Doing Business in Bangladesh for Foreign Investors

 Overview of Bangladesh’s Economic Growth

Over the past two decades, Bangladesh has become one of the fastest-growing economies in the world. Its GDP growth has consistently outpaced global averages, driven by a booming textile sector, increasing exports, and expanding domestic demand. The country’s economic growth is estimated at around 7-8% annually, a testament to its resilience and promising future. Bangladesh’s diversified economy, stable political environment, and a growing middle class make it a key player in South Asia.

With a population exceeding 160 million people, Bangladesh boasts a large consumer market. The country’s major exports include ready-made garments, textiles, pharmaceuticals, and seafood. The government has been focusing on industrialization, infrastructure development, and modernizing key sectors to attract foreign direct investment (FDI). The implementation of new economic reforms has resulted in a more favorable business environment for foreign investors.

Why Choose Bangladesh for Foreign Investment

There are several compelling reasons why Bangladesh is an attractive destination for foreign investment:

1. Large, Affordable Workforce
   With a median age of 26, Bangladesh offers a young, energetic, and cost-effective labour force — perfect for labour-intensive industries like manufacturing.
2. Strategic South Asian Location
   Bangladesh sits at the crossroads of India, China, and Southeast Asia, making it a gateway to over 2 billion consumers. Ideal for trade, logistics, and sourcing.
3. Rapid Infrastructure Growth
   Major projects like the Padma Bridge and Dhaka Metro Rail are transforming connectivity, boosting logistics and business efficiency.
4. Investor-Friendly Policies
   The government offers tax holidays, customs duty waivers, and unrestricted profit repatriation — all designed to welcome foreign capital.
5. Easier Business Setup
   Regulatory reforms have simplified company registration and reduced red tape, improving Bangladesh’s global ranking for ease of doing business.

Investment Roadmap 

Step 1: Spot Investment Opportunities

Focus on high-growth sectors:

• Garments – 2nd largest global exporter
• Information Technology – Fast-growing digital market
• Pharmaceuticals – Strong generic medicine production
• Renewable Energy – Government-backed green projects

Step 2: Choose a Strategic Location

Select based on your business model:

• Dhaka – Corporate and political center
• Chittagong – Ideal for trade and logistics
• Sylhet/Khulna SEZs – Lower competition, high potential

Step 3: Register Your Business

Complete legal formalities:

• Register with the Registrar of Joint Stock Companies (RJSC)
• Obtain a Trade License
• Register with the National Board of Revenue (NBR)
• Apply for required industry licenses

Step 4: Understand Regulations

Stay legally compliant:

• Labor laws – Fair wages and workplace safety
• Environmental laws – Clearance needed for manufacturing sectors

Step 5: Secure Permits

Before starting operations, ensure you have:

• Industrial permits
• Environmental clearance
• Fire safety approval

Step 6: Access Government Incentives

Maximize your benefits:

• Tax holidays for select sectors
• Customs duty exemptions
• Free repatriation of profits and capital

Support available via Bangladesh Investment Development Authority (BIDA).

Key Investment Incentives in Bangladesh

1. Tax Holidays and Exemptions
   The government offers generous tax holidays of 5 to 10 years, depending on sector and location.
   Eligible industries include:

• Textiles and RMG
• ICT and Software
• Renewable Energy
• Pharmaceuticals
• Agro-processing and Light Engineering

2. Special Economic Zones (SEZs) – Managed by BEZA

Bangladesh Economic Zones Authority (BEZA) operates multiple SEZs with investor-friendly features:

• Up to 10 years income tax exemption
• Reduced VAT and customs duties
• Plug-and-play industrial plots
• Proximity to ports and logistics hubs
• One-Stop Service (OSS) for approvals

Major SEZs: Bangabandhu Sheikh Mujib Industrial City, Mirsarai SEZ, Moheshkhali SEZ

3. Export Processing Zones (EPZs) – Managed by BEPZA

Bangladesh Export Processing Zones Authority (BEPZA) supports export-driven industries with:

• 10-year tax exemptions
• Full repatriation of profits
• Simplified customs and bonded warehouse facilities
• Skilled workforce and secured environments

Major EPZs: Dhaka EPZ, Chattogram EPZ, Uttara EPZ

4. Hi-Tech Parks & ICT Zones

To boost innovation and digital economy, Bangladesh has launched Hi-Tech Parks under the Bangladesh Hi-Tech Park Authority (BHTPA):

• 10 years tax exemption
• 100% foreign ownership allowed
• Exemptions on import duties for tech equipment
• Fast internet, ready infrastructure, and innovation labs

Key Locations: Hi-Tech City (Gazipur), Jessore Hi-Tech Park, Sylhet IT Park

Regulatory Environment in Bangladesh

 Taxation & VAT Framework

Corporate Income Tax (FY 2025-26 Rates):

VAT Obligations:

• Must register with National Board of Revenue (NBR) for Business Identification Number (BIN).
• Standard VAT rate: 15% (some sectors enjoy reduced or exempted VAT).
• Must submit monthly VAT returns.

Incentives:

• Tax holidays: 5–10 years (depending on location and sector).
• Accelerated depreciation: 100% in the first year for machinery.
• Duty exemptions: On capital machinery & raw material for export-oriented units (e.g., under EPZs, BEZA).

Customs & Import/Export Regulations

Import Requirements:

• Obtain Import Registration Certificate (IRC).
• Open a Letter of Credit (LC) for most imports.
• Comply with Bangladesh Standards and Testing Institution (BSTI) and Plant/Animal Quarantine rules.

Export Requirements:

• Export Registration Certificate (ERC) mandatory.
• HS Code and export incentives available under the Export Policy.
• Bonded warehouse license available for 100% export-oriented industries.

Customs Process:

• Automated via ASYCUDA World system (customs clearance online).
• Key checkpoints: Chattogram Port, Mongla Port, Benapole, and Hazrat Shahjalal International Airport.
• Time-bound clearance initiatives and Green Channel for priority goods.

🔹 Sector-Specific Compliance Examples

• Pharma: Must comply with DGDA (Directorate General of Drug Administration) guidelines.
• Renewables: Need environmental clearance from DoE; power purchase agreements go through BPDB/SREDA.
• ICT Firms: Must register with BHTPA for Hi-Tech Park incentives.
• Construction/Factories: Require clearances from RAJUK, Fire Service & Civil Defence, and DoE.

Approximate Fees for Foreign Investors in Bangladesh (in BDT)

 Total Estimated Initial Cost Range:

Bdt 330,000 tk  – Bdt 1,650,000 tk +
(Varies depending on business type, sector, and location)

Required Documents for Business Setup (Foreign Investors)

1. Company Registration (RJSC)

• Proposed company name (Name Clearance Certificate from RJSC)
• Memorandum and Articles of Association (MOA & AOA)
• Shareholder information (name, address, nationality, passport copies)
• Board resolution from parent company (if applicable)
• Passport-sized photos of directors/shareholders
• TIN (Tax Identification Number) application

2. Trade License

• Duly filled application form from the local city corporation
• Company MOA & AOA
• Lease/rent agreement or ownership document of business premises
• National ID/passport of the authorized person
• Passport-sized photo of the applicant

3. Tax Registration (NBR)

• Trade license
• MOA & AOA
• Passport/ID of company director
• Office address proof
• Bank account details

4. Bank Account Opening

• MOA & AOA
• Trade license
• Board resolution (if foreign parent company involved)
• Copy of passport/NID of signatories
• TIN Certificate
• Company seal and photographs

5. Foreign Investment Declaration (Optional but Recommended)

• Declaration to Bangladesh Investment Development Authority (BIDA)
• Investment plan or project proposal
• Source of funds
• FDI tracking and incentive eligibility

Business Locations and Economic Zones in Bangladesh

Top Cities for Investment

• Dhaka – Ideal for corporate, finance, and tech businesses.
• Chittagong – Best for manufacturing, logistics, and exports.

Special Economic Zones (SEZs) – BEZA

• Offer tax holidays, duty exemptions, and ready infrastructure.
• Major zones:
  • Mirsarai EZ
  • Bangabandhu Industrial City
  • Anwara EZ
  • Mongla EZ
  • Dhaka EZ
  • SEZs in Sylhet, Khulna, and more (under development)

Private Economic Zones

• Examples:
  • A.K. Khan EZ (Narsingdi)
  • Abdul Monem EZ (Munshiganj)
  • Meghna, Akij, Bashundhara, City EZs

Export Processing Zones (EPZs) – BEPZA

• For export-based businesses.
• Benefits: 10-year tax holiday, full profit repatriation.
• Key EPZs: Dhaka, Chittagong, Adamjee, Mongla, Cumilla, Karnaphuli, Ishwardi, Uttara.

Hi-Tech Parks – BHTPA

• For IT and tech industries.
• Benefits: 10-year tax holiday, 100% foreign ownership.
• Locations: Gazipur, Jessore, Sylhet, Dhaka & Khulna (under construction)

Support Systems for Foreign Investors

1. Bangladesh Investment Development Authority (BIDA)

• One-Stop Service (OSS) for approvals, permits, and registrations
• Investment guidance and aftercare services
• Assistance with land, utility, and regulatory connections

2. Bangladesh Economic Zones Authority (BEZA)

• Manages Special Economic Zones (SEZs)
• Provides serviced industrial land, tax holidays, and infrastructure support

3. Bangladesh Export Processing Zones Authority (BEPZA)

• Operates Export Processing Zones (EPZs)
• Offers duty-free facilities, customs help, and simplified regulations

4. Bangladesh Hi-Tech Park Authority (BHTPA)

• Supports IT and tech investors
• Offers tax incentives, plug-and-play facilities, and innovation labs

5. Chambers of Commerce & Industry (e.g., DCCI, MCCI, FICCI)

• Business networking, policy advocacy, and support for investor relations

Conclusion

Bangladesh presents a wealth of opportunities for foreign investors, from tax incentives to access to a young, dynamic workforce. With the right strategy, investment opportunities, and local knowledge, businesses can thrive in Bangladesh’s growing economy.

Start Your Investment Journey

Now that you understand the roadmap to business success in Bangladesh, it’s time to take the next step. Research your industry, choose the right location, and leverage the government’s support systems to establish your business.

 Key Agencies and Resources

• Bangladesh Investment Development Authority (BIDA): https://bida.gov.bd
• Bangladesh Economic Zones Authority (BEZA): https://beza.gov.bd
• Registrar of Joint Stock Companies (RJSC): https://roc.gov.bd
• National Board of Revenue (NBR): https://nbr.gov.bd
• Bangladesh Bank (Central Bank): https://bb.org.bd