Startup businesses allowed to invest $10,000 abroad

Startups can now establish legal entities abroad with an amount up to $10,000 or equivalent.

In a circular issued by the Foreign Exchange Investment Department of the Bangladesh Bank today (27 March) it was said that applicants are required to submit applications to the Authorized Dealers (ADS), after effecting remittances up to $10,000 or equivalent on behalf of a resident enterprise, and report the same to Bangladesh Bank, within one month of registration/incorporation of such legal entities abroad but not later than six months from the date of remittance. 

It has also been decided that Bangladesh Bank shall consider requests from resident companies to acquire shares abroad by exchanging their own shares/securities with the shares of companies abroad, rather than using cash consideration, reads the circular.

Investment in companies abroad through exchange of resident companies' shares/securities is expected to be a strategic move to bring financial benefits to resident companies.

Bangladesh Bank shall consider the proposals in which the shares/securities swap ratio is determined in accordance with global best practices, the circular adds.