Facilities for foreign investors :


Government of Bangladesh provides lot many incentives for foreign investors. These are, in brief, as follows :

            (1) Protection of foreign investment and its repatriation :

            Protection of foreign investment from expropriation by the state is fully ensured. Moreover, full repatriation of capital invested from foreign sources is allowed. Similarly profits and dividend accruing to foreign investors are allowed to be transferred in full. Remittance of approved post tax royalties, technical know-how and technical assistance fees is allowed in full. Foreigners employed in Bangladesh are entitled to remit 50 per cent of their salary and full repatriation of their savings and retirement benefits.

           (2) Fiscal incentives :

(i)        Avoidance of double taxation on the basis of bilateral agreements.

(ii)        Tax exemptions of foreign technicians employed in approved industries for a period of 3 years subject to fulfillment of prescribed conditions.

(iii)       Tax exemption of capital gains from transfer of shares of public companies listed with stock exchange.

(iv)       Tax Holiday

            Tax holiday for 5/7 years is available to newly set up industries, physical infrastructure facilities and tourist industries on fulfillment of certain conditions.

(v)       Tax Break for computer software enterprises

            Income from computer software business is excerpt for the period from July 01, 2002 to June 30, 2005.

(vi)       Tax holiday for Agro Processing industry

            Income of agro processing industry from July 01, 2002 to June 30, 2005 is fully excerpt from tax.

(vii)      Concessionary tax on new industrial undertakings

            Industries setup between 01 July, 2002 to 30 June, 2005 are to pay tax @ 20% for 5 years from the date of commercial production.

(viii)     Concessionary import of Capital Machinery

            Concessionary import duty and exemption from VAT and supplementary duty are available in case of import of capital machinery.

(ix)       Incentives to Private Sector Power Generation

            Private sector power generation companies are allowed tax holiday for 15 years from the date of commercial production. Salaries of employees there are tax-free for 3 years.

(x)        Special incentives to Oil and Gas sectors

            In respect of petroleum operation undertaken by contractor entering into production sharing contract (PSC) with the government, government holds and keeps the contractor harmless from all present and future Bangladesh taxes except where specifically provided to the contrary.

(xi)       Facilities for export oriented industries

            Duty free import of capital machineries is allowed and facilities of Bonded Warehouse, Back to Back Letter of Credit and Duty Draw Back are available in case of export-oriented industries.

(xii)      Additional facilities in the Export Processing Zones

            There are several additional benefits for industries set up in the Export Promotion Zones, viz. tax holiday for 10 years, duty-free import of machinery, equipment and raw materials, complete exemption of dividend of foreigners for tax holiday period, off-shore banking facilities, freedom from customs formalities, provision of electricity, water, gas and telecommunication connections the same day applied for.