Bangladesh Bank Approvals

by Tahmidur Remura Wahid | Aug 31, 2025 | Uncategorized | 0 comments

Bangladesh Bank Approvals (2025): The Complete, Practical Guide for Companies, Investors & CFOs

By TRW Law Firm — Foreign Exchange, Corporate & Cross-Border Practice

Executive Summary

“Bangladesh Bank approvals” touch far more than just banks. As the central bank and foreign-exchange regulator, Bangladesh Bank (BB) sets the rules for how foreign currency enters, moves through, and exits the country—across equity, loans, services, royalties, dividends, freight, shipping, software, advertising, and more. BB also licenses and supervises payment systems, money changers, mobile financial services (MFS), PSPs/PSOs, agent banking, OBUs, and Authorized Dealers (AD banks). On top of that, specific industries (airlines, shipping, telecom, power, EPC contractors, NGOs/INGOs) interact with BB frequently for routine outward remittances and profit repatriation.

This guide gives you a single, end-to-end playbook: what approvals you may need, when your AD bank can remit without prior BB approval under “general permission,” how to structure dividend and royalty remittances correctly, how foreign loans and guarantees are cleared, how share transfers with non-residents are priced and paid, and how to keep documentation and tax compliance airtight so your payments clear quickly.

Regulations and circulars evolve. Treat this as a comprehensive operating manual; always align final numbers and thresholds with current circulars and your AD bank’s latest checklist.

Part A — Where Bangladesh Bank Sits in the System

Bangladesh Bank acts in three roles that matter to you:

Foreign Exchange Regulator
Implements and administers foreign exchange rules—what can be sent or received, by whom, for what purpose, under what documentation, and whether prior approval is needed or the transaction falls under general permission (i.e., the AD bank can remit directly when the file is complete).
Prudential & Payment Systems Regulator
Licenses and supervises banks, non-bank financial institutions in specified activities, Authorized Dealers (AD) in foreign exchange, Money Changers, Offshore Banking Units (OBUs), Agent Banking, Payment Service Providers (PSP), Payment System Operators (PSO), Mobile Financial Services (MFS), card schemes/acquirers, white-label ATM operators, and certain cross-border payment rails.
Supervisor & Data Collector
Requires banks to submit transaction-level data (import/export forms, TM forms, returns). Your AD bank is the gatekeeper—if your documents are weak, the bank won’t forward or execute, even when prior BB approval is not required.

Part B — Who Needs BB Approval (or AD Bank Clearance) and When

Below is a practical catalog of entities, transactions, and licenses that touch BB, with notes on whether prior approval is typical or whether general permission with AD bank processing usually applies.

1) Corporate Forms & Market Entry with FX Touchpoints

Bangladeshi private/public companies with foreign shareholders:
Inward share subscription: Generally remittable to a local company’s bank under general permission, subject to proper encashment certificate and share issuance at compliant pricing.
Dividend repatriation to non-resident shareholders: Typically under general permission via AD bank when tax has been withheld/paid and documents are in order.
Share transfers between residents and non-residents: Require valuation per accepted methodology and AD bank sign-off; some cases may require prior BB approval (e.g., complex structures, unusual pricing, legacy cases).
Branch office (foreign company):
Profit remittance: Permitted once audited accounts and tax clearance are in place; AD banks remit under general permission with a full pack.
Closure remittance: Final remittance of unspent balances on closure normally requires a dedicated file with the AD bank; BB may be involved depending on facts.
Liaison/representative office:
Operational funding via inward remittance: General.
No local revenue; thus no profits to remit.
Closure remittance of unspent balances proceeds on a documented file.

2) Banks, NBFIs, and FX Intermediaries (Licenses Issued by BB)

Scheduled bank license (bank formation/merger/branching) — BB license and ongoing prudential approvals.
Authorized Dealer (AD) license in foreign exchange — BB approval; AD branches are specially permitted outlets.
Offshore Banking Unit (OBU) permission — BB authorization; subject to separate FX and prudential norms.
Agent Banking permission.
Money Changer license.
Payment ecosystem:
Mobile Financial Services (MFS) license.
Payment Service Provider (PSP) and Payment System Operator (PSO) approvals.
Card issuance/acquiring and certain white-label ATM/network approvals.

If you operate in any of the above, the application is a licensing dossier to BB, followed by periodic reporting, inspections and compliance conditions.

3) Foreign Currency Accounts & Retentions

Exporters’ Retention Quota (ERQ) accounts for a percentage of export proceeds; use governed by circulars.
Resident Foreign Currency Deposit (RFCD) accounts for resident individuals with eligible foreign currency income; corporates have specified FC account types for export earnings, projects and special cases.
Non-Resident Taka Accounts (NRTA/NITA) for non-resident investors for capital market and other eligible investments.

Most of these operate under general permission if you keep the file clean and within allowable uses.

4) Inbound & Outbound Services, Royalties, IP, and Intercompany Charges

Royalty, franchise, trademark, and technical know-how fees:
Often remittable by AD banks under general permission within percentage caps or subject to contract vetting and tax/VAT compliance.
Over-cap or unusual structures may need prior BB approval.
Management fees, shared services, IT support, cloud/SaaS, software licenses:
Many categories can be remitted by AD banks against service agreements, invoices, tax documents, and technology transfer proof where relevant.
For sensitive items or large values, banks may escalate to BB.
Professional services (audit, legal, consulting), testing/lab, training, marketing/advertising with overseas media:
Typically via AD banks with standard document sets; banks watch withholding tax, VAT on digital services, and proof of service.
Freight, shipping, airline sales, GSA/PSA commissions:
Routine in these industries; AD banks clear with standard packs (sales reports, netting statements, tax/VAT evidence, agency agreements).

5) Trade Finance & Imports/Exports

Imports via LC, usance, or collection: AD banks manage within FX rules; BB prior approval generally not needed unless an item is restricted or the structure is unusual.
Back-to-back LCs for exporters: managed by AD banks under FX/trade circulars.
Exports: Proceeds realization, retention, and use of EXP and shipping documents flow through AD banks; certain deviations escalate.

6) Foreign Borrowing, Guarantees & Security Interests

Foreign loans (term loans, buyer’s/supplier’s credit, shareholder loans, OBU loans, refinancing):
Require registration/clearance with BB (and, where applicable, alignment with the investment authority and sector regulators).
Banks and BB will scrutinize pricing, maturity, security, and use of proceeds.
Security creation over local assets in favor of non-resident lenders and upstream or cross-border guarantees typically require BB’s consent.

7) Capital Market & Investment Flows

Non-resident portfolio investment through NITA or equivalent channels: executed via custodians/ADs under general permission.
Repatriation of capital gains and dividends from listed securities: under general permission with broker/custodian packs and tax compliance.
Unlisted shares (private transfers between resident and non-resident): valuation and documentation must satisfy the AD; BB approval may be sought for complex exits.

8) Outbound Investment & Special Cases

Outbound equity investment by residents: generally requires specific prior approval (policy is conservative and fact-dependent).
Remittance for ESOP/stock option exercises for resident employees in a foreign parent: often needs specific clearance (structure-dependent).
Donations, grants, endowments, prize money abroad: usually require strong justification; AD banks may escalate for BB guidance.

Part C — The Dividend Repatriation Playbook (Company & Branch)

Dividend remittance is frequent—and avoidable errors cause most delays. Use this two-track approach:

Track 1 — Bangladeshi Company Paying Dividends to Non-Resident Shareholders

Pre-conditions

Audited financial statements for the period, approved by the board and adopted by AGM.
Dividend declaration: board recommendation + shareholder approval per Articles/Companies Act.
Tax compliance: appropriate withholding tax deducted and paid; any corporate tax arrears addressed.

Documentation Set for the AD Bank

Board minutes recommending dividend; AGM minutes declaring it.
Audited financials (Balance Sheet, P\&L, notes, auditor’s report).
Dividend schedule: shareholder-wise split, residency status, gross amount, tax withheld, net payable.
Shareholding evidence: latest Form XII/Schedule X or register excerpt matching the declaration date.
Proof of foreign investment (for non-resident holders): original encashment certificate(s) or other bank confirmation of the inward share subscription, plus share certificates/allotment return.
Withholding tax challans or bank confirmation of payment to the exchequer.
Bank remittance form(s) and beneficiary bank coordinates.
KYC update if shareholder banking details changed.

Processing Notes

In typical cases, general permission applies—your AD bank remits without sending a prior approval case to BB, as long as the file is complete and compliant.
Expect requests for clarifications if accounts show accumulated losses, intra-group balances, or if there’s a sudden jump in payout ratio.

Timing

Well-prepared files often clear in 5–10 working days; add time for large shareholder bases or complex tax positions.

Track 2 — Branch of a Foreign Company Remitting Profits

Pre-conditions

Audited branch accounts for the period.
Tax clearance noting profit remittance and confirming taxes due have been paid.
Activity compliance: profits must arise from activities within the BIDA-approved scope.

Documentation Set

Audited branch accounts and management representation (if requested).
Tax clearance (profit remittance specific).
BIDA approval letter(s) and any renewal(s).
Bank forms and beneficiary instructions.
Lease/office confirmation and TIN/VAT alignment if banks request recon.

Processing

Generally permitted via AD banks once the tax clearance exists; unusual issues (scope questions, large inter-company charges) can prompt escalation.

Part D — Royalty, Franchise & Technical Know-How Fees

Many businesses rely on overseas IP and know-how. BB’s framework generally allows AD bank remittance under general permission within defined parameters, subject to:

The Core Tests

Genuine contract: executed agreement (principal terms, scope, fee basis—percentage of net sales, per-unit fee, lump sum, milestone, or hybrid).
Pricing & caps: ensure your fee basis matches the permitted cap or market norms; if above, seek prior approval or restructure.
Tax & VAT: withholding tax (rates vary) and VAT on digital/technical services (where applicable) paid.
Evidence of use: sales base certified by CFO/auditor, proof of deliverables for technical assistance, and proof of IP use.
Transfer pricing: if parties are related, maintain contemporaneous TP documentation.

Remittance Pack

Signed agreement + any amendment.
Invoice with calculation base.
Sales/usage certificate (auditor or finance head).
Tax payment evidence (withholding/VAT).
Board resolution (sometimes requested).
Bank forms and beneficiary details.

Staying within permitted fee ratios and filing a clean, consistent pack is the fastest route. When fees exceed typical caps, prepare an approval memo explaining value, benchmarks, and strategic necessity.

Part E — Intercompany Services & Shared Costs (IT, Finance, HR, Marketing)

Multinationals charge Bangladeshi subsidiaries for shared services. AD banks can remit under general permission when:

There is a clear service agreement (scope, pricing, cost allocation keys).
Invoices are consistent with the agreement.
Withholding tax is deducted and paid (or exemption evidenced).
Transfer pricing file supports the allocation and markup.
Where relevant (software/IT/cloud), VAT on digital services is accounted for.

Pro tip: Pre-agree a yearly service calendar (deliverables, KPIs, fee envelope) so payments don’t look ad-hoc.

Part F — Foreign Loans, Buyer’s Credit & Security

Foreign borrowing must be properly cleared before drawdown and remittance of interest/principal. Expect these elements:

Lender & facility: identify whether it’s an offshore bank, shareholder, OBU, ECAs, or funds; ensure lender eligibility.
Tenor & pricing: comply with the applicable ceilings/benchmarks and minimum average maturities for term borrowings.
Use of proceeds: capex, working capital, refinancing—state precisely.
Security & guarantees: mortgages/charges over local assets and cross-border guarantees typically require consent; align with RJSC charge filings.
Registration/clearance: lodge the loan with the appropriate authorities, complete any BB registration/reference processes, and obtain drawdown clearance.
Covenants & reporting: keep post-disbursement reporting (interest, principal, covenant tests) immaculate—banks and BB may monitor.

Outflows You’ll Later Remit

Interest and principal per the repayment schedule.
Fees: arrangement, commitment, agency, ECA premiums—ensure they’re disclosed and consistent.

Early Warning Signs

Mismatched drawdown purposes versus actual use, unreported amendments, or security not registered can hold up outflows.

Part G — Imports, Exports & Trade-Related Remittances

Imports

AD banks are your primary interface: opening LCs, endorsing import forms, handling import payments at sight/usance.
No prior BB approval is needed for most goods unless restricted/sensitive or structured in an unusual way (barter/offsets, complex third-country triangulation).
Document set: LC, invoice, packing list, shipping docs, certificate of origin, insurance, and inspection where required.

Exports

EXP form registration and shipment reporting via the AD bank.
Realization: Export proceeds must be realized within stipulated time; short/over shipments and quality claims go through the AD.
Retention (ERQ): A portion of proceeds can be kept in FC for approved uses (imports of inputs, overseas marketing, travel, commissions). Keep a clear audit trail.

Freight, Shipping & Airlines

Airlines remit net sales after taxes/charges; shipping lines remit freight and demurrage/charges.
Files typically include sales reconciliation reports, tax evidence, and agency agreements; AD banks remit under general permission.

Part H — Capital Market Flows & Share Dealings with Non-Residents

Listed Securities

Non-resident investors use designated accounts through custodians/ADs; dividends and capital gains are repatriable under general permission with broker/custodian packs and tax evidence.

Unlisted Shares (Private Companies)

Share issuance to non-residents: inward remittance, compliant pricing, allotment return, and share certificate issuance.
Share transfer between resident and non-resident: valuation per accepted methods (e.g., NAV, earnings, DCF). AD banks review pricing fairness; in atypical cases, banks may seek BB guidance.
Exit & repatriation: sale proceeds (net of taxes) remittable through the AD upon proof of shareholding, sale agreement, valuation basis, and tax payment.

Boardroom rule: Keep your cap table, RJSC returns, and share certificates in perfect order; sloppy records are the #1 cause of delays.

Part I — Outbound Investment & Special Remittances

Outbound equity investment by Bangladeshi companies is policy-sensitive and generally requires specific prior approval with robust justifications (strategic fit, forex impact, governance). Expect a high evidentiary bar and longer timelines.
ESOP/stock options: outward remittance of exercise price or taxes associated with foreign parent stock plans typically needs case-by-case treatment with the AD bank and often BB input.
Donations/prizes/endowments abroad: rare and tightly controlled; most companies route such items through local charitable activities unless a strong corporate/contractual basis exists.

Part J — Payment Systems, PSP/PSO & MFS Licensing

If you run or plan to run payments infrastructure:

MFS: Wallet issuance, P2P, P2B, merchant acquiring, cash-in/out—all under BB license with capital, governance, agent network, interoperability, and settlement rules.
PSP/PSO: Gateways, aggregators, switches, card networks, QR rails, merchant acquiring—licensing with technology, security (PCI/EMV), settlement, and dispute management obligations.
Agent banking: Bank-led, BB-authorized channels using agents for deposits, withdrawals, and basic services in underserved areas.
Money Changers: License for buying/selling foreign currency banknotes and traveler’s cheques; strict AML/KYC rules.

These are full licensing matters with detailed application forms, fit-and-proper tests, capital/technology criteria, and ongoing reporting and inspections.

Part K — The “No-Surprises” Documentation Model

Whether you’re paying a dividend, a royalty, or an intercompany fee—or drawing down a foreign loan—the fastest path to clearance is a bank-ready file. Here’s the universal checklist:

Board approvals: Resolutions that clearly authorize the payment, beneficiary, amount, and purpose.
Contracts: Executed copies with all schedules; amendments consolidated; latest versions only.
Invoices & workings: Fee basis shown step-by-step; where sales-linked, include certified sales numbers.
Tax pack: Withholding challans, exemption certificates (if any), VAT compliance proof for digital/technical services.
FX evidence: For capital flows, the encashment certificate proving the original investment.
Statutory filings: RJSC returns (e.g., Form XII/Schedule X for shareholding), charge filings, or auditor letters where relevant.
Beneficiary coordinates: Bank, SWIFT, IBAN, currency; KYC on any changes.
Cover letter: One-page narrative tying it all together, with a numbered index.

Submission path: You submit to your AD bank. If within general permission, the bank executes. If outside, the bank submits to BB with its note; strong files move faster.

Part L — Taxes & Transfer Pricing: What Banks Quietly Check

Withholding tax: Correct rate, correct base (gross vs. net), timely deposit.
VAT on imported services: Where applicable (e.g., digital ad spend, SaaS), ensure VAT is paid and documented.
Transfer pricing: Intercompany charges must pass arm’s-length tests; keep your Local File/Master File ready.
Treaty positions: If you rely on a DTA rate, provide residency certificates and beneficial ownership statements.

If tax is wrong, FX will be slow. Banks won’t risk their license on a defective tax file.

Part M — Step-by-Step: The Dividend Remittance SOP (Copy & Use)

Stage 1 — Corporate Actions

Board approves audited accounts and proposes dividend.
AGM declares dividend.
Finance prepares shareholder-wise payout with residency flag and tax rates.

Stage 2 — Compliance Pack
4) Compile audited financials and signed minutes.
5) Prepare dividend schedule (gross, tax, net, currency).
6) Attach encashment certificates for non-resident holdings and the cap table evidence.
7) Pay withholding tax; print challans.
8) Draft a cover letter to the AD bank with a numbered index.

Stage 3 — Bank Execution
9) Submit the pack + bank forms; respond promptly to any clarifications.
10) On execution, collect the SWIFT copy and keep a remittance file for six years (or more per policy).

Stage 4 — Investor Relations
11) Email shareholders a remittance advice with amount, currency, date, and bank reference.
12) Update statutory registers and the audit file for next year.

Part N — Step-by-Step: Royalty/Know-How Fee Remittance (Under Caps)

Confirm your fee basis fits within permitted ratios/thresholds.
Obtain/review the executed agreement; add an annex showing fee formula.
Prepare the invoice; compute the fee on certified sales (attach certificate).
Deduct and deposit withholding tax (and VAT where applicable).
Compile the bank pack: agreement, invoice, sales certificate, tax evidence, board minute (if needed), bank forms.
Submit to AD bank. If everything is within parameters, expect straight-through processing. If not, be ready with a justification memo for prior approval.

Part O — Step-by-Step: Foreign Loan Clearance & Repayments

Before Drawdown

Finalize term sheet (amount, tenor, pricing, amortization, covenants).
Align use of proceeds with policy; prepare cashflow model.
Prepare security/guarantee matrix; obtain in-principle lender and BB/AD comfort on cross-border security.
Lodge the registration/clearance file with AD bank for BB’s concurrence or registration step.
On approval, draw down into the permitted account.

During Life
6) Track interest and principal schedules; diarize remittance dates.
7) File periodic covenant compliance and interest reporting with your bank.

On Repayments
8) Submit repayment request with loan statement, calculation of interest, and tax evidence if any withholding applies.
9) Bank executes; you keep the SWIFT and update the loan ledger.

On Amendments
10) Any material changes (tenor, pricing, security) require fresh clearance; don’t amend informally.

Part P — Industry Mini-Guides

Airlines (International)

Monthly/quarterly remittance of net ticket sales and ancillary income after taxes/charges; pack includes BSP/ARC or equivalent reports, tax evidence, and agency agreements.

Shipping Lines & Agents

Freight and demurrage remittances with manifest and billing summaries; outward commissions per agency contracts.

Telecom & Tech

Interconnect/roaming settlements; license/software/SaaS remittances; ensure data/IT security and tax alignment.
Cloud & ads: high-frequency payments—set standing documentation and tax workflows.

Power and Infrastructure

Foreign loan servicing, ECA premiums, spare-parts imports, and technical service fees; long-dated covenants and multiple lenders require precise calendars.

EPC/Contractors

Mobilization advances, progress certificates, retention money, and contractor profit remittances for foreign branches; tax and warranty obligations must be closed before final remittance.

NGOs/INGOs & Development Projects

Foreign grant inflows to FC accounts; use per project budgets; staff benefit remittances and consultant payments via AD bank rules.

Part Q — Compliance Pitfalls (and How to Avoid Them)

Unclear purpose narratives: Banks need a one-line purpose in plain language that matches documents.
Mismatched names across contracts, invoices, and bank records.
Missing encashment certificates for historic investments; solve by reconstructing with bank letters and corporate records.
Over-cap royalties without justification: restructure, stage fees, or file a cogent approval case.
Tax gaps: Withholding paid late or at the wrong rate—banks will hold.
Foreign loan amendments done informally—later remittances get stuck.
Transfer pricing silence: For intercompany services, keep a lean TP pack ready.
Expired BIDA/industry approvals for branches—banks stop profit remittance until renewed.
Charge filings not done at RJSC—BB won’t bless security/repayments cleanly.
Last-minute submissions: Build buffers for quarter-end and year-end queues.

Part R — Recordkeeping & Audit Trail

Maintain a remittance file per category:

Dividend File: minutes, audited FS, dividend list, encashment certificates, tax challans, SWIFT copies.
Royalty/Service File: contracts, invoices, sales/usage proof, tax, SWIFT.
Loan File: approvals/registration, drawdown SWIFTs, amortization schedule, interest/fee payments, amendments.
Trade File: LCs, shipping docs, EXP/IMP, insurance, claims, reconciliations.
Share Dealings: valuations, agreements, RJSC returns, tax, SWIFT.

Retention: minimum six years (longer for projects or lender requirements). Use a numbered index; your bank will love you for it.

Part S — Fast FAQs (No Jargon)

Do all outward remittances need prior BB approval?
No. Many are permitted under general permission and are executed by AD banks if the file is clean and within parameters.

When do I definitely need prior approval?
Over-cap royalties/technical fees, unusual or large intercompany payments, foreign loans and security/guarantee matters, outbound investments, and certain exceptional cases.

Can I repatriate dividends freely?
Yes—if profits are real, taxes are paid, and you can prove the original foreign investment. Your AD bank can remit under general permission.

How long does a dividend remittance take?
Well-prepared files often execute in about a week through the AD bank. Complex cap tables, tax queries, or missing encashment evidence add time.

Are software, cloud, and digital ads payable abroad?
Yes, commonly via AD banks—but ensure VAT/withholding compliance and keep agreements/invoices tidy.

Who handles my case at BB?
You rarely go directly—your AD bank prepares and sends cases when prior approval is needed. Keep your relationship team in the loop early.

Part T — SEO-Ready Outline (If You Publish This on Your Site)

H1: Bangladesh Bank Approvals: Complete Corporate & FX Guide
H2s: “Who Needs BB Approval,” “Dividend Repatriation,” “Royalty & Technical Fees,” “Foreign Loans & Security,” “Imports/Exports,” “Capital Market & Share Transfers,” “Outbound Investment,” “Payment Licenses,” “Checklists & SOPs,” “Pitfalls,” “FAQs.”
Featured Snippet Targets:
Steps to remit dividends in Bangladesh (12-step list)
Checklist for royalty remittance (6-point list)
Foreign loan clearance steps (10-point list)

Add internal links to your incorporation, RJSC compliance, sanctions & export controls, and UAE free zone guides to keep readers engaged.

Part U — The TRW Method (What We Do End-to-End)

Map your flows: dividends, royalties, intercompany, loans, freight, software, and capital market exits.
Design the paperwork: resolutions, agreements, valuation and TP files, tax packs.
Work the bank: assemble banker-grade files; pre-clear tricky points; escalate thoughtfully.
Secure approvals: when general permission won’t cover it, we prepare and shepherd a strong approval case.
Keep you compliant: calendars, templates, and registers so you don’t repeat the same ask twice.
Close the loop: SWIFTs, ledgers, and audit-ready files for every remittance.

Contact TRW Law Firm
Phones: +8801708000660 · +8801847220062 · +8801708080817
Emails: [email protected] · [email protected] · [email protected]
Offices: Dhaka — House 410, Road 29, Mohakhali DOHS • Dubai — Rolex Building, L-12 Sheikh Zayed Road

Bangladesh Bank’s framework is navigable and business-friendly when you plan. The playbook is simple: decide the correct route (general permission vs prior approval), build immaculate documentation, align taxes, and submit through a proactive AD bank. Do that, and dividends, royalties, loan repayments, and exits become predictable and repeatable—exactly what your board, auditors, and investors want.

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Loading… | 5 MIN READ | BY TAHMIDUR REMURA WAHID