To promoteinvestments in the country, the Government has established 3 specialized institutions with adequate authority in almost all investment related matters including registration of projects, processing of foreign borrowings, facilitation of import of machinery and raw materials, and even visa & work permit related issues and so on. Bangladesh Processing Zone Authority (BEPZA) and Bangladesh Economic Zone Authority (BEZA) deal with the matters relating to investments in the Export Processing Zones (EPZs) and Economic Zones (EZs) respectively, while Board of Investment (BOI) is entrusted with the matters relating to investments outside these special industrial enclaves. All the three agencies provide ‘One-Stop” service to the investors.
Board of Investment (BOI)
The Board of Investment (BOI) was established in 1989 directly under the Prime Minister’s Office to promote investments in Bangladesh. BOI primarily deals with the matters relating to investments outside the special zones such as Export Processing Zones (EPZs) and Economic Zones (EA) and provides One-Stop Service to investors. BOI functions are broadly categorized into three groups: Investment promotion, investment facilitation and policy advocacy.
BOI services also include:
- Improvement in investment climate
- Pre-investment information, counseling and welcome services (fast track immigration)
- Registration of foreign, joint-venture and local industrial projects
- Approval of work permit for the foreign nationals
- Facilitation to import of capital machinery and raw materials etc.
- Processing of foreign borrowings
- Facilitation of obtaining utility connections and industrial plots
- Approval of remittance of royalty, technology transfer, technical know-how and technical assistance fees
- Online Registration System (ORS) – for registering the project online
- Business Laws Website – for disseminating business regulations
- BOI Online Service Tracking (BOST) – for tracking the services of BOI Online
- Approval of foreign commercial offices (branch/liaison/representative offices)
Bangladesh Export Processing Zones Authority (BEPZA)
Bangladesh Export Processing Zones Authority (BEPZA) was created in 1980 as an autonomous body under the Prime Minister’s Office to facilitate development and operation of Export Processing Zones (EPZs) in Bangladesh with a view to rapid industrialization and accelerated growth in export and employment generation through local and foreign investments and transfer of technology. Country’s first EPZ in the port city of Chittagong started its journey in 1983 and BEPZA now operates 8 EPZs in different parts of Bangladesh. In accordance with a law passed in 1997, private EPZs are also allowed in Bangladesh. Country’s first private EPZ was developed and being operated by Youngone Corporation of South Korea since early 2000s.
BEPZA provides fully serviced plots and standard factory buildings along with infrastructure facilities to the investors for setting up industrial units in EPZs. All the utility connections such as electricity, water, gas, internet & telecommunication are readily connected to the enterprises. BEPZA has so far set up own water treatment plants in 4 EPZs, Central Effluent Treatment Plants in 3 EPZs, own power plants in 2 EPZs and construction of power plants in 4 other EPZs are underway.
One Stop facilities of BEPZA includes, among others: simplified project approval, issuance of import & export permits within one day, customs clearance at factory site, issuance of work permits for foreign nationals.
Bangladesh Economic Zones Authority (BEZA)
Bangladesh Economic Zones Authority (BEZA) has been created in November 2010 under the Prime Minister’s Office in line with Bangladesh Economic Zones Act of 2010 to facilitate development and operation of economic zones in Bangladesh. The Authority also encourages establishment of Economic Zones on Public-Private Partnership or fully private ownership by local and foreign entities. BEZA has set the target of establishing 100 Economic Zones on 30,000 hectares of land throughout the country in next 15 years with an employment generation for 10 million people. Already 30 government and 7 private EZs have been planned/approved.
BEZA will provide land and factory buildings on rent in secured and protected industrial areas. BEZA will arrange electricity, telecommunication, gas and water facilities for the investors. To reduce dependency on national power grid, BEZA plans to build in-house electricity generation plants. BEZA offers One-Stop Service and competitive incentive package to the investors.
Incentives for private developer of the Economic Zones: income tax exemption for 10 years with reduced tax for 2 more years; VAT exemption on electricity for 10 years and exemption of taxes on sales for 10 years; all purchases excluding petroleum product from Domestic Tariff Area (DTA) shall be exempted from VAT and sales tax; capital subsidy up to 50% on cost incurred for setting up Central Effluent Treatment Plant; exemption of customs and excise duties; exemption of tax duty; exemption of registration fee for land registration on first instance; exemption from dividend tax; exemption from tax on income from service charges.
Incentives for investors in the Economic Zones: tax holiday for 10 years (exemption of varying degree); duty free import of capital machinery, construction materials and raw materials; exemption from dividend tax after tax holiday period; full repatriation of capital and dividend; no ceiling on FDI; 50% exemption of stamp duty and registration fee; 80% exemption of VAT on all utility services; duty exemption on export; duty exemption on import of 2 vehicles within first 5 years; tax exemption on royalties and technical fees; tax exemption on capital gain from transfer of shares; 50% exemption from income tax on salary income of expatriates for 3/5 years; export processing area of EZ will be treated as Custom Bonded Area; foreign loan permissible; foreign currency account for non-residents permitted; FC account for both local and JV industry allowed; no restriction of foreign investors to enter into JV; up to 10/20% of the finished products could be sold in local market; transfer of shares by foreign investors to local investors allowed; issuance of work permits to foreigners is allowed up to 5% of the total employees of an industrial unit; reinvestment of remittable dividend will be treated a new foreign investment; resident visa for investment of US$ 75,000 or more; citizenship for investment of US$ 500,000.
Export Processing Zones (EPZs) and Economic Zones (EZs)
Bangladesh offers export oriented industrial enclaves with infrastructure facilities and logistic support for foreign investors. One-Stop Service and numerous incentives are offered to investors in Export Processing Zones and Economic Zones under Bangladesh Export Processing Zones Authority Act of 1980, Bangladesh Private Export Processing Zones Act of 1996, Bangladesh Economic Zone Act of 2010 and other relevant laws and regulations.
Chinese Economic and Industrial Zone (CEIZ) in Bangladesh
China and Bangladesh have concluded a MoU in June 2014 in relation to establishment of the Chinese Economic and Industrial Zone in Bangladesh to facilitate Chinese investments to Bangladesh. In view of the prospect for huge mutual benefits from such an initiative, both sides are working hard for the early implementation of the project. Recently, about 774 acres of land has been allocated for this project near the port city of Chittagong and a Chinese company has been designated to build infrastructure facilities on that land. Construction work is expected to start soon. Establishment of a few more such zones in the future are under consideration to meet the growing interest from the Chinese investors.