Investors who want to invest have to go through a complex procedure of acquiring the bank’s permission
Bangladeshi businesspeople are required to get authorization from Bangladesh Bank for investing abroad amounts as small as $100 while travellers have permission to take up to $12,000 with them.
According to Bangladesh Bank data, ACI Limited had to recently get permission from the bank to invest $100 in the United States, which is around Tk8,400.
According to the central bank’s Foreign Exchange Investment Department data, seven institutions have been given approval to invest abroad since 2013.
With the central bank approval, an information tech company Spectrum Engineering invested S$10,500 (Singapore dollar), which is around $7,500 or Tk636,000. Another tech company, Service Engineering, was allowed to invest $7,500 abroad.
The central bank approved these investments on conditions, including transfer of profits earned from the investment to Bangladesh.
But there are a good number of companies which have made investment abroad without taking permission from the central bank. Allegations have it that Bangladesh Nationalist Party-backed mayoral candidate for Dhaka North City Corporation election Tabith Awal has investment in a Singapore company.
Anybody who wants to invest even $100 has to go through the procedure of acquiring the bank’s permission, which is very complex. As a result, it hinders a businessperson from making investments in foreign countries.
Speaking on the issue, Bangladesh Bank spokesperson sand Executive Director Md Serajul Islam said: “Everyone has to get authorization from the bank before investing abroad, no matter how small the amount is.”
“If anyone makes investments without the bank’s knowledge, then it will be considered as money laundering,” he said.
He said adult people can take up to $12,000 with them while travelling, but when inquired about the strict regulations about foreign investments, the bank’s executive director said: “We provide various facilities to entrepreneurs so that they invest money here in Bangladesh.”
“Bangladesh Bank usually discourages investing abroad as it is more important to make investments inside the country right now,” he added.
However, Bangladesh Institute of Development Studies (BIDS) Senior Research Fellow Dr Nazneen Ahmed said: “In this free market economy, investing money abroad is not illegal. Bangladeshi businessmen have the right to invest abroad and earn foreign currency, just like other foreign investors who are investing in Bangladesh.”
Because of the difficulties that come with the procedure of getting the approval of Bangladesh Bank, many investors have chosen to launder money.
When asked about the matter, a Bangladesh Bank official anonymously said: “Many countries do not allow investors to take part in tenders if the money is not transferred legally. Because of this, entrepreneurs get authorization from the bank before investing even a small amount of money.”
Besides, some 100 economic zones have been established where both domestic and foreign investors are encouraged to invest. Investing in these economic areas has the potential to create huge employment opportunities in the country and a scope for socio-economic development.
According to Bangladesh Bank sources, in 2013, Mobil Jamuna Limited was the first to be allowed foreign investments of $510,000 in Myanmar, where they established an organization called MJL and AKT Petroleum.
However, by far, the largest investment allowed in the apparel and textile sector is DBL Group, which invested around $8,000,000 in Ethiopia.
Moreover, Square Pharmaceuticals was allowed to invest in Kenya to set up a new pharmaceutical company, whereas Akij Group was authorized to invest around $20,000,000 for acquiring some industrial institutions in Malaysia.