Paragraph 3(B), chapter 9 of the Guidelines for Foreign Exchange Transactions-2009 currently states that the sale proceeds of non-resident equity investment in unlisted companies and private limited companies are repatriable abroad with prior Bangladesh Bank approval to the extent of net asset value of the shares as on the date of sales, based on latest audited financial statements.
- It has now been decided that in such cases Bangladesh Bank will accept fair value of the shares as on the date of sale based on appropriate combination of three valuation approaches (viz. net asset value approach, market value approach and discounted cash flow approach) depending on the nature of the company.
- Application for repatriation of sale proceeds of shares shall be submitted to Foreign Exchange Investment Department at head office of Bangladesh Bank with a Valuation Certificate of shares issued by a Merchant banker licensed by BSEC or a Chartered Accountant experienced in company valuation. Annexure-A to this circular provides indicative guidelines for arriving at fair value.
- The valuation certificates by eligible valuers will have to be supported by full explanation justifying the fair value arrived at. Full set of audited financial statements of the company will have to be submitted to Bangladesh Bank along with application for remittance approval. If not fully satisfied about appropriateness of the valuation arrived at, Bangladesh Bank reserves the right to obtain second opinion from another qualified valuer of its choice.
Please inform all your concerned constituents accordingly.