Your bank, in Dhaka
"An advance remittance needs a repayment guarantee from a bank abroad."
Bangladesh Bank, Guidelines for Foreign Exchange Transactions, Vol-1, Ch.7 §II
The factory, in China
"We take T/T. 30% deposit, 70% before shipment."
The answer from most real manufacturers, every time
Not at the price, not at the specification, but at the moment the money has to leave Dhaka. Here is how the deal still closes, without asking either side to change how it works.
Why neither side moves
Rulebook one · Dhaka
Under Bangladesh Bank's Guidelines for Foreign Exchange Transactions, an authorised dealer may remit an advance against imports only where the purchase contract requires it and the supplier furnishes a repayment guarantee from a bank abroad — one that can be invoked if the goods never ship.
The guidelines waive that guarantee only for small advances on books, journals and life-saving medicines (up to USD 2,500). Everything else without a guarantee goes to Bangladesh Bank case by case.
Relaxations are issued by circular from time to time — your AD bank will tell you what is current. What does not change is the direction: advance payment is the exception, the letter of credit is the norm.
Rulebook two · China
Ask a Chinese manufacturer to arrange a repayment guarantee from its bank for one export order and the answer is no — the bank wants collateral, the paperwork outlasts the order, and the factory has ten other buyers paying T/T tomorrow.
Ask the same factory to accept your letter of credit and the answer is usually also no. Their fear is the discrepancy: one wrong date, one missing endorsement, and the bank refuses the documents after the goods have already sailed. Most factories have neither the documentation staff nor the appetite.
The ones that do accept LCs are usually trading companies — which is fine, except you are now paying a margin for the privilege.
So the buyer who insists on doing it himself has three bad options: pay a trading company's margin, split the order into pieces small enough to slip under a threshold, or send money in ways that leave him with no recourse at all. There is a fourth.
The structure
You open the letter of credit to us. We pay the factories by T/T. Your bank sees an instrument it recognises; the factory sees the payment method it always takes. The currency, the timing and the documents in between are ours to carry.
Bangladesh side
An irrevocable letter of credit at sight, opened through your AD bank against the LCAF, in favour of XILINK.
Your bank is satisfied: this is the instrument the rulebook is built around. Your remittance is documented, reportable and inside the regulations.
Letter of creditThe span — this is us
We present the documents your bank asked for and we finance the factories ourselves in the meantime.
The discrepancy risk that frightens the factory sits with us, not with you. The exchange exposure between LC settlement and factory payment sits with us. If three factories ship on three different dates, the consolidation and the single clean document set are ours to produce.
Documents · timing · FXChina side
T/T in the currency and split each factory expects — the terms it would give any domestic buyer.
No factory is asked to learn letters of credit, arrange a bank guarantee, or change how it works. That is exactly why they quote us their real price.
Bank transferTell us what you need to pay for →
Read the two ends again: nothing was asked of your bank, and nothing was asked of the factory. That is the whole point — the friction was never a negotiating problem, it was a structural one, and structure is what a buying office is for.
Worked through
This is the shape of a common transaction, not a specific past order — the amounts and dates on your deal will be your own. What is worth studying is the sequence, and which document has to exist before the next step can happen.
One PI covering everything, even when the goods come from several factories, with HS classification, quantities, unit prices, port of loading, shipment window and the payment term written as irrevocable L/C at sight. Your bank works from this document, so it has to be right before anything else moves.
Against your IRC and the PI. Typical terms: at sight, partial shipment allowed or not depending on how many factories are involved, latest shipment date set with production time and the shipping schedule in mind — not optimistically.
Deposits go out to the factories by T/T on our money, against our own inspection schedule. This is the stage where a buyer paying directly would already be exposed; here the exposure is ours until the goods exist.
Goods are checked against the specification before the balance is paid and before anything is loaded. A correction costs a phone call at the factory; the same correction costs demurrage at Chattogram.
Several suppliers, one container, one bill of lading. This matters for the credit as much as for the freight: one shipment produces one clean set of documents instead of three sets that each have to comply.
The set your bank named — invoice, packing list, bill of lading, certificate of origin and whatever else the credit calls for — presented within the presentation period. Getting this set right is the job most factories cannot do, and the reason their LC quotes carry a premium.
With the landed cost already worked out before you committed. If you have not seen how the six taxes compound, that is on the landed cost page.
Your side of the file
Import Registration Certificate. Commercial imports do not clear without it.
Where it goes wrong: Expired, or the category on it does not cover what you are importing
Letter of Credit Authorisation Form — the instrument every later remittance is reconciled against.
Where it goes wrong: Issued against a PI that later changes, so the whole set has to be reissued
The commercial basis of the credit: HS classification, quantities, unit prices, shipment window.
Where it goes wrong: HS code guessed rather than checked; shipment window copied from an optimistic supplier
Bangladesh Bank requires one for every payment against imports, in duplicate.
Where it goes wrong: Not your job to file, but a delay here delays settlement
Usually required before the credit can be issued.
Where it goes wrong: Arranged late, so the LC cannot be opened on the day you needed it
Ask us to check your PI before the bank sees it →
We prepare the documents that originate in China and check them against what your credit actually demands — before the container is sealed, while a correction is still free.
Where we fit
We are a buying office in China for orders that span more factories than you can manage from abroad. On the goods themselves we add no margin — you see and pay the factory's own invoice.
So where does our money come from? From China's export VAT rebate, 9–13% depending on the product, claimed by the exporter of record after the goods leave. It is not a kickback from any factory and it is not a cut hidden in your price. That matters here more than anywhere: because our income does not change with which factory you pick, we have no reason to steer you toward the one that pays us more.
And sometimes this order does not need us. If this one is a straight re-order of a standard item, from a single factory, on a payment route that is already running cleanly, then adding a layer adds cost and nothing else. We will say so about that order.
Straight answers
Only within the rules your AD bank applies. Bangladesh Bank's guidelines allow an advance remittance where the contract requires it and the supplier provides a repayment guarantee from a bank abroad; the guidelines waive that guarantee only for small advances on books, journals and life-saving medicines. In practice a Chinese factory will not arrange such a guarantee for a single order, which is why most Bangladesh imports settle under a letter of credit.
Usually not. What they fear is a discrepancy — a document that does not exactly match the credit, after the goods have already shipped. Factories that do accept LCs tend to be trading companies, and the willingness is priced into the quote.
Yes. The credit is opened in our favour, we pay the factories by T/T, and we present the document set your bank requires. That is the structure this page describes.
At sight is the common shape for this trade and the simplest to get right. Usance terms are possible but they change who is financing what and for how long, so they need to be agreed before the PI is issued, not after the credit is open.
Yes, and it is often the reason to use a buying office at all. One PI, one credit, one shipment, one document set — instead of three credits, three shipments and three chances for a discrepancy.
Then the issuing bank can refuse them, and the goods are already gone. Getting the set right is the work; it is also why we check the documents that originate in China against your credit before the container is sealed.
That is your bank's timetable, not ours, and it depends on your limit and your documents. What you can control is the input: a correct PI with the right HS classification and a realistic shipment window, ready before you walk in.
Tell us what you need to pay for
Tell us what you are buying, roughly what it is worth, and what your bank has said so far. We come back with the structure that works for that order — the proforma invoice your bank can open a credit against, or an honest note that this one does not need us.
Usually within one working day, Bangladesh time.
Please message us on WhatsApp or email info@xilinkglobaltrade.com.