BB eases rules for repatriation of share sales proceeds
Bangladesh Bank has eased the process for repatriating the sales proceeds of nonresident equity investment in non-listed public limited companies and private limited companies.
No permission from the central bank is required to repatriate up to Tk 1 crore equivalent foreign currency without valuation reports, according to a BB circular issued yesterday.
The central bank has taken the decision in order to attract more foreign investment, read the notice signed by its Deputy General Manager (foreign exchange investment department) Abu Saleh Mohammed Shahab Uddin.
If a company takes the net asset value approach to evaluate the share price, then authorised dealers (ADs) are allowed to effect remittances on account of sales proceeds of shares regardless of the amount, he said.
The ADs shall satisfy themselves from the undertaking of the target companies countersigned by auditors to the effect that in net asset value approach audited financial statements have contained no revalued assets, intangible assets, expenses/losses shown as asset.
The certificate should specify that the impairment of assets has been adjusted, according to the notice.
The ADs should also be ensured that there is no abnormal growth in total assets in any of the last three years, particularly last year.
In case of other valuation processes, the ADs may also effect remittances of above Tk 1 crore up to Tk 10 crore equivalent foreign currency on account of sales proceeds.
But the ADs shall submit post facto reports detailing the transactions to the BB's foreign exchange investment department.
On completion of the transactions, the ADs shall comply with usual reporting routine and preserve the records of the transactions for eventual inspection, unless under investigation, for a period of five years.
In case of any inconsistencies, the ADs should seek opinion from the central bank.
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