BANGLADESH BANK
Usage and Savings

Bangladesh offers generous opportunities for investment under its liberalized Industrial Policy and export-oriented, private sector-led growth strategy. All but four sectors
(1) Arms and ammunition and other defense equipment and machinery
(2) Forest plantation and mechanized extraction within the bounds of reserved forests
(3) Production of nuclear energy
(4) Security printing and mining
The Board of Investment (BOI), established by the government for accelerating private investment, provides institutional support services to intending investors.
GENERAL FACILITIES/ INCENTIVES


Name

Feature

 

Tax holiday
  • Tax holiday facilities will be available for 5 or 7 years depending on the location of the industrial enterprise.
  • For industrial enterprises located in Dhaka and Chittagong Divisions the tax holiday facility is for 5 years while it is 7 years for locations in Khulna, Sylhet, Barisal, and Rajshahi.

 

Tax exemption
  • Tax exemption on royalties, technical know-how fees received by any foreign collaborator, firm, company and expert.
  • Exemption of income tax up to 3 years for foreign technicians employed in industries specified in the relevant schedule of the income tax ordinance.

 

Accelerated depreciation
  • Industrial undertakings not enjoying tax holiday will enjoy accelerated depreciation allowance.

 

 

Concessionary duty on imported capital machinery
  • Import duty, at the rate of 5% ad valorem, is payable on capital machinery and spares imported for initial installation or BMR/BMRE of the existing industries.
  • For 100% export oriented industries, no import duty is charged in case of capital machinery and spares.

 

Private investment from overseas sources is welcome in all areas of the economy with the exception of the four reserved sectors (mentioned earlier). Such investments can be made either independently or through venture on mutually beneficial terms and conditions. Foreign investment is, however, especially desired in the following major categories of industries:

  • Export oriented industries.
  • Industries in the Export Processing Zone (EPZ)
  • High technology products that will be either import substitute or export oriented.

 

Other Incentives

  • Citizenship by investing a minimum of US $ 500,000 or by transferring US$ 1,000,000 to any recognized financial institution (Non-reparable).
  • Permanent resident ship by investing a minimum of US$ 75,000 (non-reparable).
  • Special facilities and venture capital support will be provided to export-oriented industries under "Thrust sectors”.

 

Investment Protections / International Agreements

  • Legal Protection
  • International Agreement
  • Bilateral Agreements
  • Investment Treaty
  • Incentives to Non-Resident Bangladeshis ( NRBs)

To facilitate investment, prior approval of the Bangladesh Bank is no longer required for:

  • Remittance of profits to their head offices by foreign firms and companies operating in Bangladesh
  • Issuance of shares to non-residents against investment for setting up industries in Bangladesh.
  • Remittance of dividends on such shares to the non-resident investors.
  • Portfolio investment by non-residents including foreign individuals/enterprises in shares and securities through stock exchanges in Bangladesh.
  • Remittance of dividends on portfolio investment by non-residents through stock exchanges in Bangladesh.
  • Remittance of sale proceeds, including capital gains of portfolio investments of non-residents  through stock exchanges in Bangladesh

 

Name of the Bond

Short title, application and commencement

Eligibility

Special Features

 

 

 

US Dollar Premium Bond

 

These rules may be called the U.S. Dollar Premium Bond Rules, 2002, and shall apply to-
(a) a person who purchases a Bond;
(b) a person in whose name a Bond is purchased;
(c) a person named as a nominee in respect of a Bond, and
(d) such other person or persons as may be related in operation of these rules

 

The Bond may be issued in the name of a holder of a non-resident account against remittances from abroad to the account.

 

 

Encashment

 

Interest payable

a

Within one year from the date of issue.

No Interest

b

After completion of one year but within two years.

6.5%

c

After completion of two years but within three years.

7%

d

After completion of 3 years.

7.5%

 

 

 

 

US Dollar Investment Bond

 

These rules may be called the U.S. Dollar Investment Bond Rules, 2002, and shall apply to
(a)a person who purchases a Bond;

  (b)a person in whose name a Bond is purchased;

  (c) a person named as a nominee in respect of a Bond, and

  (d) such other person or persons as may be related in operation of these rules

 

The Bond may be issued in the name of a holder of a non-resident account against remittances from abroad to the account.

 

 

Encashment

 

Interest payable

a

Within one year from the date of issue

No Interest

b

After completion of one year but within two years.

5.5%

c

After completion of two years but within three years.

6%

d

After completion of 3 years.

6.5%

 

 

 

 

The Wage-earner Development BOND Rules, 1981

 

 

They shall apply to –

  • A person who purchases a Bond;
  • A person in whose name a Bond is purchased;
  • A person named as a nominee in respect of a Bond;
  • Such other person or persons as may be related in operation of these rules.

 

A Bangladeshi wage-earner entitled to wage-earners’ rate of exchange on his own earnings in foreign exchange-

    • in his own name or
    • in the name of any other person named in his application;

 

Premature Encashment

Rate of interest payable

a

Before six months from the date of issue.

No interest.

b

On completion of six months but before one year.

9% interest for six months.

c

On completion of one year but before 1½ years.

10% for one year.

d

On completion of 1½ years but before two years.

11% for 1½ years.

e

On completion of two years and thereafter.

12%