GOVERNMENT POLICY SUPPORT

GOVERNMENT POLICY SUPPORT


 
 
 
 INVESTMENT POLICY OF BANGLADESH GOVERNMENT INVESTMENT GUARANTEE

• The Foreign Private Investment (Promotion and Protection Act 1980) and bilateral investment treaties ensure the protection of investment from expropriation in Bangladesh. • OPIC’s (Overseas Investment Corporation, USA) insurance and finance programmes are functional. • 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) is available. • The equity brought in is allowed to be repatriated from the country with the dividend earned.

 
 
 

THE FIRST POINT OF CONTACT

Bangladesh Investment Development Authority (BIDA) The first point of contact in Bangladesh for a foreign investor is usually the Bangladesh Investment Development Authority (BIDA), which provides information on the investment opportunities in Bangladesh and the incentive packages on offer.

Other services are: • Assistance can be obtained in completing application forms and referring investors to the relevant departments within the BIDA. • If the investor is to locate in an export processing zone then BIDA will introduce the company to the Bangladesh Export Processing Zones Authority, who will facilitate the early start up processes. • Information is provided on the types of companies that can be formed, the general costs of doing business in Bangladesh, how to obtain the necessary work permits for staff, remitting funds to Bangladesh, and so on. Registration with BIDA can be managed electronically through the BIDA Online Registration process (http://bida.gov.bd.)

 
 
 

A FOREIGN COMPANY PLANNING TO SET UP BUSINESS OPERATIONS
IN BANGLADESH HAS THE FOLLOWING OPTIONS:

AS AN INCORPORATED ENTITY Business in Bangladesh can be carried out by a company formed and incorporated locally or by a company incorporated abroad but registered in Bangladesh. Companies may be private or public limited companies or unlimited companies. In establishing a site of business of a foreign company, the company has to be registered with the Joint Stock Companies and Firms (RJSC&F) as the place of business. Incorporation options to a foreign investor include • 100% foreign-owned company in Bangladesh • Joint Venture: Establishing the Company’s Place of Business in Bangladesh

AS AN UNINCORPORATED ENTITY

• Branch office • Liaison/Representative office • Project office

 
 
 

COMPANY FORMATION PROCEDURE

To register a company with the Registrar of Joint Stock Companies and Firms (RJSCF), promoter has to undertake activities in following steps: Step 1: Selection of the Company Name; Step 2: Memorandum of Association (MOA); Step 3: Articles of Association (AOA); Step 4: Registration Application, Prescribed Application Form for registration has to be filled in, signed and submitted to the Registrar of the Joint Stock Companies and Firms

 
 
 

OPENING BRANCH/ LIAISON OFFICE

To open or extend a branch/liaison representative office of a foreign company, the company has to apply to the BIDA. Prescribed application form has to be collected from BIDA Office or downloaded from BIDA website www.bida.gov.bd. In addition, the investor has to submit: • The board resolution for opening such office in Bangladesh • Certified copy of Memorandum and Articles of Association and Certificate of Incorporation • Particulars of Board of Directors • Audit report • All the documents must be attested by Bangladesh Embassy/High Commission/Consulate Office in the investor’s country of origin

 
 
 

SETTING UP JOINT VENTURE

Any Individual entrepreneur either local or foreign can set up an industry with Public Sector Corporation. Such a joint-venture is required to be registered with BIDA if the private sectors contribution is more than 50% of the project cost and in such case it is treated as private sector project. For any public sector that makes contribution of their own fund, require approval of the concerned ministry. If the contribution of the corporation is 50% or above, it is treated as a public sector project. The public sector project is processed by the concerned Ministry for approval of the Planning Commission

 
 
 

OBTAINING INDUSTRIAL PLOT

Entrepreneurs requiring industrial plot of setting up industry in any industrial area/estates apart from SEZ and BSCIC may apply to BIDA

 
 
 

SEZ/CZ : SPECIAL ECONOMIC ZONES

Economic Zones (EZs) are export oriented and industrial enclaves which provide the infrastructure, facilities, administrative and support services for a wide variety of enterprises. Bangladesh’s highly successful EZs in Dhaka and Chittagong are now complemented by 100 new SEZ developments and other valuable real estate developments around the country. Korean investors have developed a private EZ in Chittagong. Investments that are 100% foreign-owned, joint-ventures and 100% Bangladesh-Owned companies are all permitted to operate and enjoy equal treatment in the EZs.

 
 
 

INCENTIVES OFFERRED TO THE EZ

* Ten year corporate income tax holdiay and 25% tax rate for a further 10 years thereafter

* 10 years witholding tax holiday on dividentds and other remitances to non-resident parties

* Perpetual exemption from VAT and custom import duty on inputs

* Perpetual exemption from payment of stamp duty on legal instruments

* 100% investment deduction on new investment in EZ buildings and machinery application over 20 years.

* Operation under essential one license issues by SEZ

* Rapid Project approval and licensing within 30 days ( with exception of projects requiring environmental license from National Environmental Management Agency)

* No Exchange Controls – liberalized foreign exchange regime and easy repatriation of capital and profits, access to foreign currency accounts, domestic and offshore borrowing

* At Special Economic Zone Investor Support Division assists new companies and provide help and advice in the areas of staff recruitment, labour regulations, wod permits, import-export logistics, application for utility connections and registration with tax authorities etc.,

* All zones are build to exacting international standards and provide facilities suited to export prodution

* Serviced land and ready factory buildings are available for sale or lease to licensed EZ companies, water, sewearage, electicity, all weather roads and an illuminated perimeter fence or wall are standard requirement for zones

* Relief from double taxation

* Relocation of foreign industries allowed

* Non-Reisent foreign currency deposit (NFCD) account permiteed For more information, please visit Bangladesh Economic Zones Authority (BEZA) website www.beza.gov.bd