Why Bangladesh is an exciting investing opportunity to foreign investor?
- Goldman Sachs, JP Morgan, McKinsey bullish on Bangladesh: In the “Next 11 Emerging Markets”, RMG exports to reach $36-42 Billion by 2020.
- Utilizing its geographic location between India and China as a competitive advantage.
- 160 Million population (8th Largest), trained and skilled labour force
- One of the last remaining countries with “low labour cost”
- Ranks 5th Amongst Countries Sending – Highest Remittances to India
- 2nd Largest manufacturer and exporter of Readymade Garments (RMG) second only to China
- As a frontier emerging market, Bangladesh is rated Ba3 by Moody’s (stable outlook)
Account Opening Requirements:
Foreign investors need to fill a Customer Account Information Form with Mika Securities Limited. The form is different for individual investors and institutional investors. Foreign investors need to send the form (hard copy) to the brokerage house, duly filled and signed by authorized personnel. They also need to attach photocopy of other required documents (hard copy), stated below:
For institutional investors
- A copy of the Memorandum and Articles of Association of the company.
- A copy of the Certificate of Incorporation of the company.
- A copy of the Authorization/Board Resolution to open and operate the account with us.
- A copy of the Authorization/Board Resolution authorizing the executives to operate the account, including their photographs.
In order to avail the share trading and custodial services, you are required to fill out and sign the following:
- FC Account opening Form (only if you do not already have one) – To remit foreign currency into your account for share trading.
- NITA (Non-Resident Investor’s Taka Account) opening Form – To make financial transactions for purchase and sale of shares in the secondary stock market (that is in Dhaka Stock Exchange).
- Customer Information Form – To conduct actual trading of shares in the share market.
- BO Account Opening Form – To hold shares that will be purchased by the custodian bank on your behalf.
- BO Account Nomination Form – To nominate up to two people to receive any outstanding shares in the event of death.
- Custodian Agreement – To authorize the custodian bank as the custodian of your shares.
- NITA Securities Accounts Services Agreement – To authorize the custodian bank to carry out your share trading orders and settle all transactions that are required to close deals.
- FATCA Form Individual & Proprietor – Supplement to account opening form, it is the Foreign Account Tax Compliance Act (FATCA) form
For Individual Investors/Company Account Documents Required
- Photocopy of your passport
- 7 copies of passport sized photographs of yourself
- 3 copies of passport sized photographs of nominee (with your signature).
- 2 copies of passport sized photographs of authorized person – only if you wish someone to deal with the custodian bank on your behalf.
- Any statement from your employer or a business document if you are involved in business.
- Copy of your resident/work permit or valid visa
- Proof of addresses
B/O Account Opening:
Foreign investors need to fill a Customer Account Information Form with Mika Securities Limited and send the form (hard copy) to the brokerage house, duly filled and signed by authorized personnel, together with photocopy of other required documents. They also need to open a Custodian Account with any custodian bank in Bangladesh, we can also introduce you to one of our custodian banking partners. Together with BO account opening, the custodian bank will take care of other account opening, such as Cash Account (or NITA A/C), Securities A/C and F/C Account.
Following is a list of custodian banks:
Hong Kong and Shanghai Banking Corporation
Standard Chartered Bank
Fees & Charges
There is only one fee/charge from the brokerage side. Investors only need to pay the trading commission on their buy/sale order. Mika Securities Limited do charges account opening fee of BDT. 450/= including tax and other regulatory charges. The commission fee is set at maximum 0.50% on total trade value with prime rates applicable for prime clients.
To apply for an IPO, foreign investors need to contact the custodian bank. The custodian bank will carry out the process of applying for IPO allotments.
The settlement period varies with the category of shares. For any category other than Z-category, that is A-category, B-category, G-category and N-category, the settlement period is T+2 days (transaction date + two working days) for both buying and selling of shares. For Z-category shares, the settlement period is T+9 days. However when a stock is traded in the spot market, the settlement period is T+0 day for all categories of share. The settlement process is done mutually by the brokerage house (Mika Securities Ltd.) and the custodian bank at DVP (Delivery VS Payment).
Foreign Investors also need to take into account the relevant tax associated with trading in the Dhaka Stock Exchange. Foreign individual investors only need to pay 25% tax on cash dividend, deducted at source. The rate is 20% for institutional investors. Institutional investors are also charged with capital gain tax – 10% is charged on profit portion only, deducted during repatriation of money.
*Deducted at source
Information for Fund Deposit
Deposit directly from your City Bank City Touch online. All you have to do is log into your City Touch account or any other online bank to deposit directly from your bank account to ours.
Send EFT to the following Account:
Mika Securities Ltd.
The City Bank
Dhaka South, Principal Branch
Swift Code: CIBLBDDH
Phone: +880 2 9820561 Ext 333