To export a container of garments from Bangladesh you need an Export Registration Certificate, issued by the Office of the Chief Controller of Imports and Exports, renewed yearly, and checked by the bank before it releases your foreign currency. For a year or so, banks had started asking software companies for the same paper. On 17 January the Ministry of Commerce put that to rest: exports in “non-physical form” — software and IT-enabled services — do not require an ERC.
What the notice says
The circular, signed by assistant controller Md Sirajul Islam and referring to a ministry letter of 28 November 2022, states that “in the case of export of services in non-physical form (software and ITES), it is not necessary to obtain an Export Registration Certificate from the Office of the Chief Controller of Imports and Exports.” Copies went to Bangladesh Bank, the Bangladesh Investment Development Authority, the ministry’s export wing, e-CAB, BASIS and BACCO — which is to say, to the banks that had been asking for the certificate and the associations whose members had been refused.
Why it matters: the 10 per cent
The government pays a 10 per cent cash incentive on software and ITES export earnings, paid through the exporter’s bank. Banks, applying the rules written for goods, had begun withholding the incentive from companies without an ERC — a document the Chief Controller’s office was, in turn, not designed to issue to a company that ships nothing. “There was never any ERC requirement for software and ITES exports before,” said Russell T Ahmed, president of BASIS, the software industry association. “A misunderstanding later made it necessary. We sat with the commerce ministry and explained the matter, and it has been resolved. It is good news for BASIS — from now on member companies will again receive the export incentive.”
What to do if you export
- If your bank has been holding incentive claims for lack of an ERC, take it the circular (the ministry’s 17 January notice) and resubmit.
- You still need the rest: a BASIS or BACCO membership for the incentive claim, invoices and the bank’s FTT/PRC records showing the inward remittance, and a tax file.
- Freelancers are not covered by this notice — they were never in the ERC system — but the same 10 per cent applies to earnings brought in through a bank or an authorised MFS, with the ID card the ICT Division issues.
The episode is small but typical: the country’s export machinery was built for things in boxes, and every year some part of it has to be told that code does not come in one.
What the incentive still requires
Removing the certificate removes one document, not the paperwork. The cash incentive on software and ITES export is paid by the bank that receives the money, and it is paid only against evidence that the earnings came in through formal channels in the first place.
In practice that means the receiving bank wants to see what the money was for and that it arrived as an export remittance rather than as a personal transfer. Freelancers who withdraw through a payment service into a personal account frequently find their earnings classified in a way that does not qualify, and discover it only at the point of claiming. Ask the bank which declaration it needs before the money arrives, not after.
