Bangladesh Economic Zones Authority
(BEZA)
Prime Minister's Office

Incentive Package

BEZA would provide multiple incentives, to the developers of the Economic Zones as well as to the manufacturing unit investors. Benefits to the zone developer range from income tax expatiation to reduction of capital expenditure. The incentive structure for investment such as exemption of Taxes, custom/excise duties to non-fiscal incentives such as no FDI ceiling, issuance of work permits and recommendation for resident ship /Citizenship.

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 100% Exemption SRO No. 7-lw/2016 Date: 12 January, 2016 of Internal Resources Division
10 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. 100% Exemption SRO No. 287-Law/2017/08.00.0000.040.22.005.15 Date: 21 Sep, 2017 of Internal Resources Division
11 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. 100% Exemption SRO No. 120-Law/Income Tax/2018 Date: 26 Apr, 2018 of Internal Resources Division
12 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. 100% Exemption Circular No. R-6/1M-11/2017-269

Date: 19 Sep, 2017

13 Exemption of stamp duty on the land lease agreement between BEZA & Developers 100% Exemption SRO No. 08-Law/2016 Date: 12 Jan, 2016 of Internal Resources Division
14 Exemption of stamp duty on lease registration 50% Exemption SRO No. 06-Law/2016 Date: 12 Jan, 2016 of Internal Resources Division
15 EZ investors are waived from Board of Investment Act, 1989 Completely Exempted SRO No. 108-Law/2016 Date: 21 April, 2016 of Prime Minister’s Office

Incentives for Unit Investors

Serial Incentives Explanation Gazettes
1 Income Tax exemption of  for 10 years (except edible oil, sugar, flour, cement, iron and iron related products) Extent -100%

(for 1st, 2nd , 3rd  year)

4th year – 80%

5th year – 70%

6th year – 60%

7th year – 50%

8th  year – 40%

9th  year – 30%

10th year – 20%

SRO No 104-Law/Income Tax/2020 Date: 25 March, 2020 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 Exemption from Income Tax on the income of expatriate for 3 years 50% Exemption SRO No. 298- Law/Income Tax/2015 Date: 8 Oct, 2015 of Internal Resources Division
6 Exemption from double taxation subject to the existence of double taxation agreement subject to the double taxation agreement National Board of Revenue
7 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 209- Law/2015/46/Customs Date:1 July, 2015 of Internal Resources Division

List of capital machineries

SRO No. 121- Law/2020/72/Customs Date:11 June, 2020 of Internal Resources Division

8 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

9 Home Consumption & Other Bond Facilities, Warehouse Operator All the unit investors in EZs are entitled to this facility 1.       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

2.       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

10 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

11 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

12 Sub-contracting with DTA allowed 100% Allowed
13 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) 100% Exemption SRO No. 210- Law/2015/47/Customs  Date: 1 July, 2015 of Internal Resources Division

Amendment: SRO No. 312- Law/2015/57/Customs Date: 28 Oct, 2015 of Internal Resources Division

14 Duty exemption on export 100% Exemption 1st Schedule of The Customs Act,1969
15 Exemption from VAT on Utility services related to production of goods 100% Exemption SRO No. 190-Law/2019/47-VAT Date: 13 June, 2019 of Internal Resources division
16 Land development tax exemption 100% Exemption SRO No. 05-Law/2016 Date: 11 Jan, 2016 of Ministry of Land
17 Exemption of stamp duty on lease registration 50% Exemption SRO No. 06-Law/2016 Date: 12 Jan, 2016 of Internal Resources division
18 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
19 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
20 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
21 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
22 Foreign investment in Bangladesh including EZs No restrictions except few sectors As per appendix-4 of Industrial Policy-2016
23 Ceiling of FDI No ceiling of foreign contents ·         Industrial Policy- 2016  of Ministry of Industries

·         FE Circular No. 21/2017 of Bangladesh Bank

24 Repatriation of dividend earned against the investment 100% o 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)

o 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)

25 Repatriation of sales proceeds of investment 100% o Detailed instructions outlined at FEID Circular No. 01 of 6 May 2018 of Bangladesh Bank

o Relaxation vide FEID Circular Letter 01 of 18 June 2020 of Bangladesh Bank in the following counts:

(a)     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.

(b)     No permission from Bangladesh Bank is required to repatriate sales proceeds of shares up to Tk 10.00 million without valuation reports.

(c)     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.

26 Loan from external sources 100% Paragraph 8 of FE Circular No. 21/2017 and paragraph 8, chapter 20 of GFET of Bangladesh Bank
27 Repatriation of Royalty, Technical Know-how& Technical Assistance Fees ·         For new project, not exceeding 6% of the cost of the imported machinery

·         For 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
28  Telephonic Transfer (TT) No limit Paragraph 7  of FE Circular No. 21/2017 of Bangladesh Bank
29 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
30 FC Accounts for foreign nationals working in EZ enterprises Extent –  Full Paragraph 1, chapter 13 of GFET of Bangladesh Bank
31 Remitting income of foreign nationals working in EZs 75 % of current income o   Paragraph 12 of FE Circular No. 21/2017 and paragraph 12, chapter 20 of GFET of Bangladesh Bank

o   FE Circular No. 24 of 23 June 2020 of Bangladesh Bank

32 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
33 Market exploration assistance for Type C industries operating in EZs against export of

–          Sandals and bags made of synthetic & fabrics

–          Agro processing goods

4% Cash Incentive on the condition of a minimum value addition of 30% Paragraph 9 of FE Circular No. 35, dated 22 September 2019 of Bangladesh Bank
34 Backward Linkages of raw materials to sell for export-oriented industries 100% Paragraph 06 of FE Circular No. 21/2017 of Bangladesh Bank
35 Formation of Joint Venture Industries FE Circular No. 21/2017 of Bangladesh Bank
36 Special cash incentives against export of textile goods including readymade garments FE Circular No. 01, dated 07 January 2020 of Bangladesh Bank
37 Issuance of work permit to foreigners is allowed Up to 5% of total officers/employees of an industrial unit Notification No. 03.068.004.09.00.00.016.2018-664 (7 Nov,2018)
38 Resident visa For investment of US$75000 or above Industrial Policy- 2016 of Ministry of Industries
39 Citizenship For investment of US$ 1,000,000 or above Industrial Policy- 2016 of Ministry of Industries