Foreign transactions for freelancers made easier: What's changed?

Bangladesh Bank has introduced new measures to simplify foreign currency transactions for freelancers and individual service exporters, aiming to support the country's rapidly growing digital services sector.

Under the central bank's new guidelines, freelancers will now be able to receive foreign earnings based on electronic evidence such as platform statements, emails and other forms of digital communication.

This will reduce reliance on conventional export documentation and bring the regulatory framework more in line with the realities of digital commerce.

To facilitate smaller transactions, service export earnings of up to USD 20,000 can now be repatriated without submitting a formal declaration. In addition, payments of up to USD 10,000 per transaction may be received through Online Payment Gateway Service Providers (OPGSPs). However, such earnings must still be repatriated to Bangladesh within the prescribed timeframe.

The circular also allows banks to issue dual-currency "Freelancer Cards". It further expands the use of Mobile Financial Service Providers (MFSPs) and Payment Service Providers (PSPs), making digital payments easier and more efficient.

Freelancers in the information technology sector will now be allowed to retain up to 50 per cent of their export earnings in foreign currency under the Exporters' Retention Quota (ERQ) facility. This will enable them to keep part of their earnings in US dollars to pay for international software subscriptions, cloud services, online advertising and other foreign expenses.

For exporters of other services, the foreign currency retention limit has been set at 30 per cent.

According to market insiders, if the new guidelines are implemented effectively, they could encourage more freelancers and service exporters to bring their export earnings into the country through formal banking channels. This would not only increase foreign currency inflows but also make it easier to accurately track export earnings from the services sector.

Bangladesh has seen rising foreign exchange earnings from information technology and other digital services. However, many freelancers have been discouraged from using formal channels because of cumbersome documentation requirements, difficulties in repatriating funds and limitations in international payment systems. The new measures are intended to remove many of those barriers.