Destination Bangladesh | PwC 1
Destination
Bangladesh
August 2019
2 PwC | Destination Bangladesh
Table of contents
Foreword .............................................................................................................. 3
Chapter 1: Doing business in Bangladesh: Expanding gateways ....................... 4
Chapter 2: Entering the Bangladesh market, funding opportunities and
incentives to draw foreign investments .............................................................. 12
Chapter 3: Regulations for operating in Bangladesh ......................................... 21
Chapter 4: Steps to set up business operations ................................................ 27
Chapter 5: The way forward ............................................................................... 32
2 PwC | Destination Bangladesh
Destination Bangladesh | PwC 3
Foreword
Bangladesh’s economy has witnessed steady growth in the past
decade, with the country’s annual gross domestic product (GDP)
growth rate at 7.86% in 2018. It is poised to increase by 7% on
an average till 2033, according to a forecast by the Centre for
Economics and Business Research (CEBR).
With a rising per capita income and a growing middle-class
population, there has also been a notable increase in domestic
consumer demand. This is a positive sign, as increased domestic
consumption reflects a certain insulation of the country’s
economy from global headwinds. The Bangladesh government
has been proactive in the country’s progress, as is evident from
increased government investment in various initiatives.
Some of these are in the realm of infrastructure, such as the
Padma Bridge and the Karnaphuli Tunnel. Bangladesh is also
working with China on the regional Asian Highway and the ‘One
Belt-One Road’ project. The Government is also in the process
of strengthening ties with India, Bhutan and Nepal, and this
is expected to facilitate more investment and global tie-ups.
Government support can also be seen in the power facilities,
with 7,000 MW of electricity being added to the national grid.
Additionally, Bangladesh’s Power System Master Plan (PSMP)
targets uninterrupted power supply, and this is expected to
increase the country’s power generation capacity to 34,000 MW
by 2030.
The country’s burgeoning growth and relatively stable political
scenario have attributed to steady and positive sovereign ratings,
as Moody’s and S&P’s reports indicate. The reports underline
that ‘Bangladesh is a mobile economy on the verge of moving up
the economic ladder’. Its stable growth rate of population at 1.2%
since 2013 and young workforce – 60% of the populace is in the
15-64 age group – also contribute to the growth trajectory of the
economy.
Bangladesh is already being recognised as a thriving investment
hub, and this is reflected in the country’s foreign direct investment
(FDI) inflows. Bangladesh’s FDI stood at USD 2.58 billion at the
end of June 2018. According to the Bangladesh Investment
Development Authority (BIDA), there was 13.34% growth in FDI in
the third quarter of 2018, with proposals worth USD 3.23 billion
in the basket. The government’s mega projects were viewed as
the primary reason for drawing substantial FDI investments in
the transport, storage and communications sectors. Besides
domestic consumption, exports from the country are also thriving.
Bangladesh exported goods worth USD 6.88 billion to the US in
2018-2019. This ranks the US as the primary export destination
for Bangladesh, followed by Germany and the UK.
This comprehensive report is a study of Bangladesh as an
investment destination. The positives of investing in Bangladesh
today are many. Preferential trade benefits and friendly investment
policies are offered to countries investing in Bangladesh. The first
chapter outlines the demographics, and financial and economic
indicators that support this fact. The second chapter looks at
the processes, funding opportunities and incentives available to
companies wishing to enter the Bangladesh market. The third
chapter delves into the regulations and policies that need to be
adhered to for investment in Bangladesh. The subsequent chapter
offers a step-by-step account of the processes involved in setting
up business operations in the country, while the concluding
chapter looks into the future of Bangladesh as an investment
option.
We hope the report serves as a ready reckoner for prospective
investors planning to invest in this riverine country.
Mamun Rashid
Managing Partner, PwC Bangladesh
Destination Bangladesh | PwC 3
Bangladesh as an investment destination
4 PwC | Destination Bangladesh
1 https://www.pwc.com/gx/en/issues/economy/the-world-in-2050.html
2 The World Bank. (2018). Bangladesh Development Update.
3 The World Bank. (2018). Bangladesh Development Update & Asian Development Bank (ADB) Basic Statistics (2018), available at https://data.adb.org/dashboard/
bangladesh-numbers
4 IMF. 2017. Report for Selected Country Groups and Subjects (PPP valuation of country GDP)
Chapter 1: Doing business in Bangladesh:
Expanding gateways
From strength to strength
Bangladesh is considered to be among the next 11 emerging
markets. In the past decade, Bangladesh’s economy has grown
at an annual rate of ~ 6-7%. The country has reflected both
social and economic growth. The level of poverty has dropped,
accompanied by increased life expectancy, literacy and
per-capita food intake.
Sustained economic growth in recent years has generated higher
demand for electricity, transport and telecommunication services.
While the growth rate of the population has declined, the labour
force is growing rapidly and is indicative of Bangladesh moving
towards a lower dependency ratio; thereby, lessening the expense
burden on the productive population.
Projections suggest that Bangladesh is going to be the one of
the fastest-growing economies by 2050, and the 28th and 23rd
largest economy by 2030 and 2050, respectively, from its 43rd
position
1
currently.
With aspirations to become a middle-income country by
2021, Bangladesh is making substantial efforts to maintain
macroeconomic stability, strengthen revenue mobilisation, tackle
energy and infrastructure deficits, support an expanding financial
sector and external trade reforms, and improve existing labour
skills. The country is also working on economic governance,
urban management and adapting to climate change.
Bangladesh achieved an impressive annual gross domestic
product (GDP) growth rate of 7.86% in 2018, the highest in South
Asia.
2
It has been striving to maintain an increasing GDP growth
rate for the last five years. Strong consumption and public
investment, recovery of ready-made garments (RMG) export and
high remittance growth were identified as the main propellers of
economic growth. Moreover, remittance flows increased by 17%
to reach USD 14.9 billion, equivalent to ~ 5.4% of the GDP, while
real public investments increased by 10.5% and merchandise
imports by 25.2 %.
All these factors have been contributing to the growth of the
country, and in turn is resulting in a sharp increase in domestic
consumer demand. This is also an indication of prosperity as
Bangladesh citizens begin to show an obvious preference for
better quality goods and in greater volumes.
As of 2017, Bangladesh secured the position of being the 42nd
and 58th largest economy globally in terms of purchasing power
parity and in nominal terms respectively.
4
Already established
as a lower-middle income country, according to World Bank
benchmarks in 2015, Bangladesh is ready to graduate to the
middle- income threshold by 2024. The GDP of Bangladesh is
poised to increase by 7% on an average between 2018 and 2033,
according to a forecast prepared by Centre for Economics and
Business Research (CEBR).
In terms of its significant domestic growth, rising consumption
and increased government investment are only two examples of
the main contributors. Substantial infrastructural developments
such as the Padma Bridge and the Karnaphuli Tunnel are
predicted to further boost economic growth. Additionally, the
market for consumer durables and other value-added products
is also on the rise, bolstered by the rising per capita income and
growth of the middle-class population. Moreover, Bangladesh
is pursing stronger multilateral ties with India, Bhutan and Nepal
while collaborating with China on the regional Asian Highway and
“One Belt-One Road” initiative. Bangladesh’s initiative to establish
international ties will facilitate more investment and global
collaboration.
Fig. 1.1: GDP growth rates of Bangladesh and regional
economies
3
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
9.0%
2014 2015 2016 2017 2018
Afghanistan
Bangladesh
Bhutan
India
Maldives
Nepal
Pakistan
Sri Lanka
Destination Bangladesh | PwC 5
Steady sovereign rating and strong FX reserve
Consistent growth and a stable political landscape have contributed to steady and positive sovereign ratings for Bangladesh. Both
Moody’s and S&P have labelled the country as a mobile economy on the verge of moving up the economic ladder.
With more than a 5% persistent increase in growth rate since 2015, Bangladesh’s per capita GDP as of 2018 stands at USD 1, 653
6
.
This positive trajectory may be attributed to stable population growth and an increasing GDP growth rate. Final consumption
expenditure, which accounts for private consumption and general government consumption, has been growing positively over the last
10 years, despite troughs in 2009 and 2016. Overall, both GDP per capita and consumption expenditure have demonstrated upward
trends, which resultantly reflect higher living standard for Bangladeshis.
Private consumption has also
been on the rise in the last 10
years. Total private consumption
expenditure was reported to be USD
171 billion in 2017.
9
Both private
consumption per capita expenditure
and final consumption expenditure
growth rates spiked in 2016-2017.
Consumer income is also likely to
increase with the growth in GDP. A
self-perpetuating cycle has been
established where markets face
sufficient consumer demand and
producers meet this expectation,
thereby increasing overall GDP. This
increase in output is likely to generate
more employment opportunities
and rise in income of individuals.
Consequently, a spillover would be
created in the form of higher demand.
The trends in current consumption
and estimates for the future suggest
that consumption demand will be
a key driver of economic growth,
while the pattern of consumption is
expected to reflect a preference for
high-quality products, as witnessed
with many countries experiencing
economic boom.
Source: World Bank DataBank
7
Source: World Bank DataBank
8
S&P Sovereign Ratings Moody’s Sovereign Rating
Year Rating Outlook Year Rating Outlook
2018 BB-/ B Stable 2018 Ba3 Positive
2016 BB-/ B Stable 2014 Ba3 Positive
2010 BB-/ B Stable 2010 Ba3 Positive
Table 1.1: Country Sovereign Rating by S&P and Moody
5
Fig. 1.2: GDP per Capita and Consumption Expenditure
Fig. 1.3: Private Consumption Patterns
Improved standard of living
5 https://countryeconomy.com/ratings
6 https://data.worldbank.org/country/bangladesh
7 http://datatopics.worldbank.org/consumption/
8 http://datatopics.worldbank.org/consumption/
9 https://www.ceicdata.com/en/indicator/bangladesh/private-consumption-expenditure
-
200.0
400.0
600.0
800.0
1,000.0
1,200.0
1,400.0
1,600.0
1,800.0
-
2.0
4.0
6.0
8.0
10.0
12.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Final consumption expenditure
(annual % growth)
GDP per capita (current US$)
GDP per capita (current US$) Final consumption expenditure (annual % growth)
0.00
2.00
4.00
6.00
8.00
10.00
12.00
$-
$50.00
$100.00
$150.00
$200.00
$250.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Final consumption expenditure per
capita growth (annual %)
Final consumption expenditure
(current US$)
Billions
Final consumption expenditure (current US$)
Final consumption expenditure
per capita growth (annual %)
6 PwC | Destination Bangladesh
Population growth rate has been stable at 1.2% since 2013 and the total population now stands at 167 million. The population structure
has also remained unchanged for the last 6 years, with the 15-64 age group accounting for more than 60% of the population. The
median age for the total population is 27 years (26 for males, 28 for females).
10
Source: World Bank
Source: World Bank, Chinese Bureau of Statistics, Global apparel and Trade
sourcing
Source: World Bank
Source: https://population.un.org/wpp/DataQuery
Fig. 1.4: Age structure of population (% of total population)
Fig. 1.8: Monthly minimum wage in apparel
manufacturing in 2017
Fig. 1.5: Total population in Bangladesh
Fig. 1.6: Population by age and sex (thousands)
Demographic dividend
30 30 29
29 28
65 65 66
66 67
5 5 5 5 5
2013 2014 2015 2016 2017
Age Structure of Population (% of total population)
Population ages 15-64 (% of total)
Population ages 65 and above (% of total)
Population aged 0-14 (%of total)
68
153
165
168
270
Bangladesh
Cambodia
Vietnam
India
China
Minimum monthly wages in apparel manufacturing
2017 in US($)
157
2013
159
2014
161
2015
163
2016
165
2017
166
2018
Total population in Bangladesh (in millions)
7,828
22,788
3,625
7,431
24,712
4,438
7,167
26,063
5,412
8,152
23,234
3,994
7,744
25,041
4,852
7,477
26,222
5,824
5-9 15-49 55+ 5-9 15-49 55+ 5-9 15-49 55+
2010 2015 2020
Population by age and sex (thousands)
Female Male
Source: Labor Force Survey 2016-17
Fig. 1.7: Labour force participation by age, group and sex
66.7
94.7
47.1
80.5
32.3
42.3
8.7
36.6
0
50
100
15-29 30-64 65 and
above
Total
Labour force participation rate (%) by age group and sex
Male Female
10 Central Intelligence Agency (CIA). 2018. The World Factbook. Accessed
January 30, 2019. https://www.cia.gov/library/publications/resources/the-
world-factbook/geos/bg.html.
Destination Bangladesh | PwC 7
Bangladesh’s working-age population and capabilities are
geared to make it the next major outsourcing destination for
services, replicating the paths taken by India and the Philippines.
Bangladesh is set to create over 200,000 direct and 50,000
indirect jobs and earn USD 5 billion a year in the next decade
through outsourcing [1]. Outsourcing businesses, such as
call centres, comprise only 10% of Bangladesh’s market
potential. With 65% of the population under 25, there is an
1. https://www.thedailystar.net/news-detail-225145
2. https://www.thedailystar.net/news-detail-261591
enormous opportunity for outsourcing in the country. Much
of this population is university educated, and working women
do not face significant discrimination in the workplace. As a
result, there is a larger pool of workers keen to be involved in
the ICT/outsourcing-tech-savvy sector [2]. Bangladesh’s pool
of resources is also primed to provide business processing
outsourcing (BPO) services to the rest of the world.
The minimum monthly wage for workers in the apparel
manufacturing sector in Bangladesh is 75% and 60% less than
the minimum wages in China and India respectively. This provides
a substantial manufacturing cost advantage as compared to the
regional aforementioned peers.
Over the past decade, the country has witnessed a sharp rise in
the working age population owing to the ‘demographic dividend’.
According to the United Nations (UN) population division forecast,
the median age of the population will increase to 29.5 in 2025
and 31.6 in 2030. The economy will witness a stable population
structure and growth rate, with a growing demand for consumer
durables in the future. Investors may view this phenomenon
as withstanding the challenges of an ageing population, as it
mitigates the burden of the dependency ratio for a productive
population.
Two-thirds of the total population belong to the working
age group (15 and above), of which 63.5 million are actively
participating in the country’s labour force. Additionally, 2.2 million
people are entering the job market each year. The labour force
participation rate (LFPR) as of FY 2016-17 was estimated to be
~ 58.2%. According to a report by the Economic Intelligence
Unit, Bangladesh’s graduate unemployment rate stood at 47%,
indicating a surplus of skilled labour force. By tapping into this
sound labour market and with education policies focussed
especially on Science Technology Engineering and Mathematics
(STEM), Bangladesh has the potential to integrate a substantial
number of skilled and motivated individuals into the workforce.
Bangladesh set to be an outsourcing destination
Maintaining a stable inflation rate
has been challenging over the last
decade.
11
In 2018, the general inflation
rate, which currently stands at 5.8%,
was moderated by low levels of
non-food inflation. Low food
production and weak management
of resources from FY2017 caused
food inflation to increase to 7.1% in
early 2018.
However, food inflation eased to ~
6% in late 2018 owing to a fall in rice
prices, propelled by excellent BORO
harvests, and rice and wheat imports.
Strong remittance inflows, domestic
demand and the depreciating
exchange rate helped contain
non-food inflation rates.
12
IMF forecasts strongly suggest
inflation in Bangladesh to remain
below 6% till 2023.
Stable inflation rate
0.00
2.00
4.00
6.00
8.00
10.00
12.00
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Inflation, Consumer Prices (Annual %)
Bangladesh
High Income Countries Lower & Middle Income Countries World
Fig. 1.9: Ination rate (%) from 2007 to 2023 (projected after 2019)
Source: International Monetary Fund (IMF)
11 International Monetary Fund (IMF). 2018. Inflation rate, average consumer prices. October. Accessed January 30, 2019. https://www.imf.org/external/datamapper/
PCPIPCH@WEO/OEMDC/ADVEC/WEOWORLD/BGD.
12 The World Bank. (2018). Bangladesh Development Update
8 PwC | Destination Bangladesh
Thriving export-led sectors and remittances
The economy exported USD 6.88 billion worth of goods to the US market in 2018-2019 making it the top export destination for
Bangladesh, followed by Germany and the UK. Readymade garments and frozen foods were the major items exported to these markets
Previously, the majority of Bangladesh’s import basket consisted
of food grains and consumer goods. Currently, Central Bank data
from the first quarter of 2018-19 suggests a drop in import bills
for these items. Import payment for food grains dropped by a
staggering 54.71% from USD 1.53 billion to USD 694.01 million.
Consumer goods decreased by a notable 30.35% from USD 3.83
billion to USD 2.67 billion in the same time period. On the other
hand, imports of intermediate goods, such as coal, hard coke,
clinker and scrap vessels increased to USD 2.85 billion between
July-December of FY19 from USD 1.91 billion in the same time
period of the previous fiscal year.
The demand for intermediate goods is expected to continue to
rise in the future, which may be justified by the government’s
undertaking of mega infrastructure projects such as the Padma
Bridge and metro-rail. Bangladesh’s export basket is skewed
towards RMG and textiles, along with other items such as leather,
jute, agricultural products and frozen food. In terms of service,
remittance is one of the key foreign currency earners. In FY18,
Bangladesh had exported an astounding USD 34.65 billion worth
of products, of which 82% comprised apparel items.
14
Consequently, significant efforts have been made to diversify
the export basket by patronising other manufacturing industries.
According to Figure 1.11, manufacturing sectors attract 35%
of foreign investment. The government has declared light
engineering, agro processing and ICT as thrust sectors. A recent
World Bank report (2018) ranked Bangladesh as the ninth-highest
recipient of remittances in the world, with USD 15.9 billion
remittance inflow as of FY 2017-18. The country secured the third
position in South Asia, where the first and second positions were
held by India (USD 79.5 billion) and Pakistan (USD 20.9 billion)
respectively. The Central Bank’s initiatives to keep BDT stable
against USD and maintain strong surveillance on the illegal money
transfer process, have encouraged more migrant workers to send
their earnings through legal channels. Analysts at Central Bank
predict that this upward trend will persist through 2019.
13 http://www.epb.gov.bd/site/files/51916ae6-a9a3-462e-a6bd-9ef074d835af/Statistic-Data-2017-2018
14 Export Promotion Bureau. Statistics Data 2017-18. Accessed January 29, 2019
Fig. 1.10: Top destination for export products
13
17%
USA
16%
Germany
10%
UK
6%
Spain
5%
France
4%
Italy
3%
China
3%
Japan
3%
Netherlands
3%
Canada
Top 10 Export Destination
Source: Bangladesh Export Promotion Bureau
Destination Bangladesh | PwC 9
Investment in Bangladesh
Bangladesh has faced certain roadblocks that have negatively
impacted its current account position. Experiencing a nationwide
flood in 2017 that required higher food grain imports, coupled
with increasing oil prices and demand for capital machinery
imports vital to infrastructure projects, have contributed to higher
import bills and a consequent negative current account balance
in the past year and a half. However, Bangladesh’s consistently
increasing foreign exchange (FX) reserves seem to be combatting
such issues. The foreign currency reserve can now sufficiently
cover the country’s import bills for several months. Moreover,
incremental infrastructure funding coming from China and India,
along with recovering apparel export and rebounding worker
remittances will stabilise the balance of payment (BOP), while
supporting the growth of FX reserves.
In 2016-17, 35.4% of the FDI came from the manufacturing
sector. The country experienced a notable 11% Y-o-Y growth
in this sector in 2017. Industry experts are confident that this
growth will be sustained in the coming years. The transport,
storage and communications sectors ranked second with 25%
FDI inflows. This could be attributed to the government’s mega
projects currently being commissioned and implemented. Power,
accompanied by gas and petroleum, attracted 19% FDI during
the period. The power sector has been consistently attracting
foreign investments over the years owing to favourable tax
incentives provided by the government. Sectors that witnessed
lower FDI inflows include agriculture and fishing (2%) and
services (4%), establishing a shift in focus from primary sectors to
manufacturing sectors.
The foreign direct investment (FDI) inflow stood at USD
2.58 billion at the end of June 2018. The Bangladesh
Investment Development Authority (BIDA) confirmed an
impressive 13.34% growth in FDI in the third quarter of
2018, receiving proposals worth USD 3.23 billion during
the same period, indicating robust interest on the part
of international investors.
Foreign currency reserve
Trends in foreign investment
FDI Inflow
Fig. 1.11: Foreign currency reserve showing stability
Fig. 1.12: FDI inow in last 5 years
16
Fig. 1.13: Top sectors for foreign investment
25025
30168
33493 32944
31958
0
20000
40000
21558
2013 2014 2015 2016 2017 2018
(Sept)
Foreign Exchange Reserve (USD million)
Source: Bangladesh Bank
15
Source: Bangladesh Bank 2016-17
2.6
2.54
2.83
2.33
2.15
2.58
0
1
2
3
2013 2014 2015 2016 2017 2018
FDI Inflow (USD billion)
15 https://www.bb.org.bd/econdata/intreserve.php
16 Bangladesh Bank Data. Accessed at: https://www.bb.org.bd/econdata/fdi.pdf
35%
Manufacturing
25%
Transport,
Storage and
Communication
19%
Power, gas and
petroleum
13%
Trade and
Commerce
2%
Agriculture and
Fishing
4%
Service
2%
Others
10 PwC | Destination Bangladesh
Demand has been increasing at a remarkable pace to facilitate
economic growth and industrialisation. Starting 2009, 7,000
MW of electricity has been added to the national grid. The
country’s Power System Master Plan (PSMP) simultaneously
aims to provide undisrupted power supply and increase the
power generation capacity to 34,000 MW by 2030. Moreover,
Bangladesh intends to substantially increase the number of coal
fired power plants, as they are low-cost and are a sustainable
power-generating energy source. The additional 25 new coal-
fired power plants, operational by 2022, will possess the ability
During 2016-17 fiscal year, Singapore made the highest investment
worth USD 701 million in Bangladesh and secured the top position
in the Foreign Investor’s list. Chinese and Japanese investments
only made up 5% of the total invested amount; however, the two
economies intend to significantly increase investment in Bangladesh.
China committed to invest USD 31 billion in Bangladesh in
2018. Bangladesh needs to maintain and attract high FDI for the
manufacturing industry to satisfy expanding local demand.
to generate 23,692 MW of power for meeting rising energy
demands. In addition, Bangladesh has started importing LNG
since August 2018 to meet the country’s growing need for energy
in the face of rapid depletion of gas reserves. However, LNG is
comparatively more expensive than its alternate, locally-sourced
natural gas, with the average energy cost expected to increase in
2019. Along with these actions, the country’s first nuclear
power plan, Rooppur Power Plant, is scheduled to be
operational from 2023.
Energy, utility and power play
1343 1319
1024
1003
1900
1300
851 838
1190 1270
450
1500
2011 2012 2013 2014 2015 2016
Private sector engaged in power generation
Private
Public
17,304
20,443
25,199
33,708
23,000
24,000
40,000
56,000
2020 2022 2025 2030
Total Energy Demand
(Forecasted) in MW
Total Energy Generation
Plan in MW
Source: Power System Master Plan
https://powerdivision.portal.gov.bd/sites/default/files/files/powerdivision.portal.gov.bd/page/4f81bf4d_1180_4c53_b27c_8fa0eb11e2c1/ (E)_FR_PSMP2016_
Summary_revised.pdf
Fid: 1.14 Top 10 countries with FDI in Bangladesh in FY 2016-17
29%
13%
9%
8%
7%
5%
4% 4%
3%
Singapore
UK
USA
Norway
South Korea
Hong Kong
India
Netherlands
China
Top 10 FDI Countries (2016-17)
10 PwC | Destination Bangladesh
Destination Bangladesh | PwC 1111 PwC | Potential for growth: Transforming Bangladesh’s insurance sector
Infrastructure, the road ahead
The Dhaka-Chittagong highway has been renovated into four lanes to connect the port city of Chittagong with the Capital. Inland
Container Terminals (ICT) are also being constructed as an additional route for cargo delivery through the inland waterway. Additionally,
a new Payra port has become operational.
In November 2018, Asian Development Bank committed to providing USD 200 million for upgrading road infrastructure in Bangladesh.
The USD 285.31 million worth project is due to be completed in November 2023. By 2020, Bangladesh intends to upgrade nearly 80%
of its rural infrastructure and ADB’s donation will greatly contribute to constructing 1,700 kilometres of all-weather withstanding rural
roads in 34 districts, guided by the Seventh Five Year Plan.
ActivitiesActivities Mongla PortMongla Port Chittagong PortChittagong Port
FY 2016-17FY 2016-17
% growth from % growth from
previous yearprevious year
FY 2016-17FY 2016-17
% growth from % growth from
previous yearprevious year
No. of ships handledNo. of ships handled 784784 25.84%25.84% 33703370 11.77%11.77%
Total cargo handled (MT)Total cargo handled (MT) 9,716,0009,716,000 29.31%29.31% 7820858078208580 12.33%12.33%
Import Cargo (MT)Import Cargo (MT) 9,568,0009,568,000 28.83%28.83% 7129596971295969 12.66%12.66%
Export Cargo (MT)Export Cargo (MT) 148,000148,000 74.12%74.12% 69126116912611 8.98%8.98%
No. of container handledNo. of container handled 42,98942,989 59.50%59.50% 25665972566597 10.02%10.02%
Source: Annual Report of Mongla17 and Chittagong Port Authority18
Source: Roads and Highway, Ministry of Road Transport and Bridges16
Classication Number of roads Total length (km)
National Highways 96 3,813
Regional Highways 126 4,247
Zilla Highways 654 13,242
Total 876 21,302
Destination Bangladesh | PwC 11
12 PwC | Destination Bangladesh
Chapter 2: Entering the Bangladesh
market, funding opportunities and
incentives to draw foreign investments
Companies operating in Bangladesh enjoy preferential trade
benefits and friendly investment policies, many of which are due
to the country’s status as an Least developed country (LDC).
Due to inexpensive labour and overhead costs, manufacturers
of low-cost products have been a large revenue earner. The
apparel sector has successfully harnessed this innate competitive
advantage, catapulting Bangladesh as the second largest global
apparel manufacturer after China. Other sectors - from leather
and leather goods, jute products and agro processing to frozen
fish - have been growing at a noteworthy pace.
Over the last decade, the domestic market has undergone
rapid transformation, with sharply rising per capita income,
rapid urbanisation, evolving nuclear family structure and more
involvement of women in the workforce. In 2005, 26.8% of the
total population lived in urban areas, which has increased to
34.3% in 2015. By 2025, it is estimated that 42% of the population
will be living in urban areas.
17
Urbanisation level is expected
to grow further in the next ten years with the growing Middle
and Affluent Class (MAC) population. Besides, there are bright
opportunities for investors in both export-oriented sectors and
sectors which cater to the burgeoning domestic demand.
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.
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 is 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.
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.
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.
Entering the Bangladesh market
Wholly owned subsidiaries
Joint ventures
Limited liability by purchasing shares in an existing Bangladeshi company
17 2018 Revision of World Urbanization Prospects. United Nations 2018.
For details on company registration process, please refer to Chapter 4.
Destination Bangladesh | PwC 13
Operating as a foreign entity
Branch or Liaison Office: Foreign companies can also set up
a presence in Bangladesh through a Branch Office or Liaison
Office. The activities of the Branch Office or Liaison Office must
follow the foreign exchange regulations and the activities allowed
need to have approval from BIDA. A Branch Office is generally
permitted by the BIDA to represent the parent / group companies
and undertake specific activities such as export / import of
goods, rendering of professional or consultancy services.
However, a Branch Office is generally not permitted to carry out
manufacturing activities.
A Liaison Office’s activities should be limited to serve as a
communication channel for the parent entity. A Liaison Office
cannot engage in any income generating activity in Bangladesh.
Generally, for these offices, no outward remittance of any kind
from Bangladesh is allowed unless specifically permitted by
the BIDA and aligned to regulations of Bangladesh Bank. These
offices are required to bring inward remittance of at least USD
50,000 within two months from the date of setup as establishment
cost. One of the required approvals for setting up a Liaison Office
is that security clearance has to be obtained from the Ministry of
Home Affairs, Government of Bangladesh.
The documents which are generally needed include the
Memorandum and Articles of Association and Certificate of
Incorporation of the principal or parent company, directors’
details of the parent company, details of activities to be
performed through the proposed branch or liaison office.
A fee of BDT 25,000 (twenty-five thousand) is required to be
paid through bank Pay Order and the original copy of the Pay
Order has to be submitted to the BIDA. After proper scrutiny
of all documents, BIDA officials will place the application
and documents to the Inter-Ministerial Committee and if the
Committee is satisfied, it will provide the necessary approval.
However, it is advisable to check the latest requirements prior to
applying for the approval.
Name of Capital
Market
Indice Name
Year-end Indice
(2018 Jan)
Listed
Companies
Value of
Share Trading in USD (2017)
Colombo Stock
Exchange
CSE All Share 6476.4 296 1,458.1
Dhaka Stock
Exchange
DSEX 6039.8 302 26,694.9
Pakistan Stock
Exchange
KSE 100 44,049.1 559 28,652.6
Philippines PSE Composite 8,764.0 267 17,485.2
Foreign entities can conveniently get access to funding from local financial institutions for
short and long-term investments, including loans for working capital, syndication and trade
financing. Alongside this, some of the local and international Foreign Institutions (FIs) have
access to on-shore and off-shore funding facilities.
Currently, the financial sector has 58 scheduled commercial banks as well as a host of
Non- Bank Financial Institutions (NBFIs) and specialised financial institutions.
Apart from raising debt-based funding, investors may also consider securing equity-
based financing from the country’s capital market. Bangladesh currently has two stock
exchanges, which are growing in tandem with the country’s growth. As of September 2018,
302 companies are listed with market capitalisation of USD 47.34 billion. The government
has preferential policies for encouraging companies to list in the country’s bourses.
Primary benefits include tax breaks for sector-specific companies.
Funding opportunities in Bangladesh
Fig. 2.9: Capital Markets in Asia
Fig. 2.9: Capital Markets in Asia
Equity, 85%
Mutual
fund, 1%
Debt
securities, 14%
14 PwC | Destination Bangladesh
Non-Bank
Financial Institutions
Total: 34
Commercial
Banks
Total: 58 Scheduled
Insurance
Companies
Total: 62
Micro Finance
Institutions
Total: 599
• 6 State-owned Commercial
banks
• 3 Specialised Banks
• 8 Islamic Shariah-based
Banks (Private)
• 9 Foreign
• 2 State-owned
• 1 Subsidiary of
State-owned Bank
• 15 Domestic Private
• 15 Joint Ventures
• 18 Life insurance
(1 State-owned, 1 Foreign)
• 44 General Insurance
(1 State-owned)
• Listed: 46
• Geared towards Rural
Financial Markets
• 87% market captured by
top 10
Formal Sectors
• Dhaka Stock Exchange (DSE) –
365 listed securities
• Chittagong Stock Exchange (CSE) –
328 listed securities
• House Building Financial Cooperation
• PKSF (Rural Cooperative)
• Sambay Bank
• Grameen Bank
• Stock Dealers and Brokers – 238
under DSE and 136 under CSE
• 18 Asset Management Companies
• 53 Merchant Banks
• 8 Credit Agencies
• 12 Alternate Investment Licence
Other Sectors
Capital Market
Intermediaries
Specialised
Financial
Institution &
Cooperatives
Regulatory Authorities
Bangladesh Securities
and Exchange
Commission
(Regulatory of capital
market intermediaries)
Insurance Development
& Regulatory Authority
(Insurance Authority)
Microcredit Regulatory
Authority
(MFI Authority)
Bangladesh
Bank
(For Banks and NBFIs)
Destination Bangladesh | PwC 15
Funding options
Equity capital
Foreign-owned companies can start raising capital from the
equity market, subject to compliance of some terms and
conditions. The government is keen on increasing the number of
listed companies in the local bourse and is providing regulatory
incentives for encouraging profitable companies. Listed
companies enjoy 25% corporate taxes against 35% tax rate for
non-listed companies, excluding certain sectors.
The fund-raising process requires formal approval from the
Bangladesh Securities and Exchange Commission (BSEC).
Companies can proceed using either the fixed price or the book
building process. Under the fixed price method, the appointed
merchant bank and auditor help prepare a prospectus, valuing
the company based on existing assets and future growth
potential. The indicative price of the stock is estimated and
requires approval from the regulator. The book building method
requires appointed merchant bank to prepare a prospectus with
indicative pricing. The company in contention then hosts a series
of road shows where institutional investors are invited for bidding
on their stocks. IPO share price is set based on the feedback and
interests from other institutional investors.
The process of listing in the DSEX has the mandatory requirement
of hiring or appointing an Issue Manager (approved by the DSEX).
The method of deciding IPOs requires assistance from the
approved Issue Manager. The draft prospectus must be prepared
in line with an Issue Manager and the Securities and Exchange
Commission (Public Issue) Rules, 2015. IPOs could be issued
through either book building or the fixed price method.
Debt capital from local commercial banks
Foreign investors have access to local debt funding. Trade
finance, term loans and working capital are readily available,
especially to major foreign investors. Interest rates for such loans
are low and between 9-16%. Bangladesh has a high number
of state and commercial banks (as mentioned in the previous
section), and bank loans may be obtained against secured
collateral.
Private foreign commercial borrowing
For securing long-term foreign currency loans, an application
must be submitted to BIDA, which is subsequently forwarded to
the Central Bank for further assessment.
To secure the funding, the application must include a business
case justifying the loan requirement. The application along with
the business case is submitted to a committee chaired by the
Bangladesh Bank governor including members from BIDA, PMO
Ministry of Finance for assessment and decisions.
Bonds
The bond market is at a nascent stage with only a few bonds
available for investment. Policymakers are pushing to promote the
market, but there is hardly any demand for the debt instrument,
therefore discouraging companies from floating debt-based
instruments.
16 PwC | Destination Bangladesh
Foreign investors are allowed to participate in Initial Public
Offerings (IPOs) without regulatory restrictions. Also, capital gain
from listed shares is tax-exempt for individual investors and lower
tax rate is applicable for company and others entities.
Investing in the stock market
The Bangladesh government has welcoming investment
policies, geared towards encouraging entry of investors in the
secondary and tertiary sectors. As part of the government’s
liberal policy regime, several benefits have been instituted for
investing in certain sectors. Examples of such benefits include tax
exemptions, import duty waiver, ease of profit, capital repatriation
and preferential benefits.
Government incentives for encouraging
investments
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.
Tax exemptions
No import duties are applicable for export-oriented sectors. There
are duty exemptions also for some preferred sectors. General
exemption of import duties is also available in respect of import of
specific Plant & Machinery and spares.
Import duty
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.
Double taxation regime
Full repatriation of invested capital, profits and dividends is
allowed, subject to applicable taxes.
Capital repatriation
An investor can cash out from an investment, subject to approvals
from applicable regulatory authorities. Once a foreign investor
completes the formalities to exit the country, the investor can
repatriate the net proceeds after securing proper authorisation
from the Central Bank (Bangladesh Bank).
Exit
Destination Bangladesh | PwC 17Destination Bangladesh | PwC 17
Four sectors are restricted for private investment
in Bangladesh (1) arms and ammunition and other
defence equipment and machinery, (2) forest
plantation and mechanised extraction within the
bounds of reserved forests, (3) production of
nuclear energy, and (4) security printing (currency
notes) and mining.
In addition, there are seventeen prescribed
controlled sectors which require permission from
relevant Ministries/ Authorities.
Except the aforementioned sectors, most sectors
are open for private investment without limitation
for foreign equity participation except for certain
sectors, wherein local participation has been
mandated by the respective regulatory authorities,
such as logistics and telecommunication-value
added service. Foreign investors or companies
may obtain full working capital loans from local
banks. The terms of loans are be determined
based on negotiation.
Expatriate employees are normally provided with
3 months to one-year multiple entry E1 and E visa.
Based on the recommendation of the investing
company, experts with those companies will be
provided multiple entry visa during their operating
timeline.
Citizenship by investing a minimum of USD 500,000 or by transferring USD 1,000,000 to any recognised
financial institution (non-repatriable).
Permanent residency by investing a minimum of USD 75,000 (non-repatriable).
Investing in a sector
Other incentives
18 PwC | Destination Bangladesh
Bangladesh has identified some ‘Thrust Sectors’ which have the potential for growth, especially in terms of exports or employment.
The government policy has been revised to support key players in these sectors and boost economic growth.
Trade policy in Bangladesh is operated under the jurisdiction of
Export Policy Act 2015-18 and the Import Policy Act 2015-18.
The government has a host of policy tools like tariffs and
anti-dumping measure for protecting local players. As part of the
Government’s vision for crossing USD 60 billion export within
2021, policymakers have earmarked 12 sectors as ‘Highest
priority sectors’, while 14 have been categorised as ‘Special
Development Sectors’.
The import policy 2015-18 intends to facilitate raw material import
for players operating in sectors such as jute, electronics, paper.
Sector-specic incentives and taxation policy
Tax incentives are available in various sectors in Bangladesh,
which inter-alia include:
Some sector-specific benefits include:
• RMG/ Textile sector
• Physical infrastructure facility
• (such as deep sea port, elevated expressway, gas pipe line)
• Industrial undertaking in specified areas(such as active
pharmaceuticals ingredient and radio pharmaceuticals,
bio-fertiliser, computer hardware, textile machinery,
insecticides or pesticides)
• Manufacturing industry
• Power generation companies
• Information technology-enabled services
• Export processing zones
• Economic zones
• Cinema hall or cineplex
• Public-private partnership projects
• Project loan at reduced interest rate
• Income tax rebate
• Subsidies for utility services
• Export credit
• Duty drawback
• Duty free import of equipment
High value added
Readymade Garment
and Garment
Accessories
Pharmaceutical
products
Footwear & leather
products
Plastic
products
Furnitures
Luggage
Software and IT
enabled services,
ICT products
Ship & ocean
going fishing trawler
Jute products
Agro-products &
Agro-processed
products
Home
furnishing
Fig. 2.1: Priority sectors by the GOB for investment
Destination Bangladesh | PwC 19
Special Development and Service Sectors
Diversified
jute products
Electric & electronic
products
Ceramic products
Light engineering product
Value added
frozen fish
Poppadum
Printing and packaging
Rough diamond and jewellery
Paper and
paper products
Rubber
Silk products
Handicraft
Handloom products
including Lungi
Coir products
Tourism industry
Architecture, engineering
and consulting service
Institutions facilitating investments
The investment route depends on the sector targeted for investment and the FDI policy implemented by the Government of
Bangladesh. The following government and trade institutions will regulate and facilitate investment for most sectors;
Bangladesh Investment Development Authority (BIDA), previously known as Board of Investment (BOI), was established for
dealing with matters relating to local and foreign investments. All incoming investments need to be approved beforehand by BIDA.
The regulatory body aims to promote domestic and foreign investments by simplifying the bureaucratic challenges for entering the
Bangladesh market.
Bangladesh Bank (BB) is the country’s central bank. The central bank must be formally notified while bringing in any international
investments, including portfolio investments brought into the capital market. All incoming investments must be reported to BB through
commercial banks.
Dhaka Chamber of Commerce and Industry (DCCI) is a non-profit, service-oriented chamber serving as the first point of contact for
SMEs. DCCI provides market-oriented inputs during the government’s policy formulation process with respect to import, export and
investments. The chamber regularly publishes guidebooks for facilitating trade and commerce. DCCI also has its dedicated training
facility for supporting capacity development of professionals working with member organisations.
Foreign Investment Chamber of Commerce and Industries (FICCI), established in 1963, is composed of 188 members across
industry, service and manufacturing sectors. Classified as a Class ‘A’ chamber of commerce, FCCI is affiliated with FBCCI,
International Trade Center (Geneva) and World Trade Organisation (Paris).
Metropolitan Chamber of Commerce and Industry (MCCI) is a leading chamber body composed of members from large local
and multinational corporations. MCCI maintains regular liaison with major international trade bodies and foreign private sector
organisations.
Regulatory institutions
Trade bodies and chambers
20 PwC | Destination Bangladesh
BIDA has introduced an online-based One Stop Service (OSS) for assistance with necessary licences and permits required for
international investment in Bangladesh.
Depending upon the location of place of business, local City Corporation or Municipal Corporation or Union Parishad are the
competent authorities for issuance of trade licence.
BIDA- One Stop Solution (OSS)
Trade Licence
The following online portals will be crucial for both domestic and foreign investors:
Online portals
Purpose Entity Website Link
Foreign direct investment (FDI) BIDA www.bida.gov.bd
Investing in economic zones BEZA www.beza.gov.bd
Trade-related Information Bangladesh Government https://www.bangladeshtradeportal.gov.bd/
Company name Clearance OceoftheRegistrarofJointStock
Companies and Farm (RJSC)
http://app.roc.gov.bd:7781/psp/nc_
search?p_user_id=
Registration of Company OceoftheRegistrarofJointStock
Companies and Farm (RJSC)
http://www.roc.gov.bd/
VAT Registration National Board of Revenue http://www.nbr.gov.bd/
IssuanceofCerticateforusingstandard
mark
Bangladesh Standards and Testing
Institution (BSTI)
http://www.bsti.gov.bd/Form_Online.html
Comprehensive List of Licences Bangladesh Government http://www.forms.gov.bd/
For import and export related policies,
documents, licences
Chief Controller of Importer
and Exporters
http://www.ccie.gov.bd/
For IP Registration, renewal Department of Patent, Design and Trade
Marks under Ministry of Industries
http://www.dpdt.gov.bd/
For Issuing Environmental Clearance Department of Environment http://ecc.doe.gov.bd/login/
Table 2.1: List of online portals for investors
Destination Bangladesh | PwC 21
Chapter 3: Regulations for operating in
Bangladesh
Interests of international investors are protected by government
policies. Successive governments since the country’s
independence in the 1970s have continued with the preferential
policy treatment to international investors. The policy framework
for foreign investment in Bangladesh is based on ‘The Foreign
Private Investment (Promotion & Protection) Act 1980,’ which
ensures legal protection for foreign investments in Bangladesh.
The law guarantees non-discriminatory treatment between foreign
and local investments, and permission of freely repatriating
proceeds of profits and divestments.
Profit and capital repatriation are subject to reporting
requirements or authorisation by Bangladesh Bank. Proceeds
from the sales of securities (equity) of publicly listed companies
may be repatriated without prior approval for an amount not
exceeding the market value of the shares as listed in the stock
exchange. All other capital repatriations (i.e. private limited
companies and public limited companies not listed in the stock
exchange) are subject to prior authorisation by Bangladesh
Bank. In the absence of an established market valuation of the
company, the amount repatriated may not exceed the net asset
value of the company at the date of the transaction. It is examined
on case to case basis depending on factors such as company
profile, market dynamics and transactions model.
The Foreign Exchange Regulation Act requires foreign-owned
companies to obtain commercial domestic loans. The regulations
provide a general authorisation to banks involving working
capital. Term loans may be provided as well upon fulfilling certain
conditions. Borrowing from abroad is possible based on approval
from the Central Bank and BIDA. Investors can exit the country
any time with their investment based on the resolution of the
company board. Once a foreign investor completes the formalities
to leave the country, he or she may repatriate the net proceeds
after securing proper authorisation from Bangladesh Bank.
Following are some of the benefits for foreign investors:
• Foreign investors can fully own companies (excluding certain
sectors) within the country and invest in the domestic bourse
without restrictions.
• Full repatriation of investments and dividend are permitted,
subject to relevant taxes, and reinvestment of profit is
considered as new investment.
• Expatriates working for the company in some specific sectors
will be not be subjected to personal tax for up to 3 years.
• Expatriates employed in Bangladesh are entitled to remit up to
75% of their post-tax remuneration. Residual amount can be
remitted at the time of leaving the country.
• Multiple entry VISAs i.e. E1 VISA and E VISA are issued to
foreign investors for up to one year and could be extended
through appropriate application process.
• Income tax exemptions in respect of income from business
activity are carried on in the SEZs for up to ten years (rate
of income tax exemption varies based on year of operation),
while investments in some sectors such as power enables tax
holiday for up to 15 years.
Investment friendly FDI policies
Capital repatriation
22 PwC | Destination Bangladesh
Taxation in Bangladesh
Types of Taxes in Bangladesh
Tax on Income Import Duties
Excise Duty for Banks/Airlines
Branch Profit Tax on Repatriation Value Added Tax
Supplementary Duty
Direct Taxes Indirect Taxes
Direct Tax rates - Corporate
Nature of Company Tax Rate
Bangladesh Company Rates Private Company 35%
Minimum Tax computed on the amount of
company’s gross receipts from all sources
forataxyearirrespectiveofitsprotsor
loss for that tax year
0.6% to 2.0%
(initial 3 years at the rate 0.1% for
industrial undertaking engaged in
manufacturing of goods)
Dividend Income (for all companies) 20%
BranchProtTax 20%
Otherrateforspeciedcompanies Public Listed Company* 25%
Cigarette Manufacturing Company 45%
Banking, Insurance and Financial Company
(publicly traded)
37.5%
Banking, Insurance and Financial Company
(non-publicly traded)
40%
Merchant Banking Company 37.5%
Mobile Phone Operating Company 45%
SpecicSRO Export of Ready Made Garments/Factory
having internationally green building
certication
12%/10%
*Subject to fulfillment of certain conditions, else taxed at 35%
Note: Surcharge @ 2.5% to be levied on income from business of manufacturing cigarette, bidi, zarda, gul and all types of tobacco
products.
Income from business or profession
Capital gains
Income from business or profession is computed in accordance
with the method of accounting regularly followed and subject to
the adjustments/deductions as prescribed in the Ordinance. The
income is subject to tax at the rates as mentioned above.
Companies operating in Bangladesh are liable to pay 15% on the
capital gain generated from transfer of capital assets.
Destination Bangladesh | PwC 23
Personal Income Tax
All individuals who are liable to pay income tax or are specifically prescribed to file income return must file annual tax returns by 30
November, following the end of the tax year (30 June).
Taxability of Individual
Taxed on global income earned
during the year
Taxed only on income earned in
Bangladesh during the year
Resident Non-Resident
Total Income (Bangladesh Taka) Tax Rate
First 250,000 0
Next 400,000 10%
Next 500,000 15%
Next 600,000 20%
Next 3,000,000 25%
Balance 30%
Resident: -
• Presence for 182 days or more in a fiscal year, or
• Presence for 90 days or more current year +365 days in preceding four years
Employers are required to withhold tax from salary of employees
Return filing deadline for individuals is 30th November
Non-resident Individuals (other than
Non-Resident Bangladeshi) are taxed at
a flat rate of 30%.
Resident and Non-Resident Bangladeshis are
taxed at below mentioned rates:
“The first threshold of BDT 2,50,000 is
extended for:
• Women and senior citizen (aged 65 years &
above) to BDT 3,00,000;
• Person with disability to BDT 4,00,000;
• Gazetted war-wounded freedom fighter to
4,25,000.”
Note: Surcharge for individual taxpayers having net wealth of BDT 50 crore or above to be higher of “0.1% of net wealth” or “30% of
income-tax payable”.
Amount of net wealth Rates of surcharge (as % of income tax) Minimum surcharge
(1)Net wealth upto BDT 3 crore Nil Nil
(2) (a) Net wealth exceeding BDT 3 crore
but not exceeding BDT 5 crore; or
(b) Ownership of more than one motor car;
or
(c) Ownership of house property having an
aggregate area of more than 8000 square
feet in a city corporation
10% BDT 3,000
(3) Net wealth exceeding BDT 5 crore but
not exceeding BDT 10 crore; or
15%
(4) Net wealth exceeding BDT 10 crore but
not exceeding BDT 15 crore
20% BDT 5,000
(5) Net wealth exceeding BDT 15 crore but
not exceeding BDT 20 crore
25%
(6) Net wealth exceeding BDT 20 crore 30%
Rates of surcharge applicable to individuals
24 PwC | Destination Bangladesh
Bilateral Double Taxation Avoidance Treaties
For foreign investors, double taxation may be avoided on the basis of Bilateral Double Taxation Avoidance Treaties (DTTs). NBR is
authorised to negotiate Double Taxation Agreements (DTA) with foreign countries to promote FDIs in Bangladesh. The DTA is an
agreement between two countries seeking to avoid double taxation by defining the taxing rights of each country with regard to cross-
border flows of income and providing for tax credits or exemptions to eliminate double taxation. DTAs enable exchange of information
between treaty partners regarding evasion of tax. The list of bilateral signatories of Double Tax Avoidance (DTA) are presented below:
Bangladesh: Tax Treaties – DTAA
Sl Country Sl. Country
1 Belgium(Eectivedate1stJuly,1997) 18 Poland(Eectivedate1stJuly,2000)
2 Canada(Eectivedate1stJuly,1982) 19 Romania(Eectivedate1stJuly,1989)
3 China(Eectivedate1stJuly,1998) 20 SaudiArabia(Eectivedate1stJuly,2012)
4 Denmark(Eectivedate1stJanuary,1997) 21 Singapore(Eectivedate1stJanuary,1980)
5 France(Eectivedate1stJanuary,1988) 22 SriLanka(Eectivedate1stJuly,1989)
6 Germany(Eectivedate1stJanuary,1990) 23 Sweden(Eectivedate1stJuly,1984)
7 India(Eectivedate1stJuly,1993) 24 Switzerland(Eectivedate1stJuly,2009)
8 Indonesia(Eectivedate1stJuly,2007) 25 Thailand(Eectivedate1stJuly,1998)
9 Italy(Eectivedate1stJuly,1980) 26 Turkey(Eectivedate1stJuly,2004)
10 Japan(Eectivedate1stJuly,1992) 27 UnitedArabEmirates(Eectivedate1stJuly,2012)
11 Korea(Eectivedate1stJuly,1983) 28 UnitedKingdom(Eectivedate1stJuly,1978)
12 Malaysia(Eectivedate1stJanuary,1982) 29
UnitedStatesofAmerica(Eectivedate1stOctober,
2006; withholding tax 1st January, 2007 - other taxes)
13 Mauritius(Eectivedate1stJuly,2011) 30 Vietnam(Eectivedate19thAugust,2005)
14 Netherlands(Eectivedate1stJuly,1995) 31 Belarus (not yet in force)
15 Norway(Eectivedate1stJuly,2006) 32 Kuwait (not yet in force)
16 Pakistan(Eectivedate1stJanuary,1980) 33 Bahrain(Eectivedate9thOctober2017)
17 Philippines(Eectivedate1stJuly,2004) 34 Czech Republic (not yet in force)
Destination Bangladesh | PwC 25
How to file tax returns
Value Added Tax (VAT)
eTIN registration
The process of submitting the return of taxable income to the
Deputy Commissioner (DC) of Taxes in the prescribed format is
known as tax return.
Each income tax payer or person prescribed to file tax return is
entitled to get the income tax return form, free of cost from tax
offices or NBR’s website (www.nbr-bd.org). After calculating the
amount of income tax, every assessee shall deposit the amount
to the govt. exchequer through pay order, treasury challan
and submit duly signed and verified return form along with the
necessary documents to relevant tax circle.
A company or individual must submit income tax return by tax
day following the income year. The last date for the submission
of return may be extended by the Deputy Commissioner of Taxes
by up to two months and further extended for two months with
approval of the Inspecting Joint Commissioner.
Tax day in case of company is the 15th day of the seventh month
following end of Income Year or 15th September following the
income year when the due date of filing falls prior to the said date.
Tax day for an individual is the thirtieth day of November following
the end of the income year.
Standard VAT rate of 15% is applicable on supply of both
goods and services in Bangladesh. Certain prescribed goods
and services are chargeable to VAT rate at 5%, 7.5% and 10%.
VAT is imposed on goods and services at each stage of import,
manufacturing, supply and trading. Input tax credit is available at
each stage where goods and services are supplied at standard
VAT rate of 15%. Recipient of service is liable to pay VAT under
reverse charge in respect of import of service.
All business or industrial units with an annual turnover of BDT
30,000,000 are liable to obtain VAT registration and pay VAT at the
applicable rates. If annual turnover is less than BDT 30,000,000,
a tax rate of 4% is levied as Turnover Tax. Supply of goods and
service up to the turnover of BDT 50,00,000 are exempt from
payment of VAT and Turnover tax. In terms of Section 26 of the
VAT & SD Act 2012 ( The Act), Goods and services notified in 1st
Schedule to the Act are exempt from payment of VAT.
VAT is payable on a monthly basis within 15th of next month
and monthly VAT return is also required to be filed within 15th of
next month. At present though VAT return is filed manually, it is
expected that on implementation of “VAT-online project”, VAT
return could be filed online.
Import duties
Supplementary Duty (SD)
The following import duties are generally levied on import of
goods in Bangladesh:
Customs duty, Supplementary duty, Regulatory duty, VAT,
Advance Income Tax and Advance Tax.
The Harmonised Tariff System is used for imposing import duties
on import of goods. Different rate of import duties are notified in
the Customs Tariff Schedule based on HS code of the products
imported into Bangladesh.
Supplementary duties ranging from 10% to 500% are levied
on luxury and non-essential goods imported into Bangladesh.
Further supplementary duty ranging from 5% to 65% is imposed
on non-essential or socially undesirable goods produced and
supplied in the country. The rates vary depending on the nature of
the goods.
The incumbent has to obtain Tax Identification Number (TIN).
Indirect Taxes
Destination Bangladesh | PwC 25
26 PwC | Destination Bangladesh
Merger and Acquisition (M&A) framework for
Bangladesh
Preferential trade policies
Preferential trade benefits
European Union
The US
Additional policies for protecting foreign investments
The policy on the Merger and Acquisition (M&A) of companies is
mentioned through Section 12-14 of the Companies Act, 1994.
According to Section 12, companies willing to go through M&A
must seek approval from the court.
Currently, a company planning on merging with another company
must seek approval from the existing shareholders, based on
Company Act 1994, followed by ratification from the court.
According to the proposed guidelines, the court would remain the
sole authority for ratifying merger between two organisations.
Bangladesh has bilateral agreements and investment treaties with
the following countries.
Bilateral agreements: Belgium, Canada, China, Denmark, France,
Germany, India, Italy, Japan, Poland, Romania, Singapore, South
Korea, Sri Lanka, Sweden, Thailand, The Netherlands, United
Kingdom.
Ongoing negotiations for bilateral agreements: US, Iran,
Philippines, Qatar, Australia, Nepal, Turkey, Indonesia, Cyprus,
Norway, Finland and Spain.
Investment treaties: Belgium, Canada, France, Germany, Iran,
Italy, Japan, Malaysia, Pakistan, Philippines, Poland, Republic of
Korea, Romania, Switzerland, Thailand, The Netherlands, Turkey,
UK, US, Indonesia.
Ongoing negotiations for investment treaties: Negotiations are
ongoing with India, Hungary, Oman, Moldova, DPRK, Egypt,
Austria, Mauritius, and Uzbekistan.
Bangladesh enjoys several trade benefits, which provide
significant cost advantages while competing in international
markets. However, the country is predominantly benefitting from
exporting to the EU, which has provided free entry to all kinds of
goods and services.
Bangladesh benefits from EU’s Generalized Scheme of
Preferences (GSP), namely the Everything But Arms (EBA)
arrangement, which grants duty and quota-free access for all
items, except arms and ammunition. Under the framework of the
EU-Bangladesh joint co-operation Agreement, ratified in 2001,
engagements between the two regions can include a variety
of activities from trade and economic development to good
governance and environment regulation. Bangladesh’s export
to EU is dominated by apparel, which contributes 90% of total
export.
United States is the single largest export destination for
Bangladesh and in FY 2017-18, the latter exported goods worth
USD 5.98 billion. Bangladesh used to enjoy Generalized System
of Preferences (GSP) in the US market till 2013. In response to
US’s cancellation of GSP, Bangladesh is currently negotiating
a new trade agreement with the US, under the Trade and
Investment Facilitation Agreement (TCFA) arrangement. The
agreement, signed in November 2013, provides a platform for
discussing trade and investment-related issues and other areas of
common interest.
• Bangladesh is a signatory to MIGA (Multilateral Investment
Guarantee Agency) which insures investors against political
risks. MIGA is an Investment Guarantee Agency of the World
Bank Group that guarantees foreign investors against losses
incurred due to non-commercial risks and encourages FDI.
MIGA’s guarantee protects investors from the risks of currency
transfer, exploitation, war and civil disturbances. MIGA is only
restricted to de-risking new investments, privatisation and
financial restructuring.
• Overseas Private Investment Corporation (OPIC), a US-based
organisation, insures incoming US investments to frontier
markets like Bangladesh. OPIC provides the necessary
guarantee for foreign investors in case of unforeseen major
events such as civil war, expropriation and natural calamities.
• Bangladesh is a signatory of International Centre for
Settlement of Investment Disputes (ICSID), an organisation
that settles investment disputes between states and nationals
of different countries. ICSID seeks to encourage greater
flow of international investment by providing facilities for the
conciliation and arbitration of disputes between governments
and foreign investors.
Destination Bangladesh | PwC 27
Chapter 4: Steps to set up business
operations
There are several steps involved in setting up business operations in Bangladesh. These are outlined below:
A foreign investor planning to operate in Bangladesh would need
to register the company with Registrar of Joint Stock of Company
(RJSC). While other company documents such as TIN and VAT
certificates and trade licences are equally important for business
operations, company incorporation is the first step of the process.
The following table outlines the steps, time frame and document
requirements for setting up a new company in Bangladesh.
Company registration documents
Sl No. Particulars Requirements
1. Applying for Name Clearance
to RJSC
AnonlineapplicationforobtainingnameclearancehastobeledwithRJSCinBangladesh.
Documents required generally include Board resolution with regard to preferred names of the
New Co.
Time frame
NameClearancecerticateisgenerallyallottedwithinaperiodof2-3dayssubjectto
submission of all relevant documents.
2. Transfer of paid up capital
in Bangladesh, Obtaining
Encashmentcerticateand
Payment of RJSC fees
The Investing / Holding Company is required to transfer paid up capital money (plus
incorporation expense) to a temporary Bank A/c (e.g. Provisional Bank A/C or Local Lawyers
Bank A/c) in Bangladesh. Thereafter, the Company is required to obtain encashment
certicatefromtheconcernedBankerandmakepaymentofRJSCfees.
3. Apply for Incorporation of
New Co. (Forms)
An online application for incorporation is required to be done on the RJSC website.
Documents required generally include Copy of Board Resolution, MOA & AOA and
IncorporationcerticateoftheParentCo,Letterofauthorisation(LOA)tothelocal
representative, Passport copy of the Directors of the New Co, Copy of Name clearance
approvalcerticate,Encashmentcerticate(tobeissuedbytheconcernedbankerin
Bangladesh), Receipt of payment of fees to RJSC, Draft MOA & AOA of the New Co, Filled
and signed application forms (requiring various details).
Time frame
From practical experience, it takes around a 6-8 weeks’ time for preparing and arranging
alltherequireddocuments(i.e.draftingandnalisationofMOA&AOA,preparationof
incorporation forms of the New Co., obtaining signatures on relevant documents and
notarisation /attestation of documents etc.). Once the required documentation has been
receivedandsubsequentlyledwiththeRJSC,itgenerallytakesaround10-15daystoobtain
theincorporationcerticate.
4. Application for TIN of
the New Co.
AnonlineapplicationforobtainingaTINoftheNewCo.hastobeledinBangladesh.
Documents required generally include photographs of the Directors of the New Co.,
particularsofDirectors,copyofMOA&AOAalongwithIncorporationCerticateofthe
NewCo,LOAtothelocalrepresentative,RentalDeedforOceinBangladesh,localmobile
number of the company representative.
Time frame
TIN for the New Co. is generally allotted within a period of 4-5 days subject to submission of
all relevant documents.
28 PwC | Destination Bangladesh
5. Trade Licence The New Co. is required to obtain a Trade licence from the respective City Corporation/Municipal
Corporation for conducting business in Dhaka.
Documents requiredgenerallyincludeprescribedapplicationformdulylledin[lled-upinBengali
Language],RentalDeedforOceinBangladesh,photographoftheDirectorinwhosenamethelicence
will be applied for, passport copy of the Director in whose name the licence will be applied, MOA & AOA
alongwithIncorporationCerticateoftheNewCo,BoardResolutionpassedbytheParentCompany,
LOA to the local representative, copy of the TIN of the New Co, undertaking on 200 Taka Stamp paper.
Time frame
Trade licence approval is generally issued within a period of 10-15 days subject to submission of all
relevant documents.
6. VAT / BIN
registration
number
AnonlineapplicationforobtainingVATregistrationhastobeledwithNBRthroughtheVATonlineportal
in Bangladesh.
Documents required generally include name and address of the Company, Bank Account details
(Name of Bank with branch name, Account Title & Account Number), copy of updated Form XII, copy
of Passport/ National ID of the Authorised Signatory along with details such as designation, contact
numberandemailaddress,copyofTINcerticateofthecompany,copyoftradelicenceofthecompany,
company’s estimated annual turnover.
Time frame
VATregistrationcerticateisgenerallyprovidedwithinaperiodof7-15days,subjecttosubmissionofall
relevant documents.
7. Import
Registration
Certicate
Forundertakingimports,ImportRegistrationcerticateisrequiredtobeobtainedfromChiefControllerof
Import&ExportbylingonlineapplicationintheCCI&Ewebsite.
Documents requiredgenerallyincludesignedapplicationforms,banksolvencycerticate(tobeissued
by the concerned Banker in Bangladesh), copy of Trade Licence, copy of TIN of New Co, copy of MOA
&AOAalongwithincorporationcerticateoftheNewCo,MembershipCerticatefromRecognised
Chamber/Trade Association
Time frame
IRC approval is generally issued within a period of 3-4 weeks subject to submission of all relevant
documents.
8. Export
Registration
Certicate
Forundertakingexport,ExportRegistrationCerticateisrequiredtobeobtainedfromChiefControllerof
Import&ExportbylingonlineapplicationintheCCI&Ewebsite.
Documents required generally include signed application forms, Telegraphic Code, copy of Trade
Licence,copyofMOA&AOAalongwithIncorporationCerticateoftheNewCo,banksolvency
certicate(tobeissuedbytheconcernedBankerinBangladesh),copyofTINofNewCo.,membership
certicatefromrecognisedChamber/TradeAssociation.
Time frame
ERC approval is generally issued within a period of 3-4 weeks subject to submission of all relevant
documents.
Note:Thetimelinesprovidedabovearepracticalestimatessubjecttonotarisation/attestations/signoandreceiptofallnecessaryand
relevant documents, and submission of the same with relevant regulatory / government authorities in Bangladesh.
It is also advisable to check the latest requirements prior to application.
i. NC for company: Nominal fee for each of the proposed names.
i. For the Memorandum of Association: BDT 1000.00
ii. For the Articles of Association :
Registration fees
PRIVATE COMPANY (Companies Act, 1994)
Stamp fees:
Fee for Name Clearance (‘NC’)
Fees for company registration
For Authorised Capital Fee (BDT)
Up to 20,00,000.00 3,000.00
> 20,00,000.00 up to 6,00,00,000.00 8,000.00
> 6,00,00,000.00 20,000.00
Destination Bangladesh | PwC 29
i.Forling6documents(5lledinformsplus1memorandum&articlesofassociation,@BDT400.00perdocument):BDT2,400.00
ii. For the authorised share capital:
For limited company
Please note that the fees mentioned above are exclusive of VAT @15% or any other statutory dues that may be applicable in Bangladesh.
Registration fees:
Fees for trade licence:
For Authorised Capital Fee (BDT)
Up to 20,000.00 00.00
Additionalforevery10,000.00orpartafterrst20,000.00upto50,000.00 00.00
Additionalforevery10,000.00orpartafterrst50,000.00upto10,00,000.00 00.00
Additionalforevery1,00,000.00orpartafterrst10,00,000.00upto50,00,000.00 50.00
Additionalforevery1,00,000.00orpartafterrst50,00,000.00 80.00
Paid up capital Annual fees
1 lac 1,500
1-5 lac 2,000
5-10 lac 3,500
10-25 lac 4,500
25-50 lac 5,500
50 lac- 1 Crore 7,500
1-5 crore 10,000
More than 1 crore 12,000
Documents required generally include Application in duly filled-in
prescribed form, Trade licence, Certificate of Incorporation along
with Memorandum of Association, Partnership deeds, Deeds
of the proposed land, Background of the proprietors in official
letterhead pad, Pay Order/Bank Order for applicable registration
fee in favour of BIDA, TIN certificate.
It is advisable to check the latest requirements prior to application.
Registration with the Bangladesh Investment Development Authority (BIDA)
Table 4.1: Registration fees based on investment amount
Registration fee for foreign Investment
Amount (BDT) Required fee (BDT)
Up to 10 Crore 5,000/-
10-25 Crore 10,000/-
25-50 Crore 25,000/-
50-100 Crore 50,000
30 PwC | Destination Bangladesh
• Foreign individuals or entities are not allowed to own real
estate properties in Bangladesh but may procure land under
special arrangements.
• Foreign investors may acquire a local company with 100%
foreign ownership and use the company as a vehicle for real
estate acquisition.
• Foreign investors can establish Joint Venture-based
companies for purchasing real estate.
• Foreign investors may purchase shares of a local company
that owns real estate.
• Investors can lease land in certain specialised areas such as
export processing zones (EPZs) and Economic Zones (EZ).
The primary step for executing a leasing contract involves
conducting a title verification to determine the existence of
any material or title defect of the land to be leased. Once the
title clearance is obtained, the terms of the lease need to be
ascertained. Certain clauses must be considered carefully by
both parties:
• Rent free period
• Sole renewal option for lessee
• Lock-in period
• Force majeure
• Termination
An entity willing to import equipment and machinery to
Bangladesh must obtain an import registration certificate (IRC)
from the Ministry of Commerce.
Documents required for import:
• Letter of credit authorisation form
• Bill of lading or airway bill
• Commercial invoice or packing list
• Certificate of origin
• Direct Commercial Importers: Import of goods for sale without
further value addition.
• Private Industrial Consumers in EPZs: Tax free import of any
quantity of non-restricted items
• Private Industrial Consumers (those not located inside EPZs):
These entities import raw materials and machineries to
produce goods and services for sale in both the local and
domestic markets. IRC specifies the maximum value for each
product that the industrial consumer may import each year.
Land
Commercial leasing
Machinery import
Types of importers
Note: For certain imported items, additional certifications or
import permits relating to health security or other relevant matter
have been made mandatory. Companies established in EPZs
have separate guidelines for import.
Destination Bangladesh | PwC 31
Handling contract related legal dispute
Commercial disputes are either legally handled by the court or
through an arbitration body.
Any dispute in relation to land rights is normally resolved by the
courts. The government assures foreign investors protection
against nationalisation and exploitation through the Foreign
Private Investment Act of 1980.
Bangladesh has a common law-based judicial system. The
country’s basic laws such as penal code, civil and criminal
procedural codes, contract laws and company law are used to
absolve local disputes. In cases of disputes, alternate dispute
resolutions are viable under the Arbitration Act of 2001 and 2004.
Bangladesh is a signatory of the International Convention for the
Recognition and Enforcement of Foreign Arbitral Awards and
a member of International Centre for Settlement of Investment
Disputes (ICSID). Bangladeshi law allows contracts to refer
dispute settlement to third country forums (e.g. in Singapore)
for resolution. Bangladesh is also a party to the South Asia
Association for Regional Cooperation (SAARC) Agreement for
the Establishment of an Arbitration Council since November
2005. This association aims to establish a permanent centre
for alternative dispute resolution in one of the SAARC member
countries.
• Bangladesh is a signatory of the New York Convention and
recognises the enforcement of international arbitration awards.
• Domestic arbitration is under the authority of the district judge
court bench, and foreign arbitration is under the authority of
the relevant high court bench.
• The Bangladesh Arbitration Act of 2001 and amendments in
2004 reformed alternative dispute resolution in Bangladesh.
The Act consolidated the law relating to both domestic and
international commercial arbitration.
• The Bangladesh International Arbitration Centre (BIAC) is
available for dispute resolution. The Centre operates under the
Bangladesh Arbitration Act of 2001. BIAC is an independent
arbitration centre established by prominent local business
leaders in April 2011 for commercial dispute resolution. The
council committee is headed by the President of International
Chamber of Commerce – Bangladesh (ICCB) and includes
the presidents of other prominent chambers including Dhaka
Chamber of Commerce and Industry (DCCI) and Metropolitan
Chamber of Commerce and Industry (MCCI).
Digitisation process for ‘One Stop Solution’
Dispute related to land
Legislation to ensure legal compliance
Other regulations
32 PwC | Destination Bangladesh
Chapter 5: The way forward
Bangladesh’s economy expanded by a remarkable 7.86% to USD
275.8 billion in 2018. The country has continued making strides
to achieve its social development goals for its 167 million citizens.
The country’s historic growth has been spearheaded by its private
sector, which has benefitted from the demographic dividend and
rising middle and affluent class population. Bangladesh has been
enjoying the benefit of a rising young population that has resulted
in a larger labour force to support industrialisation and a rapid
shift in consumption pattern. The young population is expected
to keep growing in the coming years, which will augur well for
expanding industrialisation. The government has also significantly
enhanced its efforts to mitigate some of the bottlenecks
hampering business operations as these contribute towards the
country’s aspiration to graduating to a middle-income economy.
In 2015, Bangladesh graduated to the World Bank’s “Lower
Middle Income” status with its Gross National Income (GNI)
reaching USD 1,046. Lower middle income countries have GNI
between USD 996 and USD 3,895, while GNI of upper-middle-
income economies range between USD 3,896 and USD 12,055
per capita. Bangladesh aims to reach that GNI by 2025.
On March 2018, Bangladesh got the nod from the UN and
graduated to the status of a developing country upon meeting all
three graduation criteria – Gross National Income (GNI) of USD
1,272 (required USD 1,230), Human Assets Index (HAI) of 72.8
(required greater than 66) and Economic Vulnerability Index (EVI)
of 25.2 (required 32 or below). The country has to maintain the
required threshold till 2024 in order to graduate to the middle-
income status.
The incremental growth of the economy will augur well for the
country in terms of its global economic standing. Bangladesh
will have more opportunities for attracting foreign investments.
Besides, the sovereign rating is also expected to improve,
leading to lower risk premium while making investments in debt
and equity-based instruments. The government’s objective of
launching sovereign bonds will get a further impetus by attracting
a wide array of investors.
Bangladesh will have till 2027 to build the necessary infrastructure
to remain competitive following the withdrawal of duty-free and
quota-free (DFQF) access. The country is already undertaking
different policy reforms and pursuing bilateral and multilateral
trade agreements to develop the platform to compete in the
global marketplace.
• Investor friendly policies and incentives including 100% foreign
equity
• Access to human capital with affordable wage rates
• A strategic geographic position in the Asia- Pacific region
• Macroeconomic stability characterised by a consistent GDP
growth rate at around 7%.
Transitioning to a developing middle-income economy
32 PwC | Destination Bangladesh
Destination Bangladesh | PwC 33
Policymakers realised the importance of infrastructure for
attracting investments. Taking lessons from China’s success
story, the government is fostering an industrialisation-led growth
strategy by setting up Special Economic Zones across the
country, while attracting investments through policies such as tax
holidays. Bangladesh Economic Zone Authority (BEZA), a
semi-autonomous body under the Prime Minister’s office,
is primarily responsible for managing the development of
these zones, with the mandate to eliminate any bureaucratic
bottlenecks hindering the flow of incoming investments.
The government investment in the power sector resulted in the
rise in electricity access that has gone up from 50.5% in 2006
to 75.92% in 2016. According to a World Bank publication, the
time required for businesses to obtain new electricity connections
significantly decreased from 400 days in 2014 to less than
150 days in 2018. However, given the rapid expansion of the
Bangladesh economy, continuous investments are required for
meeting the energy demand of 30,000 MW in 2030. Greater
private sector participation is imperative for scaling up the power
sector further, apart from infusion of Government-to Government
(G2G)-based investments and more power and natural gas
import.
Infrastructure development of the country has been driven by
both national and international (G2G and multilateral agencies)
funding. Recently, both China and India have committed to
investing nearly USD 31 billion and USD 4.5 billion respectively. A
majority of these investments has been designed for road, rail and
port infrastructure development, as part of implementing China’s
“One belt, one road” initiative. The initiative is meant to connect
Bangladesh through infrastructure and economic collaboration
to other parts of Asia and Africa; and factors in India’s bid for
securing transit through Bangladesh to connect Indian states
located on the two sides of Bangladesh. Further investments
are in the pipeline to build and repair new highways and expand
existing port capacities as well as build a deep-sea port and new
power plants.
For averting corruption while registering a company, BIDA
will launch a One Stop Service (OSS) online portal for
foreign investors, with a mandate to securing all necessary
documentation for setting up a company within 45 working days.
Investors can track the progress of the registration process
through an online portal.
Overall, the government intends to digitise the investment
process by making government services more accessible. As part
of the digitisation process, the government has already digitised
the tax payment procedure, introducing e-tins for simplifying the
payment cycle. Other areas of improvement include property
registration process. Therefore, although bureaucratic challenges
and corruption may be impediments for operating businesses in
Bangladesh, continual efforts are being made to combat such
issues.
Bangladesh’s graduation to the middle-income status would
negate existing preferential trade benefits currently enjoyed by
the country. However, the government has proactively started
engaging in bilateral trade agreements with major trading
partners. The economic impact of the government’s initiatives to
establish diplomatic ties will further bear fruit in the coming years.
In conclusion, the influx of emerging sectors such as readymade
garments, consumer staples & durables and telecommunication
in Bangladesh is indicative of the dynamic investment
opportunities in the country. Bangladesh’s robust economic
growth, rising young population and progress in human and
social development are propelling its domestic consumption and
private investments. The market for both imported and
locally-manufactured consumer durables is expanding at a
rapid pace. Moreover, the government’s incentives to attract
investments, such as setting up economic zones with robust
infrastructure and fiscal incentives, are supplementing
Bangladesh’s promising GDP forecast.
Once prospective investors have familiarised themselves with
the logistics and regulations for operating in Bangladesh, the
opportunities would be ripe for the picking.
The road ahead
The digital edge
34 PwC | Destination Bangladesh
Works cited
• 2018 Revision of World Urbanization Prospects. United Nations 2018.
• Asian Development Bank (ADB) Basic Statistics (2018). Accessed at https://data.adb.org/dashboard/bangladesh-numbers
• Bangladesh Bank Data. Accessed at: https://www.bb.org.bd/econdata/fdi.pdf
• Bangladesh Bank. Accessed at https://www.bb.org.bd/econdata/intreserve.php
• Central Intelligence Agency (CIA). 2018. The World Factbook. Accessed January 30, 2019. https://www.cia.gov/library/publications/
resources/the-world-factbook/geos/bg.html.
• Export Promotion Bureau. Accessed at http://www.epb.gov.bd/site/files/51916ae6-a9a3-462e-a6bd-9ef074d835af/Statistic-
Data-2017-2018
• Export Promotion Bureau. Statistics Data 2017-18. Accessed January 29, 2019
• https://countryeconomy.com/ratings
• https://www.ceicdata.com/en/indicator/bangladesh/private-consumption-expenditure
• IMF. 2017. Report for Selected Country Groups and Subjects (PPP valuation of country GDP)
• International Monetary Fund (IMF). 2018. Inflation rate, average consumer prices. October. Accessed January 30, 2019. https://www.
imf.org/external/datamapper/PCPIPCH@WEO/OEMDC/ADVEC/WEOWORLD/BGD.
• The Long View: How will the global economic order change by 2050. Accessed at https://www.pwc.com/gx/en/issues/economy/the-
world-in-2050.html
• The World Bank. (2018). Bangladesh Development Update
• World Bank Data. Accessed at http://datatopics.worldbank.org/consumption/
• World Bank Data. Accessed at https://data.worldbank.org/country/bangladesh
34 PwC | Destination Bangladesh
Destination Bangladesh | PwC 35
About PwC
AtPwC,ourpurposeistobuildtrustinsocietyandsolveimportantproblems.We’reanetworkofrmsin158countries
with over 250,000 people who are committed to delivering quality in assurance, advisory and tax services. Find out more
and tell us what matters to you by visiting us at www.pwc.com.
InBangladesh,PwCoceisinDhaka.FormoreinformationaboutPwCBangladesh’sserviceoerings,
visit www.pwc.com/bd
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see www.pwc.com/structure for further details.
© 2019 PwC. All rights reserved
Contributors
This report was prepared by Mamun Rashid, Salman Afsar Alam and Nahiyan Nasir from PwC Bangladesh. Sushmita
Basu, Kapil Basu and Prabir Mitra from PwC India have contributed commentaries in the tax and regulatory sections of
the report.
A very special thanks is also due to Bangladesh Investment Development Authority and to National Board of Revenue
for their guidance.
Editorial support: Vishnupriya Sengupta
Design: Shipra Gupta and Faaiz Gul
Contact us
Mamun Rashid
Managing Partner, PwC Bangladesh
Email: [email protected]
Nahiyan Nasir
Manager, PwC Bangladesh
Email: [email protected]
Sanjeev Krishan
Deals Leader, PwC India
Email: sanjeev[email protected]
Sushmita Basu
Member of the Board of Directors, PwC Bangladesh
Leader - Bangladesh Tax and Regulatory Services
Email: [email protected]
Kapil Basu
Director, Tax and Regulatory Services, PwC Bangladesh
Email: [email protected]
Dinesh Arora
Partner, Corporate Finance and Investment Banking, PwC India
Email: [email protected]
Anuj Madan
Partner, Transaction Services, PwC India
Email: [email protected]
For macroeconomic insights and transaction related queries, please contact:
36 PwC | Destination Bangladesh
pwc.com/bd
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sources believed by PricewaterhouseCoopers Bangladesh Private Limited (PwCBPL) to be reliable but PwCBPL does not
represent that this information is accurate or complete.
Any opinions or estimates contained in this document represent the judgment of PwCBPL at this time and are subject to change
without notice. Readers of this publication are advised to seek their own professional advice before taking any course of action
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