Desk Report,
‘Expatriate Bonds’: Investment gains, tax-free income and added security
Investment opportunities in the country are limited for Bangladeshis working abroad. As a result, it is necessary to be aware of the opportunities that are available. It is not possible for many to keep some money in hand after returning home. Therefore, the Wage Earners Development Bond—also known as the ‘Expatriate Bond’—has long been a popular investment medium for expatriates.
‘Expatriate Bonds’: Investment gains, tax-free income and added security
Much like a bank’s fixed deposit, expatriates invest a lump sum of money with the government in this bond and get that money back with profit after a specified period. But the difference is that the profit rate here is relatively high, the income is completely tax-free, and there is also death risk insurance. This bond pays simple interest at the rate of 12 percent per annum. That profit is available every six months. Suppose someone invests one lakh taka—after six months, he will receive 6,000 taka, a total of 12,000 a year. The biggest advantage is that there is no withholding tax or income tax on this income. Whereas tax is deducted in other savings certificates, expatriate bonds are completely tax-free. Once upon a time, these bonds used to earn compound interest; but now they earn simple interest. The government can increase or decrease the interest rate from time to time.
Although the profit on a foreign currency investment of 15 lakh taka in bonds is 12 percent, the profit is 11 percent for investments of 15 lakh taka to 30 lakh taka, 10 percent for investments of 30 lakh taka to 50 lakh taka, and 9 percent for investments of 50 lakh taka to 1 crore taka. The financial benefit that is given to the nominee or person nominated by the bondholder in case of death before maturity is the death benefit. However, the death benefit is not more than 20 lakh taka and the bondholder must be below 55 years of age. If the nominee wants to take the death benefit, he has to apply within three months of the death of the bond investor. After the death of the bondholder, his heirs will receive the principal and profit on the maturity of the bond. Expatriate bonds can be used not only to earn profit, but also as collateral for bank loans if necessary. It is possible to get a loan of up to 75 percent of the investment. However, this loan cannot be taken outside the country and cannot be used as collateral for a third party. The bond has a term of five years. However, it can be renewed twice more if desired – meaning that a one-time investment can be effective for up to 15 years. Many people also use it as a long-term pension plan. Currently, there is no investment limit in this bond. If desired, several crores of taka can be invested. Although there were some restrictions earlier, the opportunity is now more open for big investors.
In November 2024, the government lifted the investment limit on Wage Earners Development Bonds for expatriate Bangladeshis. Since December 1, expatriate Bangladeshis have been able to buy as many Wage Earners Development Bonds as they want. Expatriate Bangladeshis have had the opportunity to invest in US Dollar Premium Bonds and US Dollar Investment Bonds for as long as they want. Now, Wage Earners Development Bonds have been added to this list.
According to the government notification, if someone buys Wage Earners Development Bonds for one term with expatriate income, they will be given reinvestment facilities for two consecutive terms. That is, they can invest for a total of 15 years in three terms.
Non-resident Bangladeshi mariners, pilots and cabin crews working in foreign offices of foreign-owned shipping and aviation or airways companies will have the opportunity to invest in Wage Earners Bonds. To buy expatriate bonds, you will need a national identity card, passport, copy of valid visa, proof of employment, and a savings account in Bangladesh. If you are a businessman, you will need a trade license, and for professionals, a professional certificate.
These bonds can be purchased at Bangladesh Bank, exchange houses, exchange companies and foreign and authorized dealer (AD) branches of scheduled banks. The profit from these bonds is exempt from income tax. There is also an opportunity to take a loan against the bonds. Apart from this, there is no obligation to have a foreign currency (FC) account to buy bonds.
