A Bangladeshi citizen living abroad
with a valid status like foreign country’s permanent resident or with valid work
permit is called NRB (Non-Resident Bangladeshi). In case of a foreign passport holder
an endorsement either from the relevant Bangladeshi embassy or from Bangladesh foreign
ministry stating that “No visa is required” for traveling to Bangladesh – as a
proof of dual citizenship.
Incentives for Non-Resident Bangladeshis (NRBs):
- 10% quota in all Initial Public Offerings (IPOs) is reserved for non-resident Bangladeshis.
- Can also trade in the secondary capital market while abroad through Nominee.
- There is no Capital Gain tax on individual.
- Individual Income Tax assessment is similar to any other Resident Bangladeshi.
- @10% tax rebate on investment allowance on security investment.
How to Start:
- Open Foreign Currency (FC) Account that is needed for channeling foreign currency in as well as repatriation of earnings from investment.
- Open Non-Resident Investors Taka Account (NITA) that is required for converting foreign currency into BDT.
- Open a Custodian Account with any of the SEC registered Securities Custodian so that NRB & Foreign Investors may choose to appoint a Custodian to ensure trade execution and safe custody of shares.
- Open Beneficiary Owners (BO) Account with any brokerage house
- Assign a Nominee/ Power of Attorney (POA) - optional
- A nominee for inheritance/transmission, in case something happens to investor, is required to be assigned. Remember that this nominee and the POA may or may not be the same person.
Required Documents to open NITA and FC Account:
- Photocopy of Passport / Social Security Card / Resident Card etc duly attested (if you are situated in a foreign country then attestation needs to be done the respective Bangladesh Embassy or High Commission)
- Passport size photographs duly attested
- A Nominee - beneficiary in case of death of the investor. His/her signature and photo (duly attested by the investor) on the prescribed form provided by the brokerage house
- Employment Certificate / Trade license copy / work permit or Pay slip / tax return document as a proof of earning status of the NRB
- A nominated person with POA (Power of Attorney) who will sign trading documents on behalf of the NRB while he is abroad. His/her photo (attested by the NRB) and signature in a prescribed form by the brokerage house (POA can be any adult person of legal age residing in Bangladesh)
- If the broker is a bank then an extra form of KYC (Know your customer will also have to be filled)
- Initial fund will have to be a cheque or pay order or other allowed form drawn from the FC account
Required Documents for Custodian Account:
- Photocopy of Passport / Social Security Card / Resident Card etc duly attested (if you are situated in a foreign country then attestation needs to be done the respective Bangladesh Embassy or High Commission)
- Passport size photographs of Account Holder duly attested l Photographs of Authorized person
- A Nominee - beneficiary in case of death of the investor. His/her signature and photo (duly attested by the investor) on the prescribed form provided by the brokerage house
- Employment certificate / trade license copy / work permit or Pay slip / tax return document as a proof of earning status of the NRB
Required Document for Stock Broking and BO Accounts:
- Photocopy of Passport / Social Security Card / Resident Card etc duly attested (if you are situated in a foreign country then attestation needs to be done the respective Bangladesh Embassy or High Commission)
- Passport size photographs of Account Holder duly attested
- Photographs of Authorized person
- Photographs of Power of Attorney (POA)
- A Nominee - beneficiary in case of death of the investor. His/her signature and photo (duly attested by the investor) on the prescribed form provided by the brokerage house
- Bank Statement or Certificate from FC Account
How to Operate from Abroad:
- Collect the relevant forms from your preferred brokerage house via mail. Fill it up and get the introducer part attested by the local Bangladeshi Embassy as a proof of the NRB status by providing to them the required documents.
- Get your photos attested by the local Bangladesh Embassy as well
- Send the forms back to the brokerage house with the Nominee and POA part filled in. Send the POA to the brokerage house.
- IPO application needs to be filled on a prescribed form. Such forms can be obtained through mail, website of issuing company, or through broker etc.
- Trading in secondary market is done by Buy/Sell order forms.
- If POA (Nominee) is assigned then the POA need to sign the Buy/Sell order form within 24 hours of order placement
- If NRB wishes not to assign a POA then orders can be placed via phone or email (broker approval required) and then a signed Buy/Sell order form needs to be faxed to broker within 24 hours
- Trading will be carried out within prevailing market guidelines
- Shares will be credited or debited to the BO account accordingly
Note:
If NRB is interested to avail
custodian service then it is advisable to try to avail the service
collectively. The custodial service provided by the local Custodians in
Bangladesh (HSBC Limited, SCB Limited, Dhaka Bank Limited, South East Bank
Limited, AB Bank Limited and Citi NA), is done through whole sale window not
retail. As such they are not comfortable to provide custodial service to individual
in a cost effective manner. The way to get collective custodial service is to contact
any fund manager or international broker or global custody service provider in your
locality and contact a custodian in Bangladesh through them. In this way you are
free to have individual level BO and order placement without any problem through
the intermediary. This process will easily enable you to take part in the secondary
market with proper legal channels for foreign currency in and out.
Thanks,
Related:
Best Safe Investment Option in
Bangladesh
Dhaka Stock Exchange | Foreign Investors Guide
Safe Investment Ideas | Real Estate
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