The payment could be made in their own currencies subject to the deduction of advance taxes and duties
Bangladesh Bank (BB) yesterday granted permission to foreign-owned manufacturing entities operating in the country to pay interest against short-term borrowing sourced from their parent companies or shareholders.
The payment could be made in their own currencies subject to the deduction of advance taxes and duties.
In this regard, the exchange rate shall be determined against the taka on the date of repayment, said a circular issued from the foreign exchange policy department (FEPD).
The circular says short-term interest bearing loan facility from parent companies and/or shareholders abroad shall be admissible for maximum three years from the date of manufacturing activities by the borrowing industrial entities.
The short-term loan so availed may be renewed/ extended for further periods within the applicable period of three years, it elaborated.
The FEPD says the repayment of principal and accrued interest on maturity could be repatriated after conversion of payable taka into currency of sourced country at the prevailing exchange rate.
According to the guidelines for foreign exchange transactions-2018 (vol-1), the BB allows interest-free loans from parent companies/shareholders to foreign owned/controlled industrial enterprises in Bangladesh for up to one year.