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GENERAL NOTES

The basic objective of this statistical survey is to identify the sources through which Foreign Direct Investment (FDI) come into Bangladesh and vice versa and quantify the magnitude of such resource flows. In recent times, as you are probably aware, FDI is increasingly being favoured all over the world as a more productive form of financing development activities than the traditional Official Development Assistance. As the central bank of the country, Bangladesh Bank is responsible for monitoring FDI flows, which are to be used in compiling balance of payments statistics and international investment position of Bangladesh. Periodicity This survey will, henceforth, be conducted by the Bangladesh Bank twice a year, covering the period January-June and July-December. The attached survey form, duly completed, should be submitted to the General Manager, Statistics Department, Bangladesh Bank, Head Office, Dhaka by 30th September (for the January-June period) and 31st March (for the July-December period). If you have no information to report, send a ‘nil’ statement. The report forms must be duly authenticated by a responsible official of your enterprise. Use informed estimates or provisional figures if actual/audited figures are not readily available. Authority Bangladesh Bank has the full legal authority to request from any natural or juridical person any data or information for the proper execution of its duties, in terms of Article 69 of the Bangladesh Bank Order, 1972. (President’s Order No. 127 of 1972). Data Confidentiality Bangladesh Bank respects the right to privacy and confidentiality of the respondents and likes to mention that, under no circumstances will any individual statement or data be published or made known to any other individual or corporate body without express written permission of the respondent concerned. Aggregated data, when published, will naturally conceal individual identity. Others Please take some time to go through the attached Technical Notes to understand methodological issues. If you need more information or help, please feel free to get in touch with: FOREIGN INVESTMENT AND EXTERNAL DEBT STATISTICS DIVISION Statistics Department Bangladesh Bank Head Office, Dhaka. Telephone: 7120940 Telefax: 9566212 e-mail:gmstat2@bangla.net

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a group of related individuals.1: FOREIGN INVESTMENT IN BANGLADESH FORM FI-2: BANGLADESHI INVESTMENT ABROAD Definitions: 1. A foreign direct investor is an individual. enterprises or other organizations ordinarily domiciled in a country other than Bangladesh. Foreign Direct Investment: Foreign direct investment reflects the object of obtaining a lasting interest by a resident entity in one economy ("direct investor") in an entity resident in an economy other than that of investor ("direct investment enterprise"). Actually. subsidiaries and affiliates of foreign banks and enterprises operating in Bangladesh and persons who normally live in Bangladesh for one year or more are Bangladeshi residents.although the investor usually could be expected to have net foreign claims and the enterprise to have net foreign liabilities. Branches. Residents and nonresidents: Residents include all individuals. It is often referred to as an asset for the economy of the direct investor and as a liability for the economy in which the direct investment enterprise operates. as are persons who do not normally live in Bangladesh. The components of FDI equity capital transactions are ordinary shares. Foreign assets of resident enterprise/company/entity comprise its claims on nonresidents and liabilities comprise its indebtedness to nonresidents. Nonresidents are individuals. each other . both incorporated and unincorporated. reinvested earnings. Foreign Assets and Liabilities: An asset or liability must represents actual claims that are legally in existence. households. or liabilities to. regardless of whether they are citizens or are owned by Bangladeshi citizens or foreigners. households. a subsidiary. enterprises or other organizations operating in Bangladesh. Nonresident branches and subsidiaries of Bangladeshi banks and enterprises operating in another country are examples of nonresidents. Direct investment involves both the initial transaction between the two entities and subsequent capital transactions between them and among affiliated enterprises.that is. These units have a centre of economic interest in Bangladesh. the investor and the enterprise have claims on. regardless of citizenship. 2. revaluation & capital reserves. an incorporated or unincorporated public or private enterprise.TECHNICAL NOTES Survey Questionnaire FORM FI. share money deposits. 3. or a group of related incorporated and/or unincorporated enterprise which has a direct investment enterprise . The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Page 2 of 10 . and other reserves.

Other Capital: This covers remittances received by incorporated and unincorporated resident direct investment enterprises on account of loans. Equity Capital: Remittances received by the incorporated or unincorporated direct investment enterprises operating in Bangladesh on account of equity participation in those by the nonresident direct investors. 1. Information required: FORM FI-1 on foreign investment in Bangladesh seeks comprehensive information on the financial claims on and liabilities to nonresidents through form 1(A). general reserve. A direct investment enterprise is defined as an incorporated or unincorporated enterprise in which a foreign investor owns 10 per cent or more of the ordinary shares or voting power of an incorporated enterprise or the equivalent of an unincorporated enterprise. debt securities and suppliers credit etc.associate or branch . b) Revaluation & Capital Reserves: This item comprises revaluation reserve. non-remittable special capital reserve.a subsidiary or associate company . c) Share Money Deposits: These are the deposits of the shareholders to get ordinary shares in future.operating in a country other than the country or countries of residence of the foreign direct investor or investors. in an associate enterprise a direct investor owns 50 percent or less shares and branches are wholly or jointly owned unincorporated enterprise either directly or indirectly owned by the direct investor. Direct investors may have direct investment enterprise which have subsidiaries. form 1(B) and form 1(C) respectively. non-distributable special reserve and premium on shares. Page 3 of 10 . capital reserve. associates and branches in one country or in several countries. d) Reinvested earnings: It is the amount of profit retained for reinvestment. Equity capital comprises: a) Ordinary Share: This item represents the total paid-up capital against issue of ordinary shares. e) Other Reserves: This item comprises tax holiday reserve. A direct investment enterprise may be an incorporated enterprise . reserve for bonus share. 2. In a subsidiary enterprise a direct investor owns more than 50 percent shares. from the foreign direct investors. Equity capital investment of the nonresidents (Direct Investors) in a resident enterprise (Foreign owned or Joint venture) should be reported on the liabilities side against the item 1 of Form FI-1(B).or an unincorporated enterprise (branch). special reserve etc.

It also includes debt securities that have been sold under repurchase agreements. If a resident enterprise or direct investment enterprise lends to any nonresident. either as direct investors or as other nonresidents). advance payments by nonresidents to the reporting enterprise for "work that is in progress or to be undertaken". either as direct investor or as other nonresidents). Trade credits increase due to export of goods to nonresidents and decreases when its value is received. either as direct investors or as other nonresidents). either as direct investors or as other nonresidents). It is called accounts receivable. These transactions are to be reported on the claims side of form FI-1(A) against item 1(b) or 4(b) according to the category of the enterprises (i. If a resident enterprise borrows from any nonresident.e. fixed sum of money on a specified date.1. it should be reported on the liabilities side of Form FI-1(B) against the item 2(a) or 6(a) according to the category of the lenders (i. Short-term: Short-term means an original term to maturity of one year or less. overdrafts etc. It is called accounts payable. c) Other debts: It covers money market instruments.2. commercial paper. These transactions are to be reported on the liabilities side of form FI-1(B) against item 2(b) or 6(b) according to the category of the enterprises (i. Long-term: Long-term means an original term to maturity of more than one year. either as direct investors or as other nonresidents). it should be reported on the claims side against the item 2(a) or 5(a) of Page 4 of 10 .e. it should be reported on the claims side against the item 1(a) or 4(a) of Form FI-1(A) according to the category of the borrowers (i.e. overdrafts etc. a) Loans: It includes loans.e.) from non-residents and decreases when its value is paid. it should be reported on the liabilities side of Form FI-1(B) against the item 3(a) or 7(a) according to the category of the lenders (i. raw materials etc.2. Trade Credit increases due to purchase (foreign) or import of goods (say.e. and bankers' acceptances that usually give the holder the unconditional right to receive a stated. If a resident enterprise or direct investment enterprise lends to any nonresident. b) Trade credit and accounts payable (Liabilities): Trade Credits may arise due to • • direct extension of credit by buyers (nonresidents) to the reporting enterprise for goods and services transactions. 2. such as bills. yarn. a) Loans: It includes loans. Trade Credit and accounts receivable (Claims): Trade credits may arise due to direct extension of credit by suppliers (reporting enterprise) to non-residents for goods and services transactions. If a resident enterprise borrows from any nonresident.

either as direct investor or as other nonresidents). If a non-resident purchases equity securities issued by a resident enterprise. after the claims of all creditors have been met. Preference rights are defined in the articles of association of the relevant company but may relate to dividend. d) Other: It covers shares in mutual funds and investment trusts. • convertible (into ordinary shares).e. claims to the residual values of enterprises. and notes that usually give the holder the unconditional right to a fixed cash flow or contractually determined variable money income. It covers all instruments and records acknowledging. depository receipts etc. debentures. There are two types of preference shares such as i) Participating Preference share These preference shares have further rights that are normally linked to the relevant company's profits or dividend payment on ordinary shares. c) Share Money Deposits: These are the deposits of the shareholders to get ordinary shares in future. or distribution of surplus assets. b) Bonds and notes: It covers bonds. 3. then the resident enterprise should report the amount of securities sold to the non-resident on the liabilities side against the item 5 of Form FI-1(B). Page 5 of 10 . b) Preference shares: Part of the share capital of a company that ranks after secured creditors but before ordinary shareholders in the event of liquidation.e. or • permanent (not redeemable except at issuer's option). Ordinary shares are usually issued in registered form.. • redeemable (at a fixed date or contingent on a special event). c) Other debts: It covers debt securities that have been sold under repurchase agreements and debt securities that have been lent under a securities lending arrangement. voting rights. Equity securities: A security is defined as an instrument that is traded or tradable.Form FI-1(A) according to the category of the borrowers (i. ii) Other Preference share These will have the rights of standard preference shares but may also be: • cumulative (i. income arrears are carried forward to the next payment date). Equity securities comprises: a) Ordinary Share: This item represents ownership share with full voting rights.

special reserve etc. b) Revaluation & Capital Reserves: This item comprises revaluation reserve. If a nonresident enterprise borrows from the resident reporting enterprise. non-remittable special capital reserve. branches and associates operating abroad. all shares in subsidiaries and associates. 2. Equity capital comprises: a) Ordinary Share: This item represents the total paid-up capital against issue of ordinary shares. capital reserve. a) Loans: It includes loans. Direct Investment Abroad: Direct investment in the form of equity capital comprises equity in branches. Page 6 of 10 . overdrafts etc. Equity capital investment of a resident enterprise in a nonresident enterprise should be reported on the claims side against the item 1 of Form FI-2. 1. non-distributable special reserve and premium on shares. e) Other Reserves: This item comprises tax holiday reserve. on account of lending. Short-term: Short-term means an original term to maturity of one year or less.1. Here equity capital is the resident direct investment abroad. suppliers' credit and holding debt securities. it should be reported on the claims side of Form FI-2(A) against the item 2(a). reserve for bonus share. general reserve. c) Share Money Deposits: These are the deposits of the shareholders to get ordinary shares in future.FORM FI-2 on Bangladeshi investment abroad seeks comprehensive information on the financial liabilities to and claims on nonresidents through form 2(A). 2. Equity capital: Remittances abroad by the resident enterprise/company for equity participation in a nonresident enterprise which is an affiliated enterprise of the resident enterprise/company. Other Capital: It covers payment abroad by the domestic enterprises/companies to their subsidiaries. d) Reinvested earnings: It is the amount of profit retained for reinvestment. form 2(B) and form2(C) respectively.

it should be reported on the claims side of Form FI-2(A) against the item 6(a). These transactions are to be reported on the liabilities side of form FI-2(B) against item 1(b) or 4(b) according to the category of the enterprises (i. It is a liabilities (increase) entry.e. and bankers' acceptances that usually give the holder the unconditional right to receive a stated.e. c) Other debts: It covers money market instruments. If a nonresident enterprise lends to the resident reporting enterprises or other residents. Page 7 of 10 . raw materials etc. Trade Credit and accounts receivable (Claims): Trade credits may arise due to direct extension of credit by suppliers (reporting enterprise) to non-residents for goods and service transactions. • Trade Credit increases due to purchase (foreign) or import of goods (say. These transactions are to be reported on the claims side of form FI-2(A) against item 2(b) or 6(b) according to the category of the enterprises (i. It is called accounts payable.It is a claim (increase) entry for this report . Trade credits increase due to export of goods to nonresidents and decreases when its value is received. then the reporting enterprises or other residents should report it on the liabilities side of Form FI-2(B) against the item 1(a) or 4(a) respectively. Long-term: Long-term means an original term to maturity of more than one year.) from non-residents and decreases when its value is paid. fixed sum of money on a specified date. It is a liabilities (increase) entry for this report advance payments by nonresidents to the reporting enterprise for "Work that is in progress or to be undertaken". yarn. either as direct investors or as other nonresidents).2. It is an entry of Accounts receivable. b) Trade credit and accounts payable (Liabilities): Trade Credit may arise due to • direct extension of credit by buyers (nonresidents) to the reporting enterprise for goods and service transactions. such as bills. 2. either as direct investors or as other nonresidents). commercial paper.If a nonresident enterprise borrows from other residents except reporting enterprise.

. b) Preference shares: Part of the share capital of a company that ranks after secured creditors but before ordinary shareholders in the event of liquidation. debentures. Equity Securities Investment Abroad: Remittances abroad for investment in foreign equity securities (shares.e. income arrears are carried forward to the next payment date). then the reporting enterprises or other residents should report it on the liabilities side of Form FI-2(B) against the item 2(a) or 5(a) respectively. Page 8 of 10 . There are two types of preference share such as i) Participating Preference share These preference shares have further rights that are normally linked to the relevant company's profits or dividend payment on ordinary shares. redeemable (at a fixed date or contingent on a special event).) by domestic banks/financial institutions. c) Share Money Deposits: These are the deposits of the shareholders to get ordinary shares in future. c) Other debts: It includes other securities that are not included in the item bonds and notes. and notes that usually give the holder the unconditional right to a fixed cash flow or contractually determined variable money income. it should be reported on the claims side of Form FI-2(A) against the item 7(a). voting rights. b) Bonds and notes: It covers bonds. convertible (into ordinary shares). or distribution of surplus assets.a) Loans: It includes loans. 3. ii) Other Preference share These will have the rights of standard preference shares but may also be: • • • • cumulative (i. stocks etc. overdrafts etc. Preference rights are defined in the articles of association of the relevant company but may relate to dividend. or permanent (not redeemable except at issuer's option). If a nonresident enterprise borrows from the resident reporting enterprise. Equity securities comprises: a) Ordinary Share: This item represents the total paid-up capital against issue of ordinary shares. it should be reported on the claims side of Form FI2(A) against the item 3(a). resident individuals and private and publicly owned enterprises. If a nonresident enterprise borrows from other residents except reporting enterprise. If a nonresident enterprise lends to the resident reporting enterprises or other residents.

Net income includes income received in the form of interest. Valuation: a) Market values should be used to value securities including shares issued by nonresidents and held by the reporting enterprises. are not traded in organized markets. the parent company in the case of a Page 9 of 10 . depository receipts etc. net income. dividends and the reinvested earnings attributable to major owners. they should be valued at book values. the defining factor being it is held in a resident financial institution and owed to a nonresident. c) Values (balances) in foreign currency on the opening date and the closing date should also be converted in the same way. and retained earnings of nonresident enterprises (and associated subsidiaries. exchange rate gains and losses.d) Other: It covers shares in mutual funds and investment trusts. regardless of the currency of transaction. it should be converted to Bangladesh Taka at the mid-point of the buying and selling rate applicable at the related end period. b) Market values should be used to value securities including shares issued by the reporting enterprise and held by nonresidents. other than shares. In case of Bangladeshi direct investment abroad. d) Shares not traded in organized markets should be valued at net asset value (that is assets at current market values less non-equity liabilities at current market values). and any extraordinary items should be excluded from the calculation. Part I(C) seeks information on the profit. Currency and Deposits: These include domestic currency held by nonresidents and deposits held by nonresidents. special tax provisions (such as accelerated depreciation). depreciation should be calculated at the written down replacement cost value. For Both FORM FI-1 and FI-2 1. and retained earnings of the reporting enterprise (and its subsidiaries) attributable to foreign direct investors. Taxes should be recorded when due without penalty. Part II(C) seeks information on the profit. 12. Major owners of an enterprise include the head office in the case of a branch. 2. Positions denominated in foreign currencies: a) All values are to be reported in thousand Taka. Deposits may be in domestic and foreign currencies. b) For outstanding amount denominated in a foreign currency.) attributable to the Bangladeshi direct investors. branches etc. 3. In calculating operating profit. Operating profit and net income {Part I(C) & II(C) }: In case of foreign direct investment in Bangladesh. c) Where securities. net income. Operating profit includes profits from the operations of enterprises. less interest paid.

Interest on debt should be reported on an accrual basis. ******* Page 10 of 10 . interest accrued during the reporting period should be reported. the difference between the discounted issue price and the value at maturity should be treated as interest and reported as it accrues during the period. In the case of instruments for which interest payments are made at maturity. For bonds and other deep-discounted instrument.subsidiary and any enterprise in which an owner has directly or indirectly a 10 percent or more ownership interest.