Facilities for foreign investors (As of 01 July, 2010):


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, post-tax 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 also 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 at reduced rate of 10% of capital gains from transfer of shares of public companies listed with stock exchange.

(iii)      Tax Holiday

           Tax holiday for 5/7 years is available to defined sectors of industry and physical infrastructure on fulfilment of certain conditions.

(iv)      Concessionary import of Capital Machinery

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

(v)      Incentives to Private Sector Power Generation

           Private sector power generation companies are allowed tax holiday for 15 years from the date of commercial production.

(vi)     Special incentives to Oil and Gas sectors

           In respect of petroleum operation undertaken by a 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.

(vii)    Facilities for export-oriented industries

           Import of capital machineries and parts thereof is allowed on nominal duty of 1% besides the facilities of Bonded Warehouse, Back to Back Letter of Credit and Duty Draw Back in case of export-oriented industries.

(viii)      Additional facilities in the Export Processing Zones

           There are several additional benefits for industries set up in the Export Processing Zones, viz. tax holiday for 10 years, duty-free import of machinery, equipment and raw materials, complete exemption of tax on dividend of foreigners for tax holiday period, off-shore banking facilities, freedom from customs formalities, provision of electricity, water, gas and telecommunication connections on the same day applied for. After the expiry of tax holiday period, 50% of income of such industries attributable to export sales is exempt from income tax.