Dhaka, Bangladesh (BBN) – The central bank of Bangladesh has relaxed foreign exchange rules for Industrial enterprises operating in Export Processing Zones (EPZs) to bring uniformity in regulations between enterprises of EPZs and Economic Zones (EZs).
The central bank issued a circular on Sunday and asked all authorised dealers (AD) in foreign exchange in Bangladesh to follow the latest instructions related to use of share capital and authorised loans through foreign currency/local currency accounts by the EPZs’ industries.
Under the relaxations, ‘Type B’ and ‘Type C’ industries of EPZs can now get foreign currency from the banks concerned for importing capital machinery by the conversion of equivalent equity and/or authorised loans received in local currency with prior approval from the Bangladesh Bank (BB), the country’s central bank.
Besides, equity from foreign shareholders of ‘Type A’ and ‘Type B’ enterprises and authorised loans received in foreign currencies from external sources by EPZ industries are eligible to credit into their FC (foreign currency) accounts.
“We’ve taken the latest moves aiming to bring uniformity in regulations between enterprises of the EPZs and EZs,” a BB senior official said while explaining the main objective of the circular.
Foreign investment in EPZs (in ‘Type A’ and ‘Type B’ enterprises) is subject to report to the central bank within 14 days of issuance of shares favoring non-resident investors as per instructions stipulated in the Guidelines for Foreign Exchange Transactions (GFET).
‘Type C’ enterprises of EPZs may obtain foreign exchange from ADs to settle obligations for importing capital machinery by the conversion of equivalent equity and/or authorized loan received in local currency, the circular spells out.
Similarly, ‘Type B’ enterprises may convert their local equity/authorised loans received in local currency to foreign exchange to settle obligations for importing capital machinery if equity/authorised foreign loan received from abroad falls short of fulfilling such obligations, it added.
“Instructions regarding repayment of Taka loans along with interest shall remain unchanged,” the BB said in its circular.
There are three categories of industrial unites now operating in all EPZs across the country.
A total of 72 ‘B’ category (joint venture) industrial unites are operating while 132 ‘C’ (100 per cent locally owned) in the EPZs.
Besides, 259 ‘A’ category (fully owned by foreigners) are operating in the special economic zones of the country.
“More than 463 industrial unites are now operating in the EPZs while 87 are under implementation,” a BEPZA (Bangladesh Export Processing Zones Authority) official told BBN in Dhaka.
There are eight EPZs in Bangladesh—located in Chittagong, Dhaka, Mongla, Ishwardi, Comilla, Uttara, Adamjee, and Karnaphuli.