Investment Opportunities in Bangladesh

Investment Opportunities in Bangladesh


Bangladesh offers generous opportunities for investment under its liberalized Industrial Policy and export-oriented and private sector-led growth strategy. All but four sectors (a) arms and ammunition and other defence equipment and machinery, (b) forest plantation and mechanized extraction within the bounds of reserved forests, (c) production of nuclear energy, and (d) security printing and mining are open for private investment in Bangladesh. The government’s role is that of a facilitator which helps create an enabling environment for expanding private investment, both domestic and foreign.


Why to invest in Bangladesh?

  • Good macroeconomic stability characterized by a high growth rate close to 8%;
  • Goldman Sachs branded Bangladesh in ‘Next 11’-list after the BRIC nations;
  • An open and diverse economy;
  • A very low-cost Young and skilled workforce;
  • A strategic and competitive position in the value chain of the global economy;
  • An economic and legislative environment globally favourable to business;
  • A strategic geographic location as a gateway to countries in the Asia-Pacific region.


Incentives for encouraging investments in Bangladesh

            As part of the government’s liberal policy regime, several benefits have been instituted for investing in certain sectors.

Tax holiday and exemptions

  • 5-10 years of Tax Holiday and reduced tax depending on areas.
  • 100% tax exemption on income and capital gain for certain projects under Public Private Partnership (PPP) for 10 years.
  • 100% tax exemption from software development, Nationwide Telecommunication Transmission Network or Information Technology Enabled Services.
  • 50% of income derived from export is exempted from tax.
  • Tax exemption on royalties, technical know-how and technical assistance fees and facilities for their repatriation.
  • Tax exemption on interest paid on foreign loan.

 Exemption on import duties

  • Exemption of customs duties on capital machineries;
  • Exemption of import duties on raw material used for producing export goods;

Double taxation regime

  • Bangladesh has double taxation avoidance agreement with more than 30 major trading partner countries.
  • Expatriate employees involved in specific sectors can also avail income tax exemption for up to 3 years.

Capital repatriation

  • Full repatriation of capital invested from foreign sources will be allowed.
  • Profits and dividend accruing to foreign investment may be transferred in full.
  • If foreign investors reinvest their dividends and or retained earnings, those will be treated as new investment.

Bonded warehousing facilities

  • For export-oriented industries
  • Bond period varies from industry to industry

Tariff reduction

  • Tariff (if paid) refund on import of raw materials for export

Accelerated depreciation

  • Industrial undertakings not enjoying tax holiday will enjoy accelerated depreciation allowance.
  • Such allowance is available at the rate of 100 per cent of the cost of the machinery or plant if the industrial undertaking is set up in the areas falling within the cities of Dhaka, Narayanganj, Chittagong and Khulna and areas within a radius of 10 miles from the municipal limits of those cities.
  • If the industrial undertaking is set up elsewhere in the country, accelerated depreciation is allowed at the rate of 80 per cent in the first year and 20 per cent in the second year.


  • 100% ownership is allowed

Investing in the stock market

  • Foreign investors are allowed to participate in Initial Public Offerings (IPOs) without regulatory restrictions.
  • Capital gain from listed shares is tax-exempt for individual investors and lower tax rate is applicable for company and others entities

Other incentives

  • Citizenship by investing a minimum of USD 500,000 or by transferring USD 1,000,000 to any recognized financial institution (non-repatriable).
  • Permanent residency by investing a minimum of USD 75,000 (non-repatriable).


How to Enter Bangladesh Market?

            Foreign investors can either form a fully/ partially owned subsidiary or setup branch or liaison office for operating in Bangladesh. The type of entity formed would depend on the investor’s medium and long-term strategy for penetrating the market.

Wholly Owned subsidiaries

            Foreign companies are permitted to establish wholly owned subsidiaries in Bangladesh under the ‘Companies Act 1994’, for establishing either a private limited or a public limited company.

            Company registration documentation and its approval are handled by the Registrar of Joint Stock Companies and Firms (RJSC) and foreign entities can incorporate a new company complying with the requirements of the RJSC. Foreign entities can also fully acquire any existing Bangladeshi companies.

Joint venture

            Like wholly owned subsidiaries, foreign companies can incorporate a joint venture company with Bangladeshi partner(s). The equity ownership of the foreign company will vary depending on the amount invested by each party.

Limited liability by purchasing shares in an existing Bangladeshi company

            Foreign investors are free to invest in local companies (subject to limitation in certain sectors) There are no restrictions on the transfer of shares to non-residents. Foreign investors may sell their shares, irrespective of their percentage of shareholding.

            The Bangladesh government provides five to ten years of tax exemption to international investors planning on operating in certain sectors. Investments in select priority sectors such as Power enjoy tax exemption for up to 15 years.