Bangladesh has changed the rules on how foreign investors take their money out of private companies. The change is aimed at all foreign investors. But it may help startups the most.
On 8 March 2026, Bangladesh Bank issued a new master circular on this topic (Bangladesh Bank, 2026). It does two important things. First, it raises the amount a foreign investor can take out without central bank approval from Tk 10 crore to Tk 100 crore. Commercial banks now make most of these decisions (TBS Report, 2026). Second, it sets out clear rules on how to value a company when its shares are sold. For startups, this second change may matter even more.
The old law: a strong promise, a slow process
The right to take money out of Bangladesh is not new. It comes from a 1980 law, the Foreign Private Investment (Promotion and Protection) Act. Section 8 of this law guarantees that foreign investors can send home three things: the money they invested, the profit they earned, and what is left if the company closes. There is one condition. In a serious economic crisis, the government can limit these transfers (Government of Bangladesh, 1980).
The promise was strong while the process lagged. The rules for selling shares in private companies were spread across a 2018 guidelines book and many later changes. Any sale above Tk 10 crore needed approval from Bangladesh Bank, and there was no deadline for a decision.
Large companies could live with the delay but small investors often could not. This group includes angel investors and Bangladeshis living abroad, who fund many young companies. For them, the uncertainty was often reason enough to stay away. Difficulty in taking money out is one of the most common worries for investors in emerging markets, and Bangladesh has been no exception (Mazumder, 2026).
What the new circular changes
The circular replaces the old patchwork with one document. It sorts share sales into four groups by size (Bangladesh Bank, 2026):
If shares are sold at or below the company's net asset value, the bank can approve the transfer at any amount. Net asset value is what the company owns minus what it owes.
If the sale is Tk 1 crore or less, no independent valuation is needed. The buyer and seller sign a statement explaining the price. A committee led by the bank's chief financial officer approves it.
If the sale is between Tk 1 crore and Tk 100 crore, an independent valuer must confirm a fair price. A committee led by the bank's chief executive approves it.
If the sale is above Tk 100 crore, it still goes to Bangladesh Bank.
The circular also sets deadlines. Banks must send the money within five working days once the papers are complete. The whole transfer must be finished within 45 days. The company's audited accounts cannot be more than six months old. Investors can send the money abroad or keep it in a foreign currency account in Bangladesh and invest it again.
The deadlines may be the most important change. An investor can plan around a known delay. An unknown delay is much harder to plan for. Under the old system, it was this uncertainty, more than the paperwork, that kept small investors away.
Why startups benefit most
Bangladeshi startups depend heavily on foreign money. In 2025, startups raised USD 124 million, and about 99 percent of it came from foreign investors, according to LightCastle Partners (LightCastle Partners, 2026). When almost all the money comes from abroad, the rules for taking it back out matter a great deal. They affect whether the money comes in at all.
How the rules fit the angel investment cycle
The new rules fit the way early-stage investing actually works. Angel investors usually spread small sums across many young companies, knowing that most will fail and that the few which succeed must earn enough to cover the rest. Those successes rarely end in a stock market listing. More often, an angel exits by selling shares to a larger investor that joins in a later funding round, so the rules on private share sales decide whether an angel is ever paid at all.
On that measure, the circular helps at almost every stage. Because most angel stakes are small, many exits will fall below Tk 1 crore, where no paid valuation is needed and costs stay in proportion to the gain. When a local fund buys out an early investor, the investor's own bank can now approve the sale without waiting for the central bank, and the money must be sent within five working days. The proceeds can also stay in Bangladesh in a foreign currency account, so that one successful exit can fund the next investment. This is how angel networks build momentum in more mature markets, and the same logic holds for Non-Resident Bangladeshis, who, despite close ties to the country, have so far invested relatively little in startups at home (Bangladesh Bank, 2026).
How startups will be valued
Every exit needs a price that the regulator accepts. Regulators often prefer net asset value. But a software company owns few physical assets. Its value lies in its product, its team and its customers. Net asset value misses most of that. Bangladesh Bank's guidelines admit this. They say that for technology companies and startups, the net asset approach "will also not help" (Bangladesh Bank, 2026).
Instead, the guidelines suggest two other methods. The first is price to sales (P/S). It compares a company's value with its yearly revenue, not its profit. This suits startups, which often make losses for years. The guidelines say P/S "focuses on revenue generation potential rather than current profitability." The second is discounted cash flow (DCF). It estimates how much cash a company will earn in the future and converts that into today's value. The guidelines list "technology, e-commerce, and start-up companies" as a good fit for DCF.
The rules also include safeguards. In a DCF, the discount rate must be at least the yield on the 20-year government bond, or the company's weighted average cost of capital (WACC) if that is higher. A higher discount rate gives a lower value, so this keeps valuations cautious. The sale price must also match any share issue price from the past year. Both rules seem designed to stop people from inflating prices to move money out of the country. That is reasonable. But it could hold back the exit price of a startup whose value has grown quickly since its last funding round.
The risk the rules cannot fix
The circular solves the problem of process. It does not solve the problem of currency. The taka was about Tk 85 to the dollar in 2021. By 2024-25 it was roughly Tk 110 to 120. So a company can grow well in taka and still give a poor return in dollars. Sharif Mazumder, writing in The Daily Star, warned that making exits easier while reserves are under pressure could speed up money leaving the country if confidence falls (Mazumder, 2026).
This concern is real. Pakistan and Nigeria show what happens when a country runs short of dollars. During Pakistan's 2022-23 crisis, an unofficial restriction kept foreign companies from sending home most of their profits. An estimated USD 1.5 billion to USD 2 billion built up unpaid. When the restriction ended, profit transfers rose 266 percent in one quarter (News Desk, 2023). In Nigeria, about USD 850 million belonging to foreign airlines was stuck by mid-2023. Emirates stopped flying to the country for about two years until most of it was paid (Saidane, 2024). In both countries, the law never changed. There simply were not enough dollars.
But these cases also show something else. Neither country attracted investment by making exits harder. Both lost investor trust, and both worked to clear the backlog as soon as they could.
Following global practice
Bangladesh's reform is not unusual. It brings the country closer to what its neighbours already do. In India, a sale of shares between a local and a foreign investor does not need approval from the Reserve Bank of India in most sectors. The investor's bank handles it and reports it. A chartered accountant or registered merchant banker must certify the fair value, using methods such as DCF (Vijay, 2025). Bangladesh's new system works in much the same way: banks approve, independent experts value, and the central bank is informed afterwards. Bangladesh Bank's guidelines are also based on the International Valuation Standards.
India's experience also shows how much valuation rules matter. For years, its "angel tax" treated money raised by startups above an official fair value as taxable income. This led to many disputes over what young companies were worth. India abolished the tax for all investors in July 2024 (Dixit, 2024). By accepting P/S and DCF, Bangladesh appears to have learned from that experience.
The new rules do not guarantee that more money will flow in. That depends on a stable taka, healthy reserves, and banks actually meeting the five-day deadline. But on the question that has long worried startup investors, whether money put into a Bangladeshi startup can come back out on clear terms, Bangladesh now has a clear answer. For a startup sector that has struggled to attract long-term investors, that is a good start.
References:
Bangladesh Bank (2026) FEID Circular No. 01: Master circular on transfer of shares and repatriation of sale proceeds of shares in favor of non-resident in private/public limited companies not listed with stock exchanges, 8 March. Available at: https://www.bb.org.bd/mediaroom/circulars/feid/mar082026feid01e.pdf (Accessed: 1 October 2026).
Dixit, P. (2024) 'Budget 2024: Angel Tax abolished for all tax classes by Finance Minister Nirmala Sitharaman', Business Today, 23 July. Available at: https://www.businesstoday.in/technology/news/story/budget-2024-angel-tax-abolished-for-all-tax-classes-by-finance-minister-nirmala-sitharaman-438331-2024-07-23 (Accessed: 2 October 2026).
Government of Bangladesh (1980) The Foreign Private Investment (Promotion and Protection) Act, 1980, s. 8. Available at: https://bdlaws.minlaw.gov.bd/act-597/section-18657.html (Accessed: 1 October 2026).
LightCastle Partners (2026) Bangladesh Startup Investments Report 2025: Year in Review. Available at: https://lightcastlepartners.com/insights/2026/01/bangladesh-startup-investments-report-2025-year-in-review/ (Accessed: 1 October 2026).
Mazumder, S. (2026) 'A risky moment to liberalise capital exit', The Daily Star, 16 March. Available at: https://www.thedailystar.net/opinion/news/risky-moment-liberalise-capital-exit-4129601 (Accessed: 1 October 2026).
News Desk (2023) 'Profit repatriation surge by 266% as Pakistan lifts 'ban'', Profit by Pakistan Today, 26 October. Available at: https://profit.pakistantoday.com.pk/2023/10/26/profit-repatriation-surge-by-266-as-pakistan-lifts-ban (Accessed: 2 October 2026).
Saidane, A. (2024) 'Nigeria clears 98% of blocked airline funds, says IATA', African Business, 4 June. Available at: https://african.business/2024/06/trade-investment/nigeria-clears-98-of-blocked-airline-funds-says-iata (Accessed: 2 October 2026).
TBS Report (2026) 'Foreign investors allowed to repatriate capital up to Tk100cr without prior approval', The Business Standard, 9 March. Available at: https://www.tbsnews.net/economy/foreign-investors-allowed-repatriate-profits-tk100cr-without-prior-approval-1381646 (Accessed: 1 October 2026).
Vijay, S. (2025) 'Transfer of shares among Non-Resident and Residents', Corporate Professionals, 26 May. Available at: https://www.corporateprofessionals.com/articles/transfer-of-shares-among-non-resident-and-residents/ (Accessed: 3 October 2026).