Investment Climate and Opportunities www.boi.gov.bd © Board of Investment 2014

Investment Climate and Opportunities
© Board of Investment  2014
www.boi.gov.bd
Bangladesh at a glance
$1.6bn
FDI
$30.1bn
$129.9bn
Export
GDP
8
6.2%
EPZs
GDP
Growth
8
$1044
Airports
2
GDP Per
Capita
Sea ports
20
Land ports
156.6mn
Population
9
River ports
Source:
© Board of Ministry
Investment  2014 of Finance,
www.boi.gov.bd
2
Investment Climate
Why Bangladesh?
Bangladesh is a winning combination with its competitive businessfriendly environment and cost structure that can give you best returns:
• Industrious competitive workforce
• Strategic location between china and India with regional connectivity and
worldwide access.
• Strong local market and growth
• Low cost of energy
• Proven export competitiveness
• Competitive incentives
• Export and Economic Zones
• Positive investment climate.
© Board of Investment  2014
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Why Invest in Bangladesh?
Conducive policies, greater market access and encouraging incentives …
Policies and Reforms
Market Access
 Continued reforms taking
place embracing global best
practices
• Bangladesh has a large domestic
market of nearly 160 million
 A positive attitude among
policy makers towards
undertaking reforms for
business growth
 A special high-level
committee works for policy
and regulatory improvement
Appealing incentives
 Offering a whole range of
investment incentives and
benefits
 All fiscal, financial and other
types of incentives are
competitive among similar
locations
© Board of Investment  2014
• Middle class (with purchasing power)
is growing fast
• Has access to regional market of about
1.5 billion people through regional and
bilateral integration in South Asia
• Bangladesh has preferred market
access (global reach) to large
developed markets
Source: International Finance Corporation
• ASEAN /East Asian investors can utilize
Bangladesh as an export springboard
to the world
Median Age:
One of Asia’s Youngest Populations
China
35.8
Thailand
Sustained
supply of
workingage
workforce
34.7
Vietnam
28.5
India
26.6
Bangladesh
23.8
15
25
www.boi.gov.bd
Source: CIA World Factbook (Tractus Asia
Analysis)
35
45
Why Bangladesh – Steady rise in investments
 FDI in Bangladesh last year rose by 24% to US$ 1.6bn, the
highest in its history;
 In SA region, Bangladesh has fared well during the global downturn and has secured
2nd position;
 It is also one of the few countries that have shown an upward trend, despite the global downturn.
© Board of Investment  2014
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Investment Climate
Investment Promotion and Protection
 Foreign investment in Bangladesh is secured by law against
nationalization and expropriation.
 Local and Foreign investment is given equal treatment
 100% foreign equity is allowed along with unrestricted exit.
 Bilateral and multilateral investment agreements ensures protection of
investment.
 Bangladesh is a signatory to ICSID, UNCITRAL, OPIC, MIGA, WAIPA,
WIPO and WTO.
 Bilateral Investment treaties (BITs) signed with 29 countries
Austria, DPR Korea , Thailand, Belgium, Republic of Korea, UK, Canada, Malaysia, USA, China. Pakistan Uzbekistan, France, Poland,
Vietnam, Germany, Romania, Singapore, Indonesia, Switzerland, Denmark, Iran, The Netherlands, India, Italy, The Philippines, UAE,
Japan, Turkey)
 Double taxation treaties (DTTs) with 33 countries
Canada, Poland, Norway, China, Romania, Turkey, Denmark, Sigapore, Vietnam, France, Republic of Korea, Philippines, Germany, Sri
Lanka, Indonesia, India, Sweden, Switzerland, Italy, Thailand, Oman, Japan, The Netherlands, Malaysia, UK, Belarus, Belgium, KSA,
Mauritus. Myanmer,Pakistan, UAE, USA)
© Board of Investment  2014
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Investment Climate
FDI Policy Framework
The National Industrial Policy, 2010 of Bangladesh recognizes:
a. Private sector is treated as the engine of growth
b. No upper ceiling for foreign investors or performance requirements
c. 100% foreign equity is allowed
d. All industrial sectors are open for foreign investors for investment
except 4 reserve sectors for the government.
e. Equal treatment for both local and foreign investment
f. Export oriented industries are given top priority
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Investment Climate
FDI Policy Framework
The broader FDI policy & regulatory framework include, among others, the following:
Business Stage
Policy & Regulation
1. General
- Bangladesh Industrial Policy (as undertaken from time to time)
1. Business start-up
- The Companies Act, 1994
- Securities and Exchange Commission Act, 1993
1. Protection
- The Foreign Private Investment (Promotion & Protection) Act, 1980
1. Export Zones
- Bangladesh Export Processing Zones Authority Act, 1980
- Bangladesh Private Export Processing Zones Authority Act, 1996
1. Facilitation
- The Investment Board Act, 1989
1. Corporate /
Personal Taxation
and incentives
- Income Tax Ordinance 1984 and related rules and SROs
- National Budget
- The Finance Act/Bill
1. International Trade
(Export & Import)
- Bangladesh Export Policy (as undertaken from time to time)
- Bangladesh Import Order (as undertaken from time to time)
1. Sectoral
- Bangladesh Energy Regulatory Commission Act, 2003 (BERC)
- Bangladesh Telecommunication Regulatory Commission Act, 2001 (BTRC)
- The National Drug Policy, 2005
1. Foreign Exchange
- Bangladesh Foreign Exchange Guidelines (issued from time to time)
© Board of Investment  2014
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Investment Climate
FDI Policy Framework - Incentives
Fiscal Incentives
• Corporate tax holiday: 5 to 7 years for
selected sectors and areas
• Tax
holiday
for
infrastructure
investment: upto 10 years
• Accelerated depreciation on cost of
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
© Board of Investment  2014
Financial & Other Incentives
• 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.
• Remittance of royalty, technical
know-how and technical assistance
fees
• Citizenship by investing a minimum
of US$ 5,00,000
• Permanent resident permits on
investing US$ 75,000
• And many more .....
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Investment Climate
FDI Policy Framework - Incentives
 Financial incentives:
 Businesses exporting 80% or more of goods or services
• Reduced import duty on machinery & spares
• (1% for export oriented industries and 3% for other industries)
 Export credit guarantee scheme
• Domestic market sales up to 20% allowed to export-oriented
companies outside EPZ (relevant duties apply)
 Cash incentives and export subsidies (on the FOB value)
• 2% on 5% for export oriented local textiles (instead of duty drawback
and custom bond) , ship building, SME in textile industry, 7.5% on
frozen shrimp, Jute thread, 10% for jute products, light engineering
products, PET flex, export bone powder, 12.5% frozen fish, potato,
15% for leather products, and 17.5% for bicycles. 20% for agroprocessing and agricultural produce, potato export, handicrafts made
of straw sugarcane straw , halal meat.
© Board of Investment  2014
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Investment Opportunities
Allowed Sectors for investment (as per the Industrial Policy 2010)
 Sectors open for investment by the private sector – local & foreign
1. Agro-based & agroprocessing industry
2. Jute & jute-mixed goods
3. Flower cultivation
5. Commercial plantation
6. Horticulture
7. Silkworm & silk industry
8. Furniture
9.Handicrafts
10. Home Textiles
© Board of Investment  2014
11. Textiles industry
12. Readymade garments industry
13. High value added RMG
14. Computer software & ICT
goods
15. Electronics
16. Light engineering incl.
automobiles
18. Pharmaceutical goods
19. Leather and leather products.
20. Herbal medicines
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Investment Opportunities
Allowed Sectors for investment (as per the Industrial Policy 2010)
 Sectors open for investment by the private sector – local & foreign
21. Ceramics
22. Frozen Food
23. Integrated shrimp
cultivation
24. Infrastructure
25. Jewellery and diamond
cutting polishing
26. Oil and gas
27. Tourism industry
© Board of Investment  2014
28. Basic chemicals/raw materials
used in industries.
29. Dye and chemicals used in
textiles industry.
30. Cosmetics and toiletries.
31. Information & Communication
Technology
32. Health care
www.boi.gov.bd
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Investment Opportunities
Reserved Industries (as per the Industrial Policy 2010)
 Sectors Reserved for investment by public sector. Private sector may
participate in procurement process as vendor/contractor.
1. Arms and ammunitions and other military equipments and
machinery
2. Nuclear power
3. Security printing and minting
4. Forestation on and Mechanized Extract on within the boundary
of reserved forest
13
© Board of Investment  2014
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Investment Opportunities
Controlled Industries (as per the Industrial Policy 2010)
 Controlled Industries (considered as strategic investment. Free to
invest but requires pre-approval from specific regulatory agencies).
1.
2.
3.
4.
5.
6.
7.
8.
Fishing in the deep sea
Bank/financial institution in the private sector
Insurance Company in the private sector
Generation, supply and distribution of power in the private sector
Exploration extraction and supply of Natural gas/oil
Exploration, extraction and supply of coal
Exploration, extraction and supply of other mineral resources
Large-scale infrastructural project (e.g. flyover, elevated
expressway, monorail, economic zone, inland container depot/
container freight station)
14
© Board of Investment  2014
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Investment Opportunities
Controlled Industries (as per the Industrial Policy 2010)
 Controlled Industries (considered as strategic investment. Free to
invest but requires pre-approval from specific regulatory agencies)
9. Crude oil refinery (recycling/refining of lube oil used as fuel)
10. Medium and large industry using natural gas/condescend and
other minerals as raw material
11. Telecommunication Service (mobile/cellular and land phone)
12. Satellite channel
13. Cargo/passenger vessels
14. Sea bound ship transport
15. Sea-port/deep sea-port
16. VOIP/IP telephone
17. Industries using heavy minerals accumulated from sea beach
15
© Board of Investment  2014
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Investment Opportunities
Economic Zones
 Govt has promulgated Economic Zones
Act in 2010 to build EZ in the country
- Key Features:
 Comprehensive industrial
Infrastructure
 Development under PPP (Private
Public Partnership) model
 Owned and regulated by the
government, but managed by the
private sector
 Encompasses multiple business
sectors within each zone
 Combines both bonded and nonbonded area
 EZ includes non processing &
domestic area
© Board of Investment  2014
Economic Zones under
implementation…
Mongla,
Sirajganj,
Anowara,
Mirershorai
Maulvibazar
www.boi.gov.bd
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Bangladesh Context
Growing PPP portfolio…
PPP Projects by Size
Large Project
25 Projects
($12b)
Small Projects
3 Projects
($7m)
Medium Projects
6 Projects
($110m)
Total
34
projects
($12.5b)
Source: PPP Office, Bangladesh
© Board of Investment  2014
PPP Projects Pipeline
(Note: Project names have been shortened)
SL.
Sectors
Implementing Agency
Name of the Project
Project
Size
Estimated
Cost (US$m)
1
Road
BD Bridge Authority
Dhaka-Elevated Expressway
Large
$1,088
2
ICT
BD Hi-tech Park Auth
Hi-tech Park at Kaliakoir
Large
$125
3
Health
DGHS
40 beds Hemodialysis Centre at CMCH
Small
$2
4
Health
DGHS
Hemodialysis Centre at NIKDU
Small
$1
5
Bridge
BD Bridge Auth
Dhaka-Ashulia Elevated Expressway
Large
$1,471
6
Road
RAJUK
Flyover - Santinagar to Mawa over Buriganga River
Large
$313
7
Port
MPA
2 Jetties at Mongla Port through PPP
Large
$50
8
Social Care
DSS
Oboshor: Senior Citizen Health Care Complex
Medium
9
Road
Dhaka-Chittagong Access Controlled Highway
Large
$1,585
10
Rail Bridge
Roads & Highways
Dept
Bangladesh Railway
Fulchhari Bahadurabad MG Railway Bridge
Large
$1,400
11
Rail Bridge
Bangladesh Railway
Dual gauge Double line Bangabandhu Bridge
Large
$1,000
12
Road
Dhaka Bypass 4 Lane (Joydevpur-Madanpur)
Large
$114
13
Tourism
Roads & Highways
Dept
BD Parjatan Corp
5 Star Beach Hotel with 18-Hole Golf Course
Large
$125
14
Housing
Nat Housing Assoc
NHA Housing Satellite Project at Mirpur
Large
$57
15
Port
CTG Port Authority
Construction of Laldia Bulk Terminal
Large
$60
16
Bridge
BD Bridge Authority
2nd Padma Multipurpose Bridge Paturia-Goalundo
Large
$1,902
17
Port
CTG Port Authority
3rd Sea Port
Large
$1,200
18
Road
Jatrabari-Sultana Kamal Brdg-Tarabo PPP Rd
Large
$44
19
Road
Hemayetpur-Singair-Manikganj PPP Road
Large
$84
20
Housing
Roads & Highways
Dept
Roads & Highways
Dept
RAJUK
High–Rise Apartment Complex Purbachal Phase 1
Large
$1,199
21
Airport
CAAB
Medium
$23
22
Health
Bangladesh Railway
Med College/Hospital Upgrade-Kamlapur
Large
$97
23
Health
Bangladesh Railway
Medical College/Hospital Upgrade- CRB Chittagong
Large
$73
24
Health
Bangladesh Railway
Med College/Hospital Upgrade- Saidpur Nilphamary
Large
$73
25
Health
Bangladesh Railway
Med College/Hospital Upgrade-Paksey Pabna
Large
$73
26
Health
Bangladesh Railway
New Medical College & Hospital - Khulna
Large
$97
27
Rail Depot
Bangladesh Railway
New Inland Container Depot - Dhirasram Rail
Station
Large
$150
Large
$40
Large
$36
Multi Mode Surveillance System (Radar) HSIA
Inland Container Terminal PPP-Khanpur
$6
28
Port
BIWTA
29
Tourism
Bangladesh Railway
5 Star Hotel at Zakir Hossen Road, Chittagong
30
Hospitality
Bangladesh Railway
Shoping Mall with Hotel-cum-Guest House in Khulna Medium
$29
31
Hospitality
Bangladesh Railway
Shoping Mall with Hotelin Chittagong
Medium
$11
32
BD Petroleum Corp
LPG Bottling Plant (Jetty, Pipelines) Kumira
Medium
$31
33
LPG /
Energy
Hospitality
Mongla Port Tower
Medium
$10
34
Fisheries
MPA
Dep of Livestock Serv 16 X Fisheries and Livestock Projects
Small
Note: (1) All figures are initial estimates and will be updated in project development &
procurement phase.
(2) Figures have been converted to US$ @ BDT80=US$1
www.boi.gov.bd
$4
Roadmap to Invest in Bangladesh
Arrival in Bangladesh
Help Desk of Board of
Investment at Airport
Opening a Bank Account
(As per “GFET 1996, Vol-1,
Bangladesh bank)
Trade License
from Local Govt.
Bodies
Tin Certificate
from Income
Tax Office
Company Formation
& RJSCF registration
http://www.roc.gov.bd
http://www.bangladesh-bank.org
Import of Machinery Open
Letter of Credit (LC) or as
Equity Investment
DOE Clearance
Fire License
Industrial ad-hoc IRC from
CCI&E being Recommended
by BOI
http://www.ccie.gov.bd
Clearing of Capital
Machinery paying
VAT
Application for BOI
Registration
Private Limited Company
(Capital if exceeds Tk. 10
crore, SEC permission
needed)
Public Limited Company
(Minimum paid-up capital
shall be Tk. 400 million)
• BOI Prescribed Form
• Project Profile
• Memorandum of Articles
of Association
• Certificate of
Incorporation
• Land Information &
Document
• Machinery Details
• Tax Identification
Number
• VAT Registration
• Trade License
• Pay Order
VAT Registration from NBR
http://www.nbr-bd.org
© Board of Investment  2014
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Board of Investment
Services to Investors
Regulatory services:








Registration of New Industries
Facilitation of Setting up Foreign Commercial Offices
Facilitation of Utility Services
Visa Recommendation
Work Permit Issue
Recommendation for IRC, Bonded Warehouse
Approval of Royalty and Technical Assistance Fees
Processing of Foreign Borrowing
© Board of Investment  2014
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Board of Investment
Services to Investors
 Facilitation services:

Responding to investment-related queries

Guidance on doing business in Bangladesh

Support forming Sector-specific legislations/regulations,
Industrial policy, custom and excise duties, taxation,
investment and trade agreements, etc.

Investment guidance and advice in specific sectors and in
areas of land, incentives, etc.
 Business-to-business linkages:

Helping identify and connect with potential joint venture
partners/technical collaborations

Help finding Bangladeshi partners for investments
© Board of Investment  2014
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Board of Investment
Services to Investors
Handholding support for investments :
• Coordinating with governments agencies for facilitating
information on land availability/infrastructure/power, etc.
• Coordinating meetings with relevant authorities in various govt
agencies and organize visits for investors
• Addressing any concerns faced by individual companies — with
government departments and other areas
© Board of Investment  2014
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Business process Simplification: at a glance
Types of the Process simplified
No. of
process
reformed
18
A
Business Regulation Simplification
B
Legal/Policy Amendments and New
Laws
12
C
Private public joint efforts
4
© Board of Investment  2014
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Thank you
Board of Investment, Prime Minister’s Office
Government of the People's Republic of Bangladesh,
Jiban Bima Tower (19th Floor), 10 Dilkusha C/A, Dhaka-1000, Bangladesh
Phone: (880-2) 957 7271 Fax: (880-2) 956 2312 Email: [email protected] Web: www.boi.gov.bd
© Board of Investment  2014
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