Tax exemptions are allowed in the following cases:
* Tax exemption on royalties, technical know-how fees received by any foreign
collaborator, firm, company and expert.
* Exemption of income tax up to 3 years for foreign technicians
employed in industries specified in the relevant schedule of the income tax
* Tax exemption on income of the private sector power generation company for 15 years from the date of commercial production.
* Tax exemption on capital gains from the transfer of shares of public limited
companies listed with a stock exchange.
Industrial undertakings not enjoying tax holiday will enjoy accelerated depreciation
allowance. Such allowance is available at the rate of 100 per cent of the cost of the
machinery or plant if the industrial undertaking is set up in the areas
falling within the cities of Dhaka, Narayangonj, Chittagong and Khulna and
areas within a radius of 10 miles from the municipal limits of those cities.
If the industrial undertaking is set up elsewhere in the country,
accelerated depreciation is allowed at the rate of 80 per cent in the
first year and 20 per cent in the second year.
duty, at the rate of 5% ad valorem, is payable on capital machinery and
spares imported for initial installation or BMR/BMRE of the existing
industries . The value of spare parts should not, however, exceed 10% of the
total C & F value of the machinery. For 100%
export oriented industries, no import duty is charged
in case of capital machinery and spares. However, import duty @ 5% is
secured in the form of bank guarantee or an indemnity bond will be returned
after installation of the machinery. Value
added Tax ( Vat)
is not payable for imported capital machinery and spares.
Private investment from overseas sources is welcome
in all areas of the economy with the exception of the four reserved
sectors (mentioned earlier). Such investments can be made either
independently or through venture on mutually beneficial terms and conditions.
Foreign investment is, however, especially desired in the
following major categories of industries:
* Export oriented industries
* Industries in the Export Processing Zones ( EPZs)
* High technology products that will be either import substitute
or export oriented.
(a) For foreign direct investment, there is no limitation pertaining to foreign
equity participation, i.e. 100 percent foreign equity is allowed.
Non-resident institutional or individual investors can make portfolio
investments in stock exchanges in Bangladesh. Foreign investors or companies
may obtain full working loans from local banks. The terms of such loans will
be determined on the basis of bank-client relationship.
(b) A foreign technician employed in foreign companies will
not be subjected to personal tax up to 3 (three) years , and beyond
that period his/ her personal income tax payment will be governed by the
existence or non-existence of agreement on avoidance of double taxation with
country of citizenship.
Full repatriation of capital invested from foreign sources will be allowed.
Similarly, profits and dividend accruing to foreign investment may be
transferred in full. If foreign investors reinvest their repatriable
dividends and or retained earnings, those will be treated as new investment.
Foreigners employed in Bangladesh are entitled to remit up to 50 percent of
their salary and will enjoy facilities for full repatriation of their savings
and retirement benefits.
Foreign entrepreneurs are, therefore, entitled to the same facilities as
domestic entrepreneurs with respect to tax holiday, payment of royalty,
technical know-how fees etc.
The process of issuing work permits to foreign experts on the recommendation
of investing foreign companies or joint ventures will operate without any
hindrance or restriction. Multiple
entry visa" will be issued to prospective foreign investors for 3 years.
In the case of experts," multiple entry visa" will be issued for the
whole tenure of their assignments.
Citizenship by investing a minimum of US $ 500,000 or by transferring
US$ 1,000,000 to any recognised financial institution ( Non-repatriable ).
Permanent residentship by
investing a minimum of US$ 75,000 ( non-repatriable).
Special facilities and venture capital support will be provided to
under "Thrust sectors" .
Thrust Sectors include Agro-based industries, Artificial
flower-making, Computer software and information technology, Electronics,
Frozen food, Floriculture, Gift items, Infrastructure, Jute goods, Jewellery
and diamond cutting and polishing, leather, Oil and gas, Sericulture and silk
industry, Stuffed toys, Textiles, Tourism.
Protection: The policy
framework for foreign investment in Bangladesh is based on 'The Foreign
(Promotion & Protection ) Act. 1980,'
which ensures legal protection to foreign investment in Bangladesh
against nationalisation and expropriation. It also guarantees
non-discriminatory treatment between foreign and local investment, and
repatriation of proceeds from sales of shares and profit.
International Agreements: Bangladesh
has concluded bilateral agreements for avoidance of double taxation and
investment treaties for promotion and protection of investment with the
Canada, China, Denmark, France, Germany, India, Italy, Japan, Poland,
Romania, Singapore, South Korea, Sri Lanka, Sweden, Thailand, The
Netherlands, United Kingdom ( including
Northern Ireland ). Negotiations are ongoing with U.S.A, Iran,
Philippines, Qatar, Australia, Nepal, Turkey, Indonesia, Cyprus, Norway,
Finland and Spain.
treaty: Belgium, Canada,
France, Germany, Iran, Italy, Japan, Malaysia, Pakistan, Philippines, Poland,
Republic of Korea, Romania, Switzerland, Thailand, The Netherlands, Turkey, United
Kingdom, USA, Indonesia. Negotiations are ongoing with India,
Hungary, Oman, Maldova, DPRK, Egypt, Austria, Mauritius, Uzbekistan.
addition, Bangladesh is a signatory to MIGA ( Multilateral Investment
Guarantee Agency), OPIC ( Overseas Private Investment Corporation ) of USA,
Centre for Settlement of Investment Disputes) and a member of the WIPO
(World Intellectual Property Organization) permanent committee on
development co-operation related to industrial property.
of NRBs will be treated on par with FDI. Special incentives are provided to
encourage NRBs to invest in the country. NRBs will enjoy facilities
similar to those of foreign investors.
Moreover, they can buy newly issued shares/debentures of Bangladeshi
companies . A quota of 10% has been fixed for NRBs in primary public shares.
Furthermore, they can maintain foreign currency deposits in the Non-resident
Foreign Currency Deposit (NFCD) account.
'Taka' is convertible for current external transactions. Individuals/firms
resident in Bangladesh may conduct all current external transactions,
including trade and investment related transaction, through banks in
Bangladesh authorised to deal in foreign exchange ( Authorised Dealers )
without prior approval of the Bangladesh Bank. Non- resident direct
investment in industrial enterprise in Bangladesh and non-resident portfolio
stock exchanges in Bangladesh also do not require prior approval of
the Bangladesh Bank. Remittance of post-tax dividend/profit on non resident
direct or portfolio investment do not require prior approval. Sale proceeds,
including capital gains on non-resident portfolio investment may also be
remitted abroad without prior approval. Repatriation of sale proceeds of
non-resident investment in unlisted companies is allowed by Bangladesh Bank
on the basis of the net asset value of the shares of the company.
Investors may obtain relevant procedural details by contacting any
Authorised Dealer bank in Bangladesh .
facilitate investment, prior approval of the Bangladesh Bank is no longer
required for :
remittance of profits to
their head offices by foreign firms and companies operating in Bangladesh
issuance of shares to
non-residents against investment for setting up industries in Bangladesh.
remittance of dividends on
such shares to the non-resident investors.
portfolio investment by
non-residents including foreign individuals/enterprises in shares and
securities through stock exchanges in Bangladesh .
remittance of dividends on
portfolio investment by non-residents through stock exchanges in Bangladesh .
remittance of sale proceeds,
including capital gains of portfolio investments of non-residents
through stock exchanges in Bangladesh
remittance of principal and
interest instalments on loans/suppliers credits obtained by industrial units
from foreign lenders with approval of the BOI. 100% foreign owned ( Type A)
industrial units in the EPZs (Export Processing Zone) do not require prior
permission of BOI for such foreign borrowing.
remittance in repayment of
principal and payment of interest of such loans.
remittance of technical fees
and royalties against technical assistance/royalty agreements in conformity
with BOI guidelines.
remittance of savings of
expatriate personnel at the time of their leaving Bangladesh, out of the
salaries and benefits stated in their employment contracts as approved by BOI.
extension of term loans by
banks on normal banking considerations to foreign firms operating in
subject to compliance of the instruction of GFET-2009, Vol-1, chapter-16, para 4(B).
extension of working capital
loans to all foreign owned/controlled industrial and trading firms/companies
by banks on the basis of bank customer relationship and normal banking practice.
of interest-free repatriable short-term foreign currency loans by foreign
firms investing in Bangladesh from their head offices or any other sources
through any authorised dealer.