Bangladesh Bank Simplifies Foreign Exchange Rules for Freelancers and Service Exporters

In a major boost to the country's gig economy, Bangladesh Bank has issued new directives to streamline foreign currency transactions for freelancers and individual service exporters. In a circular issued on Wednesday (July 22), the central bank introduced several key relaxations regarding the receipt, retention, and utilization of foreign earnings, aligning regulatory frameworks with digital trade realities.

Simplified Proof of Foreign Earnings: Under the new guidelines, freelancers are no longer required to submit traditional paper-based export documentation. Instead, platform account statements, emails, digital invoices, and electronic communications will be accepted as valid proof of foreign income, making the fund repatriation process significantly smoother.

No Declaration Required for Inward Remittance up to $20,000: In a major relief for small-to-medium earners, inward remittances of up to $20,000 USD can now be received without submitting formal declarations. Furthermore, the single-transaction ceiling via Online Payment Gateway Service Providers (OPGSP) has been set at $10,000 USD. However, the requirement to ensure timely repatriation of these funds within specified timeframes remains intact.

Dual-Currency Freelancer Cards & MFS Expansion: To bolster the digital payment ecosystem, the central bank permitted the issuance of dual-currency 'Freelancer Cards'. Furthermore, the operational scope for Mobile Financial Service Providers (MFSPs) and Payment Service Providers (PSPs) has been expanded to facilitate faster and more convenient cross-border payment settlements.

50% Foreign Currency Retention in ERQ Accounts: IT and software sector freelancers can now retain up to 50% of their total export earnings in foreign currency inside their Exporters' Retention Quota (ERQ) accounts. For other service exporters, the limit has been capped at 30%. This will enhance their financial flexibility to pay for international business expenses, such as software tools, hosting fees, and global digital marketing.

Business leaders and tech stakeholders welcomed the initiative, emphasizing that aligning the regulatory framework with digital commerce will incentivize freelancers to bring their earnings through formal banking channels. This move is expected to enhance transparency, boost official foreign exchange inflows, and integrate Bangladeshi service exporters more seamlessly into the global digital economy.
//DBTech/ FI/ SME//