Date post: | 13-Apr-2017 |
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We Are PresentingOn
A Guideline To Invest In Bangladesh
We are1. Md. Biplob Hossain (21)2. Amit Hasan (51)3. Md. Nazmul Haque Chowdhury (253)
Key Economic Indicators of Bangladesh
GDP size $140 billion Expected GDP Growth Rate- 6.00% ( 2015) Per Capita Income- $1314 (2015) Inflation Rate- 6.19% ( 2015) Investment Contribution to GDP- 19.3% ( July 2011-May 2012) FDI- $1.53 billion (2014) Export- 192.41Billion BDT (February 2015) Import- 239Billion BDT (February 2015) Balance of trade -46.90 billion BDT (February 2015) Gold Reserves 13.78 tones Remittance $1397.49 million Foreign currency reserve over $24billion.
Source: BOI and Bangladesh Bank
Why Bangladesh? Industrial low cost laborPer hour labor cost in Bangladesh is $0.62 in 2014 the lowest among the developing countries. Low cost of energy Water Supply : Tariff : 22.43 euro cents / cu-m. Gas Supply : Tariff : 6.45 euro cents / cu-m. Power Supply : Tariff : 6.11 euro cents / kwh. Good ranking in FDI magazine by CTG EPZ is 200 out of 700 global economic
zones Proven export competitor
Bangladesh is one of the top exporters of readymade garments to US and Europe. Bangladesh also has some preferential treatment benefits in European countries.
Why Bangladesh?
Strategic Location
Why Bangladesh? Competitive Incentives
Fiscal and non-fiscal incentives
Tax Exemptions
Generally 5 to 7 years.
For power generation
exemption isallowed for 15
years
Double taxation can be avoided on the basis of
bilateral agreements.
Duty
No import duty for export
oriented industry
For other industry it is @ 5% ad valorem
Remittance and Exit
Full repatriation of invested
capital, profit and dividend
Wind up on investment either
through a decision of the AGM or EGM
Repatriation of the sales proceeds after securing
proper authorization from the Central Bank
Export Processing Zone (EPZ)
Eight EPZs so far
Directly supervised by Prime ministers office
Specially allocated for FDI of manufacturing
sectors
Why Bangladesh? Export and economic zones
Facilities Provided by Bangladesh Export Processing Zone Authority (BEPZA)
Duty free import and export of raw materials and finished goods
GSP facility available
Duty & quota free access to EU, Canada, Norway, Australia etc.
Enjoy MFN (most favored nation) status
No ceiling on foreign and local investment
Foreign Currency loan from abroad under direct automatic route
Non-resident Foreign Currency Deposit (NFCD) Account permitted
Off-Shore banking available
Relocation of foreign industries allowed
Sub-contracting with export oriented Industries inside and outside EPZ allowed
Facilities Provided by Bangladesh Export Processing Zone Authority (BEPZA)Duration and rate of tax exemption for Chittagong, Dhaka, Comilla, Adamjee,& Karnaphuli EPZ for the industries set up after January 01, 2012:
Why Bangladesh? Risk factors of FDI are the minimum in Bangladesh Since independence non of the governments of Bangladesh had imposed any
unfavorable policy against foreign investors.
Stable exchange rate – Over the last few years Bangladesh managed to maintain the foreign currency exchange rate at a stable position.
Exchange rate on 20.06.2015 British Pound = 122.9tk Euro =87.88tk American Dollar =77.39tk Low sovereign risk - Bangladesh has never defaulted in its debt repayment as
Bangladesh has over $24 billion of foreign currency reserve. Growing market
Increasing purchasing power with per capital income $1314.
Board of investment- one stop service center.
1. Pre-Investment Information and Counseling Service
2. Investor Welcome Service (faster immigration)
3. Registration /approval of foreign, joint-venture and local
project
4. Registration /approval of Branch/Liaison/Representative
Offices
5. Approving work permit for the Foreign Nationals
6. Facilitating utility connections (electricity, gas, water &
sewerage, telecom etc.)
7. Assistance in obtaining industrial plots
8. Pre-Investment Information and Counseling Service
9. Approving remittance of royalty, technical know-how and
technical assistance fees
10. Facilitating import of capital machinery & raw materials
11. Approving foreign loan suppliers' credit, PAYE scheme.
20%
26%
21%
22%
2%3%
6%
FDI by sectorsTelecommunica-tion
Textile and Weaving
Banking
Others
Agriculture
Food
Power, Gas and petroleum
Sectors in which Bangladesh gives most incentives
Energy Infrastructure, Pharmaceutical Textiles Agriculture Healthcare Telecom Climate change Education Shipbuilding and light engineering
Import Registration Certificate (IRC)
For the Import Registration Certificate (IRC) one needs to register with the BOI and the Chief Controller of Imports & Exports. The following supporting documents are needed:
a. Trade License photocopy b. Valid membership of association (e.g. FBCCI) c. Passport photocopy of the Managing Director d. Bank solvency certificate (original) e. Original receipt (challan) of bank deposit for the fees
Export Registration Certificate (ERC)
For the Export Registration Certificate (ERC) the following documents are needed:
a. Attested copy of: i. Trade License ii. Valid membership of association or chamber iii. AOA iv. MOA v. Incorporation certificate b. Original of Bank receipt (challan) for deposit of the fees
Environmental Clearance Certificate The company has to apply to the BOI Utility Service Cell (USC) for
Environmental Clearance Certificate. BOI will obtain the necessary clearance from the Department of Environment (DOE) who will visit the factory for inspection.
Social Compliance The registration for Social Compliance can be acquired from the
Chief Inspector of Factories and Establishments (CIFE). Any manufacturing company employing ten or more workers is required to be registered under the Factories Act 1965 at the office of CIFE. This act is primarily intended to regulate working conditions and to ensure safety in the factory.
Factors influencing FDI in Bangladesh
Comparison of cost of doing business between Bangladesh and Pakistan
BangladeshDoing business rank is 173 in 2015
Starting a business: 115 out of 189 countries
Registering property: 184 out of 189 countries
Paying Taxes: 83 out of 189 countries Getting credit: 131 out of 189 countries Protecting investors: 43 out of 189
countries Trading across border*: 140 out of 189
countries Enforcing Contracts: 188 out of 189
countries
PakistanDoing business rank is 128 in 2015
Starting a business: 116 out of 189 countries
Registering property: 146 out of 189 countries
Paying taxes*: 172 out of 189 countries Getting credit*: 131 out of 189 countries Protecting investors: 21 out of 189
countries Trading across border: 108 out of 189
countries Enforcing contracts: 168 out of 189
countries
Comparison in Incentives
Bangladesh Bangladesh allow complete foreign
holdings and the ability to repatriate 100% of profits
Tax holiday available for 5 to 7 years depending on the sectors
100% tax credit for new equity investment in an industry set up before 1 July 2012 for the purposes of expanding plant and machinery or undertaking a new project
Credit for investment in plant and machinery for extension, expansion, balancing, modernization and is 90% of the amount invested.
The Corporate Tax Rate in Bangladesh stands at 27.50 percent
Pakistan Pakistan allow complete foreign holdings
and the ability to repatriate 100% of profits
100% tax credit for five years on new industries.
100% tax credit for new equity investment in an industry set up before 1 July 2011.
Credit for investment in plant and machinery for extension, expansion, balancing, modernization and replacement is 10% of the amount invested.
The Corporate Tax Rate in Pakistan stands at 33 percent