25 May Provision made for online opening of temporary accounts by foreign investors
For ease of business and for overall growth of foreign direct investment in Bangladesh, the Central Bank has issued a circular with regard to opening of temporary Non-Resident Taka Accounts (NRTA) and temporary foreign currency accounts.
The Central Bank through its recent circular has provided the scope of opening temporary NRTA and temporary foreign currency accounts through online application received via website/web portal/app of banks or Government service providing entities like Bangladesh Investment Development Authority (BIDA), Bangladesh Economic Zones Authority, Bangladesh Export Processing Zones Authority, Bangladesh Hi-Tech Park Authority, etc. under their one stop service facilities.
Through this circular, from now on, temporary NRTA and temporary foreign currency accounts may be opened in the name of proposed companies/ enterprises of foreign investors willing to invest in Bangladesh in terms of paragraph-2(C), chapter 9 and paragraph 3(ii), chapter 20 of the Guidelines for Foreign Exchange Transactions-2018 (GFET), Vol. 1; paragraph 2(b) of FE Circular 21 dated May 16, 2019 and subsequent FE Circulars and Circular Letters.
In terms of due diligence of bank accounts, the Central Bank has directed the scheduled banks to follow a Simplified Due Diligence procedure in opening thetemporary bank accounts for the said foreign investors. However, the Central Bank has directed the scheduled banks to follow the regular Customer Due Diligence (CDD) procedures before transferring balances held in the temporary bank accounts to the regular accounts immediately after incorporation of the companies/enterprises along with other relevant instructions.
With this circular, foreign direct investment in Bangladesh is likely to rise amidst this COVID pandemic as it will assist the foreign investors to open temporary NRTA and temporary foreign currency accounts at the comfort of sitting in their own countries and finishing up the preliminary steps.
Update by: Wahid Sadiq, Associate at Mahbub & Company