Investment Opportunities & Incentives for EPZ -

In order to stimulate rapid economic growth of the country, particularly through industrialization, the government has adopted an ‘Open Door Policy’ to attract foreign investment to Bangladesh. The Bangladesh Export Processing Zones Authority (BEPZA) is the official organ of the government to promote, attract and facilitate foreign investment in the Export Processing Zones. The primary objective of an EPZ is to provide special areas where potential investors would find a congenial investment climate, free from cumbersome procedures. Two EPZs, one in Chittagong and the other near Dhaka are now operational.

In the wake of increasing demand of the investors, the Dhaka EPZ has been expanded. Development work of the EPZ at Mongla, a southern port of Bangladesh is progressing fast. It is expected to be operational soon. Two other EPZs - one at Comilla and the other at Ishurdi are in implementation stage.

ELIGIBLE INVESTORS

100% foreign owned including Bangladesh nationals ordinarily resident abroad (Type-A). Joint venture between foreign and Bangladesh entrepreneurs resident in Bangladesh (Type-B). 100% Bangladesh entrepreneurs resident in Bangladesh (Type-C).

MODE OF INVESTMENT

Investment in convertible foreign currencies by foreign investors. Option to establish public/private Ltd. Companies or sole proprietorship/partnership concerns.

INVESTMENT GUARANTEE

Foreign Private Investment (promotion and Protection) Act, 1980secures all foreign investment in Bangladesh.
OPIC’s (Overseas Private Investment Corporation, USA) insurance and finance programmes operable.
Security and safeguards available under Multilateral Investment Guarantee Agency (MIGA) of which Bangladesh is a member. Arbitration facility of the International Center for the Settlement of investment Dispute (ICSID) available.

TELE-COMMUNICATIONS

E-mail, Internet, Telex, Fax and International Dialing Services connected through satellite system available.

COMMUNICATIONS

Adequate sea, rail, road and air communication services available.

ONE WINDOW SAME DAY SERVICE AND SIMPLIFIED PROCEDURE

Bangladesh Export Processing Zones Authority (BEPZA)

• Sanctions projects generally within one week.

• Issues required Import/Export Permits

• Issues required Work Permits for foreign nationals working in Export Processing Zones (EPZ) enterprises

• provides required infrastructural facilities in EPZs

• Offers ‘One Window Same Day Service’ to investors in EPZs

PRODUCTION ORIENTED LABOUR LAWS

Law forbids formation of any labour union in EPZS. Strike within the zones prohibited. BEPZA is vested with responsibility to administer labour matters for all enterprises in EPZs.

MINIMUM WAGES (MONTHLY)

Other benefits include Conveyance Allowance, House Rent, Medical Allowance and Festival Bonus.

WORKING HOURS

48 hours a week in a factory.
39 hours a week in an office.
6 working days a week.

EMPLOYEES LEAVE

10 days Casual leave.
17 days Annual leave.

FACILITIES AND INCENTIVES
FACILITIES

• Land and factory buildings are available on rental basis.

• Electricity, tele-communications, gas and water are provided by the zones.

• Import and export permits are issued by EPZ within 24 hours.

• Work permits are issued by BEPZA.

• EPZ is a secured and protected area.

• Recreational facilities are available.

• Availability of food stuff and beverages on payment of nominal tax for foreigners working in EPZs.

• Potential investors are required to deal only with BEPZA for investment and all other operational purposes.

• Permanent residentship to a foreign citizen investing a minimum of US$ 75,000 or equivalent amount (non-repatriable) similarly citizenship to any foreign citizen investing US$ 500,000 or transferring US$ 1,000,000 to any recognised Bangladeshi financing institution (non-repatriable).

INCENTIVES FISCAL

I. Tax Exemption

• Tax holiday for 10 years.

• Exemption of income tax on interest on borrowed capital.

• Relief from double taxation subject to bilateral agreement.

• Complete exemption from dividend tax for tax holiday period for foreign nationals.

• Exemption of income tax on salaries of foreign technicians for 3 years subject to certain conditions.

II. Duty Free Import and Export

• Duty free import of machineries, equipment and raw materials.

• Duty free import of three motor vehicles for use of the enterprises in EPZs under certain conditions.

• Duty free import of materials for construction of factory buildings in the zones.

• Duty free export of goods produced in the zones.

• GSP facilities available for export to USA, European and Japanese markets.

• Export from Bangladesh to USA enjoys Most Favoured Nation (MFN) status.

NON- FISCAL

I. Investment

• All foreign investments secured by law.

• No ceiling on extent of foreign investment.

• Full repatriation of profit and capital permissible.

• Repatriation of investment including capital gains, if any, permissible.

• Remittances allowed in following cases :

  1. All post tax profit and dividend on foreign capital.

  2. Savings from earnings, retirement benefits, personal assets of individual on retirement/ termination of services.

  3. Approved royalties and technical fees.

II. Project Financing and Banking

• Off-shore banking facilities available.

• Local and international banking facilities also wide-open.

III. Import

• Freedom from national import policy restrictions.

• Import of raw materials also allowed on Documentary Acceptance (DA) basis.

• Advantage of opening back to back LC for certain types of industries for import of raw materials.

• Import of goods from the Domestic Tariff Area (DTA) permissible.

• Enterprises can sell their 10% of the product to the DTA on payment of duties and taxes under certain conditions.

IV. Project Implementation

• Re-location of existing industries from abroad allowed.

• Re-location of industries from one zone to another within the country permissible.

V. Operation

• Sub-contracting within EPZ allowed.

• Inter-zone and intra-zone export permitted.

• All customs formalities done at the gate site of the respective factory building within the zone.

• Permission for import/export given in the same day.

• Repairing and maintenance of machineries and capital equipment form domestic tariff area allowed.

VI. Employment

• Liberal employment of foreign technicians/ experts allowed.

• Foreigners employed in the zones enjoy equal rights similar to those of Bangladesh nationals.

VI. Employment

Customs office, Post office, Medical center, Fire station, Police station are within the zone.

NB: This list is not exhaustive, only indicative.
Information Source: Bangladesh Government Publications