Bangladesh stands out as an investment-attractive country among many others right now. Why is that? It offers the best tax incentives.
Also, the country’s location, vast population, and growing economy make it unique to investors.
Another essential factor about Bangladesh is its Special Economic Zones (SEZs). SEZs speed up the legal process and offer many extra benefits, ultimately helping investors start and run new businesses smoothly.
Here, we’ll discuss Bangladesh’s economy, where SEZs and tax exemptions are essential. One more significant aspect is FDI, or foreign direct investment, which creates new and innovative ideas. So, find out how these things make Bangladesh a better investment choice for investors.
Understanding Tax Incentives in Bangladesh
Tax incentives are advantages your country gets from the government.
We’re currently seeing many examples of tax incentives being used in Bangladesh. The goal is to attract as many foreign investors as possible.
Tax incentives play a very important role in a country’s economic growth. So, it’s a win-win situation for Bangladesh since the country is using the benefits of giving tax incentives and creating more jobs.
You may say that these incentives are there to reward the investors as an encouragement.
How? These incentives create an atmosphere for investors that motivates them to invest more in Bangladesh. To achieve this, you have to educate both parties so that they are aware of corporate income tax regulations.
Corporate Income Tax Exemptions
Bangladeshi companies have been using corporate income tax holiday policies for some time. These policies cut additional costs and help a country make more money.
According to data, it’s been ten years since businesses are using the benefits of SEZs.
However, to use these advantages, financial companies must register with the Bangladesh Investment Development Authority and then sign up with the National Board of Revenue to receive any tax exemptions.
Import Duty Exemptions
It is another essential part of tax incentives in Bangladesh.
With import duty exemptions, many startups can sometimes cut their initial cost by not paying for capital equipment and other things. That’s why, for better outcomes, companies should register with BIDA, BEZA, or other agencies.
Remember that these companies will need permission from the Chief Controller of the Import and Export office. The board doesn’t permit businesses that are not qualified for this incentive.
Role of the Bangladesh Investment Development Authority (BIDA)
Bangladesh Investment Development Authority (BIDA) is beneficial for the country’s private investment and industrial development. The process will get you multiple aftercare facilities, which primarily work for overseas businesses.
To cut your business’s official regulatory red tape, you’ll need BIDA. This way, it unleashes the benefits of tax incentives. You’ll also receive complete guidance and support from BIDA and take full advantage of the tax benefits.
The help comes in the form of longer corporate tax holidays, import duty exemption on capital goods and financial support incentives.
BIDA’s One-Stop Service (OSS) for Investors
BIDA takes help from its One-Stop Service (OSS) and offers services from a single source. It can provide investors with more accessible investment opportunities. You get assistance regarding business registration, visa assistance, and utility connections.
Investors can benefit from using OSS for tax incentives. The process speeds up the approval process and reduces the paperwork time. It ensures that companies receive tax incentives and experience flexibility while conducting their businesses.
Registration and Approval
It’s pretty easy for anyone to get tax incentives through BIDA!
First, you must submit your application and ensure that you have provided all the necessary details. After your submission, BIDA will review the application.
To successfully complete this, you also need approval from the concerned offices, like BEZA or BEPZA. Once the proposal is approved, businesses will receive tax incentives. This ultimately helps them save money with higher margins.
Special Economic Zones (SEZs) in Bangladesh
We know that SEZs are specific areas with special rules and infrastructure to attract foreign investors.
In Bangladesh, SEZs offer many tax incentives. These zones are beneficial because they boost economic growth by providing more accessible investment opportunities.
So, here, we’ll discuss about SEZs briefly:
Benefits of SEZs
If you’re doing business in any special economic zone, you’ll get some tax incentives where you won’t have to pay corporate income tax and import duties. Any investor will find it helpful as they can do business without spending too much money.
Also, with SEZs, you’ll get more than just tax exemptions. There’ll be more accessible company rules and good infrastructure. Another perk is that many companies under SEZs can use better facilities.
Major SEZs in Bangladesh
An important SEZ in Bangladesh, Bangabandhu Sheikh Mujib Shilpa Nagar (BSMSN), is Situated at a prime location on the Dhaka-Chittagong industrial corridor. It provides a high level of connectivity and amenities.
Its potential can be underscored by the fact that companies like Honda and Sumitomo have invested here.
Various other important and controlled SEZs, such as Mirsarai Economic Zone and Anwara Economic Zone, also exist in this region. Such zones have drawn in massive investments, and many companies are thriving in them.
Their roles in enhancing economic growth and attracting FDI have been further strengthened by the strategic locations and supporting infrastructure for these SEZs.
Conclusion
To wrap up, tax incentives are very important to attract foreign investors to Bangladesh. These incentives provide more money and less cost to businesses. Since Bangladesh is using the tax incentive strategy, it has become a better choice for investors than many other countries. Foreign companies are trying to invest more in Bangladesh’s SEZs.
Also, these special economic zones provide flexible business opportunities to investors. That’s why, for a better economy, our advice for Bangladesh would be to continue to use tax incentives and SEZs and attract as many investors as possible.