Foreign Investment in Bangladesh: Incentives in General

Foreign Investment in Bangladesh: Incentives in General

Investment in Bangladesh: Incentives in General
           (Updated upto May, 2020)

1. Tax Holiday and Tax Exemption:

  • 5 to 10 years of Tax Holiday and reduced tax depending on area-   Dhaka and Chittagong divisions, excluding Dhaka, Mymensingh, Narayanganj, Gazipur, Chittagong, Rangamati, Bandarban and Khagrachari districts, for a period of five years ·         Rajshahi, Khulna, Sylhet, Barisal and Rangpur divisions (excluding City Corporation area) and Rangamati, Bandarban and Khagrachari districts, for a period of ten years 100% tax exemption on income and capital gain for certain projects under Public Private Partnership (PPP) for 10 years.
  • 100% tax exemption from software development, Nationwide Telecommunication Transmission Network or Information Technology Enabled Services.
  • 50% of income derived from export is exempted from tax
  • Tax exemption on royalties, technical knowhow and technical assistance fees and facilities for their repatriation
  • Tax exemption on interest paid on foreign loan
  • 100% tax exemption from software development, Nationwide Telecommunication Transmission Network or Information Technology Enabled Services.
  • 50% of income derived from export is exempted from tax
  • Tax exemption on royalties, technical knowhow and technical assistance fees and facilities for their repatriation
  • Tax exemption on interest paid on foreign loan
  • 100% tax exemption from software development, Nationwide Telecommunication Transmission Network or Information Technology Enabled Services.
  • 50% of income derived from export is exempted from tax
  • Tax exemption on royalties, technical knowhow and technical assistance fees and facilities for their repatriation
  • Tax exemption on interest paid on foreign loan
  • 100% tax exemption from software development, Nationwide Telecommunication Transmission Network or Information Technology Enabled Services.
  • 50% of income derived from export is exempted from tax
  • Tax exemption on royalties, technical knowhow and technical assistance fees and facilities for their repatriation
  • Tax exemption on interest paid on foreign loan
2.  Accelerated Depreciation
  • Accelerated depreciation for machinery and plants
3.  Exemption on Import Duties
  • Exemption of customs duties on capital machineries
  • Exemption of import duties on raw material used for producing export goods
4.  Tariff Refund Tariff (if paid)
  •  refund on import of raw materials for export
5.  Double Taxation Prevention
  • Benefits for countries with double taxation avoidance treaty.  
  • Double Taxation Prevention Benefits for countries with double taxation avoidance treaty.
6.  Bonded warehousing Facilities
  • For export oriented industries
  • For large import for local selling in certain items
7.  Ownership
100% ownership is allowed

8. Repatriation of invested capital and dividend
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 dividends and or retained earnings, those will be treated as new investment.

9.Others

·         No restrictions on issuance of work permits to project related foreign nationals and employees
·         Facilities for repatriation of invested capital, profits and dividends
·         Provision of transfer of shares held by foreign shareholders to local investors
·         Reinvestment of remittable dividends would be treated as new investment
·         Remittance of royalty, technical know-how and technical assistance fees
·         The Foreign Private Investment (Promotion & Protection) Act. 1980 ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation ·         Equal treatment of both local and foreign investment.
·         Bilateral and multilateral investment agreements ensure protection of investment
·         100% FDI, Joint Ventures, Partnerships, PPPs, Non-equity mode (Technology transfer, licensing Franchising, contracting etc.), and Foreign Lending are allowed
·         100% FDI or Joint Venture FDIs are allowed to participate in the primary and secondary stock markets.
·         Foreign Investors are allowed to have access to local banks for working capital requirements. Intellectual Property right is protected by Law.

Source:BIDA

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