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Bangladesh’s economy continues on its path of consistent growth, reflected also in its rising per capita income – now higher than India’s – and foreign companies are paying attention; many have already considered the country to be a viable investment destination outside China. In this article, we shall address the basics of opening a bank account in Bangladesh, including individual accounts that can be opened by expatriates and types of corporate bank accounts.
Types of bank accounts and their procedural requirements
Individual
Expatriate workers in Bangladesh are able to open bank accounts for both Bangladesh Taka (BDT) and foreign currency. There is no requirement for an initial deposit or inward remittance, and the individuals may remit up to 75 percent of their basic salary to their respective countries of origin.
The documents required to open a bank account in Bangladesh for a foreign individual are as follows:
Bank Account Opening Form and signature card
Copy of the Applicant’s work permit, employment certificate, or approval for self-employment
Copy of the Applicant’s passport and visa
Two recent passport-sized photos of the Applicant
One recent passport-sized photo of each nominee or guardian (where the nominee is a minor) attested to by the Applicant
E-TIN certificate of the Applicant, if applicable
Most foreign banks have “internet banking” (online banking) for individuals and corporate entities but require customers to fill out a separate Internet Banking Application Form. After processing this form, the bank provides a username, password, and security token. The customer must then call the bank to activate internet banking.
Liaison or Branch Office
We mentioned previously in our article, “Starting a Business in Bangladesh: Common Legal Entity Options”, that the three most common legal entities for entering the Bangladeshi market are Private Limited Companies (PLCs), Liaison Offices (LOs), and Branch Offices (BOs). One of the requirements for setting these up is opening a bank account.
In the case of a Liaison or Branch Office (LO/BO), the Central Bank (Bangladesh Bank) or the Bangladesh Investment Development Authority (BIDA) must first grant approval of the LO/BO before a bank account can be opened.
The documents required to open a bank account in Bangladesh for a LO/BO of a foreign company are as follows:
Bank Account Opening Form and signature card
Copy of BIDA permission
Board resolution detailing the establishment and authorization of the LO/BO in Bangladesh, attested to by the Bangladesh High Commission in the Company’s country of origin
List of Directors specifying their names, addresses, and nationalities, attested to by the Bangladesh High Commission in the Company’s country of origin
Notarized copy of Power of Attorney of the person authorized to open and operate the bank account on behalf of the Company
Certified copies of the Company’s Memorandum and Articles of Association, attested to by the Bangladesh High Commission in the Company’s country of origin
Copy of the Company’s Certificate of Incorporation, attested to by the Bangladesh High Commission in the Company’s country of origin
As previously discussed, the Liaison or Branch Office must bring an inward remittance of at least US$50,000 within two months of the permission letter’s issuance date for initial establishment and operating expenses.
In the case of LOs, no outward financial remittance from Bangladeshi sources is allowed before the LO is closed. However, BOs may submit a request to the Central Bank to waive this restriction under certain permissible grounds, such as profit repatriation and the payment of expenses incurred by the head office.
Additionally, internet banking is available, and the application process is similar to that in the case of individual bank accounts.
Private Limited Company
In the case of a Private Limited Company, the Name Clearance Certificate must first be obtained from the Registrar of Joint Stock Companies (RJSC) before a bank account can be opened. This initial bank account is temporary and only used to make the initial paid-up capital investment. The documents required to open a regular (permanent) bank account in Bangladesh for a foreign-owned PLC are as follows:
Bank Account Opening Form and signature card
Memorandum and Articles of Association and Certificate of Incorporation of the Company, if applicable
Joint Venture Agreement, if applicable
Board resolution to open the bank account including signatory instructions
List of individuals or shareholders specifying names, addresses, dates of birth, parents’ names, nationalities, passport numbers, occupations, etc., as per the Memorandum and Articles of Association
Copy of the individuals’ or shareholders’ passports
Passport-sized photos of the individuals or shareholders
Trade license, if applicable
E-TIN certificate of the Company, if applicable
Copy of work permit with Employment or Private Investor visa, where the Signatory is an expatriate living in Bangladesh
Once all of these documents have been submitted, the temporary bank account is converted to a permanent one that can be used for all sorts of transactions (not just paid-up capital investments) and given a new account number.
Outward remittances are permitted, subject to the approval of the Central Bank.
Additionally, internet banking is available, and the application process is similar to that in the case of individual, LO/BO bank accounts.
Corporate banking in Bangladesh
Bank accounts are usually titled after the name of the company (for example, ABC Company Ltd.). The most common type of corporate bank account is called a “current account” – it is basically the same as a checking account. Apart from the current account, companies can also have different types of loan accounts (for example, a bank overdraft account, letter of credit loan account, packing credit loan account, BMRE loan account, project financing loan account, etc.). Additionally, it is possible to set up different accounts for different purposes (for example, salary account, provident fund account, gratuity fund account, etc.)