Export Processing Zones (EPZs) are created by the People’s Republic of Bangladesh to promote export and create employment opportunity by attracting investment. The BEPZA is the official organ of the government to promote, attract and facilitate both foreign and local investment in the EPZs.
For more details on EPZs, visit the BEPZA website: www.epzbangladesh.org.bd
Only 100% export-oriented industries are entitled to set up factory in the EPZs. Investors who have established factories in the EPZs enjoy certain facilities, such as Customs bonded warehousing. Firms located in the EPZs will have to get registration/license from the concerned Customs Bond Commissionerate.
Customs have issued special rules to facilitate and monitor the import and export activities by the factories established in the EPZs. The relevant NBR SRO is titled “The Customs (Export Processing Zones) Rules, 1984”.
To download the Rules, click here.
The NBR also offers the facility for duty free import of vehicles by the firms/factories located in the EPZs under the SRO no. 151-Law/99/1787/Customs, dated 10 June 1999.
To download the SRO, click here.
Customs Bond Commissionerates, Dhaka and Chittagong administer the major Customs activities in the EPZs. Customs Bond Commissionerates have officials posted in the EPZs under their jurisdiction to monitor and discharge Customs related activities.
To access detailed Customs guidelines on the EPZs, click Standing Order No. 1/2014 of Customs Bond Commissionerate Dhaka.
Fiscal incentives offered by the NBR and enjoyed by the industrial units/factories located in the EPZs are highlighted below:
- Tax holiday for 10 years for the Industries to be established before 1st January, 2012;
- Duty free import of construction materials;
- Duty free import of machinery, office equipment, spare parts and vehicles (car, jeep, pick up, microbus);
- Duty free import of raw materials;
- Avoidance of double taxation;
- Exemption from dividend tax; and
- Accelerated depreciation on machinery or plant.
Other incentives enjoyed by the industrial units/factories located in the EPZs are highlighted below:
- 100% foreign ownership permissible;
- Full repatriation of capital, dividend and fees related royalty and consultancy;
- Enjoy MFN (most favored nation) status;
- No ceiling on foreign and local investment;
- Foreign Currency loan from abroad under direct automatic route;
- Non-resident Foreign Currency Deposit (NFCD) Account permitted; and
- Operation of FC account by ‘B’ and ‘C’ type Industries allowed.
Facilities for factory owners in the EPZs are:
- Export and import activities are conducted on the basis of Import Permit (IP) and Export Permit (EP) issued by the BEPZA;
- Work permits issued by the BEPZA;
- Secured and protected bonded area;
- Off-shore banking;
- Import on Documentary Acceptance (DA) basis;
- Back to Back L/C;
- Import and Export on CM basis;
- Import from DTA (Domestic Tariff Area);
- 10% sale (export) to DTA;
- Customs clearance at factory site;
- Simplified sanction procedure;
- Sub-contracting with export oriented industries inside and outside the EPZ; and
- Relocation of foreign industries.
Three types of investors set up their factories in EPZs. These are:
Type – A : 100% foreign owned including Bangladesh nationals ordinarily resident abroad.
Type – B : Joint venture between foreign and Bangladesh entrepreneurs resident in Bangladesh.
Type – C : 100% Bangladesh entrepreneurs resident in Bangladesh.
At present there are 8 EPZs in Bangladesh. These are:
- Dhaka Export Processing Zone, Savar, Dhaka
- Adamjee Export Processing Zone, Siddhirganj, Narayanganj
- Chittagong Export Processing Zone, South Halishahar, Chittagong
- Karnaphuli Export Processing Zone, North Patenga, Chittagong
- Comilla Export Processing Zone, Comilla
- Mongla Export Processing Zone, Mongla, Bagerhat
- Ishwardi Export Processing Zone, Ishwardi, Pabna
- Uttara Export Processing Zone, Nilphamari