Please find below a listing of the Frequently Asked Questions raised by potential and actual foreign investors in Bangladesh.
1. What are the various structural options that an investor can choose to set up a business?
If you are a local investor you may set up your business under several organizational structures such as single proprietorship, partnership and limited company. If you are a foreign investor, you may establish your business only under limited company.
2. Can a foreign investor be allowed to own 100% of a business?
Yes, 100% foreign equity may be allowed in all areas of investment under Companies Act 1994. However, private investment, local as well as foreign, is restricted in four sectors on strategic grounds as mentioned in the Industrial Policy-2010.
3. What are the areas of investment covered by the Industrial Policy 2010?
The Industrial Policy-2010 covers almost all investment areas except the following four reserve sectors where private investment is not allowed:
a) Arms and ammunitions and other military equipments and machinery
b) Nuclear power
c) Security printing and minting
d) Forestation and mechanized extraction within the boundary of reserved forest
4. Are there other areas that require prior approval for setting up industries?
Yes, there are 17 controlled sectors which require prior clearance/ permission from the respective line ministries/authorities. These are:
a) Fishing in the deep sea
b) Bank/financial institution in the private sector
c) Insurance company in the private sector
d) Generation, supply and distribution of power in the private sector
e) Exploration, extraction and supply of natural gas/oil
f) Exploration, extraction and supply of coal
g) Exploration, extraction and supply of other mineral resources
h) Large-scale infrastructure project (e.g. flyover, elevated expressway, monorail, economic zone, inland container depot/container freight station)
i) Crude oil refinery (recycling/refining of lube oil used as fuel)
j) Medium and large industry using natural gas/condescend and other minerals as raw material
k) Telecommunication service (mobile/cellular and land phone)
l) Satellite channel
m) Cargo/passenger aviation
n) Sea-bound ship transport
o) Sea-port/deep sea-port
p) VOIP/IP telephone
q) Industries using heavy minerals accumulated from sea beach
5. Where does an investor apply for registration of investments?
a) For single/sole proprietorship (Bangladeshi investors only), you may go online at ORS BOI to register your project with required documents/papers. If you want to register manually, please contact Director (Registration & Incentives-2), Board of Investment. Contact Number: +88-02-9551644.
b) If you are a foreign investor for 100% foreign or joint venture investment, you may go online at ORS BOI to register your project with required documents/papers. If you want to register manually, please contact Director (Registration & Incentives-1 Industrial), Board of Investment. Contact Number: +88-02-9562426
c) In order to establish branch or liaison or representative office of a foreign company, you may go online at ORS BOI to register your project with required documents/papers. If you want to register manually, please contact Director (Registration & Incentives-1 Commercial), Board of Investment. Contact Number: +88-02-9562546.
6. What are the procedures to incorporate change/addition/reduction of equity, machineries, production of goods in the registered industry?
The concerned registered company will apply in the prescribed format to BOI for the proposed change which is to be supported by necessary papers with a pay order of BDT 1000.00
7. What are the procedures to change the board of directors/share structure of the registered company?
The Registered Company will apply in the letterhead pad of the company for the change supported by the relevant certificates from the Registrar of Joint Stock of Companies and Firms (RJSC&F).
8. What requirements must be complied with before an enterprise can enjoy tax benefits?
For local and foreign investors to qualify for incentives, the project must be registered with the Board of Investment, Bangladesh under Board of Investment Act, 1989. Besides, TIN (Taxpayers Identification Number) need to be obtained to avail the facilities.
9. What are the fiscal incentives offered to a local or foreign investor?
- Corporate tax holiday (outside EPZs): 5 to 7 years for selected sectors and areas.
- Accelerated depreciation on cost of capital machinery for new industries in lieu of tax holiday
- Avoidance of double taxation under bilateral tax convention
- Tariff concessions on import of capital machinery
- Tariff concessions on import of raw materials of the export oriented industries
- Bonded warehousing facility
- Cash incentives and export subsidies ranging from 5% to 20% on the FOB value of selected products
- Funds for export promotion, export credit guarantee scheme, permission for domestic sales up to 20% by export-oriented companies outside EPZ areas.
- Remittance of royalty, technical know-how and technical assistance fees
- Citizenship by investing a minimum of US$ 500,000.00 and permanent resident permits on investing US$ 75,000.00
- And many more
10. What are the relevant documents/papers required for registering with the Board of Investment, Bangladesh?
a) Documents required for local & foreign investment are:
- Application Form duly filled in
- Trade License
- Certificate of Incorporation
- Memorandum and Articles of Association
- Registered partnership deed
- Name and address of other shareholder/director(s) of the project
- Additional documents for projects in controlled sectors
- Copy of rental agreement or lease deed for premises or land purchase document
- TIN Certificate
- Registration Fee (Bank Draft)
b) For Joint venture investment, in addition to the documents mentioned above a copy of the agreement concluded between the local and foreign investors in a joint venture agreement is also required.
11. What are the post-investment services provided by BOI?
Once the investor decides to invest and forms a company, BOI provides the following specific facilities and comprehensive services:
- Issues Industrial Registration
- Recommend for Industrial Plot (if available)/ in any designated industrial area other than BSCIC & BEPZA
- Recommend for utility connections
- Recommend for Foreign Loan, Suppliers' Credit, deferred payment, PAYE Scheme, etc.
- Recommend for import of machinery and raw materials.
- Recommend for the issuance of work permit.
- Recommend for the remittance of Royalty, Technical Know-How and Technical Assistance Fees
12. What is the protection of investment in Bangladesh?
The Foreign Private Investment (Promotion and Protection Act 1980) and bilateral investment treaties ensure the protection of investment from expropriation in Bangladesh. The equity brought in is allowed to be repatriated from the country with the dividend earned.
13. How the equity, dividend, royalty and technical assistance can be remitted from Bangladesh?
The equity can be remitted if the company decides to exit from the country. The dividend earned each year can be remitted based on the necessary documentation and approval. The royalty and technical assistance can also be remitted based on the documents and criteria fixed by the government.
14. How an investor can get a new work permit in Bangladesh?
An investor has to apply in a BOI prescribed form which could be downloaded from BOI website (www.boi.gov.bd). The holders of Private Investor (PI) Visa or Employment (E) Visa or E1 Visa may get work permit in Bangladesh.
15. How an investor can extend/renew a work permit in Bangladesh?
An investor must apply in a BOI prescribed form for renewal and extension of the work permit which could be downloaded from BOI website. In addition, the work permit holders must pay taxes and submit the certificate of income tax payment for extension or renewal of work permit.
16. How can an investor apply for the amendment of a work permit in Bangladesh?
An investor can have his/her work permit amended by submitting the original documents with the proposed amendment/ amendments, board resolutions for amendment, Appointment Letter and proof of salary received etc. to the BOI.
17. How can an investor apply for the cancellation of a work permit in Bangladesh?
An investor can apply for cancellation of his/her work permit by submitting the resignation letter, updated tax payment certificate, board resolution and the identity card etc.
18. When/How does BOI recommend for E, E1 or PI visa in favor of investors?
BOI recommends E, E1 or PI visa for an investor if he/she applies with the daily newspaper clipping containing advertisement for employment, appointment letter, passport, identity card and statements justifying such appointment etc.
19. How can an investor open a new Branch Office/Liaison Office/Representative Office in Bangladesh?
In order to open a new Branch Office/ Liaison Office/Representative Office in Bangladesh, an investor will have to apply in a BOI prescribed form which could be downloaded from BOI website. In addition, the investor has to submit
(a) The board resolution for opening such office in Bangladesh
(b) Certified copy of Memorandum and Articles of Association and Certificate of Incorporation
(c) Particulars of Board of Directors
(d) Audit report
(e) All the documents must be attested by Bangladesh Embassy/High Commission/Consulate Office in the of the investor.
20. How can an investor change the address of a Branch Office/Liaison Office/Representative Office in Bangladesh?
An investor can change the address of a Branch Office/Liaison Office/Representative Office in Bangladesh through an application with BOI certified copy of rent deed and board resolution duly supported by a treasury chalan of BDT. 1000.00
21. How can an investor close a Branch Office/Liaison Office/Representative Office in Bangladesh?
An investor can close a Branch Office/Liaison Office/Representative Office in Bangladesh by an application to BOI with audit report, updated tax payment certificate, No Objection Certificate (NOC) from Bangladesh Bank etc.
22. What are the procedures to waive requirements?
The Branch Office/Liaison Office/Representative Office of the company has to apply to BOI to waive specific condition(s).
23. Is BOI approval/registration needed for commercial enterprises?
BOI's approval/registration is not needed for commercial enterprises. They must register under concerned law and proper authority.
24. What is the minimum wage of the workers prevailing in the country?
The wage in Bangladesh is probably the lowest in south Asia. The productivity of the employees is satisfactory and apt to change is frequent. The wage in Bangladesh is controlled by the relevant statutes. The minimum wage in ensured by the constitution. Wages vary form sector to sector as well as well through profession.
25. What is the availability of land for industrial uses?
The land use for the industries can be as under:
a) Export processing zones (EPZ): The land in the EPZ enclaves is allotted by the EPZ authority.
b) Private lands: The private lands can be scouted by the investors thereby. A foreign company can own land in its name.
c) Government owned land: The investor can look for Government owned land. If he/she chooses certain government owned land in an administrative district, he can seek assistance from BOI for allotment of the same in his/her favor for certain land in a district (regional centre) and can seek support of BOI. On receipt of such request from the investor, BOI requests the Deputy Commissioner, the administrative head of the district, to lease out the chosen land of the investor.