Repatriating Profits, Dividends, Share Sale Proceeds and Capital from Bangladesh: The 2026 Rules

In this guide: Dividends to non-resident shareholders · Branch profits, and the JVCA exception · Sale proceeds of shares in an unlisted company · Capital on liquidation and capital reduction · The circulars expire: how to stay current · Where remittances fail

The short answer

For a dividend, have the auditors certify the Appendix-9 application and the board resolution, attach the audited accounts, the tax deduction certificate, the certificate that tax provisions cover all years, the latest assessment order and the shareholder list, and hand the file to the company’s nominated bank; the bank converts the taka dividend at the day’s rate and remits, withholding 20% tax (25% for an individual shareholder, or the treaty rate on the NBR certificate). No application to Bangladesh Bank is made. For branch profit, the same route with the head-office accounts and a reconciliation, the deductions the circular requires, and the 20% branch profit tax paid first; the bank sends the papers to Bangladesh Bank within a month afterwards. For the sale of shares in an unlisted company, sign a memorandum with the buyer, fix the price under one of the three 2026 tests (net asset value; up to Tk 1 crore on a joint statement; up to Tk 100 crore on an independent valuation), complete the transfer within 45 days, and the bank remits the net proceeds after capital gains tax within five working days of a clean file; outside the tests, the bank forwards the file to Bangladesh Bank. For liquidation, the liquidator applies through the bank for Bangladesh Bank permission with the winding-up record, the tax clearance and the encashment certificates of the original investment. In every case the file depends on one thing done years earlier: the bank’s 14-day report of the original share issue, described in our share money guide. The checklist below tracks the dividend file.

Dividends to non-resident shareholders

Since FE Circular 29 of 21 July 2020 the authorised-dealer bank remits dividends to non-resident shareholders without referring the file to Bangladesh Bank, before or after; it keeps the file for inspection. The governing text is now Part D of Bangladesh Bank’s consolidated circular on current-account outward remittances, FEPD-1 Circular 40 of 30 September 2026, which re-issues the 2025 circular (FE Circular 37) and is valid for a year; the attachment list below is the 2025 list, which the 2026 text re-adopts. The application is in Appendix-9, in triplicate, certified by the company’s auditors, with: the attested certificate of incorporation (once only); the audited balance sheet and profit and loss account for the dividend year; an auditor-certified copy of the board resolution declaring the dividend; the list of non-resident shareholders entitled to payment; the auditor’s certificate that tax on the dividend has been deducted; the auditor’s certificate that tax provisions cover all past and present liabilities, including years not yet finally assessed; the final assessment order once issued; and an undertaking to refund any ineligible amount. The conditions: the dividend comes from normal business profit or past remittable reserves; past losses and tax liabilities are adjusted first; government cash subsidies are deducted unless Bangladesh Bank allows otherwise; the company uses one nominated bank notified to the Foreign Exchange Investment Department; the dividend is declared in taka and converted at the rate on the day of remittance. Withholding tax on dividends is 20% for a non-resident company and 25% for a non-resident individual under section 119 of the Income Tax Act 2023, reduced to the treaty rate where the shareholder holds a tax residence certificate and the NBR has issued its certificate for the treaty rate; our treaty guide covers that step.

Two alternatives to remitting. The dividend may be credited to the shareholder’s foreign-currency account in Bangladesh, which the bank reports as an outward remittance on Form TM; a later encashment from that account is an inward remittance on Form C. Or the dividend may be reinvested in new shares, in which case the company’s bank reports the share issue to Bangladesh Bank within 14 days under Chapter 9 of the Guidelines, as for any issue to a non-resident. Payments that compete with dividends as a way of moving value to the parent are capped: fees for services from a parent or group company holding more than half the shares at 10% of net profit without approval, and training and consultancy fees at 1% of the previous year’s sales or US$100,000, whichever is higher; royalties and technical fees above the bank’s thresholds need Invest Bangladesh’s approval.

Branch profits, and the JVCA exception

A branch of a foreign company remits its profit through its nominated bank without prior Bangladesh Bank approval, on: the audited Bangladesh accounts; the consolidated head-office accounts with a reconciliation; the tax documents; and details of fixed-asset additions and borrowings. Before remittance the bank deducts past losses, fixed-asset additions not financed from depreciation, asset disposals or non-repatriable funds, profit on immovable property unless Bangladesh Bank permits, and government cash subsidies. The documents go to the Foreign Exchange Investment Department within one month for post-facto checking (the 2019 circular letter said 30 days; the 2026 circular says one month). The branch profit tax of 20% on the remitted amount is paid first, on top of the corporate tax on the branch’s income, and the Invest Bangladesh permission condition restricting profit remittance must have been waived; see our office guide. Head-office expenses charged to the branch are remittable without prior approval within the income-tax limits. Foreign banks, financial institutions and insurers remit under their own paragraphs of the same circular after the prescribed deductions.

The exception is a joint venture, consortium or association with a foreign partner that is not a company (a JVCA executing a contract): under FEID Circular 02 of 20 November 2024, profit remittance needs prior Bangladesh Bank approval, applied for through the bank with the joint venture agreement, the audited financial statements, the auditor-certified profit resolution and calculation of the remittable amount, the encashment certificates, the auditor’s tax certificate, the final assessment order, the refund undertaking and a year of bank statements. The older guidance that a branch needs Invest Bangladesh and Bangladesh Bank permission for each remittance is outdated; the current rule is bank remittance with post-facto checking.

Sale proceeds of shares in an unlisted company

The rule changed on 8 March 2026, when FEID Circular 01 of 2026 replaced the 2018 and 2020 instructions and raised the thresholds (the Bangladesh Bank portal page still shows the old Tk 1 crore and Tk 10 crore tiers; the circular governs). Where a non-resident sells to a resident, the bank remits the proceeds without Bangladesh Bank approval if any one of three tests is met: the price is at or below the net asset value in the latest audited accounts (the company signs the calculation and the auditor countersigns); or the deal is up to Tk 1 crore, with a joint statement of buyer and seller justifying the price and no valuation; or the deal is up to Tk 100 crore at a fair value fixed by an independent valuer. Any other case goes to the Foreign Exchange Investment Department, to which the bank forwards the file within three working days. Where a resident sells to a non-resident, or one non-resident to another, no approval is needed at fair value, with a valuation report above Tk 1 crore and Form C from the resident seller.

The procedure: a signed memorandum of understanding; audited accounts no more than six months old at the memorandum date (interim audited statements otherwise); a valuation, where needed, by a BSEC-licensed merchant banker or a chartered accountant firm on the Bangladesh Bank or BSEC panel, independent and IVS-compliant, using net asset value, a market approach on Bangladeshi peers and discounted cash flow at the higher of the weighted average cost of capital and the 20-year treasury bond yield, weighted or one method justified; completion within 45 days of the memorandum or of Bangladesh Bank’s approval; a bank committee (headed by the chief financial officer for the net-asset-value and Tk 1 crore cases, the chief executive for the larger case) decides; the price must be consistent with any share issue in the last year; capital gains tax and stamp duty are paid by the non-resident seller from funds brought in through the banking channel, not by the company; the bank remits within five working days of a clean file or credits a foreign-currency account; escrow needs Bangladesh Bank’s permission. The bank reports the transfer to Bangladesh Bank within 14 days with the RJSC-endorsed Form 117, Schedule X, the encashment or TM record, the valuation, the memorandum and the committee minutes. The Companies Act side of the transfer, Form 117 and the stamp duty, is in our share transfer guide. For listed shares held through a non-resident investor’s taka account, sale proceeds up to the market price on the day are repatriable with no approval at all.

Capital on liquidation and capital reduction

Repatriation of the final distribution on winding up, voluntary or by the court, needs prior permission of the Foreign Exchange Investment Department in every case, under FEID Circular 01 of 5 February 2020. The application through the nominated bank attaches: the corporate record (certificate of incorporation, Memorandum and Articles, Form XV, Schedule X, Form 117, latest audited accounts); proof of the original investment (encashment certificates, or bills of entry for machinery contributed in kind); the winding-up record (the special resolution in Form VIII, the RJSC return of the final meeting, the liquidator’s certificates that the Companies Act has been complied with, that all Bangladesh liabilities including tax are paid and that no litigation is pending, and the liquidator’s final statement); the tax clearance certificate; a CIB report; for exporters and importers a statement of overdue export proceeds and bills of entry; the list of non-resident shareholders; the liquidator’s undertaking to refund any ineligible amount; and for a court winding-up the court’s order endorsing the distributable amount. Section 8 of the 1980 Act guarantees the transfer of liquidation proceeds, subject to the Government’s power in exceptional financial or economic difficulty, and in practice Bangladesh Bank grants permission where the record is complete; the applications that stall are those where the original share issue was never reported or the tax file is open. A reduction of capital returned to a non-resident is remitted at fair value, and the fair value must be stated in the scheme put to the court. The winding-up itself is in our winding-up guide.

The circulars expire: how to stay current

Between 2025 and 2026 Bangladesh Bank replaced most of Volume 1 of the Guidelines for Foreign Exchange Transactions with annual consolidated circulars, each valid for a year and each repealing the earlier instructions on its subject: FE Circular 37 of 2025 and then FEPD-1 Circular 40 of 2026 for outward remittances including dividends and profits; FE Circular 34 of 2025 and then FEPD-1 Circular 32 of 2026 for loans; FEID master circulars for share transfers (01 of 2026) and share issues (01 of 2025). The reporting rules in Volume 2 survive. What this means for an investor: cite the current circular, not a Guidelines paragraph; expect the circular to be re-issued around September each year with small changes; and keep the company’s remittance file in the form the current circular prescribes, because the bank applies the circular in force on the day of remittance, not the one in force when the dividend was declared. We review client files against each new circular as it appears, and this guide carries the date of its last check at the top.

Where remittances fail

In our files the refusals are not refusals of principle; they are missing papers. The original share issue was never reported to Bangladesh Bank within 14 days, so the bank cannot show that the investment came in through the banking channel; the cure is a late report with the incorporation documents and encashment certificates, which Bangladesh Bank accepts but slowly. The tax file is open: an assessment under appeal, a year not yet assessed without a provision certificate, or withholding returns not filed. The auditor will not certify that provisions cover all years because the company disputes a demand. The dividend is declared from revaluation reserve or a subsidy. The nominated bank was changed without telling the Foreign Exchange Investment Department. The share sale price is inconsistent with a share issue in the previous year. Each is fixable, and each is cheaper to fix before the board declares the dividend than after the shareholder has been told the date.