In a significant policy shift, Bangladesh Bank (BB) has eased regulations, allowing startups to invest up to $10,000 overseas by establishing legal entities reportedly.
The central bank issued a notice announcing general permission for Bangladeshi startups to set up companies abroad within the $10,000 investment cap. Previously, startups in the country were restricted from making any foreign investments.
This move is aimed at fostering growth and expansion opportunities for startups, aligning with Bangladesh Bank’s broader support for the sector.
Under the Foreign Exchange Regulation Act, 1947, local enterprises can now apply through banks to facilitate remittances for setting up foreign entities. Additionally, individual Bangladeshi nationals can also establish businesses abroad within the same investment threshold.
However, applicants must present innovative business ideas that hold potential for future returns and reinvestment into Bangladesh.
Read more: Bangladesh’s April Investment Summit To Focus On Job Creation And Economic Growth
In addition to these small-scale allowances, the central bank has introduced provisions for resident companies to acquire foreign shares by exchanging their own shares or securities, eliminating the need for cash transactions.
Each proposal under this framework will be evaluated based on global best practices to determine a fair share swap ratio.
A Bangladesh Bank official highlighted this as an initial step toward opening up capital account transactions, adapting to evolving economic conditions.
Industry experts believe that the relaxed regulations will not only help local startups expand internationally but also encourage inward investment as these businesses grow beyond national borders.
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