How to Invest in the US Stock Market from Bangladesh
Investing in the US stock market offers Bangladeshi investors exposure to global companies like Apple, Tesla, Amazon, Microsoft, and more. Although Bangladesh does not have direct access to foreign stock exchanges through its own market infrastructure, it is legally possible for individual investors to participate in the US stock market under existing regulations — provided certain conditions are met.
Legal Framework for Foreign Investment by Bangladeshi Residents
Investment in foreign securities by Bangladeshi citizens is governed by:
- Foreign Exchange Regulation Act, 1947
- Guidelines for Foreign Exchange Transactions (GFET)
- Bangladesh Bank circulars and approvals
Under current law, Bangladeshi citizens are not allowed to remit money abroad freely for portfolio investment purposes unless they receive specific permission from Bangladesh Bank.
However, a limited scope exists for investment through:
- Special permission from Bangladesh Bank
- International brokerage accounts using foreign income
- Offshore investments by companies operating abroad
1. Permission from Bangladesh Bank
As per Bangladesh’s foreign exchange laws, individuals cannot transfer funds abroad for investment in foreign stock markets without prior approval. Interested investors must:
- Submit an application to Bangladesh Bank
- Disclose source of funds
- Provide purpose of remittance and investment plan
- Maintain documented trail of earnings (especially if foreign)
Such permissions are rarely granted for individuals but may be considered if:
- The funds originate from legitimate foreign earnings
- The investor is a non-resident Bangladeshi (NRB) remitting income from abroad
- The investment is part of a joint venture or business expansion
2. Using Foreign Earnings (NRBs and Freelancers)
Non-resident Bangladeshis (NRBs) and freelancers with documented foreign income have more flexibility. If you earn in USD or other foreign currencies and retain those earnings in a Foreign Currency (FC) Account in Bangladesh, you may be eligible to:
- Invest in foreign assets using your FC account balance
- Request remittance facility for investment purposes
- Avoid foreign exchange conversion by using dollar earnings
This approach still requires permission from Bangladesh Bank but has greater legal viability if funds are already in foreign currency.
3. International Online Brokerage Accounts
Some Bangladeshi investors open accounts with international brokers offering access to US stocks, such as:
- Interactive Brokers
- TD Ameritrade
- Charles Schwab
- Webull
- eToro or Trading 212 (limited availability)
- Stake, Moomoo, or SoFi Invest
These brokers typically require:
- Passport and proof of address
- Tax identification number (TIN or equivalent)
- Declaration of foreign residence (may affect accessibility)
Note: Funding these accounts from Bangladesh without approval may violate foreign exchange regulations, even though technically feasible using third-party services or dollar cards.
4. Investing via Licensed Third Parties (Limited Scope)
At present, there are no Bangladesh Securities and Exchange Commission (BSEC) licensed intermediaries that offer legal access to US stock markets for retail investors.
Any platform claiming to allow direct investment without regulatory clearance or bank permission should be approached with caution.
5. Offshore Business Structures
High-net-worth individuals or business owners with operations abroad can invest in US markets via:
- Setting up a foreign company or LLC (e.g., in the US, Singapore, or UAE)
- Routing investment through the offshore entity
- Complying with local tax and foreign reporting obligations
This structure is generally used for corporate investment, not individual retail trading.
Taxation on US Stock Investments
| Item | Tax Treatment |
|---|---|
| Capital Gains | Taxable under Bangladeshi income tax laws |
| Dividends from US Stocks | 30% withholding tax by US IRS (may apply DTAA) |
| Reporting Obligation | Must be disclosed in income tax return (if allowed) |
| Tax in Bangladesh | Included in global income; tax rebate may apply |
Investors must ensure full disclosure of foreign assets and earnings under the Income Tax Ordinance, 1984.
Risks and Compliance Concerns
- Violation of exchange control laws may result in fines or legal action
- Investments without Bangladesh Bank approval are not protected by law
- Risk of account closure or asset freezing by foreign brokerages if KYC compliance fails
- Double taxation may occur without proper documentation
Summary Table
| Aspect | Status/Requirement |
|---|---|
| Legal Status | Restricted; requires Bangladesh Bank permission |
| Allowed for NRBs | More feasible if using FC account with documentation |
| International Brokers | Technically accessible but may violate forex laws |
| Foreign Income Use | Permissible with proper disclosure and approval |
| Taxation | Taxable in both US and Bangladesh (if allowed) |
| Offshore Entities | Permitted for corporates with international operations |
| Key Risk | Legal non-compliance under FERA and BB guidelines |
While technically possible, investing in the US stock market from Bangladesh requires strict adherence to foreign exchange regulations. Investors are advised to seek prior permission, use legal earnings, and consult with a qualified tax or corporate lawyer to ensure compliance with Bangladesh Bank and NBR requirements.
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