Basic Outlines of Investment Policy in Bangladesh

Bangladesh offers generous and attractive packages of incentives to investors. It is now considered as the most liberal and business friendly economy in South Asia and an attractive destination for foreign private business and investments. Moreover, Bangladesh’s unique geostrategic location between South Asia and ASEAN Region has been an increasingly important consideration for prospective investors. Board of Investment (BOI) of Bangladesh, a government body, coordinates and facilitates the process of foreign investment and provides necessary institutional support. Here are some reasons why one should invest in Bangladesh:

  • Despite the recent global financial crisis, Bangladesh maintains a steady GDP growth of 6% for last 5 years.
  • There is a tremendous opportunity for the growth of private equity and other new forms of capital funding for private enterprise.
  • Bangladesh has no records of defaults in its bilateral and multilateral donors and debt-service liabilities.
  • For the last 42 years of independence, Bangladesh has never experienced negative growth.
  • Investment Protection Agreement and 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.
  • Remittance of royalty, technical know-how and technical assistance fees.
  • Repatriation facilities of dividend and capital at exit.
  • Permanent resident permits 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 year seven.
  • 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 of 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.