Father of the Nation Bangabandhu Sheikh Mujibur Rahman This publication has been prepared under the guidance of the Executive Chairman of Bangladesh Investment Development Authority, Prime Minister’s Of�ice. References to and citations from this report are allowed but must be Publishedproperly inacknowledged. year 2020 For queries please contact: Bangladesh Investment Development Authority Prime Minister’s Of�ice Government of the People’s Republic of Bangladesh E-6/B, Sher-e-Bangla Nagar, Dhaka-1207 Phone-+88-02-55007241-45, Fax: +880255007238, E-mail: [email protected] www.bida.gov.bd facebook twi�er linkedin youtube Bangladesh Investment Handbook A guide for investors PRIME MINISTER GOVERNMENT OF THE PEOPLE’S REPUBLIC OF BANGLADESH 13 Sraban 1427 Message 28 July 2020 I am happy to know that Bangladesh Investment Development Authority (BIDA) is publishing its flagship publica�on �tled ‘Bangladesh Investment Handbook – A Guide for Investors’. Investment is the lifeline of our economy and investment promo�on has been designated as one of the ten special ini�a�ves of the Awami League government. Bangladesh offers its large domes�c markets, strategic loca�on, high profitability, demographic dividend and conducive policy incen�ves that rendered the country as one of the most preferred investment des�na�ons in the world. These have fostered increased private investments and yielded significant rise in both local and Foreign Direct Investment (FDI) in the recent years. Moving up of 8 notches, from 176 to 168 in World Bank’s Ease of Doing Business index 2020, demonstrated feats of asser�ve regulatory reforms, we adopted to accelerate investment in the country. Establishment of interoperable One Stop Service (OSS) in BIDA is another approach of facilita�ng services required to improve business climate. These reinforce our efforts to capitalize the global investments more successfully which is spearheaded by our prime Investment Promo�on Agency (IPA), BIDA. We are celebra�ng ‘Mujib Year’ marking the birth centenary of the Greatest Bangalee of the all �mes, Father of the Na�on Bangabandhu Sheikh Mujibur Rahman. Being imbued with his vision of building Sonar Bangladesh, we have achieved outstanding socio-economic progress in the last 11 and a half years. To encourage investment especially from SMEs, we have declared Light Engineering products as ‘Product of the Year 2020’. Together with keeping steady economic Growth Rate of over 8.0 percent in the last few years, our government has relentlessly been working to implement Vision-2021, Vision-2041 and Delta Plan-2100 along with SDGs. However, the pace is temporarily halted by the pandemic of COVID-19 in the country. Despite the turmoil, we have allocated special fiscal incen�ve packages from our own exchequer to con�nue, and even improve the businesses in the country. Such publica�on is the best way to inform the available policies, incen�ves and procedures to the poten�al investors. I believe the BIDA Handbook will be helpful in mobilizing private investments and also be useful for investors in making decision and doing business easily in the country. I wish publica�on of ‘Bangladesh Investment Handbook – A Guide for Investors’ a grand success. Joi Bangla, Joi Bangabandhu May Bangladesh Live Forever. Sheikh Hasina ADVISER TO THE HON’BLE PRIME MINISTER PRIVATE SECTOR INDUSTRY & INVESTMENT Government of Bangladesh Message I am pleased to know that Bangladesh Investment Development Authority (BIDA) is going to publish an important and most needed document the ‘Bangladesh Investment Handbook: A Guide for Investors’. This landmark publica�on will deliver all the informa�on required to start and operate a business in Bangladesh. Bangladesh is o�en described as the land of untapped opportuni�es. The country enjoys stunning economic record, highly adap�ve & compe��ve workforce and several poten�al industrial sectors that have been discussed in this handbook. Inspired by the vision of the Father of the Na�on Bangabandhu Sheikh Mujibur Rahman, the government led by the Honourable Prime Minister Sheikh Hasina has built a solid founda�on to support the growth of economic ac�vi�es in Bangladesh. Investment, both foreign and local, is given the highest priority by her government. When the COVID-19 pandemic struck us, she foresightedly unveiled significant s�mulus package worth over BDT 1 trillion, which is about 3.6% of the GDP. Under her strong leadership, Bangladesh is poised to diversify its economy and emerge as a developed country by 2041. As the country’s apex investment promo�on agency, BIDA employs an open-door policy for investors from all corners of the globe. It is the first stop for poten�al investors who arrive in our country with their valuable proposals. BIDA facilitates the star�ng of business, the opera- �on of established businesses, a�er care of the investments and advocates for the right invest- ment policies. During the period of the pandemic, BIDA proac�vely reached out to businesses and drove the implementa�on of policy recommenda�ons that provided ease to investors. Using its online One Stop Service portal, BIDA processed over a thousand investor applica�ons and ensured round-the-clock delivery of services. I believe, with the help of this publica�on, BIDA’s key effort to promote Bangladesh as the ideal investment des�na�on will be further strengthened. I would like to congratulate BIDA not just for bringing out this publica�on but also for its sincere endeavors in improving Bangladesh’s investment prospects. Joi Bangla, Joi Bangabandhu. May Bangladesh Live Forever. Salman Fazlur Rahman MP EXECUTIVE CHAIRMAN BANGLADESH INVESTMENT DEVELOPMENT AUTHORITY (BIDA) Prime Minister’s Office Message Bangladesh Investment Development Authority (BIDA) is the apex Investment Promo�on Agency (IPA) of the country. It deals with the private-sector investment of home and abroad. By a�rac�ng investment and crea�ng investment-friendly environment, it is mandated to serve as a world class IPA fostering growth and development of the country. Bridging between the public and private sectors, BIDA is working to simplify the processes and procedures related to investment. We assist investors through proac�ve policy supports and facilita�ng business environment which are the precondi�ons for successful investment. In the global arena of investment, informa�on is crucial for decision making. It is impera�ve for the investors to have prior understanding on the incen�ves and procedures for investment in Bangladesh. A compila�on of such informa�on is of paramount importance to the poten�al investors which are logically described in this publica�on of BIDA. Bangladesh Investment Handbook – A Guide for the Investors delivers up-to-date informa�on on business climate, processes required to start and operate a business, necessary costs, tax/policy regimes, incen�ves and compara�ve advantages, visa rules and above all, the poten�al of businesses in the country. It is expected to ameliorate investment scenario of the country that would, in turn, flourish our economy and implement na�onal development goals and visions including SDG. I hope this endeavour would be beneficial to investors and all our key stakeholders. Md. Sirazul Islam RANGPUR SYLHET MYMENSINGH RAJSHAHI DHAKA BARISHAL KHULNA CHATTOGRAM Contents Message of the Honourable Prime Minister 07 Message of the Private Sector Industry and Investment Adviser 08 Message of the Execu�ve Chairman 09 Bangladesh facts 15-19 Chapter 1: Business climate and opportuni�es Why Bangladesh 22 General incen�ves 34 Sector-specific incen�ves 37 Trea�es and instruments 45 Focus infrastructure 48 BIDA and other IPAs 55 Chapter 2: Star�ng a business Selec�ng a structure 63 Types of companies 64 Se�ng up a business • Blocked account 65 • One Stop Service 65 • Name clearance 66 • Company registra�on 66 • Corporate TIN 66 • Commercial office 66 Post-incorpora�on compliances • Fire licence 67 • Trade licence 68 • Registering with BIDA 69 • VAT registra�on cer�ficate 72 Opera�onal setup • Industrial plot 73 • U�lity 73 • Import & export 75 • Registering with Chief Inspector of Factories and Establishment 77 • Bonded warehouse licence 78 • Environment clearance cer�ficate 79 • Work permit 79 • VISA recommenda�on 80 11 | BIDA Banking & capital transfer • Bringing in cash 82 • Transfer of capital, capital gain 82 • Transfer of shares and repatria�on of sales proceeds 82 • Remi�ance of royalty and technical assistance fees 84 • Transfer of profit and dividend 85 Winding up of business • Repatria�on of residual money 86 • Borrowing 86 Chapter 3: Cost of doing business Costs in major ci�es and regions in Asia 90 Fees for cer�ficates, permits, licences 94 Port tariffs 110 Chapter 4: Paying taxes Tax year 114 Corporate tax rate 114 Income tax return submission Tax exemp�on 115 • Exemp�on period and loca�on Tax benefits for investment in Special Economic Zones 117 Tax benefits for developing units in Special Economic Zones 117 Tax benefit for inves�ng unit of Hi-tech park zone 117 Tax benefits for developing units in Hi-tech park zone 118 Tax benefit for Public Private Partnership Project 118 Export Processing Zones 118 Double Taxa�on Trea�es 118 Chapter 5: Applying for visa Type, dura�on and condi�ons for visa 121 Mandatory visa condi�ons 124 Visa on Arrival 124 Chapter 6: Sector overviews Readymade garments 129 Informa�on technology 135 Pharmaceu�cals 142 12 | BIDA Ac�ve Pharmaceu�cal Ingredients 147 Healthcare services 150 Medical equipment 153 Agro processing 156 Jute and jute products 165 Leather & leather footwear 170 Light engineering 176 Electronics and electrical equipment 181 Plas�cs 186 Automobile 190 Motorcycle & parts 195 Shipbuilding 199 Construc�on material 203 Ceramics 207 Annexures 211-225 13 | BIDA Bangladesh facts 15 | BIDA Official Name : The People’s Republic of Bangladesh Area : 147,570 square kilometers Territorial Sea : 118,813 Sq.