BANGLADESH LAW AND PRACTICE Contributed by: Shahwar Nizam, Tarannum Tasnim, Mahboob Aziz, Saif Bhuiyan, Farhan Kabir, Tanzim Ahmed and Rizvi Khan, DFDL Bangladesh
7.4 National Security Review Enforcement Bangladesh does not recognise investments from countries with which it has no diplomatic relationship or which are declared as enemy states by Bangladesh. Other than this, Bangladesh has no restriction upon FDI. However, if any particular person is found to be a potential security threat for Bangladesh, the Ministry of Home Affairs and Ministry of Defence, in collabora - tion with the Ministry of Foreign Affairs, will conduct a background search and necessary investigation. After concluding the necessary investigation, a visa and work permit will be issued by the relevant depart - ment of the Ministry of Home Affairs. Other than this, work permit and visa services are provided through BIDA. Also, Bangladesh Bank has certain KYC poli - cies that are mandatory for inward remittances into Bangladesh in order to avoid any terrorism funding coming into the country. The FPIP Act is the principal legislation that provides protection for foreign private investments in Bangla - desh. The FPIP Act defines “foreign private invest - ment” as “investment of foreign capital by a person who is not a citizen of Bangladesh or by a compa - ny incorporated outside Bangladesh, but does not include investment by a foreign government or an agency of a foreign government”. The FPIP Act further defines “foreign capital” as “any industrial undertaking by a citizen of any foreign coun - try or by a company incorporated outside Bangladesh, in the form of foreign exchange, imported machinery and equipment, or in such other form as the GOB may approve for the purpose of such investment”. On this basis, it is likely that a project company having foreign private investment will fall within the FPIP Act. 8. Other Review/Approvals 8.1 Other Regimes The FPIP Act stipulates “fair and equitable treatment to foreign private investment” with “full protection and security in Bangladesh”. Further, the FPIP Act also ensures that foreign private investment is afforded the “same favourable treatment” that is afforded to similar private investment by citizens of Bangladesh.
In addition, foreign investments are also provided with “adequate compensation” in the event of any expro - priation or nationalisation. “Adequate compensation” is defined under the FPIP Act as the “amount equiva - lent to the market value of investment expropriated or nationalised immediately before the expropriation or nationalisation”. The FPIP Act also guarantees repatriation of liquidation proceeds in respect of for - eign private investment, transfer of capital and the returns therefrom. However, please note that there are no precedents as of yet of foreign investments being nationalised by the GOB. In addition, dealing in foreign currency is strictly regu - lated by Bangladesh Bank, and only certain authorised dealers’ (ie, licensed banks’) branches are allowed to remit foreign currency outside Bangladesh. Further - more, no other person may deal in foreign exchange without the prior consent of Bangladesh Bank. Remit - tance of money outside Bangladesh is allowed only in specific circumstances and is required to be sup - ported by appropriate documentation. The foreign exchange laws generally apply to any transaction that involves foreign currency or remit - tance of funds inside or outside of Bangladesh. A summary of the foreign exchange controls in Bang - ladesh follows. Restrictions in Dealing With Foreign Currency FERA and the GFET stipulate that, without obtaining general or special permission from Bangladesh Bank, Bangladeshi residents cannot make any payment to or for the credit of any person who is a resident out - side Bangladesh, or draw, issue or negotiate any bill of exchange or promissory note, or acknowledge any debt, so that a right to receive a payment is created or transferred in favour of any person residing out - side Bangladesh. FERA also restricts the creation or transfer of security interest to any place outside of Bangladesh without a general or special permission from Bangladesh Bank. Inward Remittance Must Be Used for Its Particular Purpose Under FERA and the GFET, any foreign currency that is acquired by any person other than an authorised dealer for any particular purpose must be utilised for
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