Foreign Currency (FC) Accounts are available in the following foreign currencies:
British Pound Sterling (GBP),
Who can establish an FC account?
Bangladeshi nationals working or earning abroad, including self-employed Bangladeshi immigrants moving abroad for employment, are permitted to establish an FC Account without an initial deposit.
Foreign nationals residing abroad or in Bangladesh, as well as foreign firms registered abroad and operating abroad or in Bangladesh.
Missions abroad and their expatriate personnel.
Bangladeshi nationals employed by foreign or international organizations operating in Bangladesh, provided their salaries are paid in foreign currency or they receive consultancy fees or honoraria in foreign currency.
The customs authorities-licensed Diplomatic Bonded Warehouse (duty-free stores).
Local and Joint Venture contracting firms hired by foreign donors/international donor agencies to execute projects in accordance with the relevant contract, which will be closed as soon as the projects are completed.
Bangladeshi Shipping Firms and Airline Operators
Retention quota for merchandise exporters: Exporters providing inputs against back-to-back foreign currency letter of credit.
EPZ and EZ companies are permitted to establish foreign currency accounts.
Branch offices, liaison offices, and representative offices may establish FC accounts.
Note: A Private Limited Company operating outside of EZ/EPZ and registered under RJSC cannot establish an FC account.
Conditions, terms, and specifics of numerous FC account types:
Account in a Private Foreign Currency (FC):
Private FC Accounts can be opened at any of our Authorized Dealer locations.
Bangladeshi citizens living and working abroad;
b. foreign nationals residing in Bangladesh or abroad;
c. diplomatic missions and their expatriate personnel;
d. foreign firms registered overseas and functioning in Bangladesh or internationally;
e. Bangladeshi nationals employed by foreign or international organizations in Bangladesh who are eligible to be paid in foreign currency.
Accounts of the Diplomatic Bonded Warehouse for FC
ADs may establish foreign currency accounts in the names of Diplomatic Bonded Warehouses (duty-free shops) under the following conditions:
a. These accounts may only be credited with convertible foreign currency (notes and coins, travelers’ cheques, drafts, cheques or credit card settlements) received on account of the sale of merchandise.
b. Foreign exchange may only be transferred overseas for the import of goods by the bonded warehouse. Foreign exchange may also be transmitted from these accounts to foreign currency accounts maintained with other ADs for the same purpose.
Local and joint venture contracting enterprises’ FC accounts
– Individuals, including Bangladeshi nationals and non-resident Bangladeshis (NRBs) – Companies, corporations, and foreign investors.
FCAs can be maintained in various foreign currencies, such as USD, EUR, GBP, JPY, and more, subject to Bangladesh Bank’s approval.
Purpose of FCAs
– Facilitating international trade – Remittance of foreign earnings – Investment in Bangladesh – Holding foreign currencies for future use, and more.
– For individuals: Valid passport, visa, and other KYC documents – For businesses: Incorporation documents, trade licenses, and more, depending on the type of account.
– Visit a bank authorized for FCAs with required documents – Fill out an account opening form – Choose the type of FCA – Deposit the required initial amount – Sign an account agreement
Operation of FCAs
– FCAs can be operated freely for authorized transactions. – Funds can be transferred abroad and back without significant restrictions.
– The interest rates on FCAs vary and are typically lower compared to local currency accounts. Interest is paid based on the respective foreign currency.
– Interest income from FCAs is generally tax-exempt in Bangladesh. – Capital gains tax may apply when converting foreign currency back to Bangladeshi Taka.
FC Accounts of Bangladeshi residents working for foreign/international organizations
Accounts in a foreign currency may be opened:
a. In the names of domiciled Bangladeshi nationals who are employed by foreign or international organizations operating in Bangladesh, if their salaries are paid in foreign currency.
b. This account may only be credited with the foreign currency portion of the salary and debited for all approved current transactions, such as travel expenses, the cost of children’s education, medical expenses, etc. These foreign currency accounts also allow for unrestricted local Taka withdrawals.
c. Consultancy fees/honoraria received in foreign currency by the aforementioned category of residents may also be credited to foreign currency accounts, with debits to such accounts subject to the same conditions as stated above.
Account for Non-Resident Foreign Currency Deposits (NFCD):
NFCD accounts can be established at our Authorized Dealer locations by:
a. Bangladeshis living and working abroad
b. Bangladeshis with dual citizenship who reside abroad
c. Bangladeshi nationals operating abroad with Bangladeshi diplomatic missions
d. Officers/staff of the government/semi-government organizations/nationalized banks and corporate body employees posted abroad or deputed with international and regional agencies in foreign countries against foreign currency remitted through banking channels or carried in cash.
Account for resident foreign currency deposits (RFCD):
a. Individuals with a permanent residence in Bangladesh may establish an RFCD account with foreign currency brought back from a trip abroad.
b. Residents may establish this account at any time following their return to Bangladesh.
Account for Exporters’ Retention Quota (ERQ):
Retention quota accounts may also be established and maintained in the names of deemed exporters for supplying inputs against inland back-to-back foreign currency letter of credit.
ADs are required to strictly adhere to the following:
a. The total amount credited to the direct exporter’s retention quota account and foreign exchange paid to the presumed exporter for the supply of inputs cannot exceed the net repatriated amount.
b. FOB export value of the direct exporter; and The foreign exchange shall only be credited to the retention quota account of the deemed exporter upon resolution of the amount against back-to-back LC for deemed export.
Foreign currency accounts for enterprises in the EPZ:
The following procedures will govern the release of foreign currency to enterprises:
Exports originating from EPZs:
a. One hundred percent, eighty percent, and seventy-five percent, respectively, of repatriated export proceeds of Type A, B, and C and industrial unit in EPZ may be retained in FC account in the name of the unit with an AD in Bangladesh.
b. FC account balances may be freely used to satisfy all foreign payment obligations, including import payment obligations of the unit and foreign exchange payment obligations to BEPZA.
Individuals and businesses are able to establish FC accounts in Bangladesh based on their demand and requirements. Other FC accounts include Foreign currency accounts for Initial Public Offerings (IPO); Foreign currency accounts for shipbuilders (exporters); Foreign currency accounts of shipping companies, airlines, and freight forwarders; and Special FC accounts can be opened by obtaining BB’s permission and providing evidence.
Bangladesh Bank is the primary regulator of the country’s monetary and financial system, as well as the entity in charge of banking and financial legal services in Bangladesh. The Bangladesh Bank Order 1972- President’s Order No. 127 of 1972 (Amended in 2003) created it on December 16, 1971. The Governor is also the Chief Executive Officer of this historic institution.
The key tasks of the BB are:
• design and implementation of foreign currency policy; • holding and managing Bangladesh’s official foreign reserves; • authority for issuing Taka; and • monitoring banks and other financial institutions. •BB is governed by a number of laws, rules, and guidelines that help it carry out its responsibilities in regard to the economy’s monetary and fiscal systems. Some of these laws are as follows:
· Bangladesh Bank Order 1972; · Bank Company Act 1991 · Bank Company (Amendment) Act 2013 · Negotiatble Instrument Act 1881 · The Bankers’ Book Evidence Act 1891 · Foreign Exchange Regulations Act 1947 · Foreign Exchange Regulations (Amendment) Act 2015 · Financial Institutions Act 1993 · Financial Reporting Act 2015 · Money Loan Court Act 2003 · Money Laundering Prevention Act,2012 · Money Laundering Prevention (Amendment) Act, 2015 · Anti-terrorism Act, 2009
Mr. Tahmidur Rahman Remura Wahid, a law company in Bangladesh, offers clients confronting legal challenges in banking and finance both litigation and corporate services. Our banking and finance legal services in Bangladesh are provided by a team of experienced lawyers who prepare various documents required to obtain finance, review documents to be submitted to regulatory authorities, provide advice on obtaining finance, and resolve disputes both inside and outside of court using effective dispute resolution skills.
TRW has a significant banking and finance legal services clientele base in Bangladesh, both local and foreign, in the form of banks and other financial institutions, including but not limited to insurance companies, asset management organizations, and so on.
We often represent our clients in money suits, Negotiable Instruments Act 1881 cheque concerns, Money Loan Court Act 2003, Bank Companies Act 1991 mortgage disputes and redemptions, regulatory compliance and communications.
Tahmidur Rahman Remura Wahid, a Dhaka law firm, assists clients in arranging and or structuring loan transactions, project finance, trade finance, construction finance, mergers and acquisitions of corporate entities, resolving transactional disputes, conducting due diligence on mortgaged properties, and so on.
GLOBAL OFFICES: DHAKA: House 410, ROAD 29, Mohakhali DOHS DUBAI: Rolex Building, L-12 Sheikh Zayed Road LONDON: 1156, St Giles Avenue, Dagenham
Bills of exchange and promissory notes are written pledges between two parties that confirm the completion of a financial transaction. Bills of exchange are more commonly employed in foreign trade than promissory notes are in domestic trade.
A negotiable instrument is a written commercial document that contains an order for money to be paid on demand or after a particular period of time. Bills of exchange, promissory notes, and cheques are the three sorts. In some cases, the bill of exchange is used in conjunction with a promissory note. The primary distinction between a Bill of Exchange and a Promissory Note is that the former bears a command to pay money, whilst the latter bears a promise to pay money.
Acceptance is a key distinction between the two business instruments; bills of exchange must be accepted in order to be effective. A promissory note, on the other hand, does not require any type of acceptance. So, when working with these two, one should be aware of their significance and characteristics.
What exactly is a Promissory Note?
A promissory note is a form of negotiable instrument that contains a written promise to pay in full. These are duly signed and stamped by their drawers, stating that they will pay a particular sum of money to the holder on a specific day or on demand. Promissory notes, which are used by debtors to borrow from creditors, may not be accepted by a creditor after they have been drawn.
Hence, they have the following characteristics.
Written promises to repay a debt.
The drawer or promisor must sign.
The payment date is set in stone.
Both the promisor and the promisee agree on a sum of money to be paid.
For settlement, the legal currency of the relevant country is used. It involves the two parties listed below:
The debtor who promises to pay a certain amount to its creditor.
A creditor who has been promised a certain amount of money on a specific day.
What exactly is a Bill of Exchange?
A bill of exchange, which is a written note legally bonded and duly stamped and signed by its drawer, is also a negotiable tool. It directs that a certain sum of money be paid to the holder of this instrument on demand or within a specified time limit. These are usually payments for products and services that must be accepted by a debtor in order to be valid. It has the features listed below.
It must be properly dated.
Contains a payment order.
The drawer/maker’s signature is required.
A drawee must accept the bill.
The payment order and amount should be specified.
It has to be delivered to the appropriate payee.
It involves the three parties listed below:
The person who receives payment from the issuer of this instrument.
A person who must pay the applicable sum.
Payee: This is the person who gets payment and, in most cases, is the same as the drawer. What is the difference between Promissory Notes and Bills of Exchange? While promissory notes, bills of exchange, and cheques have some similarities, they are separate from one another. Despite the fact that they are financial instruments with a documented pledge to pay.
BASIS FOR COMPARISON
BILL OF EXCHANGE
Bill of Exchange is an instrument in writing showing the indebtedness of a buyer towards the seller of goods.
A promissory note is a written promise made by the debtor to pay a certain sum of money to the creditor at a future specified date.
Notice is necessary to be given to all the parties involved.
Notice is not necessary to be given to the maker.
There are significant distinctions between bills of exchange and promissory notes, as you are now aware. Here are some of the most noticeable differences:
A bill of exchange is a negotiable instrument produced when the debtor is directed to pay the creditor the outstanding amount within a particular time frame. A promissory note, on the other hand, is a written agreement between the drawer and the drawee in which the drawer pledges to pay a certain amount within a certain time frame.
A Bill of Exchange involves three parties: the drawer, the drawee, and the payee. A promissory note involves two parties: the drawer and the payee/drawee.
A bill of exchange must be accepted by the debtor in order to be considered valid. In the case of a promissory note, the drawee’s acceptance is not required.
If the Bill of Exchange is not followed, a notice is given to all parties involved. In the case of a promissory note, no notice of dishonor is issued to the “maker.”
In the event of a bill of exchange, no asset is kept as security. An asset can be used as collateral for a loan in specific cases, such as with promissory notes.
Bills of exchange and promissory notes are equally as important in business as cheques. These notions, which are critical for commercial transactions and financing, are, nevertheless, rarely emphasized. Bills of exchange are one of the most crucial negotiable documents when a debtor obtains products on credit.
The creditor sends the debtor a bill of exchange, asking him to pay the amount within the time range indicated. The promissory note is similar, but it is issued by the debtor and specifies that the required amount will be paid within a specified time frame. These ideas will help you understand business in a practical way, and you will be able to apply them in your own business or at work.
Bill of Exchange
A negotiable instrument issued to order the debtor to pay the creditor a certain sum of money within a specific date or on demand.
A negotiable instrument issued by the debtor with a written promise to pay the creditor a certain amount within a specific date or on demand.
Mentioned in Section 5 of the Negotiable Instruments Act, 1881
Mentioned in Section 4 of the Negotiable Instruments Act, 1881
Three parties involved i.e a drawer, the drawee and a payee.
Two parties involved i.e a drawer/maker and the payee
Drawee needs to accept the bill of exchange before payment.
No acceptance required from the drawee.
Liability of drawer is secondary and conditional.
Liability of drawer is primary and absolute.
Dishonouring of instrument
Notice served to all the concerned parties involved in the transaction on dishonouring the instrument.
No notice served to the drawer in case of dishonouring the instrument.
Bill of exchange can have copies.
The promissory note allows no copies.
Is it Payable to drawer/maker
Yes, the same person can be drawer and payee.
The same person cannot be drawer and payee.
ব্যারিস্টার তাহমিদুর রহমান রিমুরা কর্তৃক চেক ডিসঅনার মামলা সম্পর্কিত আইনী সেবা:
ব্যারিস্টার তাহমিদুর রহমান: সিএলপি একটি সনামধন্য ‘ল’ চেম্বার যেখানে ব্যারিস্টারস এবং আইনজীবীদের মাধ্যমে চেক ডিসঅনারের মামলা সম্পর্কিত সকল প্রকার আইনগত সহায়তা, পরামর্শ প্রদান করে থাকে। কোন প্রশ্ন বা আইনী সহায়তার জন্য আমাদের সাথে যোগাযোগ করুনঃ-
Company Registration in Bangladesh: A Comprehensive Guide
By Tahmidur Rahman Remura Wahid Law Firm
Registering a company in Bangladesh is a crucial step for investors looking to start a business or expand their operations in the country. Bangladesh offers a favorable environment for company registration procedure in bangladesh, and most businesses prefer to be registered as private limited liability companies due to the legal protection and limited liability they offer.
In Bangladesh you can do proprietorship company registration in bangladesh, private limited company or if you are a foreign entity then you can incorporate your fully owned subsidiary, branch or liaison office in Bangladesh by hiring suitable company registration consultants in bangladesh.
This article from our esteem partners aims to provide a detailed overview of the company registration process in Bangladesh, requirements, and post-registration formalities in Bangladesh for private limited company incorporation in Bangladesh.
Pre-Registration – What You Need to Know
Before diving into the company registration process, it’s essential to understand key facts about company formation in Bangladesh:
Company Name Clearance: The proposed company name must be approved (cleared) before incorporation.
Directors: A minimum of two directors are mandatory, who can be either local or foreign. Directors must be at least 18 years old, not bankrupt, and not convicted of malpractice in the past. They must own qualification shares as stated in the Articles of Association.
Shareholders: A private limited company can have a minimum of 2 and a maximum of 50 shareholders. Shareholders can be individuals or legal entities.
Authorized Capital: The maximum share capital the company is authorized to issue must be stated in the Memorandum of Association and Articles of Association.
Paid-up Capital: The minimum paid-up capital for registration is Taka 1, but it can be increased after incorporation.
Registered Address: A local address must be provided as the registered address, which must be a physical address and not a P.O. Box.
Memorandum and Articles of Association: The company must prepare these two documents detailing the business objectives, shareholder information, and company regulations.
Considerations for Foreigners
Foreign investors planning to register a company in Bangladesh i.e a foreign company registration in bangladesh, should take note of the following points:
Bank Account Opening: A bank account must be opened in the name of the proposed company with the name clearance obtained from the Registrar of Joint Stock Companies and Firms (RJSC).
Remote Incorporation: All incorporation formalities can be handled remotely through authorized lawyers/agents in Bangladesh.
Foreign Directors and Shareholders: All directors and shareholders can be foreigners, and there is no requirement for any special visa if they do not plan to relocate to Bangladesh.
Work Permit: If foreign investors plan to operate the company from Bangladesh, they must obtain a work permit.
At first, before we get into the process of company registration in bangladesh, for company incorporation in Bangladesh, the following documents are required by the company registrar:
Company Name Clearance Certificate
Memorandum of Association and Articles of Association
Shareholders’ particulars (National ID for Bangladeshi shareholders)
For foreigners: Copy of passport of shareholders and directors.
Procedure for Company Registration in Bangladesh
The company registration process in Bangladesh involves the following steps:
Step 1: Name Clearance
Select a desired company name and apply for name clearance on the Registrar of Joint Stock Companies and Firms (RJSC) website.
Pay the prescribed fee for name clearance.
After verification, RJSC will issue a name clearance certificate, which is valid for six months and can be extended if necessary.
Step 2: Drafting AoA & MoA for company registration in bangladesh
Drafting Memorandum of Association:
A limited company’s Memorandum of Association (MOA) is an essential aspect of the company registration process. A company’s objectives are included in a MOA. In the MOA, you can include as many objectives as you wish.
Drafting Article of Association:
The company’s constitution is its Articles of Association (AOA). As a result, the AOA contains all of the regulations governing how a limited company will operate, as well as who will serve as the firm’s Managing Director, Chairman, and Directors.
Step 3: Bank Account Opening and Paid-up Capital
Open a temporary bank account in the company’s name with a scheduled bank in Bangladesh.
Remit the paid-up capital (if foreign shareholding) to the bank account, and obtain an Encashment Certificate from the bank.
Deposit of share capital:
Following the opening of the provisional bank account, for completing company registration in bangladesh, a share money deposit will be paid from the foreign shareholder’s nation to the provisional account. As a result, the funds must be transferred from the shareholder’s person or entity account. After receiving payment, the Bangladeshi bank will provide an encashment certificate.
Step 4: Submit Company Information to RJSC
Upload digital copies of the MoA, AoA, and other required documents on the RJSC website.
Step 5: Submission of Physical Documents and required fee
Affix non-judicial stamps on the MoA and AoA.
Submit physical copies of the MoA, AoA, and other documents, along with the Encashment Certificate, to RJSC.
The government registration fee is determined by the company’s authorized capital. For example, if the allowed capital is 50 lakh, the government charge will be BDT 13570 (USD 160) plus 15% VAT. The government fee for company registration in Bangladesh can be found here.
Step 6: Obtain Incorporation Certificate
RJSC officials will review the submitted documents.
If satisfied, RJSC will issue the Certificate of Incorporation, Digital Certified Copy of MoA and AoA, and List of Directors (Form XII).
Present the Incorporation Certificate to the bank to convert the temporary account to a regular account.
After company registration, the following post-registration formalities need to be completed:
Obtain Trade License, Tax Identification Number, and Other Licenses: Apply for a trade license and obtain a Tax Identification Number (TIN). Depending on the business activities, additional licenses may be required.
Return Filing Requirements:
Hold an Annual General Meeting (AGM) within 18 months of incorporation, and no more than 15 months between subsequent AGMs.
File relevant returns for any changes in the board of directors, shareholding structure, or other significant changes.
Taxation and Company Registration in Bangladesh:
Corporate Tax Rate
Publicly traded companies (listed companies on the stock market)
Non-publicly traded companies (private companies limited by shares)
Publicly traded banks, insurance, and financial institutions other than merchant banks
Non-publicly traded banks, insurance, and financial institutions
Publicly traded mobile network operators
Non-publicly traded mobile network operators
Publicly traded cigarette manufacturers
Non-publicly traded cigarette manufacturers
One Person Company (OPC)
Annual Income Tax Return Deadline
File income tax return annually
Usually on 15th January of the next year following financial closing (usually July-June).
Additional Tax Information
What is the Corporate Tax on profit?
Corporate tax on its profit Minimum tax usually @ 0.06% of gross revenue to be paid
How to Inject paid-up capital to the company’s bank account?
By cheques or any other instrument
Are there any transparency requirement?
The company should adequately explain debit-credit in the bank statements
Please note that besides the corporate tax rates mentioned above, there are several tax exemption facilities available for companies based on the nature of their business and location. Additionally, one-person company registration in Bangladesh has been officially launched, allowing individuals to incorporate a company on their own.
FAQ about Company Registration in Bangladesh:
What is a Private Limited Company?
A Private Limited Company is a type of company that restricts the right of share transfer, limits the number of members to fifty, and prohibits public invitation to subscribe to shares or debentures.
How to incorporate a private limited company?
The process of company registration in bangladesh involves obtaining name clearance, drafting required documents, opening a temporary bank account, submitting documents to RJSC, and obtaining the incorporation certificate.
Are there any minimum shareholders required to form a company?
Yes, a minimum of two shareholders is required to form a private limited company.
Are there any minimum directors required to form a company?
Yes, a minimum of two directors is required to form a private limited company.
Is there any requirement of a resident/local director to operate a foreign company in Bangladesh?
Generally, there is no requirement for a resident/local director, but one director must be physically present to open a bank account.
Is there any minimum amount for the authorized and paid-up capital to be prescribed?
There is no specific limit on authorized or paid-up capital, but it is suggested to have a minimum authorized capital equivalent to USD 50,000 for legal purposes and adequate paid-up capital for business operation.
Are there any guidelines on reflecting company activities in the name?
There are no strict guidelines, but it is suggested to reflect the company’s activities in the name.
Is it mandatory to have a registered local address for the company?
Yes, a registered local address is mandatory for the company.
Do you provide office address?
Yes, office address services are available for company registration.
What documents are required for company formation?
Required documents include Memorandum of Articles and Articles of Association, directors’ resolution, consent forms, and various registration forms.
Whether prior permission of regulatory authority is needed for making investment?
For investment in kind, the concerned company needs to be registered with RJSC, and relevant forms and agreements must be filed with RJSC for record-keeping.
What is the difference between authorized capital & paid-up capital?
Authorized capital is the maximum share capital the company can issue, while paid-up capital is the amount actually paid by shareholders.
Whether directors need to obtain any registration before becoming directors of the company?
Directors do not need any specific registration before becoming directors.
Is it mandatory to appoint a company secretary?
There is no mandatory requirement for a company secretary in private limited companies.
What is the timeline for company formation?
The timeline for company formation may vary, but it usually takes a few weeks to complete the entire process.
What are the post-company formation required licenses and approvals?
Post-formation, licenses such as Tax Identification Number (TIN), Trade License, and VAT Registration Certificate need to be obtained.
When will a company be fully ready to operate legally in Bangladesh?
A company can start operating legally in Bangladesh after completing the registration process and obtaining necessary licenses and approvals.
Are there any restrictions/guidelines for altering company operation & management in the future?
Yes, any changes in company operation or management must be reported to the Company House.
What documents are required for bank account opening?
Documents such as the Certificate of Incorporation, Memorandum and Articles of Association, and identification documents are required for bank account opening.
Can a company own several businesses under different names?
Yes, a company can own multiple businesses under different names, as long as it complies with its Memorandum of Association and obtains necessary permissions if required.
Can a company change its business category not mentioned in its memorandum?
To carry out a different business not mentioned in the memorandum, the company needs to apply to the High Court to add that category.
Registering a company in Bangladesh is a streamlined process that can be handled remotely through authorized agents. Foreign investors have the flexibility to operate their businesses from overseas or relocate to Bangladesh with appropriate work permits. With its investor-friendly policies and favorable business environment, Bangladesh presents attractive opportunities for both local and foreign entrepreneurs.
If you are considering company registration in Bangladesh, it is advisable to seek professional legal assistance to navigate the registration process efficiently and ensure compliance with all regulatory requirements.
Time Requirement For A Company Formation
We want to finish the registration procedure as soon as possible. Preparing papers, RJSC online filing, payment, and a physical encounter with RJSC might also affect the timeline.
The fees and costs of company registration in Bangladesh will be determined by the nature of your firm. The following table shows the projected cost of forming a company:
Nature of Business
Expected Cost (Taka)
Service and General Trading Company
Less than 60000
Relating to Export and Import Company
Less than 120000
Relating to Export, import and Manufacture
Less than 400000
Branch and Representative Office
Less than 60000
Employment and Investor Visa
Less than 50000
Summary for Company Registration in Bangladesh and FAQ:
How can I register my company in Bangladesh?
In Bangladesh, the average projected time for full registration is 45- 60 days.
Step 1: Clearance of names:
To begin, you must obtain clearance from The Registrar of Joint Stock Companies and Firms (RJSC) for the name of your company.
Step 2: Draft the necessary documents.
Second, write the Articles of Association (AoA) and the Memorandum of Association (MoA). You must draft it along with other forms as required for RSJC compliance while preparing those.
Step 3: Create a bank account
Third, if you intend to hire foreign personnel, you must open a bank account in the planned company’s name and submit an inward remittance of at least US$ 50,000. Emerhub can assist you in opening a bank account.
Step 4: Submit paperwork to the RSJC
In this phase, you must submit all essential documents to the RJSC as well as pay the registration fees. During the regular process time, you can also look into RSJC for the incorporation certificate.
Step 5: Post-registration conformity You now have a freshly formed company in Bangladesh, as well as the certificate of incorporation, Articles of Association (AoA), and Memorandum of Association (MoA).
You must additionally obtain the following permits and registrations: Tax Identification Number (TIN) for a Trade License Fire Certificate Environmental Clearance Certificate (if required) VAT Registration Certificate
How much is company registration fee in Bangladesh?
The registration fee varies and mainly depend on the selected Authorised Capital by the company in its AoA and MoA.
Can a foreigner own a company in Bangladesh?
Of course. Foreign investors can establish a wholly owned subsidiary or a jointly owned company in Bangladesh. Public and private limited companies are the most popular types of incorporation. Incorporated companies must adhere to the Companies Act of 1994 and can conduct any legally acceptable activity and establish operations in any location in Bangladesh. Company formation in Bangladesh entails the following steps: Step 1: Obtaining RJSC&F name clearance. Step 2: Open a temporary bank account to deposit capital. According to Circular No. 11 of the Foreign Exchange Policy Department of Bangladesh Bank, issued on May 17, 2021, investors can open temporary accounts through online arrangements for FDI in Bangladesh. Step 3: Prepare Articles of Association and Memorandum of Association, and submit application for incorporation with RSJC&F. The above processes normally take five weeks to complete.
How can I verify the status of a company's registration?
Anyone can check the ROC GOV BD website, but registered users can readily verify in detail after logging in.
To check, go to App Roc Gov Bd, app.roc.gov.bd. Also, keep an eye on your registered email for updates if anything changes.
What is the registration number of the company?
As the firm's identity, each incorporated company receives a registration number from the RJSC office. This identifying number is only available in the copy of the Incorporation Certificate.
What are the fundamental documents needed to register a company?
The basic documentation of a firm are: a) the shareholders' passports 2) Parent's address, email, phone number, and name 3. Signing the RJSC forms
What exactly is an encashment letter?
A letter is issued by a local bank in response to foreign shareholders purchasing stock (TT). Depositing cash in a bank to receive an encashment or remittance letter is completely prohibited.
What does RJSC stand for?
RJSC stands for Registered Joint Stock Companies and Firm, which is a government organ. All firms are registered with RJSC, and all enterprises are required by law to file annual returns to RJSC.
If the company's shares are increased, sold, or otherwise changed, the RJSC office must be notified.
What is Bangladesh's most profitable and quickly growing business?
The most profitable and rapidly increasing businesses in Bangladesh are RMG, sea fish, clothes, leather, poultry, and food.
Which foreign countries have the most investments in Bangladesh?
According to the 2019 FDI report, China appears to be Bangladesh's largest investment partner, followed by South Korea, India, the United Kingdom, the United Arab Emirates, Malaysia, and others.
How do expatriates send money out of Bangladesh?
It is restricted unless permission is obtained from BIDA, the Income Tax Department, and the Bangladesh Bank.
How much does the business tax cost?
It is a clean 30% as per FDI law, with an additional VAT of 5 as per NBR policy. Visit this site to learn more about Income Tax in Bangladesh.
How can I get a PI and an E visa?
We have previously covered them above, and you are encouraged to read them. You must obtain permission from BIDA/BEPZA and invest $50,000 in accordance with their guidelines.
Visit to learn more about the PI and E Visa application processes.
Are you planning to do your company registration in Bangladesh?
Company formation and registration at Tahmidur Rahman Remura Wahid: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman Remura Wahid Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering all sorts of companies in Bangladesh . For queries or legal assistance, please reach us at:
Industrial Project Finance in Bangladesh: A Comprehensive Guide
Industrial project finance is a vital component driving economic development and infrastructure growth in Bangladesh.
This financing mechanism plays a crucial role in funding industrial and infrastructure projects, fostering economic growth, and enhancing the country’s competitiveness.
In this comprehensive guide presented on behalf of the Tahmidur Rahman Remura law firm, we will delve deeper into the intricacies of industrial project finance in Bangladesh, including the types of projects financed, regulatory framework, approval requirements, material laws, international treaties, and structuring the financing.
Types of Projects Finance in Bangladesh:
Industrial and infrastructure projects are the primary beneficiaries of project finance in Bangladesh. Industrial projects, predominantly concentrated in the private sector, encompass diverse sectors such as manufacturing, textiles, garments, pharmaceuticals, and more.
These projects fuel the industrial growth of the nation, creating job opportunities and contributing to the overall economic landscape.
On the other hand, infrastructure projects are often undertaken either by the government of Bangladesh itself or through public-private partnership (PPP) models.
These essential projects include toll roads, ports, metro rail systems, liquified natural gas (LNG) terminals, power generation facilities, and energy initiatives.
They address critical infrastructure needs, facilitating efficient transportation, energy distribution, and enhancing the overall quality of life for citizens.
Additionally, project finance is extended to service sectors, such as education, healthcare, telecommunications, and other emerging industries that contribute significantly to the country’s progress.
Regulatory Framework for Project Finance in Bangladesh:
The regulatory framework for industrial project finance in Bangladesh is a crucial aspect that ensures transparency, compliance, and accountability throughout the financing process. Key regulatory authorities involved in project finance approvals include:
As the central bank and the supreme regulatory authority for financial matters, Bangladesh Bank plays a pivotal role in approving project finance applications. It sets guidelines and regulations for both local and foreign currency borrowing and oversees the smooth functioning of the financial sector.
Bangladesh Investment Development Authority (BIDA):
BIDA is the government authority responsible for processing loan applications authorized by Bangladesh Bank. It evaluates and approves project proposals based on their economic viability, financial feasibility, and adherence to regulatory guidelines.
Executive Committee of the National Economic Council (ECNEC):
ECNEC, comprising all members of the Cabinet, approves major development projects, including infrastructure initiatives. It plays a critical role in shaping the nation’s long-term economic development policies and priorities.
Economic Relations Division (ERD):
ERD, under the Ministry of Finance, mobilizes external resources for socio-economic development. It approves sovereign guarantees or framework agreements with foreign lenders or governments, ensuring adherence to international norms and regulations.
Bangladesh Securities and Exchange Commission (BSEC):
BSEC is responsible for approving issues of bonds by private entities and overseeing large-scale share offerings. It ensures compliance with securities laws and regulations, safeguarding the interests of investors and stakeholders.
Regulatory Considerations and Approval Requirements
To facilitate industrial project finance, Bangladesh has established specific regulatory considerations and approval requirements for both local and foreign currency borrowing.
Local Currency Borrowing:
Local banks and financial institutions can extend loans to local companies in Bangladeshi Taka (BDT). Approved forms of local currency lending include continuous loans (cash credit, overdrafts, etc.), demand loans (e.g., loans against imported merchandise), and fixed-term loans.
The Bangladesh Bank sets a limit on the interest rate spread between deposits and lending (currently around 9%). Lenders must maintain risk-based capital adequacy and adhere to single borrower exposure limits to mitigate risks.
Additionally, lenders must verify borrowers’ credit information from the Credit Information Bureau before authorizing, renewing, or rescheduling loans, ensuring that credit facilities are not provided to defaulters. Credit risk grading is adopted for large loans to assess credit risk effectively.
Foreign Currency Borrowing:
Public sector companies must obtain authorization from ECNEC and approval from ERD for foreign loans.
Any sovereign guarantee or framework agreement with foreign lenders or governments must also be approved by ERD. Under local foreign exchange regulations, public sector companies require permission from the Hard Term Loan Sanction Department of Bangladesh Bank to receive hard term offshore loans. Generally, any interest rate of 4% or more is considered a hard term loan.
For private sector companies, the Bangladesh Bank requires borrowers to obtain permission from BIDA for foreign borrowing. Foreign loans can be raised from internationally recognized sources such as international banks, international capital markets, multilateral financial institutions, export credit agencies, and suppliers of equipment.
However, foreign borrowing is allowed for project financing purposes only and cannot be utilized as working capital. During the approval process, BIDA considers the borrower’s past conduct and the financial viability and profitability of the project.
Specific conditions applicable to foreign borrowing include a maximum 70:30 debt-to-equity ratio, with some sectors like power having an allowance of up to 80:20. The standard interest ratio is up to LIBOR +4%, with an all-in cost ceiling that considers interest and other annualized fees and expenses.
Shareholder Loans and Bonds:
Generally, shareholder loans for project financing are not allowed, except for short-term bridging purposes. Private sector entities can raise funds through bonds with the prospectus approved by BSEC and underwritten by a merchant bank.
Filing and Registration:
Local borrowing does not require registration. However, for foreign borrowing, the industrial or infrastructure project must be registered with BIDA before submitting the foreign borrowing application. All securities over immovable properties require registration with the office of the sub-registrar in the relevant geographic area.
In addition, securities over any asset of a company must be perfected with the Registrar of Joint Stock Companies (RJSC) within 21 days of the date of creation of the security. Certain conditions may also be imposed under concession agreements.
Material Laws and International Treaties
The legal landscape surrounding industrial project finance in Bangladesh is governed by various material laws and international treaties. Key material laws include:
The Companies Act governs several aspects relevant to project finance, including the perfection of charges on a company’s assets, debt and equity conversions, and procedural compliances related to borrowing and security interest creation.
This Act provides summary procedures to enforce securities and loan agreements by local financial institutions and some foreign creditors such as the International Finance Corporation, Islamic Development Bank, World Bank, etc.
The CPC governs the procedure for civil court proceedings and is used by creditors for recovery proceedings and enforcement of security.
In addition to material laws, several international treaties to which Bangladesh is a party can affect cross-border transactions, including investment-related disputes, recognition, and enforcement of foreign arbitral awards, free trade agreements, comprehensive economic partnership agreements, and preferential trade agreements.
Structuring the Financing in Bangladesh
The successful structuring of industrial project finance in Bangladesh requires careful consideration and coordination among various parties involved in the transaction. Each party plays a distinct role in ensuring the smooth execution of the project and mitigating risks. Below are the main parties involved in an industrial project finance transaction:
The sponsors are the owners or ultimate beneficiaries of the project. They initiate the project, bear the initial costs, and assume the risks associated with the venture. Sponsors are often responsible for bringing together the various stakeholders and securing financing for the project.
The project company, also known as the borrower, is the entity responsible for implementing the project. It is typically a special-purpose vehicle (SPV) incorporated by the sponsors solely for the purpose of undertaking the project. The SPV isolates the project’s assets and liabilities from the sponsors’ other business activities, minimizing their exposure to potential risks.
The lender, often a financial institution or consortium of lenders, provides the funds necessary for financing the project. Lenders assess the project’s feasibility, creditworthiness of the sponsors, and the anticipated cash flow from the project to ensure the repayment of the loan.
The off-taker is the party, usually a government authority or state-owned enterprise, that enters into a long-term agreement with the project company to purchase the output or services generated by the project. For infrastructure projects, the off-taker is often the government agency responsible for that particular sector, such as the Bangladesh Power Development Board for power generation projects.
Third-party guarantors are entities other than the sponsors who provide guarantees to lenders for the repayment of the loan or fulfillment of the project’s obligations. These guarantees enhance the project’s creditworthiness and reduce the lender’s risk exposure.
Bank guarantors are financial institutions that issue performance or payment guarantees on behalf of the project company to support the project’s contractual obligations and mitigate potential risks.
Export Credit Agencies:
For projects involving the import of equipment and technology, export credit agencies (ECAs) can provide financing or insurance to exporters and lenders to facilitate cross-border transactions and mitigate commercial and political risks.
The security trustee is a resident entity appointed by the lenders to hold the project’s security interests on their behalf. The security trustee ensures that the lenders’ rights and interests are adequately protected and enforced in case of default.
The account bank is the financial institution where the project company maintains an account to receive loan proceeds and accumulate funds for debt servicing and other project-related expenses.
In syndicated financing, where multiple lenders are involved, an inter-creditor agent represents the lenders’ interests and facilitates coordination among them. The agent ensures that all lenders are treated fairly and that the syndication process runs smoothly.
Industrial project finance is a crucial driver of economic development and infrastructure growth in Bangladesh. The regulatory framework, supported by various authorities, ensures transparency, compliance, and accountability throughout the project financing process.
Through a comprehensive approach that involves multiple stakeholders, including sponsors, lenders, off-takers, and guarantors, projects are financed, implemented, and managed efficiently, contributing to the country’s sustainable economic progress.
As Bangladesh continues to prioritize its industrial and infrastructure development, industrial project finance will remain a key mechanism for mobilizing domestic and foreign investments.
The collaboration between the public and private sectors, underpinned by sound legal and regulatory principles, will shape Bangladesh’s economic landscape and lead the nation toward prosperity and development.
Additional securities such as sponsor support and guarantee:
In Bangladesh, project financing is primarily conducted on either a non-recourse or limited recourse basis. Non-recourse financings are typically secured by collateral, while limited recourse financing involves additional securities such as sponsor support and guarantees. The following sources of funding are typically available for projects in Bangladesh:
a. State-owned commercial banks:
Bangladesh has six state-owned banks that actively participate in project financing.
b. Specialized banks:
These state-owned banks focus on specific sectors and areas, contributing to project funding.
c. Private commercial banks:
There are 40 local licensed banks and nine licensed branches of foreign banks operating in Bangladesh, providing financing options for various projects.
e. Foreign multilaterals and development finance institutions:
These institutions are permitted to finance local projects.
f. Foreign banks/financial institutions:
Foreign entities are allowed to finance projects within Bangladesh.
g. Government funds:
The government provides funds to support Public-Private Partnership (PPP) projects facing short-term economic challenges, including Viability Gap Financing (VGF) and the Bangladesh Infrastructure Finance Fund (BIFF).
Major Types of Financings in Bangladesh:
Several types of financing are commonly adopted in local projects in Bangladesh, including:
a. Buyers’ credit:
Project infrastructure buyers can directly obtain loans from lenders to finance their purchases. b. Suppliers’ credit:
Suppliers either arrange a loan to finance their credit sales or extend credit to the buyers themselves, with agreed-upon mark-ups. c. Lease finance:
This option is widely used in the local market, wherein a leasing company leases equipment under financial or operational leases.
Cross-border lease finance is structured as a supplier credit. d. Islamic finance: Islamic financing is gaining popularity in Bangladesh, especially for acquiring high-cost equipment and machinery. Common arrangements include sale and leasebacks (Ijarah), musharaka leasing, one-step murabaha, two-step murabaha, and commodity murabaha.
Advantages and Disadvantages of Project Financing:
Project financing offers several advantages for sponsors and lenders:
a. Risk-sharing: Project financing enables sponsors to share project risks with other stakeholders through security arrangements and contractual agreements.
b. Cash flow management: Lenders can manage free cash flow after operational expenses and statutory payments, leading to a lower cost of capital compared to equity.
c. Lower cost of capital: In the long term, the cost of capital is generally lower compared to the cost of equity.
d. Limited liabilities: A special project vehicle helps sponsors limit their liabilities in project financing.
Project financing deals are complex due to the need to structure multiple contracts negotiated by all parties involved.
b. Higher transaction costs:
The complexity of project financing leads to higher transaction costs, including legal expenses, tax, and preparation of ownership and loan documentation.
Corporate Vehicles for Project Financing:
In Bangladesh, limited liability companies are typically used for project financing due to various reasons:
Limited liability companies are preferred by local entrepreneurs for their limited liability. c. Appropriate for non-recourse or limited-recourse financing.
Typical Documents in a Project Financing Transaction:
Several essential documents are involved in a project finance transaction in Bangladesh, including:
A summary of the key terms and conditions of the financing arrangement.
b. Facility agreements: Agreements defining the terms of the financing provided by lenders.
c. Security agreements: Contracts outlining the forms of security granted to lenders.
d. Inter-creditor agreements: Agreements among multiple creditors defining their respective rights and priorities.
e. Account bank/escrow agreements: Agreements governing the use of accounts or escrows for fund management.
f. Cost over-run/sponsor support agreements: Agreements where sponsors pledge to support the project financially in case of cost overruns.
g. Guarantees: Agreements providing additional financial support and protection to lenders.
h. Direct agreements: Agreements between lenders and project parties, ensuring lenders’ direct access to project cash flows and collateral.
Forms of Security in Project Financing:
The main forms of security used in project financing in Bangladesh include:
a. Mortgages: Commonly used for immovable assets such as land and buildings.
b. Fixed and floating charges: Fixed charges grant control over assets, while floating charges allow the chargee to deal with charged assets until crystallization.
c. Pledge of shares: Shareholders can pledge company shares in favor of lenders.
d. Corporate guarantees: Shareholders and third parties can provide guarantees for loans.
e. Bank guarantees: Separate approval from the Bangladesh Bank is required for bank guarantees.
f. Liens: Strictly defined and governed by relevant statutes and conventions.
g. Assignment of receivables: Common for taking security over contractual rights.
Insurance Arrangements for Projects in Bangladesh:
Insurance is a crucial aspect of project financing in Bangladesh, providing protection against various risks that projects may encounter. Common insurance arrangements for projects in the country include:
b. Burglary, natural disaster, and fire insurance:
These insurances protect against losses caused by burglary, natural disasters, and fire incidents, providing additional security to project assets and infrastructure.
c. Third-party liability insurance:
Projects often carry third-party liability insurance to protect against claims from third parties in case of property damage, bodily injury, or other liabilities arising from the project’s activities.
d. Employer’s liability insurance:
This insurance covers liabilities arising from workplace-related injuries or accidents, ensuring protection for employees and laborers involved in the project.
Lenders’ Protection Concerning Project Insurance:
In project financing, lenders have a vested interest in ensuring adequate insurance coverage for the project’s various elements. To protect their interests regarding project insurance, lenders typically adopt the following measures:
a. Beneficiary of project insurance:
Lenders often nominate themselves as the principal beneficiary of the project insurance policies. This allows them to have direct access to insurance proceeds in case of any covered incidents.
b. Compliance monitoring:
Lenders may require borrowers to provide regular updates on insurance coverage and policy renewals to ensure continuous protection throughout the project’s duration.
c. Escrow arrangements:
In some cases, lenders may set up escrow accounts to hold insurance proceeds. This ensures that the funds are available for necessary project repairs or replacements in case of an insured event.
d. Verification of coverage:
Lenders may conduct periodic checks to ensure that the insurance policies meet the required coverage levels and address potential risks adequately.
e. Review of policy terms:
Lenders carefully assess insurance policies to ensure that the coverage aligns with the project’s specific risks and liabilities.
Mechanisms to Protect Security Interests:
Security interests must be perfected within the prescribed period with the relevant authorities. Subsequent interest acquirers are deemed to have notice of the security from the date of its perfection.
Subsequent mortgages or charges require approval from the prior chargee or mortgagee, but subordinated or pari-passu charges can be created with prior approval.
Public Private Partnerships (PPPs) in Bangladesh:
Until 2010, Bangladesh lacked a specific PPP framework. However, in 2010, the government introduced the Policy and Strategy for Public-Private Partnership to promote private sector participation in infrastructure development. This move aimed to address the challenges of funding and executing large-scale projects while leveraging private sector expertise and efficiency.
To support the PPP process and infrastructure development in Bangladesh, the government enacted several regulations and guidelines:
Procurement Guideline for PPP Projects 2016:
The Procurement Guideline provides a framework for transparent and competitive procurement processes for PPP projects. It ensures that project contracts are awarded through fair and open procedures, promoting accountability and reducing the risk of corruption.
Guidelines for Unsolicited Proposals 2016:
The Guidelines for Unsolicited Proposals allow private sector entities to submit project proposals to the government for consideration. These proposals are evaluated based on their feasibility, economic and social benefits, and alignment with national development priorities. Successful proposals may lead to PPP project development.
Guideline for Viability Gap Financing for PPP Projects 2012:
The Guideline for Viability Gap Financing outlines the mechanism through which the government provides financial support to PPP projects that have high economic and social viability but lack complete financial viability. Viability Gap Financing can be in the form of a capital grant or annuity payment.
Guideline for PPP Technical Assistance Financing 2012 & Scheme for PPP Technical Assistance Financing 2012:
The government offers technical assistance financing to support the preparation and development of PPP projects. These guidelines and schemes aim to strengthen project preparation and enhance the overall viability of projects.
PPP Screening Manual:
The PPP Screening Manual provides guidance on project screening and selection criteria for potential PPP projects. This process helps prioritize projects with significant development impact and ensures that viable projects receive attention.
Financing PPP Projects in Bangladesh:
PPPs in Bangladesh are typically financed through a combination of funding sources, including multilateral institutions, development finance institutions, and private commercial banks. While the government may not provide payment guarantees for PPP projects, it does play a role in supporting financing through various mechanisms:
Viability Gap Financing (VGF):
As mentioned earlier, VGF is provided to projects with high economic and social viability but uncertain financial viability. The government’s financial support enhances the feasibility of these projects and encourages private sector participation.
Specialized financial institutions like the Bangladesh Infrastructure Finance Fund (BIFF) and Infrastructure Development Company Limited (IDCOL) provide financing facilities for PPP projects in the form of debt or equity. The government may participate in such financing arrangements through budget provisions.
Financing against Linked Components:
The government may consider financing and implementing linked activities, such as land acquisition, rehabilitation, provision of utility services, and construction of approach roads. These complementary activities contribute to the overall success of the main PPP project.
Security and Guarantees in PPP Projects:
In PPP projects, concessionaires (private entities) may be allowed to give security to lenders over their interests in the project company, subject to approval from the grantor (government). This security allows lenders to have recourse to the assets of the project company in case of default, providing them with an additional layer of protection.
Social, Ethical, and Environmental Issues:
Social and ethical issues play a significant role in project financing in Bangladesh. The country has ratified the UN Convention against Corruption and has enacted specific laws to address corrupt practices, money laundering, and human rights abuses. Fair practices across all spheres of social, economic, and political activities are ensured through various laws, including the Prevention of Corruption Act, Money Laundering Prevention Act, and Right to Information Act.
Additionally, environmental concerns are addressed through adherence to the Environmental Policy and Bangladesh Environment Conservation Act. Compliance with international guidelines like the IFC Performance Standards and Equator Principles is also required to meet environmental and social requirements.
Tax Holidays and Incentives for Foreign Investment in Projects:
Foreign investment plays a crucial role in the development of infrastructure projects in Bangladesh. To attract foreign investors, the government offers various tax holidays and incentives. Let’s explore some of these incentives and how they encourage foreign investment in the country:
Tax Holidays for Thrust Sectors and Infrastructure Projects:
The government provides tax holidays for industrial undertakings and physical infrastructure facilities established in thrust sectors. Thrust sectors refer to industries that have significantly contributed to the country’s industrialization. Additionally, industries set up in Export Processing Zones (EPZs) are also eligible for tax holidays. The duration and extent of the tax holidays vary based on the location of the project and the type of industry.
Industrial undertakings not benefiting from tax holidays can take advantage of accelerated depreciation allowances. This allows them to claim higher depreciation in the early years of the project, reducing their taxable income and, consequently, their tax liability.
Concessionary Duty on Imported Capital Machinery:
Industries with an annual turnover below a certain threshold may benefit from a concessionary import duty rate of 3% on capital machinery and spares. This measure reduces the cost of setting up the project and enhances the attractiveness of foreign investment.
Incentives for Export-Oriented Industries:
Export-oriented industries enjoy a range of incentives to boost their competitiveness in the global market. These incentives include duty-free import of capital machinery and spares, bonded warehousing, access to loans and funds for export promotion, cash incentives and export subsidies, and more.
Double Tax Avoidance Agreements (DTAs) and Bilateral Investment Treaties (BITs):
Bangladesh has entered into DTAs with several countries and BITs with various other nations to avoid double taxation of income and protect foreign investments. These agreements provide certainty and predictability to foreign investors, assuring them of fair treatment and non-discrimination.
Power and Energy Fast Supply Enhancement (Special Provision) Act 2010 (PEFSE):
The PEFSE Act empowers the government to quickly deal with and accept solicited or unsolicited proposals in the power and energy sectors on an emergency basis. It allows the government to enter into arrangements with companies bypassing the usual procurement processes. Moreover, it indemnifies the government against any legal proceedings relating to the award of contracts under the PEFSE.
Foreign Currency Accounts:
While opening and operating onshore and offshore foreign currency accounts are generally prohibited without approval from the Bangladesh Bank, there are exceptions for specific projects. For instance, under the private power generation policy, private power generation companies have been granted the right to open and maintain onshore foreign currency accounts.
Dividend Repatriation and Shareholder Loans:
There are no restrictions on the payment of dividends or repayment of shareholder loans to a foreign parent company. However, for the repayment of shareholder loans, prior approval from the Bangladesh Bank is required.
Choice of Law and Jurisdiction
Foreign Law: When parties enter into a project contract or financing agreement, they have the option to choose foreign law as the governing law for the contract. The Bangladesh courts will uphold such a choice of foreign law, provided the intention to do so is clearly expressed in the contract. This decision was reinforced by the precedent set in PLD 1964 Dacca 637, which establishes that the expressed intention of the contractual parties regarding the law governing the contract overrides any other presumption.
Jurisdiction: If a project contract or financing agreement designates a foreign court as having exclusive or non-exclusive jurisdiction, the Bangladesh courts will respect this choice. In such cases, the Bangladesh courts will not exercise jurisdiction over contractual disputes unless all parties involved in the dispute agree to submit to the jurisdiction of the Bangladesh courts. However, it’s worth noting that the Bangladesh courts may assume jurisdiction in specific cases where they have exclusive jurisdiction, such as labor disputes.
Enforceability of Waivers of Immunity
In the context of international contracts that do not contravene local policy and are otherwise valid and binding, Bangladesh courts recognize waivers of sovereign immunity. Additionally, for disputes arising out of commercial contracts, the Bangladesh courts accept the common law doctrine of restrictive immunity, which has been adopted by the English courts.
Recognition of Foreign Arbitral Awards and Court Judgments
Foreign Money Judgment: Under the Code of Civil Procedure 1908, a foreign money judgment can be enforced in Bangladesh within six years from the date of the judgment, subject to court approval for longer durations. To be enforceable, the foreign judgment must fulfill several requirements, including being conclusive and given on the merits of the case, pronounced by a court of competent jurisdiction, and capable of enforcement in the original court.
It must not have been obtained through fraud, be contrary to public policy or applicable laws of Bangladesh, or sustain a claim based on a breach of a law in force in Bangladesh. Furthermore, there should be no pending or possible appeal against the judgment in the original court.
Foreign Arbitral Award: The recognition and enforcement of foreign arbitral awards are subject to certain grounds in Bangladesh. The courts may decline to enforce a foreign arbitral award if a party to the arbitration agreement was under some incapacity, if the arbitration agreement is not valid under the agreed law, or if the party against whom the award is invoked was not given proper notice or an opportunity to present their case.
The award may also be denied enforcement if it contains decisions on matters beyond the scope of the submission to arbitration, except for the part related to the submitted matters. Moreover, the composition of the arbitral tribunal or the arbitral procedure should be in accordance with the parties’ agreement and the law of the country where the arbitration took place.
Enforcement can also be denied if the award is not yet binding on the parties, has been set aside or suspended by the competent authority in the country where it was made, or if the subject matter of the dispute is not capable of settlement by arbitration under the law of Bangladesh, or if the recognition and enforcement would be contrary to public policy.
Recent Legal Developments in Project Finance
As of now, there are no current proposed legal reforms impacting project finance in Bangladesh. However, the landscape of local project financing has seen a new addition in the form of Export Credit Agency (ECA) backed finances. The Bangladesh Investment Development Authority evaluates projects based on its prior payment requirements for the ECA premium, leading to two primary disbursement methods: direct disbursement and reimbursement.
Hire the best law firm for Project finance in Bangladesh
Navigating international projects and finance in Bangladesh requires a keen understanding of the country’s legal framework. Parties can choose foreign law as the governing law for contracts, and the courts respect such choices.
Additionally, waivers of immunity are enforceable in specific circumstances, and the recognition of foreign arbitral awards and court judgments follows set criteria. Staying up-to-date with legal developments is essential, particularly in project finance, where ECA-backed finances are becoming an important consideration. As Bangladesh continues to engage in global business ventures, consulting with legal experts is vital to ensure compliance and successful outcomes in cross-border transactions.
Tahmidur Rahman Remura Wahid Associates represents a variety of high-profile clients operating in Bangladesh to carry out specific projects such as power plants, roads and motorways, and so on. They frequently require financing from many financial institutions, and our lawyers assist clients in creating the relevant documentation as well as advising them on any legal difficulties that may develop as a result of such transactions. Tahmidur Rahman Remura Wahid Associates Associates also aids clients by supplying them with lawyers who negotiate with financial institutions on their behalf.
External Commercial Borrowing (ECB) is the borrowing of funds from international lenders by a country’s business sector. In Bangladesh, the ability of private firms to access foreign currency loans from outside financial institutions or corporations has aided industrial growth, particularly in the context of new projects, expansion, and capital goods imports.
The architecture and effectiveness of foreign commercial borrowing in Bangladesh are examined in this essay, with an emphasis on private sector external debt. It examines the approval procedure, the sorts of projects sponsored, and the economic consequences of such borrowing.
The Eligibility and Approval Process
Private enterprises registered with the Board of Investment (BOI) and incorporated under the Companies Act of 1994 are eligible to apply for external commercial financing. These borrowers can look to organizations or individuals in other countries for commercial loans, financial loans, bank loans, buyer’s credit, or supplier’s credit. However, it is vital to highlight that foreign loans cannot be utilized for working capital or capital market investment.
Companies must receive approval from the Scrutiny Committee of the Board of Investment, which is chaired by the Governor of the Bangladesh Bank (BB), in order to acquire foreign loans.
The application process requires the submission of the required documents, which include the Certificate of Incorporation, Memorandum and Articles of Association, Term-sheet or Loan Agreement, feasibility report, financial analysis, equity forms, and other appropriate credentials. The Scrutiny Committee assesses these applications based on business viability, borrower creditworthiness, repayment length, and debt-equity ratio, among other factors.
Foreign-owned (100%) investment projects in Export Processing Zones (EPZ) are exempt from obtaining prior clearance from BIDA or BB for foreign currency loans from overseas financial institutions or corporations.
The Power Sector and Other Requirements
The Power Sector has unique requirements for external commercial borrowing in addition to the standard requirements. For this sector, the Letter of Intent, Implementation Agreement, and Power Purchase Agreement are required papers.
External Borrowing Trends in the Private Sector
An examination of private sector external borrowing in Bangladesh from 2011 to 2013 indicated a considerable increase in sanctioned loans. In 2011, about 20 private firms were approved for loans totaling USD 936.30 million. In 2012, this value climbed to USD 1579.57 million among 81 firms, while in 2013, it increased to USD 1555.33 million among 116 enterprises. During this time, around 55 enterprises gained clearance for loans worth USD 1357.06 million on an annual basis.
However, in comparison to the permitted loans, the disbursement of external debt was comparatively modest, creating concerns that require additional study.
Debt Sustainability Analysis
In November 2013, the International Monetary Fund (IMF) and the International Development Association (IDA) conducted a Debt Sustainability Analysis (DSA), which found that Bangladesh was unlikely to encounter severe debt-related stress in the next two decades. The DSA took into account both domestic and external debt numbers and predicted various debt indicators up to 2034 under various scenarios.
The DSA results demonstrated Bangladesh’s resilience to debt-related shocks, particularly external debt, making a solid case for permitting additional private external loans into the economy.
A survey of thirteen private enterprises from various industries, including RMG, footwear, telecommunications, power generation, and pharmaceuticals, revealed information about the effectiveness of external commercial borrowing in Bangladesh. Between 2007 and 2013, these corporations borrowed a total of USD 894.24 million.
According to the poll, the key reasons for borrowing from foreign sources were lower interest rates compared to domestic possibilities and the inability of local banks to provide large financing due to insufficient capital bases. The majority of the borrowed funds were used to import capital machinery for new projects or expansion of existing ones, demonstrating that the loans were put to good use.
External commercial borrowing has been critical in propelling Bangladesh’s industrial growth and development. Foreign currency loans have helped private sector businesses fund new initiatives and grow existing operations. BIDA and the Scrutiny Committee manage the clearance procedure, which guarantees that the borrowing is consistent with the country’s economic priorities and financial stability.
Despite the efficiency of external commercial borrowing, the low proportion of disbursements relative to approved loans warrants more investigation. The Debt Sustainability Analysis, on the other hand, reassures that Bangladesh is well-equipped to deal with debt-related difficulties, particularly external debt concerns.
External commercial borrowing has aided Bangladesh’s economic development by providing private firms with critical resources for growth and development. As long as the borrowing is consistent with the country’s economic goals and regulatory safeguards are in place, it can serve as a catalyst for long-term development and prosperity.
External Commercial Borrowing (ECB) in Bangladesh
What is External Commercial Borrowing (ECB)?
External Commercial Borrowing (ECB) refers to the borrowing of funds by private sector enterprises in Bangladesh from foreign lenders in foreign currency.
It includes commercial loans, buyer’s and supplier’s credit, etc., primarily used for importing capital goods, financing new projects, or expanding existing production facilities.
Which entities are eligible for ECB in Bangladesh?
Private enterprises incorporated under the Companies Act 1994 and registered with the Board of Investment (BOI) are eligible to apply for External Commercial Borrowing (ECB) in Bangladesh.
What are the main purposes for obtaining ECB?
The main purposes for obtaining ECB in Bangladesh include financing new projects, importing capital machinery, and expanding existing production facilities. It is not permitted to use foreign loans for working capital purposes or investment in the capital market.
What is the role of Bangladesh Investment Development Authority (BIDA)?
BIDA plays a vital role in the ECB process. It scrutinizes and approves applications for foreign loans, ensuring that they align with the country’s economic priorities and financial stability. The applications are then submitted to the Scrutiny Committee headed by the Governor of Bangladesh Bank (BB) for final approval.
Are foreign-owned investment projects exempt from approval?
Yes, foreign-owned (100%) investment projects located in Export Processing Zones (EPZ) may obtain foreign currency loans from overseas financial institutions or entities without prior approval from BIDA or BB.
What documents are required for ECB approval?
The application for ECB approval must be submitted with several supporting documents:
including the Certificate of Incorporation, Memorandum and Articles of Association of the company, Term-sheet or Loan Agreement with repayment details, financial analysis, board resolution related to the proposed borrowing, feasibility report of the investment project, relevant equity forms, bank certificate on creditworthiness, and track record of foreign borrowing.
Additional documents may be required for specific sectors like the Power Sector.
How are ECB applications processed?
After submission, ECB applications are duly scrutinized by BIDA. Upon satisfactory evaluation, they are forwarded to the Scrutiny Committee, which includes the Governor of Bangladesh Bank (BB), for final approval. The process has been streamlined through BIDA’s online OSS platform.
What is the trend of private sector external borrowing in Bangladesh?
The trend of private sector external borrowing in Bangladesh has shown significant growth in approved loans over the years. Between 2011 and 2013, around 81 enterprises were approved for loans totaling USD 1579.57 million, increasing from USD 936.30 million among 20 enterprises in 2011.
However, there has been a relatively low proportion of disbursement compared to approved loans, warranting further investigation.
What does the Debt Sustainability Analysis (DSA) indicate?
The Debt Sustainability Analysis (DSA) jointly conducted by the International Monetary Fund (IMF) and the International Development Association (IDA) suggests that Bangladesh is highly unlikely to face significant debt-related stress within the next two decades.
The analysis considers both domestic and external debt and projects various debt indicators up to 2034, demonstrating the nation’s resilience to shocks related to debt conditions, particularly external debt.
How have private companies used external loans?
A survey of selected private companies between 2007 and 2013 revealed that the borrowed funds were primarily used for importing capital machinery to expand existing projects or establish new ones.
The loans were found to be utilized productively, with most companies benefiting from lower interest rates and the availability of substantial financing for their projects.
Company Law practice in TRW law firm in Bangladesh
The Barristers, Advocates, and lawyers at TRW Law chamber in Mohakhali DOHS, Dhaka, Bangladesh are highly experienced at assisting clients in dealing with and registering branch offices in Bangladesh. For queries or legal assistance to set up a branch office in Bangladesh, please reach us at:
E-mail: [email protected] Phone: +8801847220062 or +8801779127165 or +8801708080817 House 410 Road 29 Mohakhali DOHS
And except for Proprietorship, in all other ways, Shares play an instrumental role. Sections 30-76 of the Companies Act 1994 deal with shares, transfer of shares and rights
of shareholders. Sections 152-156 deal with issue of shares at a discount, redeemable preference shares and issue of further shares.
A company share in Bangladesh is a movable property transferable as per provisions of the articles. There is no exhaustive definition of a share in the Act.’ A share is the interest of a shareholder in the company measured by a sum of money, for the purpose of liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with section.
A company share in Bangladesh is a type of contractual claim against a company. It is an example of intangible property called a ‘chose in action’ or “Thing in action’. Professor R Pennington discusses the difficulty of defining shares and concludes that they are a species of intangible movable property which comprises a collection of rights and obligations relating to an interest in a company of an economic and proprietary character, but not constituting a debt.
Legal and Equitable Actions in company share in Bangladesh
In English law there are two kinds of chose in action; (i) legal choses in action (being claims enforceable at common law) and (ii) equitable choses in action (Being claims enforceable in equity). Because a company share in Bangladeshis a creature of statute, it is a legal rather than an equitable chose in action. In that respect it differs from a share in a partnership, which is an equitable chose in action because, historically, the interest of a partner has been enforceable in equity and not at law.
A share in a company also differs from a share in a partnership in terms of transferability of membership. In companies listed on the Stock Exchange a share can be freely sold and transferred. In unlisted companies there can be restrictions on transfer. The transferee becomes a member of the company in substitution of the transferor. A person who buys the share of a partner, however, acquires an interest but does not become a partner; the vendor becomes a trustee for him of the interest agreed to be sold.
A transfer of a share as a legal chose in action differs from transfer of a debt as a legal chose in action. A creditor can transfer the legal ownership of a debt by a two sided written assignment between a transferor and transferee with written notice to the debtor, but without needing his consent. Of course, the debtor cannot transfer the liability without the consent of the creditor.
But to transfer the legal ownership of a company share in Bangladesh, a change in the company’s share register is needed. That means there is a three-sided novation (the substitution of a new contract in place of an old one)rather than a two-sided assignment. Hence,liability attached to a partly paid-up share can be transferred although the transferor can remainliable if the company commences to wind up within one year from the transfer.
The rights making up a share are not separate pieces of property. If a company share in Bangladesh had carried only financial rights it might have been considered divisible; but a share carries rights of membership and the whole scheme of the company law does not admit of membership referable to a fraction of a share. Hence, a company cannot allot fractional shares.
Nor can a shareholder divide an allotted share so as to assign only some of the set of rights, such as the right to be paid dividends. If a member wishes to dispose of only part of the benefits of a share, that can be done behind the screen of a trust.
The member could create a trust of the share so that the trustee would be bound to account to one beneficiary for, say, dividends only and to account to another beneficiary for other benefits. A share as an item of property differs from physical subjects of ownership such as land in that its characteristics are fixed, not by nature, but by whatever is put into the contract between company and shareholder.
In a company, the rights attached to company share in Bangladesh may be so framed that the shareholder is restricted (for example, as to transfer of the shares) and those restrictions will apply to anybody who becomes owner of the shares. In other words, in a share the restrictions can go to defining the property itself instead of being something external that is imposed in respect of a pre-existing item of property.
If you want to know about Share Transfer Process in Bangladesh
The word “capital” used in connection with a company has several different meanings. It may mean the nominal or authorised share capital, the issued share capital, or the paid-up share capital of the company.
The nominal or authorised capital is merely the amount of share capital which the company is authorised to issue. In the case of a limited company the amount of potential share capital with which it proposes to be registered, and the division thereof into shares of a fixed amount, must be set out in the memorandum of association. This as well as the paid-up amount may be increased or reduced.
The amount of the company’s nominal capital depends on its business requirements, actual or potential. At the time of registration of the company the promoters will have to pay fees and stamp based on the amount of the nominal capital.
The issued or allotted capital is that part of the company’s nominal capital which has been issued to the shareholders. The company is not bound to issue all its capital at once.
Further issues of capital are made as they are needed (please find the details in section 155 of the Act).
The paid-up capital is that part of the issued capital which has been paid-up by the shareholders. The company may, for example, have a nominal capital of Tk 500,000 divided into 500,000 shares of Tk One each, of which Tk 400,000 is issued, i.e., 400,000 of the shares have been issuedand only Tk 100,000 is paid-up, i.e., the company has so far required only 25p. to be paid-up on each share.The uncalled capital is the remainder of the issued capital and can be called up at any time by the company from the shareholders in accordance with the provisions of the articles.
The paid-up capital of the company includes the value of the shares paid-up and any premium on such shares although the share premium will be shown as share premium account in the balance sheet.
The issued share capital of a company is the fund to which creditors of the company can look for payment of their debts, and so, to protect the creditors, shares can be treated as paid-up only to the extent of the amount actually received by the company. Section 152 and 153 of the Company Act impose restrictions on issue of shares and debentures at a commission or discount.
A commission may be paid only if its payment and rate are approved by the articles and is mentioned in the prospectus where such a prospectus is issued and, in a statement, in lieu of prospectus where such a prospectus is not issued.
Shares may be issued at a discount if such issue is authorised by resolution of the company in general meeting and sanctioned by the Court.
The resolution must specify the maximum rate of discount not exceeding ten percent at which shares are to be issued and not less than one year has elapsed since the date on which the company was entitled to commence business and the shares to be issued at discount are done so within six months after the date on which the company was entitled to commence business.
Every prospectus and balance sheet issued after the company share discount must contain particulars of the discount allowed on the issue of shares.
Redeemable Preference Shares in Bangladeshi Companies (company share in Bangladesh)
Redeemable Preference Shares can be issued if so authorised by the articles. Section 154 of the Companies Act however provides that no such share shall be redeemed except out of profits of the company which would be otherwise available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption or out of sale proceeds of any of the profits of the company.
No such share shall be redeemed unless they are fully paid-up and where any such shares are redeemed otherwise, than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend, be transferred to a reserve fund to be called the capital reserve fund.
A sum equal to the amount applied in redeeming the shares, and the provisions of the Act relating to the reduction of the share capital of a company shall apply as if the capital redemption reserve fund were paid-up share capital of the company.
Where any such shares are redeemed out of the fresh issue, the premium, if any, payable on redemption must have been provided for out of the profits of the company before the shares are redeemed.
There shall be included in every balance sheet of a company which has issued redeemable preference shares a statement specifying what part of the issued capital of the company consists of such shares and the date when the shares are liable to be redeemed and where no such date is fixed the period of notice that is to be given for redemption.
If you want to open a liaison office in Bangladesh or about branch formation click here!
A branch is not a separate incorporated entity, but rather an extension of its parent company. In other words, the parent company is liable for the liabilities of its branches.
WithBangladesh Investment Development Authority’s (BIDA) approval, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, strictly monitor its operation. In Bangladesh, the average time to open a branch officis 45- 60 days.
Also, keep in mind that a liaison office in Bangladesh cannot earn any local income. Through remittance, the parent company bears all of its expenses and operational cost. It also adheres to the general business registration procedure in Bangladesh.
The legal team of Tahmidur Rahman, The Legal Source TRW are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company, Branch office Registration, Share Transfer Process in Bangladesh . For queries or legal assistance, please reach us at:
Address: House 410, Road 29, Mohakhali DOHS, Dhaka 1212
What is the basic of issuing Shares of a company in Bangladesh?
The procedure through which companies distribute additional shares to shareholders is known as an issue of shares. There are two types of shareholders: individuals and corporations. When issuing shares, the corporation complies with the regulations set forth under the Companies Act of 1994.
What are the nature and classes of shares in Bangladesh?
One of the components into which a company's capital is divided is a share. Therefore, if a firm has BDT 5 lakh in total capital and divides that capital into 5000 units of BDT 100 each, each unit of BDT 100 is equivalent to one share of the company.
As a result, ownership of the company is based on shares. A shareholder is a person who owns such shares and is hence a member of the business.
The fundamental information about shares and share capital, such as the kinds of shares that must be mandated, will now be found in the articles of association. According to the Companies Act of 1994, a corporation may only issue two different kinds of shares. They differ in nature and in their rights and responsibilities.
What is the preference share of a company?
A share that has two exclusive preferential rights over the other form of shares, namely equity shares, is referred to as a preference share. These two preference share specific requirements are
a preferred position in relation to a company's declared dividends. They may get such dividends at a predetermined rate based on the nominal value of the shares they own. Preference shareholders receive the dividend before equity stockholders as a result.
preferential treatment when it comes to capital repayment in the event of a corporate liquidation. This indicates that preference shareholders receive their payouts before equity shareholders do.
Preference shares are comparable to equity shares aside from these two rights. Preference share holders have the opportunity to vote on any issues that directly affect their rights or duties.
Actually, there are numerous forms of preference shares. They may be exchangeable or not. They can either participate (share in additional income after a dividend is paid out) or not. Additionally, they could be non-cumulative or cumulative (demand arrears will accumulate).
What is the Equity Share of a company in Bangladesh?
A share that isn't a preference share is an equity share. Shares without any preferential rights are therefore considered equity shares. They are only given equity, or ownership, in the business.
Dividends paid to equity stockholders are not set in stone. Depending on the company's financial performance, the Board of Directors makes the decision. Additionally, the stockholders forfeit the dividend for that year if it cannot be declared; the dividend does not accumulate in such cases.
Additionally, equity shareholders have proportional voting rights based on the company's paid-up capital. In essence, it is a system of "one share, one vote." A business cannot publish non-voting
What is the procedure of Issuing Shares in Bangladesh?
1] Issue of Prospectus
The prospectus is released first, then the shares. The prospectus functions as a kind of solicitation to the general public to subscribe for company shares. A prospectus includes all of the company's information, including its financial breakdown, profit and loss accounts from the prior year, and balance sheets.
Additionally, it describes how the funds raised will be used. A corporation must publish a prospectus or a document in its place when soliciting deposits from the general public.
2) Receiving Applications
Prospective investors may now submit applications for shares after the prospectus is released. The prospectus specifies the schedule bank where the required application funds must be deposited along with the completed application. The duration of the application period is 120 days at most. If the required minimum subscription amount is not met in these 120 days, the share issuance will be canceled. Within 130 days of the prospectus's release, the application funds must be returned to the investors.
3] Share Allocation
The shares may be distributed after the required minimum subscription amount has been met. Shares are typically oversubscribed, hence the allocation is made on a pro rata basis. Those whose shares have been allocated get Letters of Allotment in the mail. As a result, a legal contract is formed between the applicant and the business, who is now a shareholder.
Letters of regret are provided to the applicants in the event that their application was refused. Following the allotment, the firm is free to pay the share capital in full or in installments as it pleases.
What is a minimum subscription of share in Bangladesh?
When the shares are made available to the general public as part of the share issuance, this is the minimum amount that must be raised. The Board of Directors typically determines this minimum subscription, however it cannot be less than 90% of the issued capital. As a result, for the offer to be considered successful, at least 90% of the issued capital must be subscribed for. In this scenario, the application money that has already been received must be refunded within the established time frame.
What are the shares Issued at Par - Share Capital Account?
Share allocation is not assured by applying for shares. A few applications will be turned down. In this case, we do not credit the share capital account when the application money is received. We create a new account—a sharing application account—for convenience's sake.
According to the Companies Act, the funds obtained from the application must be placed in the bank account at a Schedule Bank. This account has been set up specifically to handle the application fee. The following is the journal record for this transaction in the business's books:
What are the Shares issued at premium?
We refer to shares issued at a premium as when the corporation chooses to issue shares at a price greater than the nominal value or face value. It is a fairly typical practice, particularly when the business has a solid track record, strong financial results, and a solid reputation. Let's say a share has a face value of BDT. 100 and is issued by the corporation at BDT. 110. It is said that the share was issued at a 10% premium. The premium will be shown in a separate account called the Securities Premium Account rather than becoming a part of the Share Capital account. The corporation can now call up this premium amount whenever it wants, i.e. with any call. The premium is often collected using allocation or application money, and rarely with call money. The Securities Premium Account has been credited with the premium sum that we previously specified. On the liabilities side of the balance sheet, under the heading Reserves and Surplus, is where you'll find this account.
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.
Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:
⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.
⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group
⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio
⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector
⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia
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