Non-Resident Borrowings Relaxed
The RBF has announced the relaxation of the local borrowing by non-resident companies.
The non-resident controlled companies can now have access to more borrowing from commercial banks and other lending institutions. The relaxation of this policy means that non-resident companies can now borrow up to a certain percent locally based on the debt-to-equity ratio. The guideline to this ratio is 3:1. This ratio is subject to verification by a chartered accountant.
The conditions for the borrowing are as follows:
§ for 51% - 70% non-resident ownership – can borrow up to 85% local financing;
§ for 71% - 90% non-resident ownership – can borrow up to 75% local financing; and
§ for 91% - 100% non-resident ownership – can borrow up to 60% local financing.
The policy is effective immediately.