Dhaka, Bangladesh (BBN)– The central bank of Bangladesh has relaxed regulations allowing foreign commercial banks (FCBs) to remit expenses of their head offices, officials said.
Under the relaxations, the FCBs operating in Bangladesh are eligible to send the shares of their head offices expenses without the central bank’s prior approval.
The Bangladesh Bank (BB) issued a notification in this connection on Sunday and asked all authorised dealer banks to follow the latest instructions properly.
Talking to the BBN, a BB senior official the FCBs will be able to remit such expenses complying with the Income Tax Ordinance 1984 and other conditions.
According to the notification, branch operations of foreign banks need to share expenses of their head offices against benefits accrued to operations in Bangladesh.
It also said that these expenses of head offices are incurred on account of the general management, administration and strategy of the whole company, including its foreign branches.
“Head offices allocate these expenses to their branches in accordance with standard practices,” it noted.
It further said that the gross remittable amount (before deduction of tax at source) will not exceed the limit allowed in the country’s income tax regulations.
“The remittance is subject to compliance with tax regulations like deduction and payment of applicable source tax and VAT,” it added.
Currently, nine FCBs are running their businesses across the country.
A foreign bank senior official welcomed the BB’s latest move, saying that it would help boost foreign investments in Bangladesh.