From now on Bangladesh Bank will allow foreign shareholders to repatriate fair value of shares in unlisted public companies and private limited companies as on the date of sale based on appropriate combination of three valuation approaches (net asset value approach, market value approach and discounted cash flow approach) depending on the nature of the company.
On August 31, 2014, through FE Circular No. 32 Bangladesh notified this decision. Previously, it was net asset value of the shares as on the date of sales, based on latest audited financial statements.
Bangladesh Bank provides a detailed guideline on the circular how the calculation should be done.
Application for repatriation of sales 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 Bangladesh Securities Exchange Commission 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 the Bangladesh Bank along with application for remittance approval. If not fully satisfied about appropriateness of the valuation arrived at, Bangladesh Bank may obtain a second opinion from another qualified valuer.