Foreign companies can open foreign currency accounts under local offices

Summary:  

Bangladesh Bank (BB) has allowed authorized dealers to open foreign currency accounts in the names of branch offices or liaison offices of foreign companies as opposed to the name of employed local executing firms, operating under approval from the Bangladesh Investment Development Authority (BIDA), or other relevant bodies. This will attract more foreign direct investment if operated under the supervision of knowledgeable persons.

Content:

According to general knowledge, a Foreign currency account is a transactional account designated in a currency other than the home currency and can be maintained by a bank in the home country or a bank in another country. A foreign currency account allows a person to bill in a foreign currency which makes it easier to deal with overseas customers. It will allow the person to hold the foreign currency in the local bank account.

Foreign investors are required to open temporary bank accounts to bring money invested in Bangladesh. However, they will have to comply with the terms of the approved contract with the government authority under the Guidelines for Foreign Exchange Transactions 2018 (GFET). Under GFET, Authorized Dealers (AD) being responsible for dealings in foreign exchange are required to keep proper records. It is also a requirement that they submit to the Bangladesh Bank prescribed periodic returns and statements of all foreign exchange transactions concluded by them.

Speaking to the Dhaka Tribune,  Rizwan Rahman, president of Dhaka Chamber of Commerce and Industries (DCCI), said the move by BB is imperative for foreign direct investment (FDI), as well as a business-friendly one. Previously, the central bank allowed opening foreign currency accounts in the names of local and joint venture contracting firms employed to execute projects by foreign donors or international donor agencies only. It was a bar for many foreign investors as they needed to be dependent on the local ventures. Now they can freely operate without any time and procedural bars.

Source: Dhaka Tribune,

Photo from: The conversation

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