Financing Options In Bangladesh

EQUITY SHARE CAPITAL. The most common method of financing a Bangladeshi business is issuing shares. The number of shares a company may issue is subject to the authorized share capital as specified in the Memorandum of Association of a company. The authorized share capital may be increased subject to permission. Equity capital invested by a foreign company may be repatriated in the event of liquidation or share transfer.

BORROWING. Financing from local or foreign lending sources is permitted. However, financing from foreign lending sources may be subject to prior approval of Bangladesh Bank and/or BIDA.

REPATRIATION OF FUND. Repatriation of foreign investment and any returns on the investment is generally permitted. Though, in other aspects, certain limits may be imposed and prior approval may be required from Bangladesh Bank.

DIVIDENDS. Post-tax profits and dividends are repatriable without prior approval from the Bangladesh Bank subject to certain conditions. Prior approval is also not required to remit profits from Bangladeshi branches to their Head Office outside Bangladesh.

COSTS OF TRAINING AND CONSULTANCY SERVICES. Bangladeshi companies producing for local markets may remit a certain limit of annual sales as declared in the previous years’ tax returns to meet costs for training and consultancy services without prior approval of the Bangladesh Bank.

COSTS OF ROYALTY, TECHNICAL KNOWHOW OR TECHNICAL ASSISTANCE FEES, OPERATIONAL SERVICES FEES, MARKETING COMMISSION ETC. Payments relating to royalty, technical know-how or technical assistance fees, operational service fees, marketing commission etc. may only be remitted with prior approval from the relevant authorities.