As part of the government’s liberal policy regime, several benefits have been instituted for investing in certain sectors.

 

Tax holidays and exemptions

  • 5-10 years of Tax Holiday and reduced tax depending on areas.
  • 100% tax exemption on income and capital gain for certain projects under Public Private Partnership (PPP) for 10 years.
  • 100% tax exemption from software development, Nationwide Telecommunication Transmission Network, or Information Technology Enabled Services.
  • 50% of income derived from exports is exempted from tax.
  • Tax exemption on royalties, technical know-how, and technical assistance fees and facilities for their repatriation.
  • Tax exemption on interest paid on foreign loans.

 Exemption on import duties

  • Exemption of customs duties on capital machinery;
  • Exemption of import duties on the raw material used for producing export goods;

Double taxation regime

  • Bangladesh has a double taxation avoidance agreement with more than 30 major trading partner countries.
  • Expatriate employees involved in specific sectors can also avail income tax exemption for up to 3 years.

 

Capital repatriation

  • Full repatriation of capital invested from foreign sources will be allowed.
  • Profits and dividends accruing to foreign investment may be transferred in full.
  • If foreign investors reinvest their dividends and or retained earnings, those will be treated as new investments.

 

Bonded warehousing facilities

  • For export-oriented industries
  • Bond period varies from industry to industry

 

Tariff reduction

  • Tariff (if paid) refund on import of raw materials for export

 

Accelerated depreciation

  • Industrial undertakings not enjoying tax holidays will enjoy accelerated depreciation allowance.
  • Such allowance is available at the rate of 100 percent of the cost of the machinery or plant if the industrial undertaking is set up in the areas falling within the cities of Dhaka, Narayanganj, Chittagong, and Khulna and areas within a radius of 10 miles from the municipal limits of those cities.
  • If the industrial undertaking is set up elsewhere in the country, accelerated depreciation is allowed at the rate of 80 percent in the first year and 20 percent in the second year.

 

Ownership

  • 100% ownership is allowed