BB Circuler 16 May 2019 Fepd 21e
BB Circuler 16 May 2019 Fepd 21e
BB Circuler 16 May 2019 Fepd 21e
Bangladesh Bank
Head Office
Dhaka
www.bb.org.bd
Dear Sirs,
Please refer to relevant instructions of the Guidelines for Foreign Exchange Transactions
(GFET)-2018, Vol-1 and subsequent FE Circulars for foreign exchange transactions of
enterprises operating in Export Processing Zones (EPZs) and Economic Zones (EZs). To
facilitate foreign exchange transactions for enterprises located at Hi-Tech Parks (HTPs)
established by Bangladesh Hi-Tech Park Authority (BHTPA) under the Act ÔThe Bangladesh Hi-
Tech Park Authority Act, 2010 (Act No. 8 of 2010)’, it has been decided to formulate a separate
set of instructions for Authorized Dealers (ADs) including Off-shore Banking Units (OBUs) as
stated below:
(a) 'Type A': 100 percent foreign owned including those owned by Bangladeshi nationals
ordinarily resident abroad;
(b) 'Type B': Joint venture between foreign investors and Bangladeshi entrepreneurs
resident in Bangladesh;
(c) 'Type C': 100 percent owned by Bangladeshi entrepreneurs resident in Bangladesh.
2(a). Foreign Investment in HTPs: Foreign investors are free to invest in HTPs, subject
to registration with BHTPA. Foreign investment in HTPs (in 'Type A' and 'Type B' Units) shall
have to be reported to FEID, Bangladesh Bank within 14 (fourteen) days of issuance of shares
favoring non-resident investors as per instructions mentioned in paragraph 2, chapter 9 of GFET.
Such investment shall have to be reported to Statistics Department, Bangladesh Bank also as
mentioned in paragraph 25, chapter 2, GFET (Vol-2) and subsequent circulars/circular letters.
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Similarly, transfer of shares of the companies not listed in the stock exchanges, from resident to
non-resident, non-resident to resident and non-resident to non-resident shall have to be reported
to Bangladesh Bank including additional documents mentioned in paragraph 2(B), chapter 9 of
GFET.
(b) Payment against import of non-physical contents (software, bandwidth etc.) through
e-delivery is subject to observance of the following instructions:
a) ADs shall be satisfied with the certification/license issued by the supplier that the non-
physical contents has already been received by the purchaser;
b) ADs shall observe due diligence and comply with AML/CFT regulations in respect of
the transactions;
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c) ADs shall keep an authenticated copy of the certification/license issued by the supplier
and report the transactions on IMP Form to Bangladesh Bank in monthly returns/schedules.
d) Instructions as stated above are applicable for OBUs executing transactions on behalf
of 'Type A' enterprises.
7. Credit Facilities
For obtaining credit facilities from abroad (including from parents, associates or
shareholders), other associates in Bangladesh, other banks in Bangladesh (both long and short
term, as the case may be) by the enterprises of HTPs, instructions mentioned in chapter 16,
section-II of GFET and its subsequent circulars shall be applicable. However, for obtaining
medium and long term debt from abroad/OBUs of scheduled banks in Bangladesh by the
enterprises of HTPs, applications for borrowing approvals shall have to be submitted to
Bangladesh Bank through BHTPA following the procedures as mentioned in paragraph 7,
chapter 15 of GFET.
Sales proceeds of shares held by non-resident investors of HTP enterprises listed with the
stock exchange(s) may be repatriated without prior approval of Bangladesh Bank following the
instructions mentioned in paragraph 3(A), chapter 9 of GFET. Repatriation of sales proceeds of
shares held by non-resident investors of HTP enterprises not listed with the stock exchange(s)
may be effected with prior permission of Bangladesh Bank in accordance with FEID Circular
No. 1, dated May 06, 2018.
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10. Repatriation of royalty, technical know-how and technical assistance fees
ADs (also OBUs for 'Type A' enterprises) may remit the royalty, technical know-how and
technical assistance fees of enterprises of HTPs from their FC accounts without prior permission
from Bangladesh Bank or BHTPA if the total fees and other expenses connected with above
mentioned purposes do not exceed the following limits:
(a) for new projects, not exceeding 6 (six) percent of the cost of imported machinery;
(b) for ongoing concerns, not exceeding 6 (six) percent of the previous year's sales as
declared in the income tax returns.
However, remittance of such fees in excess of the prescribed limit is subject to prior
specific approval from BHTPA. Besides usual reporting to Bangladesh Bank, each transaction
shall have to be reported to BHTPA also.
12. Reporting
ADs shall report all foreign exchange transactions of enterprises of HTPs through 'Online
Foreign Exchange Transaction Monitoring System' of Bangladesh Bank. Such transactions are
also to be reported in monthly returns to Statistics Department, Foreign Exchange Operation
Department and other concerned offices of Bangladesh Bank in relevant Statements (S-10 and S-
11), Schedules, etc. as mentioned in paragraph 14, chapter 2, GFET (Vol-2).
Please bring the contents of this circular to the notice of your concerned clientele.
Yours faithfully,
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