FAQ , Investment Incentives, Privileges and Facilities

What privileges and facilities are provided to the registered investors, apart from the incentives for investment?

Oct 11, 2021

Aside from the “incentives” to registered investors, investors in general can benefit from various privileges and facilities. Some of the major privileges are:

• Double taxation prevention in accordance to the bilateral double taxation treaties,
• Repatriation of invested capital, profit, and dividend,
• Remittance of royalty, franchise, technical license/ know-how/ assistance fees,
• Reinvestment of remittable dividends (treated as new investment),
• Provision of transfer of shares held by foreign shareholders to local investors, etc. In addition, export-oriented industries (exporting more than 80% of their goods and services) regardless of their locations (i.e., within or outside EZ/ EPZ) can benefit from the following privileges and facilities:
• Eligible to be exempted from income tax for 50% earnings from export (unless paying tax at reduced rate),
• Bonded warehouse (BWH) and duty drawback (tariff refund) systems,
• Eligible to open back-to-back letter of credit (L/C), and receive loans up to 90% of the value against irrevocable or confirmed L/C sales contract,
• Eligible to receive export retention quota (ERQ) which can be utilized for marketing, overseas office establishment, trade fair participation, etc.,
• Export credit guarantee for facilitating access to foreign exchange finance for material/ input procurement,
• Eligible to claim advance income tax rebate on export earnings, and exempt taxes on a specified quantity of samples for manufacturing export goods,
• Can be allowed to import banned and restricted goods if they are deemed essential material and input for manufacturing export goods, and,
• Eligible to sell up to 20% of goods locally as far as trading is settled by L/C in foreign currency and related taxes are paid. Exporters of certain sectors enjoy additional benefits in the form of a subsidy or cash incentive based on some conditions.