Introduction

Foreign Direct Investment (FDI) is a key element for Bangladesh economy and represents investment made by non-resident investors in enterprises operating in Bangladesh. To monitor foreign investment inflows, ownership, financial position and related transactions, Bangladesh Bank requires enterprises having FDI to submit prescribed FDI returns through their nominated Authorized Dealer (AD) bank. The reporting mechanism is primarily a statistical and regulatory requirement and enables Bangladesh Bank to maintain information on Bangladesh’s international investment position and balance of payments.

What is an FDI Return?

An FDI return is a structured regulatory report that companies with foreign direct investment are required to submit to Bangladesh Bank. It provides a comprehensive account of the foreign investment position of the reporting entity, including details of equity capital, reinvested earnings, intra-company loans, remittance of dividends, repatriation of capital, and other financial flows between the domestic entity and its foreign investors or parent companies.

Who is Required to Submit the FDI Return?

The requirement generally applies to enterprises in Bangladesh having foreign direct investment. This includes:

• 100% foreign-owned companies; and
• joint-venture companies.

However, in practice, the following enterprises are generally not required to submit this return, as they submit a separate return (QRPA) for the same purpose:

• Branch office;
• Liaison office; and
• Representation office.

Reporting Frequency and Deadlines

Under the current Bangladesh Bank Guidelines for Foreign Exchange Transactions, enterprises having inward FDI are required to submit the return on a quarterly basis. The reporting quarters are as follows:

• January – March;
• April – June;
• July – September; and
• October – December.

The FDI enterprise must submit the duly completed return, together with the required supporting information and documents, to its reporting AD bank within 20 days following the end of the relevant quarter.

Prescribed Form

The prescribed format for quarterly FDI return submission is Form FI-1 – Foreign Investment in Bangladesh. Under the current Guidelines for Foreign Exchange Transactions, Volume 2, Form FI-1 is supported by prescribed Rationalized Input Templates (RITs), including information relating to foreign investment, non-resident investors and operating profit. Form FI-1 is available in the below link:

Web link:

Key Information Required in the FDI Return

A standard FDI return form typically requires the reporting enterprise to furnish the following information:

• Basic enterprise details: name, legal form, equity structure, sector/industry, contact and other information;
• Foreign ownership structure: names of foreign investors, their country of origin, and percentage of equity held;
• Equity capital: paid-up share capital, share money deposits, revaluation and other reserves;
• Reinvested earnings: retained profits attributable to foreign investors;
• FDI flows: new inflows during the period, additional capital injections, and any capital repatriation;
• Intra-company loans: outstanding balances, interest payments, and new borrowings from parent/affiliate companies;
• Dividend and profit remittances: amounts repatriated during the reporting period;
• Trade credits: short-term payables and receivables with foreign-affiliated entities;
• Others as per requirements.

Supporting Documents

A key aspect of FDI reporting is that the information reported in FI-1 should be capable of being reconciled with the company's accounting records and supporting documents. Bangladesh Bank's guidelines specifically require reporting enterprises to submit the relevant financial statements/accounts, audited or unaudited, for the reference period together with the quarterly FDI return.

In practice, the AD bank may also request supporting documents such as:

• Audited/unaudited financial statements;
• Bank statements and remittance evidence;
• Share subscription/share transfer documents;
• Dividend declarations and remittance documents; and
• Details of foreign shareholder transactions;

Role of Authorized Dealers (Commercial Banks)

Authorized Dealers (ADs) serve as the critical link between FDI-receiving companies and Bangladesh Bank. Their responsibilities in the FDI return process include:

• Receiving completed FDI return forms from client companies and verifying their accuracy and completeness;
• Forwarding verified returns to Bangladesh Bank within prescribed timelines;
• Assisting companies in understanding reporting requirements, forms, and deadlines;
• Maintaining records of all FDI transactions and related documentation for regulatory inspection;
• Ensuring that any remittance of dividends, profits, or capital is properly documented and that relevant FDI returns are in order; and
• Others as per requirements.

Consequences of Non-Compliance

Failure to submit FDI returns on time or providing inaccurate information is a violation of the Foreign Exchange Regulation Act, 1947. Bangladesh Bank may impose penalties, issue notices, and restrict foreign exchange transactions including dividend repatriation until the company is compliant. Repeated non-compliance can attract more severe regulatory action, including cancellation of the enterprise's foreign exchange permissions. Authorized Dealers that fail to ensure compliance from their client companies may also face regulatory scrutiny.