Foreigner’s Salary Outward Remittances

Foreigner’s?Salary?Outward Remittances

Bangladesh has become a business hub of South Asia. The economy of this country is booming day by day. The geographical location and business environment attract foreign investment and foreigner. Foreign Residents are also interested to do several types of work in Bangladesh. A Transparency International Bangladesh study shows that more than 250,000 foreigners from 44 countries work in Bangladesh. Foreigners are employed in more than 20 sectors, such as apparel and textile industries, government development projects, power generation centers, and international non-government organizations.

Bangladesh bank (hereinafter, BB) has proper guidelines and allows foreigners to remit their earnings. Day by day BB provided better opportunities to foreigners.

Foreigners employed in Bangladesh could remit 75% of their monthly salary after deducting all admissible expenses, saving and admissible retirement benefits through an authorized dealer. In April 2013, the BB had raised the limit on remittance for foreign nationals to 75 percent of their net income from 50 percent.

The BB issued a circular on 27th December 2021 as part of the liberalization of its remittance facility for foreigners working in Bangladesh (FE Circular no.: 33).?This circular says that foreigners residing in Bangladesh and have income in Bangladesh would be able to remit 80 percent of their net income after tax every month.

The remaining 20% of foreign nationals' net income will be remittable at the end of the financial year upon completion of income tax assessment, supported by a certificate issued by the tax authority concerned.

BB also instructed the employers of the foreign nationals to prepare the certificate under para 2(a) under of amended Appendix 5/81 considering all the monetary and non-monetary benefits as specified in the work permit granted by the competent authorities in compliance with the relevant provisions of income tax regulations in force.

BB also issued a circular on 8th February 2022 for foreign individuals and business entities who are providing services in the country to pay 25 percent tax against their income before repatriating it as outward remittances. The central bank's Foreign Exchange Policy Department instructed all the dealer banks through a circular issued in this regard on February 8, 2022. According to the circular, if the authority finds irregularities in repatriating income, then an additional 2 percent simple interest charge will be applied monthly, apart from the existing 25 percent tax on income.

Practice and Calculation for family Remittance of a Foreign National working in Bangladesh:

Foreigner needs to open a Remittance file in AD Bank with Passport, Work Permit, TIN, Salary Pay Slip and BB prescribe form. AD usually do the below calculation at the time of salary outward remittances:

Note: Foreigners can remit the salary income 100% end of the year after the Tax assessment of the income year.

Reference:

1. 1.FE Circular Letter No. 33 Date: 27 December 2021
2. 2.FE Circular Letter No. 08 Date: 09 February 2022
3. 3.Guidelines for Foreign Exchange Transactions (GFET Vol-1, 2009),?Chapter 11, Clause 8.?