Capital worth at least Tk 10 billion and a paid-up capital worth Tk 1 billion have been authorised by the investors and will be eligible to build gold refineries in Bangladesh.
Investors are mandated to set up the refineries on at least 20 bighas of their constant and own land.
The conditions have been included in the standard operating procedure (SOP) for setting up and operating gold refineries.
The SOP, dated July 7, 2021, was issued by the commerce ministry via a gazette notification in an attempt to implement the Gold Policy (amended)-2021.
As of right now, there is no gold refinery in Bangladesh as the import of raw gold was restricted.
The import of raw gold was permitted by the commerce ministry for the first time on June 3, 2021, by issuing the amended Gold Policy.
A circular was issued by the foreign exchange policy department of Bangladesh Bank, on July 1, 2021, with an instruction that import of unrefined gold would be allowed for the investors who will have their own refinery.
It has been claimed by the investors that the amended gold policy will open up new avenues in industrialisation in Bangladesh.
In line with the SOP, it is compulsory for the investors to complete the work on their gold refineries within 2 years of awarding licences.
Local investment in gold refineries is encouraged by the government or other areas of the jewellery industry for a minimum of 10 years.
In line with the policy, the government would allow unrefined or partially refined gold. It is compulsory for the entrepreneurs to refine those at their own refinery plants to produce and market different grades of gold bars and gold coins.
The raw gold’s source has been established in the SOP on the basis of the stock of nearly 100 tonnes of gold in one or more gold mines or having the capacity to supply 10 tonnes of partially refined gold (DORE) in a year.
The gold mines have to be recognised as the highest-grade gold mines for importing unrefined gold.
A memorandum of understanding has to be signed by the entrepreneurs with one or more international standard companies to import gold.
The source of raw gold importers must not have any involvement in money laundering or not have any sanction by the international community.
In line with the SOP, the bonded warehouse facility and tax holiday facility will be offered by the National Board of Revenue (NBR) after starting production for a certain period, considering the investment cost and risk-factor in the financing, duty-free facility on import of capital machinery and other consumable products to be used in refineries.
Entrepreneurs will have to submit reports on import, sale, stock or purchase of gold to the divisional officer of the Value Added Tax (VAT) office.
Investors will have to submit applications to the commerce ministry for setting up gold refineries along with details of probable capacity and necessary documents.
There will be two committees–one for selecting investors and another for scrutinizing compliance.
In 2019, the world market for gold jewellery was equivalent to US$229.3 billion and it is expected to reach US$291.7 billion in 2025.