Bangladesh is your dream investment destination | Contact: +880 2 55007241-45 Fax: +880 2 55007238-40|info@bida.gov.bd

Incentives

Incentives 2017-05-07T09:50:00+00:00

The most competitive

tax  incentives

The Free Trade Zone Regime is the mainstay of Bangladesh export and
investment promotion strategy. It is a set of incentives and benefits granted by
the Bangladesh government to companies making new investments in the
country and it provides tax incentives.

Companies that may apply for the
Free Trade Zone System Regime:

EXPORT SERVICES
COMPANIES

50% of services
must be exported

SCIENTIFIC RESEARCH
FIRMS

Either companies or organizations

STRATEGIC SECTORS
OR COMPANIES

Outside the Greater Metropolitan Area

SIGNIFICANT
SUPPLIERS

40% of sales to FTZ companies

List of incentives granted:

Bangladesh´s tax incentives and benefits are standardized. They apply to any and all companies according to their operation, so there is no need for negotiation on a per case basis. In addition, entities wishing to set up operations in areas outside the Greater Industrial Area can enjoy greater benefits. Discover the option according to your needs.

Incentives & Benefit for Developers:

TAX
  HOLIDAY

Income tax exemption on income derived from the business development of EZ in a block of 10 years in 15 years. After expiry of  10th year tax exemption will be 70% in 11th year and 30% in 12th year. But the tax exemption will not be applicable from 13th year.

VAT ON
ELECTRICITY

Exemption of VAT on electricity or taxes on sale, of self generated or purchased electric power for use of processing area of EZ (for 10 years).

VAT ON
LOCAL PURCHASE

All purchase excluding petroleum product from Domestic Tariff Area (DTA) shall be exempted from VAT, sales tax etc.

Exemption from custom/excise duties for development of EZs.

Exemption of stamp duty and registration fees for registration of EZ land but limited to first transaction only.
Exemption of stamp duty for registration of loan/credit document.

Exemption from dividend tax.
Exemption of income tax on service charges

Incentives & Benefit for Investors/EZ users:

TAX HOLIDAY For all Economic Zones Income Tax Holiday (ITH)- 1st and 2nd year 100%, 3rd year 80%, 4th 70%, 5th 60%,6th 50%, 7th 40%, 8th 30%, 9th 20% and 10th year 10%.
CUSTOM DUTY Duty free import of raw materials, construction materials, capital machineries, finished goods.
INCOME TAX-OTHERS Exemption from dividend tax (After tax holiday over)
REPATRIATION Full repatriation of capital and dividend.
FREE FLOW FDI No ceiling of FDI.
BACKWARD LINKAGE 100% backward linkage raw-materials and accessories to sell for export oriented industries( EOI) in Domestic Tariff Area( DTA).
LOCAL SALE 20% sale of finished product to DTA (From Export Processing Area –EPA).
SUB- CONTRACTING Sub-contracting with DTA allowed.
STAMP DUTY 50% exemption of stamp duty and registration fees for registration of leasehold land/ factory space.
VAT 80% exemption of VAT on all utility services consumed inside the zone.
CUSTOM DUTY Duty exemption on Export.
CD ON VEHICLE Exemption of CD for import of 2 vehicles within 1st 5 years for foreign investors.
DOUBLE TAXATION Exemption of double taxation subject to Double taxation agreement.
IT INDIVIDUAL 50% Rebate of income tax on salary income of expatriates for 5 years.
CUSTOM BOND Consider EZ as custom bonded area.
FOREIGN EXCHANGE FC loan availability (To ease business activity).
FC Account for Non-Resident.
FC Account for both local and joint venture industry.
JOINT VENTURE Joint venture allowed.
ROYALTIES Royalty, technical fees will be exempted from income tax.
CAPITAL GAINS Tax exemption on capital gain.
SHARE TRANSFER Share transfer allowed.
WORK PERMITS Work permits – No restrictions on issuance of work permits on project related foreign nationals and employees but limited up to 5% of total employees.
RE- INVESTMENT Re-investment of remittable dividend to be treated as new foreign investment.
RESIDENT Resident visa for investment of US$ 75000 or more.
CITIZENSHIP Citizenship for investment of US$ 500000 or more.

FDI in Bangladesh

FDI Magazine’s rankings

_________________

FDI Magazine of The Financial Times in March 2010 conducted a competition entitled “Global Ranking Competition of Economics Zones” based on the following nine categories of ranking:

  • Best Overall Global Special Economic Zone
  • Best Economic Potential
  • Best Cost Effectiveness
  • Best Facilities
  • Best Transportation Link
  • Best Incentives
  • Best Promotion
  • Best Airport
  • Best Port

In the competition out of 700 Economic Zones globally 200 participated in the competition. All the zones were evaluated on a 10 point scale on the basis of some set criteria. Among the top 10 of the two categories Chittagong Export Processing Zone, Bangladesh scored 3rd position in the “Best Cost Effectiveness” and also 4th position in the “Best Economic Potential” for 2010-2011.

Source: FDI Magazine

We offer the most attractive and

cost-effective tax incentives in the region

Investment Climate of  Bangladesh

The broad investment climate of Bangladesh is very much conducive to investors. The successive government of Bangladesh has given highest priority in augmenting private investment in Bangladesh. The regime is considered as the most competitive in South Asia. There is no restriction on the amount of share of investment. Foreign investors are eligible to take advantage of a wide range of generous tax concessions and other fiscal incentives and facilities. Investment in Bangladesh is secure vis-à-vis nationalization and expropriation. To facilitate investment Bangladesh is signatory to Multilateral Investment Guarantee Agency (MIGA) of the World Bank Group, Overseas Private Investment Corporation (OPIC) of USA and International Centre for Settlement of Investment Disputes (ICSID) and also a member of World Association of Investment Promotion Agencies

Exemption from tax of newly established industrial
undertakings set up between the period of July, 2011 and June,
2 [2019], etc. in certain cases.
( as per SECTION 46B of the Income Tax Ordinance, 1984)

Income, profits and gains from an industrial undertaking set-up in Bangladesh
between the first day of July, 2011 and the thirtieth day of June, 2019 (both
days inclusive) shall be exempted from the tax payable under this Ordinance
for the period, and at the rate, specified below:

Income, profits and gains from an industrial undertaking set-up in Bangladesh between the first day of July, 2011 and the thirtieth day of June, 2019 (both days inclusive) shall be exempted from the tax payable under this Ordinance for the period, and at the rate, specified below:

Fiscal-and-Non-Fiscal-Incentives

Bangladesh offers some of the world’s most competitive fiscal non-fiscal incentives. BOI can advise further on this matter. In summary and in most cases, these amount to the following: Remittance of royalty, technical know-how and technical assistance fees. Repatriation facilities of dividend and capital at exit. Permanent resident permits on investing US$ 75,000 and citizenship on investing US$ 500,000.

____________

Fiscal Incentives

1. 10 years tax holiday for the Industries to be established before 1st January, 2012 and Industries to set up after 31st December, 2011 tax holiday period will be:

Tax exemption period                                          Rate of tax exemption

First 02 years (1st and 2nd Year) 100%
Next 02 years (3rd and 4th Year) 50%
Next 01 years (5th Year) 25%

2. Duty free import of construction materials
3. Duty free import of machineries, office equipment & spare parts etc.
4. Duty free import and export of raw materials and finished goods
5. Relief from double taxation
6. Exemption from divident tax
7. GSP facility available
8. Accelerated depreciation on machinery or plant allowed
9. Remittance of royalty, technical and consultancy fees allowed
10. Duty & quota free access to EU, Canada, Norway, Australia etc.

Non – Fiscal Incentives

1. 100% foreign ownership permissible
2. Enjoy MFN (most favored nation) status
3. No ceiling on foreign and local investment
4. Full repatriation of capital & dividend
5. Foreign Currency loan from abroad under direct automatic route
6. Non-resident Foreign Currency Deposit (NFCD) Account permitted
7. Operation of FC account by ‘B’ and ‘C’ type Industries allowed.

Facilities

1. No UD, IRC, ERC and renewal of Bond license
2. Work permits issued by BEPZA
3. Secured and protected bonded area
4. Off-Shore banking available
5. Import on Documentary Acceptance (DA) basic allowed
6. Bank of Back L/C
7. Import and Export on CM basis allowed
8. Import from DTA (Domestic Tariff Area)
9. 10% sale to DTA (Domestic Tariff Area)
10. Customs clearance at factory site
11. Simplified sanction procedure
12. Sub-contracting with export oriented Industries inside and outside EPZ allowed
13. Relocation of foreign industries allowed
14. Accords Residentship and Citizenship
15. One Window same day service and simplified procedure.

Print Friendly, PDF & Email