Bangladesh Bank has granted general permission for fully foreign-owned industrial enterprises, operating both within and outside specialised economic zones, to borrow directly from their parent companies, associates, or shareholders abroad, in a move aimed at easing access to finance for foreign investors.

The central bank's Foreign Exchange Investment Department (FEID) issued the directive through FEID Circular on Wednesday revising earlier provisions under FE Circular No. 34 of September 2, 2025, which governed external borrowing by such enterprises.

Under the new provisions, foreign-owned manufacturing and service enterprises outside specialised zones such as EPZs, PEPZs, EZs and HTPs can now avail short-term borrowing of less than one year without prior Bangladesh Bank approval, provided the funds are used for genuine business purposes.

The circular allows two options for such borrowing-enterprises may take interest-free loans for general working capital needs, excluding input procurement, with no central bank clearance required even for principal repayment.

Alternatively, they may opt for cost-bearing loans in convertible foreign currencies, including for input procurement, but the all-in cost of such borrowing must not exceed 3 percent per annum.

These loans must be repaid in a single bullet payment at maturity and may be rolled over, provided the total tenor, including rollovers, does not exceed three years from the date of initial drawdown. Such short-term facilities cannot be converted into medium or long-term loans.

Authorized Dealers (ADs) have been directed to report all such transactions to the FEID within one week of execution, in addition to routine reporting requirements.