Investment Policy in Bangladesh
Bangladesh is now considered to be the most business friendly economy in South Asia and an attractive destination for foreign investors. Bangladesh’s unique geo-strategic location between South Asia and ASEAN Region has been an increasingly important consideration for prospective investors. Bangladesh Investment Development Authority (BIDA) coordinates and facilitates the foreign investment and extends institutional support.
Why Bangladesh is an attractive investment destination:
- Despite the recent global financial meltdown, Bangladesh maintained a steady GDP growth of 6.3% above for last 1 decade.
- There is a tremendous opportunity for the growth of private equity and other new forms of capital funding for private enterprise.
- For the last 48 years of independence, Bangladesh has never experienced negative growthand Avoidance of Double Taxation Agreement are in force with most of the countries.
- Lower production costs in terms of semi-skilled and skilled work force.
- Cost of living is reasonable and low.
- English is widely understood and spoken.
- Provisions for remittance of royalty, technical know-how and technical assistance fees.
- Repatriation facilities of dividend and capital at exit.
- Bangladesh government issues permanent residency on investing US$ 75,000 and citizenship on investing US$ 500,000.
- Tax holidays: In Dhaka & Chittagong Divisions: 100% in first two years: 50% for the next two years and 25% in the year five.
For the rest of Bangladesh: 100% for first three years, 50% for next three years, and 25% for up to 7 years.
- Depreciation allowances: Accelerated depreciation for new industries is available at the rate of 50%, 30% and 20% for the first, second and third years respectively, on the cost of plant and machinery.
- Industries exporting over 80% goods or any other services qualify for duty free import of machinery and spares and bonded warehousing.
- 90% loans against letters of credit and funds for export promotion.
- Export credit guarantee scheme.
- Domestic market sales up to 20% is allowed to export oriented business located outside an Export Processing Zones (EPZs) on payment of relevant duties.
- Cash incentives and export subsidies are granted on the Free On Board (FOB) value of selected exports ranging from 5% to 20% on selected products.