The government allowed foreign nationals to buy flats in 1996
Foreign individuals and companies engaged in operations in Bangladesh spent approximately Tk321 crore to purchase 216 residential flats in 2022, providing a vital boost to the country’s under-stress foreign currency reserves.
There were 2,486 such purchases worth Tk2,542 crore between 2013 and 2022, a trend that real estate businesses welcome as a significant contributor to the sector’s growth.
Real Estate and Housing Association of Bangladesh (REHAB) President Alamgir Shamsul Alamin told The Business Standard that foreign entities must pay in dollars to buy residential properties in Bangladesh as per the rules, which directly contribute to the growth of the sector and the economy.
According to Shihab Ahmed, senior general manager of Shanta Holdings, expatriates who need to stay in Bangladesh for a long time for work or business usually purchase flats.
Besides, multinational companies buy units to accommodate their expat employees.
Shihab said foreigners don’t look for luxury apartments. “Instead, they prefer mid-range apartments since they want easy resale when they leave the country.”
He added, “A handful of multinational companies have bought luxury apartments.”
Who are buying?
Of the 2,486 units sold during the 10-year period (2013-2022), 1,304 were bought by foreign individuals and 1,182 by companies, according to the unofficial data of the Directorate of Registration.
Last year, out of the 216 units sold to foreigners, 104 were in the capital’s Gulshan, Banani, Badda, Uttara and Bashundhara residential areas. The rest are in different areas of the capital, and different economic zones of the country.
Of these, Chinese nationals and companies bought 54 flats, Indians 47, Koreans 17, Russians 11, Japanese 8, Emiratis 13, and Saudis 9. The rest were bought by citizens and companies of 12 other countries.
In February 2019, two Chinese nationals bought two ready flats of Jhilik Housing in North Badda of the capital. Each of the 900 square feet apartments was priced at Tk85 lakh.
Jhilik Housing Managing Director Hasibur Rahman told TBS that the two Chinese citizens are employed by a Chinese company in Bangladesh and hold job contracts until 2030.
“Before buying the flats, the two had taken permission from the Bangladesh Investment Development Authority (Bida) with the help of their company. After that, the purchase agreement was registered as per law.”
Rules of buying flats
A senior official of the Directorate of Registration told TBS that foreign individuals had been restricted from buying land or houses in Bangladesh.
However, the government permitted foreigners to purchase only flats in 1996, he added.
They require permission also from the Bida, the Bangladesh Bank, the National Board of Revenue, and the Directorate of Registration.
“For multinationals or foreign companies, when they get permission to operate in Bangladesh, they become entitled to purchase properties, including land and houses, under the company’s name,” the official said.
This is due to the legal recognition that once a company is granted permission, it gets the right to enjoy the same rights as a citizen of Bangladesh, the official explained. Companies must also get permission from Bida.
Company law expert Barrister Ajmalul Hossain KC told TBS that according to Bida rules, foreign citizens or companies are restricted to buy residential properties in any project of any government agency such as Rajuk and Chittagong Development Authority.
REHAB President Alamgir Shamsul Alamin said the process of getting approval from the Bida and registration is complicated, requiring various documents including income source, means of money supply, and nominee.
As a result, many foreign individuals who are interested in buying apartments are hesitant to do so, he said. “Simplifying these procedures would attract more foreigners to invest in apartments in Bangladesh.”
He mentioned that in many countries, buying homes is made easier for foreigners. This way the government benefits from a significant revenue generation from the housing sector. It also contributes to those countries’ GDP.