Bridge overview
An abridge overview of Bangladesh ICT Sector
  • In recent years a thriving ICT industry has emerged in Bangladesh.
  • It can be described with four simple words high quality, low cost.
  • Many of Bangladeshi ICT companies have considerable experience with overseas clients and a successful track record in managing outsourced software projects for foreign companies.
  • Low salary cost and low production cost in general are a major attraction for the ICT industry in Bangladesh. A trained software programmer in Bangladesh earns about US$25 in Bangladesh a fraction of salaries in Europe or USA and still less than in other countries in the region.
  • More than 40 Universities and 60 colleges offer ICT courses at Bachelors and Masters levels, many of them cooperates with overseas universities and institutions in the US, in Europe and in Australia and guarantee international standards.
  • ICT Business Promotion Council has been formed under Ministry of Commerce to have focused-activities on ICT on Private- Public partnership.

Fiscal and Financial Incentives for ICT sector:

1.There will be no discrimination in case of duties and taxes for the same type of industries set up in the public and private sectors.


2.(a) Tax holiday facilities will be available for five or seven years depending on location of the industrial enterprise. Tax holiday facilities will be provided in accordance with the existing laws. The period of such tax holiday will be calculated from the month of commencement of commercial production. Tax holiday certificate will be issued by NBR for the total tax holiday period within ninety day of submission of application.


(b) Industrial under takings not enjoying tax holiday will enjoy accelerated depreciation allowance. Such allowance is available at the rate of hundred percent of the cost of the machinery or plant if the industrial undertaking is set up in the areas falling within the cities of Dhaka, Narayangong, Chittagong and, Khulna and areas within areas of ten mils from the municipal limits of those cities. If the industrial undertaking is set up elsewhere in the country, accelerated depreciation is allowed at the rate of eighty percent in the first year and twenty percent in the second year.


3. The present structure of confessional duties on imported capital machinery, based on area demarcation. Viz. "Developed" and "Underdeveloped" will remain in force. Value added tax (VAT) is not payable for import of capital machinery's and spares. In addition to other measures, creation of and Equity Development Fund will be considered for providing assistance to the industrial entrepreneurs in underdeveloped areas.


4.There will be differential duty structure for imported raw materials, intermediate inputs and finished products in ascending order. Tariff anomalies, if any, will be reviewed in accordance with the existing rules and regulations.


5. In order to eliminate any unfair competition, rationalization will be undertaken keeping in view the interests of the entrepreneurs as well as consumers. Bangladesh Tariff commission will regularly review such cases and recommend necessary measures.


6.Industrial enterprises in the private sector outside the Export processing zones (EPZS), and joint venture (Type-B) and Local (Type-C) industries units in the EPZs may, with prior BOI approval, enter into supplier's credit and other foreign currency loan contracts with lenders abroad. 100% foreign owned (Type-A) industrial units located within the EPZs may freely borrow abroad without any prior approval. Remittance abroad towards repayments of principal and interest on these borrowings may be sent through banks without prior Bangladesh Bank approval.


7.Special incentives will be provided to encourage non-resident Bangladeshi (NRSs) for investment. In case of their investment in Bangladesh, they will enjoy facilities similar to those given to the foreign investors. In case of initial public offering (IPO) of shares, the Security and Exchange Commission (SEC) will reserve ten per cent of the shares for the NRBs. Furthermore; they can maintain foreign currency deposits in the Non-resident Foreign Currency Deposit (NFCD) Account.


8.Special fiscal incentives may be provided to industries identified as the "Thrust Sectors" as well as to small and cottage industries. Special financial arrangement may, form time to time, be designed by the Government in support of these sectors.


9.An Entrepreneur will not be required to pay transfer fee and/or capital gain tax in case (s) he wants to use his/her own land to establish a new enterprise (duly registered with the BOI) under his/her ownership or wants to convert his/her existing enterprise into a "limited company" without changing the ownership structure.


10.Measures will be taken to create industrial fund in the Bangladesh Band, strengthen specialized Banks, establish country fund, expand capital market, create venture capital and rationalize tax holiday system.


11.The rate of stamp duty will be rationalized for the purpose of mortgaging of immovable property in the banking system.


Glimpse of Special Services & incentives for foreign investors
  • Tax holidays for up to seven years.
  • Low import duties in general and no import duties for export oriented industries.
  • Exemption of income tax for expatriates for several years.
  • Facilities for full repatriation of invested capital and profits.
  • 100% foreign equity participation.

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