BB eases foreign remittance rules for industrial enterprises in hi-tech parks

Bangladesh Bank (BB) has allowed industrial enterprises operating in hi-tech parks to make certain foreign payments from their taka accounts, easing the process of settling royalty, technical know-how and technical assistance fees.

According to a circular issued today, banks may facilitate outward remittances within prescribed limits without prior approval from the central bank or the Bangladesh Hi-Tech Park Authority (BHTPA).

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It said prior approval will not be required if the total fees and other expenses do not exceed 6 percent of the cost of imported machinery for new projects.

For ongoing concerns, the payments must not exceed 6 percent of the previous year’s sales as declared in their income tax returns, according to the circular.

The decision will allow businesses to make such payments from their taka accounts with banks, in addition to the previously permitted mechanism involving foreign currency accounts.

Before processing the outward remittances, banks shall ensure that the concerned industrial enterprise does not have any source of income in foreign currency.

The BB said the measure has been taken to facilitate the settlement of foreign payment obligations of industrial enterprises operating in hi-tech parks.

However, enterprises will still require prior specific approval from BHTPA for royalty, technical know-how and technical assistance fees that exceed the prescribed limits.

Such approval will also be mandatory for outward remittances related to other similar legitimate expenses, regardless of the amount.

The move is expected to provide greater flexibility to industrial enterprises in hi-tech parks in meeting their overseas contractual and operational payment obligations, said a BB official.