Population: 213 million

Wealth in domestic bank deposits: 159 billion USD (March 2023)

Offshore expatriated wealth: 1.7 billion USD

Main offshore banking locations: N/A

Number of individual brokerage accounts: 1.8 million (2024)

Crypto adoption (% of population): 4.2 million (2.43%)

TLDR

Bangladesh maintains strict foreign exchange controls and prohibitions on cryptocurrency use. The national currency, the Taka, is freely convertible, but foreign exchange transactions are tightly regulated under the Foreign Exchange Regulation Act 1947. Cryptocurrencies are considered illegal, with the Bangladesh Bank banning crypto trading and issuing warnings due to concerns over capital flight and money laundering.

Selling and marketing foreign securities in Bangladesh requires approval from the Bangladesh Securities and Exchange Commission (BSEC). Foreign investment is permitted, though generally confined to the secondary market under the FPI Guidelines. Listing of foreign companies on local exchanges is limited but expanding. Extensive disclosures and engagement of local intermediaries may be necessary for foreign issuers. While restrictive, the regulatory climate is evolving towards greater openness.

Exchange Controls

Bangladesh operates stringent exchange controls under the Foreign Exchange Regulation Act 1947. The Bangladesh Bank regulates foreign exchange transactions through periodic directives named the Guideline for Foreign Exchange Transactions.

Only authorized dealers (licensed scheduled banks) can deal in foreign exchange. Individuals must declare amounts above $5,000 when entering or leaving the country.

Foreign investors can repatriate capital, profits, dividends etc. with documentation. Foreign nationals can remit a portion of salary and savings per approval. Remittance by residents is tightly monitored.

Distribution rules for foreign investment products

Selling foreign securities in Bangladesh requires BSEC approval. Advertisements and disclosures must adhere to guidelines protecting local investors. Engaging local intermediaries may be necessary.

FPI by foreign investors is permitted within limits under BSEC guidelines. FDI is encouraged through government incentives. Listing of foreign companies is currently limited but expanding.

Qualified Investors

Bangladesh makes a distinction between qualified investors (QIs) and general investors for the purpose of securities trading, especially in the SME exchange platform.

The BSEC defines qualified investors as those with a minimum investment of 30 lakh Taka (around $35,000) in listed securities. Only QIs can trade on the SME platform. The requirements may differ for platforms other than SME.

Cryptocurrency Regulation

Bangladesh prohibits cryptocurrency trading and investment under existing laws, viewing it as conflicting with financial regulations. The central bank does not regulate crypto exchanges or investors.

However, the government sees potential in blockchain technology, as evidenced by the 2020 National Blockchain Strategy. A central bank digital currency feasibility study is underway. This reflects concerns over cryptocurrencies but interest in digital fiat currencies.