FDI Facilities in Bangladesh

FDI facilities in Bangladesh are often listed in brochures, but investors only benefit from them if their project is structured and documented to qualify. Many incentives are granted by law or SRO for specific sectors, locations or time periods and change with Finance Acts, so a facility that existed when a feasibility study was written may look different at the time of investment.

This page groups the facilities into ownership and protection, tax, customs and zone benefits, people and banking, and explains what an investor has to do to claim each. It complements our FDI legal procedural guide, which covers the setup steps, and our foreign investment overview.

Ownership and legal protection

• Full foreign ownership permitted in most sectors, with only a short list reserved for the state and some regulated sectors having specific conditions.
• Protection against expropriation without adequate compensation under the Foreign Private Investment (Promotion and Protection) Act 1980.
• Equal treatment with local investors in most respects.
• Bilateral investment treaties with a number of countries, offering additional protection and dispute resolution options.
• Access to international arbitration where contracts or treaties provide for it.

Tax incentives available to foreign investors

Bangladesh's tax incentives are now concentrated in specific areas rather than given broadly. Enterprises in economic zones and hi-tech parks, certain priority industries, and some export-oriented and IT-enabled services have enjoyed tax exemptions or reduced rates for defined periods under the Income Tax Act 2023, the Sixth Schedule and SROs issued by NBR. The terms, eligible sectors and expiry dates change with Finance Acts, so treat any figure you find online as a starting point to verify.

Double taxation agreements with many countries can reduce withholding tax on dividends, interest and royalties paid to the foreign investor. Claiming them requires a certificate of tax residence and correct documentation at the time of payment.

Customs, VAT and zone facilities

Export-oriented industries can import raw materials without paying duty at import under the bonded warehouse system administered by Customs, subject to licensing and strict stock reconciliation. Capital machinery for certain industries has historically enjoyed concessionary duty, defined in the customs tariff and SROs. Under the VAT and SD Act 2012, exports are zero-rated, which lets exporters recover input VAT.

• Economic zones (BEZA): zone authority acts as one-stop shop; zone-specific tax and duty benefits; land on lease.
• Export processing zones (BEPZA): ready factory buildings and plots; streamlined import and export procedures; BEPZA handles work permits and many approvals.
• Hi-tech parks (BHTPA): facilities for IT, ITES and electronics businesses.
• Outside zones: bonded warehouse and duty drawback systems for exporters.

People, visas and banking facilities

• Investor (PI) visas and employment (E) visas with visa recommendation from BIDA or zone authorities.
• Work permits for expatriate managers and technical staff, subject to conditions.
• Permanent residency and citizenship schemes linked to investment, under conditions set by the government.
• One Stop Service portals at BIDA, BEZA, BEPZA and BHTPA for multiple approvals online.
• Repatriation of dividends and, with documentation or approval, capital and sale proceeds.
• Access to foreign currency borrowing for eligible companies, subject to Bangladesh Bank's framework.

Mistakes that lose FDI facilities

• Not applying for or documenting an exemption within the period the SRO specifies.
• Mixing exempt and non-exempt activities without separate accounts.
• Using bonded raw materials for local sales without paying duty.
• Claiming treaty rates without a certificate of residence.
• Assuming a zone benefit applies to group companies located outside the zone.

How the process works

1. Project profileWe capture your sector, location, export share, investment size and timeline to test which facilities could apply.
2. Eligibility mappingWe check the current law, SROs and zone rules and list the facilities your project can realistically claim.
3. StructuringWe advise on entity, location and accounting set-up so incentives are not lost through mixed activities.
4. ApplicationsWe prepare applications to BIDA, zone authorities, NBR or Customs for registrations, exemptions or bond licences.
5. Compliance to keep benefitsWe maintain the records, returns and reconciliations needed to defend incentives in audits.

Typical timeline: Eligibility review is usually quick once project details are available; registrations, bond licences and exemptions are granted on each authority's timetable and typically take several weeks or more, depending on documents and the authority's processing.

How Tax & VAT Associates helps

• Incentive and facility eligibility review for your project
• Comparison of zone and non-zone locations from a tax and duty angle
• BEZA, BEPZA, BHTPA and BIDA application support
• Bonded warehouse licensing and reconciliation support
• Treaty relief documentation for outbound payments
• Annual compliance to protect exemptions in audits

Frequently asked questions

Related services

Last reviewed: 6 October 2026. Bangladesh tax and regulatory rules change with each Finance Act, SRO and authority circular. This page is general guidance; confirm current requirements for your case before filing.