A good numbers of industrial zone has been developed near capital city of Dhaka, commercial city Chattogram and all around Bangladesh recently. These industrial zones are well planned and provide excellent amenities for the investors.
Government of Bangladesh has declared an attractive incentive plan for the foreign investors.
Incentives for Developers
Serial
Incentives
Explanation
Gazettes
1
Income Tax exemption of varying degree for 12 years including 100% exemption for 1st 10 Years.
1st 10 years – 100% 11th year – 70% 12th year – 30%
SRO No 227-Law/Income Tax/2015 Date: 08 July, 2015 of Internal Resources Division
2
Income tax exemption on dividend for 10 years
100% Exemption
SRO No 299/Law/Income Tax/2105 Date: 8 Oct, 2015 of Internal Resources Division
3
Income tax exemption on capital gains from transfer of shares for 10 years
100% Exemption
4
Income tax exemption on royalties, technical know-how and technical assistance fees etc for 10 years
100% Exemption
5
Duty free import of goods to be used for the development of Zones (except for MS Rod/Bar, Cement, Pre-fabricated Building, Iron/Steel Sheet)
100% Exemption
SRO No 208- Law/2015/45/Customs Date: 1 July, 2015 of Internal Resources Division
6
Land development tax exemption
100% Exemption
SRO No. 05-Law/2016 Date: 11 Jan, 2016 of Ministry of Land
7
Exemption from tax sub tax, rate, toll, fees etc imposed under section 65 of Local Government (Union Parishad) Act, 2009
100% Exemption
SRO No. 333-Law/2015 Date: 12 Nov, 2015 of Local Government Division
8
Exemption from tax on transferring immovable property imposed under section 44 of Upazilla Parishad Act, 1998
100% Exemption
SRO No. 328-Law/2018 Date: 11 Nov, 2018 of Local Government Division
9
Exemption of Stamp Duty on registration of loan document with Scheduled Bank
Stamp duty is exempted at the time of transferring land in favor of the Consortium, Joint Venture (Private EZ developers) formed for the purpose of setting up the zone.
Income Tax deducted at source ( under section 53H of the Income Tax Ordinance 1984) is exempted at the time of transferring land in favor of the Consortium, Joint Venture (Private EZ developers) formed for the purpose of setting up the zone.
Registration fees (Registration Act 1908) is exempted at the time of transferring land in favor of the Consortium, Joint Venture (Private EZ developers) formed for the purpose of setting up the zone.
VAT on Land Lease Agreement registration at Local Registration Office.
100% Exemption
NBR letter no-08.01.0000.068.22.034.12/52, Date: 15/02/2022
8
Duty free import of capital machinery and construction material (except for MS Rod/Bar, Cement, Pre-fabricated Building, Iron/Steel Sheet)
100% Exemption
SRO No. 124- Law/2021/13/Customs Date: 24 May, 2021 of Internal Resources Division.SRO No. 113- Law/2021/02/Customs Date: 24 May, 2021 of Internal Resources Division.
9
Warehousing Station
Entire EZ has been declared as warehousing station.
SRO No 211/Law/2015/48/Customs Date:1 July, 2015 of Internal Resources Division Amendment: SRO No 304/Law/2017/77/Customs Date: 22 Oct, 2017 of Internal Resources Division
10
Home Consumption & Other Bond Facilities, Warehouse Operator
All the unit investors in EZs are entitled to this facility
SRO No 211/Law/2015/48/Customs Date: 1 July, 2015 of Internal Resources Division Amendment: SRO No 304/Law/2017/77/Customs Date: 22 Oct, 2017 of Internal Resources Division SRO No 181/Law/2008/2209/Customs Date: 26 June, 2008 of National Board of Revenue Amendment: SRO No. 203- Law/2017/48/Customs Date: 20 June,2017 of National Board of Revenue Amendment: SRO No. 136- Law/2020/87/Customs Date: 03 June,2020 of National Board of Revenue Amendment: SRO No. 194- Law/2020/104/Customs Date: 30 June,2020 of National Board of Revenue 3. Notification No. 42/2017/Customs/199 Date: 2 May, 2017 of National Board of Revenue Amendment: 288/2017/Customs/529 Date: 21 Dec, 2017 of National Board of Revenue Amendment: 195/2018/Customs/197 Date: 6 May, 2018 of National Board of Revenue
11
Dedicated Customs Procedure(Economic Zone)
All the industries in EZs are eligible
Notification No. 42/2017/Customs/199 Date: 2 May, 2017 of National Board of Revenue Amendment: 288/2017/Customs/529 Date: 21 Dec, 2017 of National Board of Revenue Amendment: 195/2018/Customs/197 Date: 6 May, 2018 of National Board of Revenue
12
20% sale of finished product to Domestic Tariff Area (DTA)
20% of the export volume of last fiscal year
Notification No. 42/2017/Customs/199 Date: 2 May, 2017 of National Board of Revenue Amendment: 288/2017/Customs/529 21 Date: Dec, 2017 of National Board of Revenue Amendment: 195/2018/Customs/197 Date:6 May, 2018 of National Board of Revenue
13
Sub-contracting with DTA allowed
100% Allowed
14
Exemption of Customs Duty, Regulatory Duty, VAT, Supplementary Duty for import of vehicles (up to 2000 cc, one sedan car and one microbus/pick up van/ double cabin pick up)
Exemption from tax sub tax, rate, toll, fees etc imposed under section 65 of Local Government (Union Parishad) Act, 2009
100% Exemption
SRO No. 333-Law/2015 Date: 12 Nov, 2015 of Local Government Division
20
Exemption from tax on transferring immovable property imposed under section 44 of Upazilla Parishad Act, 1998
100% Exemption
SRO No. 328-Law/2018 Date: 11 Nov, 2018 of Local Government Division
21
EZ investors are waived from Board of Investment Act, 1989
Completely
SRO No. 108-Law/2016 Date: 21 April, 2016 of Prime Minister’s Office
22
Regulatory framework of foreign exchange transactions of enterprises operating in EZs.
Completely
FE Circular No. 21 of 11 May 2017 incorporated at chapter 20 of the Guidelines for Foreign Exchange Transactions-2018 (GFET), Vol-1 of Bangladesh Bank
23
Foreign investment in Bangladesh including EZs
No restrictions except few sectors
As per appendix-4 of Industrial Policy-2016
24
Ceiling of FDI
No ceiling of foreign contents
Industrial Policy- 2016 of Ministry of IndustriesFE Circular No. 21/2017 of Bangladesh Bank
25
Repatriation of dividend earned against the investment
100%
No permission from Bangladesh Bank (paragraph 31, chapter 10 of GFET, paragraph 9 of FE Circular No. 21/2017 and paragraph 9, chapter 20 of GFET by Bangladesh Bank)Dividend can be credited in foreign currency accounts maintained by foreign investors in Bangladesh (FE Circular No. 26 of 7 July 2020 of Bangladesh Bank)
26
Repatriation of sales proceeds of investment
100%
Detailed instructions outlined at FEID Circular No. 01 of 6 May 2018 of Bangladesh BankRelaxation vide FEID Circular Letter 01 of 18 June 2020 of Bangladesh Bank in the following counts: No permission from Bangladesh Bank is required for remittance of sales proceeds of shares regardless of amount provided that fair value is determined through net asset value approach on the basis of latest audited financial statements, and the financial statements contain no revalued assets. No permission from Bangladesh Bank is required to repatriate sales proceeds of shares up to Tk 10.00 million without valuation reports.Sales proceeds exceeding Tk 10 million upto Tk 100 million may be remitted abroad based on the fair value determined on the basis of appropriate valuation methods.
27
Loan from external sources
100%
Paragraph 8 of FE Circular No. 21/2017 and paragraph 8, chapter 20 of GFET of Bangladesh Bank
28
Repatriation of Royalty, Technical Know-how& Technical Assistance Fees
For new project, not exceeding 6% of the cost of the imported machineryFor ongoing concerns, not exceeding 6% of the previous year’s sales as declared in the income tax return
Paragraph 11 of FE Circular No. 21/2017 and paragraph 11, chapter 20 of GFET of Bangladesh Bank
29
Telephonic Transfer (TT)
No limit
Paragraph 7 of FE Circular No. 21/2017 of Bangladesh Bank
30
FC Accounts for EZ enterprises
Extent – Full
Paragraph 4 of FE Circular No. 21/2017 and paragraph 4, chapter 20 of GFET of Bangladesh Bank
31
FC Accounts for foreign nationals working in EZ enterprises
Extent – Full
Paragraph 1, chapter 13 of GFET of Bangladesh Bank
32
Remitting income of foreign nationals working in EZs
75 % of current income
Paragraph 12 of FE Circular No. 21/2017 and paragraph 12, chapter 20 of GFET of Bangladesh BankFE Circular No. 24 of 23 June 2020 of Bangladesh Bank
33
Industries operating in Domestic Processing Area (DPA) of EZs can meet their foreign payment obligation on account of Royalty, Technical Know-how& Technical Assistance Fees from their Taka Account
FE Circular No. 41 of 04 October, 2020
34(a)
Market exploration assistance for all types of industries (A/B/C) operating in EZs against export of Sandals and bags made of synthetic & fabricsAgro processing goods
4% Cash Incentive on the condition of a minimum value addition of 30%
1. Paragraph 9 of FE Circular No. 35, dated 22 September 2019 of Bangladesh Bank; 2. Paragraph 2 (b) of FE Circular No. 29, dated 20 September 2022 of Bangladesh Bank.
34(b)
Assistance for all types of industries (A/B/C) operating in EZs against export of all the products except for the ones mentioned in 33 (a).
1% Cash Incentive
Paragraph 2 (b) of FE Circular No. 29, dated 20 September 2022 of Bangladesh Bank.
35
Backward Linkages of raw materials to sell for export-oriented industries
100%
Paragraph 06 of FE Circular No. 21/2017 of Bangladesh Bank
36
Formation of Joint Venture Industries
FE Circular No. 21/2017 of Bangladesh Bank
37
Special cash incentives against export of textile goods including readymade garments
FE Circular No. 01, dated 07 January 2020 of Bangladesh Bank
38
Issuance of work permit to foreigners is allowed
Up to 5% of total officers/employees of an industrial unit
Below is a detailed summary of the steps, time and cost involved in registering property in Dhaka . It assumes a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute.
Conduct RS Mutation on property Agency: Assistant Commissioner of Lands (Tahsil)
Since the last survey on Dhaka was done, transfers of property titles created before then must be converted (mutated) to the new survey. Since January 2012 in Dhaka instead of conducting RS Mutation, City surveys are conducted. This is done by the Assistant Commissioner of Lands (Tahsil) and Specific Tahsil Office. In order to obtain this, an application is required to be made to the concerned Assistant Commissioner of Land with particulars of the property. The Assistant Commissioner forwards the same to the Tahsil Office, who are responsible for conducting the relevant survey and providing a report to Assistant Commissioner of Land. Upon receiving the report, the Assistant Commissioner of Land renders the mutation certificate. The inspection is noted in Procedure 3. From January, 1 2012 all properties automatically come under City Survey Khatian.
45-60 days (simultaneous with Procedures 1 and 3)
BDT 6,000-15,000
*
2
Obtain inspection for RS Mutation Agency: Assistant Commissioner of Lands (Tahsil)
The permission is only mandatory when the property is under the control of either the Ministry of Works (National Housing Authority) or RAJUK (Dhaka Improvement Trust since 1952 until it was renamed Rajdhani Unnayan Kartripakkh –RAJUK in 1982).
Although the permission is usually always granted, unofficial payments are still paid in order to expedite the process and guarantee approval, which amount to BDT 20,000. The buyer also checks that the property is up to date with payments to the City Corporation Revenue Department, gas utility service, electricity utility service, and the water utility service to make sure that there is no outstanding dues payable so that the those liabilities do not transfer to him. Each of these checks will cost around BDT 625. These are standard steps customary in Bangladesh and not mandatory for registration.
45-60 days (simultaneous with Procedures 1 and 2)
Included in Procedure 2
*
3
Verify the record of rights from the Land Office (also known as Land Revenue Office) Agency: Land Office or Land Revenue Office
Parties check that land tax payments are up to date. The Land Administration system in Bangladesh separates Records of Ownership and Records on Revenue as such:
(a) Land Records Office for land records, surveys, publication and maintenance of records under the directorate of land records and survey (Ministry of Land). (b) Land Office or Land Revenue Office under Ministry of Land. There are 11 administrative offices in each upajela (sub district) (c) There are 64 districts in Bangladesh but 61 registration districts. 3 hill districts do not have registration centres. In Dhaka, the district land registration office has 13 subregistrar offices under the Ministry of Law.
20 days (simultaneous with procedures 2 and 3)
BDT 3,000-6,000
4
Obtain the non-encumbrance certificate from the relevant Sub-registry office Agency: Sub-registry and Land Revenue Office
The buyer checks the legal status of the land (mortgaged or leased or ownership) at the relevant Sub-registry. From January 2012 both Sub-registry and Land Revenue Office provide non-encumbrance certificate. Sometimes land report is required. A land report gives an idea about the current situation and ownership of the land that may include chain of ownership, land tax, land record, registry status etc. Whereas a non-encumbrance certificate is used in property transactions as an evidence of free title/ownership.
3-12 days
BDT 1,000-1,500
5
Prepare deed of transfer and pay stamp duty Agency: Registry Office and Designated Bank
A lawyer may prepare the transfer deed, but it can be prepared by the parties themselves. If a lawyer does it, the fees will be around BDT 6,000. The deed must be prepared in stamped paper that will cost 3% of the property value to get it. This represents the stamp duty.
1 day
3% of property value (Stamp duty)
6
Pay capital gains tax, registration fee, VAT and other taxes at a designated bank Agency: Designated Bank
Registration fee = 2% Local Government Tax = 1% The 2% registration fee is payable to the Bank in favor of the sub-registry office and the receipt is to be presented at the moment of applying for registration. Also, Capital Gains Tax = 2% (Not applicable in rural areas for agriculture. Applicable to land above 100 000 Takas, irrespective of when the transfer was made) and VAT = 1.5% (Applicable only for municipal corporation area payable by private housing and flat developers and commercial businesses) have to be paid at this stage.
1 day
Local government tax (1%) + registration fee (2%) of property value
7
Apply for registration at the relevant Sub-registry Agency: Municipal Deed Registry Office
The buyer applies for registration at the Municipal Deed Registry Office, presenting the receipts of payment for the registration fees obtained in Procedure 6. A certified registration document is obtained within a week for the buyer’s record. The original sale deed/certificate requires about 6 months to be obtained.
180 days (simultaneous with Procedure 8)
Already paid in Procedure 6
*
8
Register the change in ownership at the Land Revenue Office Agency: Land Revenue Office
The change of ownership must be registered in the Land Revenue Office. The property is recorded under the name of the new owner, who is responsible for paying the land taxes from the day it is transferred.
45 – 60 days (simultaneous with Procedure 7)
BDT 5,000
* Takes place simultaneously with another procedure.
