Foreign investors
A practical guide for non-resident investors interested in the Bangladesh capital market, reproduced from DSE's foreign investor guide.
Related guides
Who are Foreign Investors?
- Any foreigners residing in Bangladesh or abroad willing to invest in Bangladesh Capital Markets are considered Foreign Investors.
- Bangladesh provides a very friendly and open investment atmosphere for foreign investors.
- No Capital Gains Tax on individuals.
- A long-established legislative and legal framework protects foreign investment in Bangladesh.
How to start
- Open a NITA Account with an AD (Authorized Dealer) of the foreign currency department of any financial institution, or through a custodian.
- Select a Custodian in Bangladesh (HSBC, Standard Chartered, Dhaka Bank, Southeast Bank, AB Bank, or Citi NA).
- Open a BO account through the custodian.
- Open a Trading Account with your preferred broker (optional — the custodian can provide the service through the cash account/NITA on behalf of the investor).
- Start trading.
What is a NITA Account?
- The Non-resident Investment Taka Account (NITA) is an account for channeling foreign currency in, as well as repatriation of earnings from investment.
- All earnings from investments (e.g. cash dividends) are credited to the NITA account.
- An audited statement certifying that all proper taxes are withheld from earnings (usually handled by the custodian) is used for fund repatriation.
Common services provided by local Custodians
- Account services
- Trade settlement services
- Registration services
- Safe-keeping services
- Corporate Action services
- Foreign Exchange services
- Cash management services
- Market expertise
- Escrow services
Trading (Custodian ↔ Broker)
- The custodian usually receives orders via SWIFT or another acceptable standard and carries out share and monetary transactions with the local broker.
- DVP (Delivery versus Payment): delivers shares from the FI's BO to the broker's BO upon receiving payment — applicable for sale orders.
- RVP (Receive versus Payment): receives shares to the FI's BO and makes payment — applicable for buy orders.
What is a BO account?
- BO stands for Beneficiary Owners account. It holds shares purchased or credited due to corporate declarations.
Requirements — Individuals
- Attested photographs
- Bank statements
- Copy of pay slip or tax return (optional, as part of KYC)
- Copy of employment certificate or trade license
- Copy of passport
- Nominee photographs and details
- Other relevant forms
Requirements — Institutional
- Memorandum & Articles of Association
- Certificate of incorporation
- Board resolution permitting investment/trade in Bangladesh
- Custodian details
- Board resolution naming authorized persons with identification and specimen signatures
Tax Rates
- No Capital Gains Tax on individuals (subject to the condition that the assessee is entitled to a similar exemption in their country of residence).
- Income tax is 25% for individuals.
- 25% tax at source is deducted by the issuer on cash dividends.
Custodian Banks in Bangladesh
Full contact details are available in the DSE foreign investor guide.
- HSBC
- Standard Chartered Bank
- Dhaka Bank
- Southeast Bank
- AB Bank (Arab Bangladesh Bank)
- BRAC Bank
- Citi N.A.
- Agrani Bank
Source: Dhaka Stock Exchange — Foreign Investor Guide.