Foreign Investment in Bangladesh Top Law Firm in Bangladesh Leading and Best Law Firm in Bangladesh


Procedure for Foreign Investment in Bangladesh

Economic growth in any country depends upon the persistent growth of productive capacity, supported by savings and investment. Low levels of savings and investment, particularly in developing countries and least developed countries, result in a low level of capital stock and economic growth. The recognition of the role of capital in economic growth creates a basis for analyzing the role of FDI, which brings new technology and knowledge along with capital. The proponents of foreign direct investment (FDI) argue that FDI brings prosperity to the recipient countries through technology transfer, increasing volume of exports, enhancing job opportunities, and increasing government revenue.

Foreign Investment in Bangladesh Top Law Firm in Bangladesh Leading and Best Law Firm in Bangladesh

After independence in 1971, Bangladesh nationalized the abandoned industries of the Pakistani owners. However, it liberalized her industrial policies afterward, which started with the announcement of Industrial Policy in 1982. Later, ‘The Foreign Investment Act’ was enacted to ensure legal protection to foreign investment in Bangladesh. Even though there are lots opportunities for foreign investors in Bangladesh, inflow of FDI is not satisfactory.

As the economic landscape in Bangladesh is changing and developing rapidly, there exist opportunities in the real estate sector abound. In the residential market, there are tremendous opportunities for international companies to come in and consolidate, as the entire market is fragmented. As the young, urban middle class grows, there will be further demand for housing. In addition, the legal framework is still conducive for foreign investment in this sector. Although there are restrictions in terms of convertibility of currency, foreign exchange laws allow for repatriation of profits and capital.

Foreign Direct Investment (FDI)

Foreign Direct Investment involves ownership and control of company in a foreign country. In exchange for the ownership, the company usually transfers some of its tangible and intangible resources to the foreign country. The main concept behind FDI is the control of resources in host country. The investing firm generally seeks to serve a new market for its products or services or to obtain additional supplies for its existing markets. The investing company views its investments just as a domestic one; the only difference is that the project is located in foreign country. FDI is one of the most convenient sources of venture capital and the easiest means of transferring technology.

Foreign Direct Investment (FDI) grasps lots of benefit on a macroeconomic level. The FDI inflow facilitates capital formation and the growth of economy, including industry, manufacturing, infrastructure, and energy. The expansion of the GDP creates jobs and reduces unemployment rate. On the basis of intricate link between FDI and growth, the trade regime of Bangladesh has been intensely liberalized to maintain the streams of investments and finance from abroad. 

Although several attempts (Foreign Investment Protection Law, Tax incentives, Special Investment Zones) have been made to create an investment friendly climate, Bangladesh has yet to be successful in creating domestic policy settings factors, hospitable to the facilitation of business and inducement of inflow of Foreign Direct Investment.

Wholly Owned Subsidiaries in Bangladesh

A wholly owned subsidiary is a company whose common stock is 100% owned by a parent company. Wholly owned subsidiaries allow the parent company to diversify, manage, and possibly reduce its risk. Unlike other subsidiaries, a wholly-owned subsidiary has no obligations to minority shareholders. In general, wholly owned subsidiaries retain legal control over operations, products, and processes. The financial results of a wholly owned subsidiary are reported on the parent company’s consolidated financial statement.

Foreign companies are permitted to establish wholly owned subsidiaries in Bangladesh. Such companies may be established as a private limited or public limited company. Foreign equity ownership may be up to 100% in most sectors including construction, information technology and development. Foreign entities may acquire an existing Bangladeshi company or incorporate a new company complying with the requirements of the Registrar of Joint Stock Companies and Firms (RJSC). Subsidiaries are allowed to remit dividends declared on after tax profits

Foreign Investment in Bangladesh Top Law Firm in Bangladesh Leading and Best Law Firm in Bangladesh

Joint Venture

As with wholly owned subsidiaries, foreign companies may incorporate joint venture companies with Bangladeshi partners. The equity ownership of the foreign company will depend on the sector being invested in. Bangladeshi businesses are eager to collaborate with foreign partners, and the Government of Bangladesh has significantly improved conditions for joint ventures in recent years. 

Local businesses are particularly receptive to joint ventures in which the foreign partner provides foreign exchange capital, equipment, technology, and expertise, and the local partner provides land, real estate, and knowledge of the domestic market.  Ventures with 100 percent foreign ownership are also permitted, but they may encounter greater operational difficulties than those with some local ownership.

Any foreign firm incorporated outside of Bangladesh must be registered in Bangladesh in order to carry out business.  Business firms are incorporated and registered under the provisions of the Companies Act of 1994.  Foreign investors normally form corporations in Bangladesh.  Two broad categories of corporations exist: public and private.  Companies of either type may be limited or unlimited.  The liability of the shareholders of a limited company is restricted to the amount of share capital subscribed by them or held in their name.  The liability of the shareholders of an unlimited company is not as restricted.

Branch & Liaison Office

Foreign companies can also set up a limited presence in Bangladesh as a foreign entity through a branch office or liaison office on obtaining approval from the BIDA. Unlike subsidiary companies, the activities that a branch office or liaison office may undertake are relatively limited. Ordinarily, no outward remittances of any kind from Bangladesh through the branch or liaison offices are allowed unless specific exemptions are obtained from the BIDA, and the same is aligned with the central bank’s regulations. These offices are required to bring inward remittance of at least US$50,000 as establishment costs. 

Branch offices usually represent the parent company and undertake specific activities such as the export or import of goods, rendering of professional or consultancy services. However, branch offices are generally not permitted to carry out manufacturing activities. Liaison offices, on the other hand, mainly act as the liaison and communication channel for the parent entity. It cannot engage in any income-generating activity in Bangladesh.

Key Facts about Branch Office in Bangladesh
  • A Branch office of a foreign company can engage in commercial activities with prior approval of BIDA.
  • A Branch office may have local source of income from the approved field of business activities in Bangladesh and with the prior approval of BIDA.
Key Facts about Liaision Office in Banglsdesh
  • Liaison office and Representative office are same in Bangladesh.
  • A Liaison/Representative Office of a foreign Company can perform very limited activities, which includes:
    • maintain liaison/coordination between principal and local agents, distributors/exporters’ institutions through correspondences, personal contracts and other electronic media.
    • collect, compile analyze and disseminate business information related to its field of activities as mentioned in the approval letter.
  • A Liaison/Representative office will have no local source of income in Bangladesh. All setup and operational costs including salaries of the expatriates and local employees of the Liaison or Representative office will have to borne by the parent company aboard.
  • No outward remittances of any kind from Bangladesh sources will be allowed except the amount brought in from abroad (the unspent part).
Foreign Investment in Bangladesh Top Law Firm in Bangladesh Leading and Best Law Firm in Bangladesh
Key Facts about both Branch and Liaison Office in Bangladesh
  • The activities of a Branch and Liaison office shall remain confined to the areas and for the period of time mentioned and approved in approval letter issued by BIDA. If the company intends to continue their Office beyond the period approval, they will have to apply for necessary renewal/extension in the prescribed form with proper documents at least 2 (two) months before the expiry of the current term.
  • If the approved company intends to employ any foreign nationals(s) in their Office, work permits should be obtained from the BIDA.
  • An amount of foreign exchange equivalent to the sum of not less than US$ 50,000 or equivalent as estimated initial establishment cost and 6(six) months operational expenses of the Office must be brought in as inward remittance in Bangladesh within 02(two) months from the date of issuance of the BIDA permission letter. For this purpose, the Office shall have to open an account with any scheduled bank of Bangladesh as per the instructions contained in the Guidelines for Foreign Exchange transactions for receipt of remittances.
  • Quarterly return of incomes and expenditures out of remittances received from abroad shall have to be submitted to the BIDA, concerned Bank, National Board of Revenue and Bangladesh Bank with documentary evidences.
  • Any change(s) of present address shall be intimated to the BIDA for necessary action and approval before the proposed change is carried out.
  • The permitted Office shall have to obtain clearances/ licenses from the concerned government agencies, as and where required, under the existing rules of the country.
  • The permitted Office shall have to pay duty/income tax/VAT/revenues and other taxes payable to the government under the existing laws of Bangladesh.
  • Deduction of taxes at source while paying office/house rent, salaries, and bills for purchased goods, services and contract work has to be made, and subsequently deposited to the designated government accounts as per provisions of Bangladesh Income Tax Ordinance, 1984. For the purpose of deduction of taxes at source & VAT, enterprises shall have to obtain Taxpayer Identification Number (TIN) from the National Board of Revenue.
  • Approval of Branch and Liaison Offices and award of work permit for foreign nationals will be made on the condition of security clearance from the Ministry of Home Affairs. The Ministry of Home Affairs shall provide security clearance within 45 days of issuance of permission letter under the existing Visa policy. Otherwise it will be treated that the concerned agencies have no objection to the issuance of visa.
  • Expatriates working in manufacturing industry, business organizations of private sector, educational institutions, Branch and Liaison Offices etc. in Bangladesh must submit income tax clearance certificate/income tax exemption certificate under section 107 of Income Tax Ordinance, 1984.
  • Branch and Liaison Office under proprietorship companies will be generally discouraged.
  • For establishing more than one Office of the permitted Branch or Liaison Offices in Bangladesh, the foreign company shall have to take separate prior permission from the Bangladesh Investment Development Authority.
Branch/Liaison Office as a Type of Business Entity

A Branch or Liaison Office is a proper legal entity once registered with the BIDA in Bangladesh. It is considered an extension of the foreign company and not as a separate legal entity. Unlike a Bangladeshi subsidiary company, the parent company of a Branch or Liaison Office is implicitly liable for all the debts and liabilities of the Branch or Liaison Office.

Other Information

  • Name:The name of Bangladeshi Branch or Liaison Office must correspond to the name of the foreign company.
  • Constitution and Activities: The shareholders, structure of company and its activities are directed by foreign company’s Memorandum and Articles of Association. There is no separate Memorandum and Articles of Association for the Branch or Liaison Office.
  • Office Address:A Branch or Liaison Office must have an office address located in Bangladesh.
Foreign Investment in Bangladesh Top Law Firm in Bangladesh Leading and Best Law Firm in Bangladesh

Documents Required for BIDA Approval

In general, the following documents/information is required for approval of a Branch or Liaison Office in Bangladesh:

  1. Application in prescribed form signed by the authorized person for establishment of branch/liaison/ representative office – 4 copies.
  2. Memorandum and Articles of Association and Certificate of Incorporation of the principal/ parent company.
  3. Name and nationality of the directors/promoters of the principal company.
  4. Audited Accounts of last financial year of the principal company.
  5. Company’s board of director’s resolution regarding opening of office in Bangladesh.
  6. Proposed organogram of the office showing the posts to be occupied by both expatriates and local personnel.
  7. Details of activities to be performed through the proposed branch/liaison/representative office in Bangladesh.
  8. Forwarding Letter
  • Documents (item 2-5) shall have to be attested by the concern Bangladesh mission/mission of the respective country in Bangladesh/respective country’s apex business chamber/local business chambers.
  • Any documents not in English must be translated in English before submission.
  • 4 copies of all the documents must be submitted to BIDA.
  • BIDA might ask for more documents after reviewing the above mentioned documents.
Registration Procedure and Timeline

The process is now online. All documents should be uploaded to BIDA’s online portal and later copies of the documents should be submitted physically. After proper scrutiny of all documents, BIDA officials will place the application and documents to Inter-Ministerial Committee. The Committee will review the documents and might ask for more documents or a physical presentation. If the committee is satisfied, they will provide the approval. The Inter-Ministerial Committee usually sits twice every month. Usual timeline is one month or less.

Purchasing Share of a Bangladeshi Company

Purchasing Share of a Bangladeshi Company

Foreign investors are free to invest in local companies in Bangladesh unless specifically prohibited. Shares may also be issued to foreign investors against capital machinery brought into Bangladesh by them (subject to confirmation by the Customs and Excise authority of the import documents).

Right to Issue and Transfer Shares in Bangladesh

There is no need for permission from the Bangladesh Bank to set up such ventures if the entrepreneurs use their own funds. Prior approval of the Central Bank is not necessary for the issuance of shares in favor of non-residents against foreign investment in BD.    

Shares may be issued relating to freely convertible foreign exchange brought in from abroad via the banking channel or to the importation of capital machinery or the combination of both.    

Foreign exchange thus entered must be paid out in taka before the issuance of shares, except in the case of Type A (full foreign owned) and Type B (joint venture) units of EPZ and EZ, where FC’s foreign bright equity of be held in the FC accounts of the units concerned.    

Transferring shares and securities in Bangladesh from one shareholder to another shareholder regardless of their nationality / residence does not require approval from Bangladesh Bank.    

In the event of a transfer of private / public (non-listed) shares between resident-non-residents or vice versa, a general intimation to Bangladesh Bank is required by the Approved Bank within 14 days of such a transaction.    

As there is no established marketplace for such investment in Bangladesh, Bangladesh Bank will accept fair value of the shares as on the date of sale based on a reasonable combination of three valuation approaches (NAV; FMV and DCF), depending on the nature of the company in regards to the Procedure of foreign investment in Bangladesh.

Full Repatriation of Dividend Investment and Income for Foreign Investors in Bangladesh

Full repatriation of capital invested from foreign sources is allowed. Similarly, profits and dividends accruing to foreign investment may be transferred in full. If foreign investors reinvest their repatriable dividends and/or retained earnings, those will be treated as new investment. Foreigners employed in Bangladesh are entitled to remit up to 75% of their salary and will enjoy facilities for full repatriation of their savings and retirement benefits. To avail full repatriation of invested capital, profit and dividend, foreign investors would need to apply for repatriation approval from the Bangladesh Bank through a nominated bank.

Law for the Protection of Foreign Investment in Bangladesh

For a seamless procedure of foreign investment in Bangladesh, the government guarantees immunity from nationalization and expropriation through the Foreign Private Investment Act that involves repatriation of capital and dividend for foreign investors. 

In addition, to facilitate the Procedure of foreign investment in Bangladesh, Bangladesh has made ample legal provisions to secure intellectual property rights. In addition to the Foreign Private Investment Act, the government has developed an FDI Policy (Foreign Direct Investment Policy for the Procedure of foreign investment in Bangladesh), which supports easy but efficient investment mechanisms in Bangladesh.    

The policy encourages the establishment of enterprises by simplifying the leasing and purchasing process of private property, forming an agency, enabling corporate tax holidays for 7 years (15 years in the power sector) and in some respects introducing an exemption of foreign employees’ income tax for up to 3 years.

Foreign Investment in Bangladesh Top Law Firm in Bangladesh Leading and Best Law Firm in Bangladesh

Dispute Settlement in Foreign Investment

For any foreign investor, protection of their investment is a primary concern in host states. National legislations and BITs usually provide legal security to them so that they can exercise their desired economic freedom in host countries. Without legal safeguards for their investments, they will not be motivated to invest their capital further. Like other host states, generally, the national laws and BITs of Bangladesh provide significant investment protection guarantees.

In dispute cases alternative conflict settlement is possible under the 2001 Arbitration Act. The Bangladesh International Convention on the Recognition and Compliance of Foreign Arbitral Awards was signed. Bangladesh is also a member of International Centre for Investment Dispute Settlement (ICSID). 

The new law also provides for the implementation without much hindrance of international arbitral awards. Although venturing in a company may be overwhelming, Bangladesh offers investors a safe and resourceful environment suitable for establishing or expanding any company, and it can be said that Bangladesh is in fact a “dream investment destination,” after much consideration.

Visa, Work Permit, Citizenship

For periods ranging from one month to five years prospective foreign investors may apply for visas. Foreign workers must get BIDA / BEZA / BEPZA work permit. 

In an industrial organization the number of expatriate workers cannot exceed the ratio of 1:20 (foreign: local) for industrial settings and 1:5 (foreign: local) for commercial establishments. 

Citizenship in a scheduled bank may be subject to investment of USD 1 million or a fixed deposit of USD 2 million. Investors can also get ‘NO Visa Requirement’ exemption for investment of more than USD 10 million.


To facilitate and encourage investment, the Government of Bangladesh provides various fiscal and non-fiscal incentives, privileges and facilities comprising of exemptions/reduction of corporate income taxes, reduced import taxes on capital machineries and raw materials, reduced VAT, provision of export subsidies and various other banking facilities and privileges. These incentives are subject to revision upon annually enacted Finance Act and individual Statutory Regulatory Orders (SROs). Companies located in EZs/EPZs are entitled for different sets of incentive package of tax exemption.

Bangladesh will offer additional incentives against foreign investments in power, energy, transport, and logistics as more development in these sectors to sustain the country’s economic growth, said high-ups in the government. The government is even ready to share some risks relating to the investment by forming joint-ventures.

Incentives for Foreign Investors

  1. Foreign investment is protected by Foreign Investment Promotion & Protection Act, 1980;
  2. 100% foreign equity is allowed;
  3. Presence of unrestricted exit policy;
  4. Tax holiday for 5-7 years for 23 selected sectors;
  5. Private power companies are allowed a tax holiday for 15 years;
  6. Accelerated Depreciation Allowance (ADA) is allowed instead of tax holiday for newly industrial units under specified schedule;
  7. Concessionary duty on imported machinery: 1% import duty on capital machinery and spares for 80% to 100% export oriented industry. This is applicable for initial installation or BMR/BMRE of the existing industries;
  8. 3% import duty on capital machinery and spares for other industries. This is applicable for initial installation or BMR/BMRE of the existing industries;
  9. Value Added Tax (VAT) is not payable for imported capital machinery and spares;
  10. Avoidance of double taxation on the basis of Double Taxation treaties;
  11. Full repatriation facilities of dividend and capital in the event of exit;
  12. Provision for granting permanent residence permit on investing US$ 75,000 and citizenship offer investing US$ 5,000,000.
Additional Incentives:
  • Lower living costs for the expatriates;
  • Wages and salaries are lowest in the region;
  • Duty draw back facilities;
  • Consistent adaptation of market liberalization and privatization policies;
  • Investment by NRBs is considered as FDI;
  • Up to 10% of public shares are retained for NRBs;
  • NRBs are allowed to retain foreign currency deposits in NFCD accounts;
  • Highest remittance senders are awarded with CIP;
Investing Stock Market

International investors are eligible to engage in Initial Public Offerings (IPOs) without regulatory restrictions. In addition, capital gains from listed securities are tax-exempt for private investors and lower tax rates apply to corporations and other organizations.

Foreign Investors also need to take into account the relevant tax associated with trading in the Dhaka Stock Exchange. Foreign individual investors only need to pay 25% tax on cash dividend, deducted at source. The rate is 20% for institutional investors.

Import Duty Exemption

International investors are eligible to engage in Initial Public Offerings (IPOs) without regulatory restrictions. In addition, capital gains from listed securities are tax-exempt for private investors and lower tax rates apply to corporations and other organizations.

Foreign Investment in Bangladesh Top Law Firm in Bangladesh Leading and Best Law Firm in Bangladesh
Allowance of Capital Repatriation

Full repatriation of invested capital, profits and dividends is allowed, subject to applicable taxes to make the process seamless in regards to the Procedure of foreign investment in Bangladesh.

Tax Holiday Facility

Tax holiday is allowed to industries subject to the relevant rules and procedures set by the National board of Revenue of Bangladesh (NBR). This may vary from 3-7 years depending on the location of the establishment. For instance, industries located in Dhaka and Chittagong Divisions (excluding three Hill Tract districts of Chittagong Division) are exempted for five years. This tax holiday scheme, which was scheduled to end in 2015, was extended until June 2019 to create an investor friendly atmosphere in Bangladesh. Tax holiday facilities are also available to industrial units and developers of economic zones for a term of 10 years and 12 years respectively.

Special Tax Exemption for Foreign Investors

Tax exemptions are usually allowed in respect of the following cases:

  • on royalties, technical know-how fees received by any foreign collaborator, firm, company and expert;
  • on income tax up to three years for foreign technicians employed in industries specified in the relevant schedule of the income tax ordinance;
  • on income of the private company undertaking physical infrastructure projects;
  • on capital gains from the transfer of shares of public limited companies listed with a stock exchange;
  • NGO registered with the NGO Affairs Bureau; and
  • income of the companies in certain other sectors identified in the income tax ordinance.
Avoidance of Double Taxation for Foreign Investors

For foreign investors, double taxation can be avoided on the basis of Bilateral Double Taxation Avoidance Treaties (DTTs). NBR is entrusted to negotiate Double Taxation Agreements (DTA) with foreign countries to promote FDI 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. 

It also provides exchange of information between treaty partners regarding evasion of tax. For instance, Bangladesh has double taxation treaties with Belgium, Canada, China, Denmark, France, Germany, India, Italy, Japan, Poland, Romania, Singapore, South Korea, Sri Lanka, Sweden, Thailand, The Netherlands, The United Kingdom and other countries.

Remittance of Profits for Foreign Investors

Remittance of profits of branches of foreign firms/companies, dividends/capital gains, salaries and savings by expatriates, royalty and technical fees, training and consultancy fees, receivables collected by shipping companies and airlines towards freight and passage can be effected through authorized dealers without prior approval of the Bangladesh Bank. Foreign entrepreneurs are, therefore, entitled to the same facilities as domestic entrepreneurs with respect to tax holiday, payment of royalty, technical know-how fees etc.

Business Profits and Tax Exemption for Foreign Investors

Generally five to seven years’ tax exemptions are available for many business investments. However, for electric power generation tax exemptions are provided for up to 15 years.

Dividend and Tax exemption for Foreign Investors

Dividends paid by a company resident in a Contracting State to a resident in the other Contracting State may be taxed in the other State.  However, such dividends may also be taxed in the Contracting State in which the corporation paying the dividends is resident and in compliance with the laws of that State, but where the beneficiary is the beneficial owner of the dividend, the tax paid shall not exceed 10% of the gross sum of such dividends (Article 10 of the Double Taxation Agreement).

Interest arising from Contract State

Interest occurring in a Contracting State and charged to a citizen of the other Contracting State may be taxed in another State. However, such interest may also be taxed in the Contracting State in which it exists and in compliance with the laws of that State, however if the beneficiary is the beneficial owner of the interest, the tax so paid shall not exceed 10% of the gross sum of the interest.(Article 11 of the Double Taxation Agreement).

Capital gain Derived by foreign Resident

Gains obtained by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other Contracting State. (Article 13 to prevent a double taxation agreement, Procedure of foreign investment in Bangladesh)

Repatriation of Investment Foreign Investment Law

Full restitution of the capital accumulated from foreign sources is permitted. Likewise, the gains and dividends accrued on foreign investment can be transferred in full.

If foreign investors reinvest their repatriable dividends and/or retained profits, they will be considered as new assets. Foreigners living in Bangladesh are required to pay up to 75% of their wages and will benefit from complete repatriation of their savings and retirement benefits.

In order to allow full repatriation of the capital invested, benefit and dividend, foreign investors will have to apply for repatriation approval from the Bangladesh Bank through an approved bank.

Foreign Private Investment (Promotion and Protection) Act, 1980, section 8 also states:

(1) In respect of foreign private investment, the transfer of capital and the returns from it and, in the event of liquidation of industrial undertaking having such investment, of the proceeds from such liquidation is guaranteed.

(2) The guarantee under sub-section (1) shall be subject to the right which, in circumstances of exceptional financial and economic difficulties, the Government may exercise in accordance with the applicable laws and regulations in such circumstances.

Foreign Investment in Bangladesh Top Law Firm in Bangladesh Leading and Best Law Firm in Bangladesh

Opening of Bank Accounts by Foreign Companies

A non-resident may open a Non-Resident Taka Account (NRTA) in the name of the proposed company/enterprise of foreign investors wishing to invest or set up a business in Bangladesh, without requiring prior approval from Bangladesh Bank. However, the account may only receive inward remittances from abroad.

After registration/commencement of the business, a new account in the name of the company may be opened following usual procedures and the account opened previously should be closed immediately and balances lying therein shall be transferred to the new Foreign Currency (FC) accounts and Non-Resident Foreign Currency Deposit (NFCD) accounts with foreign exchange brought from outside. Balance of these accounts are freely transferable abroad.

If for any reason, the proposed investment/incorporation does not take place, then the balance of the account, after meeting the required expenses, may be allowed to be repatriated without prior approval from Bangladesh Bank.

A foreign investor may also open and operate a Taka account freely with any bank while he is a resident in Bangladesh.

Non-residents may also open a Non-Resident Investor’s Taka Account (NITA) with any Authorized Dealer (AD) bank in Bangladesh with foreign exchange remitted from abroad through normal banking channel or by transfer of funds from non-resident investor’s foreign currency account for portfolio investment in Bangladesh.

Restriction and Prior Approval

As we mentioned above, foreign investment is allowed in most sectors. In certain sectors, all kinds of investment are prohibited, whereas in some sectors prior approval of government is required.

Local as well as foreign investment is restricted in the following four sectors:

  1. Arms and ammunitions and other military equipment and machinery;
  2. Nuclear power;
  3. Security printing and minting; and
  4. Forestation and mechanized extraction within the boundary of reserved forest.

There are 17 controlled sectors which require prior clearance/ permission from the respective ministries/authorities. These are:

  1. Fishing in the deep sea
  2. Bank/financial institution in the private sector
  3. Insurance company in the private sector
  4. Generation, supply and distribution of power in the private sector
  5. Exploration, extraction and supply of natural gas/oil
  6. Exploration, extraction and supply of coal
  7. Exploration, extraction and supply of other mineral resources
  8. Large-scale infrastructure project (e.g. flyover, elevated expressway, monorail, economic zone, inland container depot/container freight station)
  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 aviation
  14. Sea-bound ship transport
  15. Sea-port/deep sea-port
  16. VOIP/IP telephone
  17. Industries using heavy minerals accumulated from sea beach

Bangladesh Investment Development Authority (BIDA)

Established under Bangladesh Investment Development Authority (BIDA) Act 2016, the Bangladesh Investment Development Authority (BIDA) is the principal private investment promotion and facilitation agency of Bangladesh. The act was enacted on September 01, 2016.The act mandated BIDA for providing diversified promotional and facilitating services with a view to accelerating industrial development of the country. In addition, the government also entrusted BIDA with some more functions in its service list. Combining all, BIDA’s present functions can be categorized as follows:

  • Pre-investment information and counseling service.
  • Investor welcome service (faster immigration).
  • Registration/approval of foreign, joint-venture and local projects.
  • Registration/approval of branch/liaison/representative offices.
  • Approving work permit for the foreign nationals.
  • Facilitating utility connections (electricity, gas, water & sewerage, telecom etc.).
  • Assistance in obtaining industrial plots.
  • Approving remittance of royalty, technical know-how and technical assistance fees.
  • Facilitating import of capital machinery & raw materials.
  • Approving foreign loan suppliers’ credit, PAYE scheme etc.

Please visit BIDA website to learn further information

If you need professional help with branch office or liaison office or foreign investment, please contact us.

Leave a Comment

Your email address will not be published. Required fields are marked *

× Chat
Share via
Copy link