democratic government is highly keen to stimulate the
economy and transform a poverty-stricken economy to
NIE within short time. Government has liberalized the
industrial and investment policies in recent years by
reducing bureaucratic control over private investment
and opening up many areas. Major incentives are as follows:
Tax Exemptions :
5 to 7 years. However, for power generation exemption
is allowed for 15 years.
import duty for export oriented industry. For other
industry it is @ 5% ad valorem.
Tax Law :
Double taxation can be avoided in case of foreign
investors on the basis of bilateral agreements.
ii. Exemption of income tax upto 3 years for the
expatriate employees in industries specified in
the relevant schedule of Income Tax ordinance.
for full repatriation of invested capital, profit
investor can wind up on investment either through
a decision of the AGM or EGM. Once a foreign investor
completes the formalities to exit the country,
he or she can repatriate the sales proceeds after
securing proper authorization from the Central
investor can set up ventures either wholly owned
on in joint collaboration with local partner.
holiday facilities will be available for 5 or 7 years
depending on location of the industrial enterprise.
and Chittagong Divisions (excluding 3 hill tract
districts of Chittagong Division)
Sylhet, Barisal and Rajshahi Divisions And 3 Chittagong
hill tract districts
holiday facilities will be provided in accordance with
the existing laws. The period of tax holiday will be
calculated from the month of commencement of commercial
production. Tax holiday certificate will be issued by
NBR for the total period within 90 days of submission
of application. This facility can be availed of by industries
set up within June 30, 2000 ADb.
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 setup 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.c.
Duty on Imported Capital Machinery
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.
of Import Duty
and taxes on import of goods which are produced locally
will be higher than those applicable to import of raw
materials for producing such goods.
to Non-Resident Bangladeshis (NRBs)
of NRBs will be treated at par with FDI. Special incentives
are provided to encourage. NRBs for investment 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)
exemption on royalties, technical know-how fees
received by any foreign collaborator, firm, company
exemption on the interest on foreign loans under
of double taxation in case of foreign investors
on the basis of bilateral agreements.
- Exemption of income
tax up to 3 years for the foreign technicians employed
in industries specified in the relevant schedule of
income tax ordinance.
exemption on income of the private sector power
generation company for 15 years from the date of
for full repatriation of invested capital, profit
- 6 months multiple
entry visa for the prospective new investors.
- Re-investment of repatriable
dividend treated as new investment.
by investing a minimum of US$ 5,00,000 or by transferring
US$ 10,00,000 to any recognized financial institution
residentship by investing a minimum of US$ 75,000
exemption on capital gains from the transfer of
shares of public limited companies listed with a
facilities and venture capital support will be provided
to export-oriented industries under "Thrust
will be no discrimination in case of duties and taxes
for the same type of industries set up by foreign and
local investors and in the public and private sectors.
to Export-Oriented and Export-Linkage Industries
industrialization is one of the major objectives of
the Industrial Policy 1999. Export-oriented industries
will be given priority and public policy support will
be ensured in this respect. An industry exporting at
least 80% of its manufactured goods or an industry contributing
at least 80% of its products as an input to finished
exportables, and similarly, a business entity exporting
at least 80% of services including information technology
related products will be considered as an export-oriented
industry. To make investment in 100 percent export-oriented
industries attractive, the following incentives and
facilities will be provided :
free import of capital machinery and spare parts
up to 10 percent of the value of such capital machinery
facilities for Bonded Warehouse and back-to-back
Letter of Credit will continue.
system for duty drawback will be further simplified
and to this end, duty drawback will be fixed at
a flat rate on exportable and potentially exportable
goods. Exporter will receive duty drawback at a
flat rate directly from the relevant commercial
arrangement for providing loans up to 90 percent
of the value against irrevocable and confirmed Letter
of Credit/Sales Agreement will continue.
ensure backward linkage, incentives will be extended
to the "deemed exporters" supplying indigenous raw
export-oriented industries. Export-oriented industries
including export-oriented RMG industries, using
indigenous raw materials will be given facilities
and benefits at prescribed rates.
export-oriented industr4ies, further to the provisions
of Bangladesh Bank foreign exchange regulations,
will be entitled to receive additional foreign exchange,
on case to case basis, for publicity campaign, opening
overseas offices and participating in international
entire export earning from handicrafts and cottage
industries will be exempted from income tax. For
all other industries, income tax rebate on export
earning will be given at 50 percent.
facility for importing raw materials, which are
included in the banned/restricted list, but required
in the manufacture of exportable commodities, will
import of specified quantities of duty-free samples
for manufacturing exportable products will be allowed
consistent with the prevailing relevant government
local products supplied to local industries or projects
against foreign exchange L/C will be treated as
indirect exports and be entitled to all export facilities.
Export Credit Guarantee Scheme will be further expanded
percent products of the enterprises, located in
both public and private EPZs will be allowed to
be exported to domestic tariff area against foreign
currency L/C on payment of applicable duties and
percent export-oriented industry outside EPZ will
be allowed to sell 20% percent of their products
in the domestic market on payment of applicable
duties and taxes.
Export-oriented industries which are identified
by the government as "Thrust Sector" will be provided
special facilities and venture capital support.
from the above-mentioned facilities, other facilities
announced and provided in the Export Policy will be
applicable to export-oriented and export-linkage industries.