technical fees, consultancy fees, commissions within 90 days.

Bangladesh Investment Development Authority (BIDA) has been working to formulate a workable policy regarding this since 2016.

Sources at BIDA said that the draft has been sent to the ministries concerned for final review and feedback. The policy will be finalised in consultation with stakeholders after consultation with the ministries. 

BIDA Executive Chairman Md Sirazul Islam said a policy is being formulated to streamline the local investors’ investment overseas.

Mentioning that allowing investment abroad is a big issue; he said it will take time to finalise the policy.

After receiving the views of the ministries and departments, discussions will be held with the stakeholders. It will then be sent to the cabinet for final approval after an inter-ministerial meeting, he added.

The draft of the policy states that in general, Bangladeshis can invest in countries where there are no restrictions on investing, working and sending money earned to Bangladesh.

Besides, investments will be allowed in countries with which Bangladesh has a dual tax avoidance agreement and has the opportunity to remit capital, dividends and other income such as technical fees, royalties, consultancy fees, commissions or other remittances.         

Investments cannot be made in countries that do not have diplomatic relations and are subject to sanctions by the United Nations, the European Union, or the Office for the Control of Foreign Assets (OFAC), according to the draft.

The policy will give priority to the companies to invest in the same kind of business they have in the country.

Failure to repatriate money and dividends invested abroad will be treated as money laundering offences.

Under the Prevention of Money Laundering Act, 2012 and the Foreign Exchange Control Act, 1947, the proprietor, director, chief executive or other officials of the applicant organization will be liable and will be punishable under these two laws.

It is mentionable that the government has long been trying to prepare a framework over allowing local investors to invest in other countries.

As of now, some local companies have investments in other countries. The government allowed them on a case to case basis.