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Special investment areas offering multiple facilities to local and foreign investors

There are eight export processing zones across the country under the Bangladesh Export Processing Zones Authority (BEPZA) with the primary objective to provide special areas where potential investors would find a congenial investment climate free from cumbersome procedures.

opportunities Bangladesh special economic zones
Figure: Special investment areas are offering multiple facilities to local and foreign investors.

Besides, the government has planned to set up more than 100 special economic zones (SEZs) by 2030 across the country in all potential areas in Bangladesh including backward and underdeveloped regions with a view to encouraging rapid economic development through increase and diversification of industry, employment, production and export through Bangladesh Economic Zones Authority (BEZA).

Once completed, SEZs are expected to create jobs for 10 million people and produce products and services worth US$40 billion.

Both BEPZA and BEZA are administered by the Prime Minister’s Office.

Though they offer more or less same facilities to investors the main distinction of the two authorities are that BEPZA is mainly for export-oriented companies while BEZA provides land for both local and export markets, according to industry people.

“Export Processing Zones are mainly for 100 percent export-oriented companies and provide all required infrastructure with services,” BEPZA General Manager (communication) Nazma Binte Alamgir told the correspondent.

One investor will get all required services from security to export-import permit, utility under efficient management working for the last 30 years, she said adding EPZs offer ready to start operation facility.

The EPZs under BEPZA are Chittagong EPZ, Dhaka EPZ, Mongla EPZ, Ishwardi EPZ, Comilla EPZ, Uttara EPZ, Adamjee EPZ, Karnaphuli EPZ.

EPZ's under BEPZA

On the other hand, BEZA initially provides land where developers can set up required infrastructure, industry people said.

With the endeavor of establishing economic zones in potential areas of the country with a view to encourage rapid economic development through diversification of industries and creation of employment and increasing production and export, BEZA has till now got approval to establish 88 economic zones countrywide, one of its officials said.

Out of them, 59 are government and 29 are private EZs. Feasibility studies, land acquisition and identifying area specific social and environmental initiatives are underway for these approved EZs, he added.

The EZs developed under BEZA would be for both local and foreign markets, he noted.

BEZA would provide multiple incentives, to the developers of the Economic Zones as well as to the manufacturing unit investors, according to its officials.

Incentives for developer include:

  • 12 years income tax exemption
  • VAT exemption on electricity
  • Local purchase excluding petroleum products
  • Exemption from custom/excise duties and dividend tax
  • Exemption of stamp duty registration fees for land registration, stamp duty for registration off loan/credit document

Incentives for unit investors:

  • 10 years income tax exemption
  • Duty-free import of raw materials
  • EZs declared as a custom bonded area
  • No ceiling of FDI
  • 100% backward linkage of raw materials and accessories to sell for EOI in DTA
  • 20% sale of the finished product to DTA
  • Sub-contracting with DTA allowed

Provision of transfer of shares by foreign shareholders to local shareholders and investors:

  • Issuance of a work permit to foreigners is allowed up to 5% of total officers/employees of an industrial unit
  • Re-investment of remittable dividend to be treated as new foreign investment
  • Resident visa for an investment of US$75,000 or more and citizenship for an investment of US$ 10,00,000 or more

There are, however, different opinions from experts. About a year back, one of the Bangladesh Institute of Development Studies (BIDS) experts recommended that the Bangladesh Economic Zones Authority and the Bangladesh Export Processing Zones Authority should merge with each other as both are carrying out same types of tasks.

Read More: Sterling Group to set up apparel factory in Pabna EPZ

The expert argued that both BEZA and BEPZA are government-sponsored investment facilitators, helping domestic and foreign investors in setting up factories in the country and both of them are also operating under the Prime Minister’s Office.

Since 2009-10 Fiscal Year to 2016-17 Fiscal Year US$ 2.76 billion investment has been gained in BEPZA, according to its annual report of 2016-17.

EPZ enterprises exports stood at US$ 40.45 billion in FY 2016-17 from $28.22billion in FY of 2009-10, it revealed.

About 2,45,597 Bangladeshi nationals have directly employed in EPZs during the period.

Industrial park

There were moves to set up the first industrial park at Gazaria, Munshiganj for many years but the project had been shelved for over several years due to bureaucratic tangles.

The plan to set up the Palli was taken up in December 2005 and the apparel industry association in April 2006 found out a 300-acre Char land at Gazaria in Munshiganj, about 37 kilometers north-east of the capital.

The garment industrial park would have about 1,000 plots with infrastructural facilities, utility services, medical facilities, CETPs (central effluent treatment plants), day-care centers, roads, drainage facilities, waste-dumping yard, firefighting equipment, banks, insurance offices, and IT (information technology) parks.

Bangladesh Garment Manufacturers and Exporters Association (BGMEA) signed a memorandum of understanding with a Chinese company to develop the park in June 2016 which latter did not see the light.

The proposed apparel park was expected to blur the future of Bangladesh’s garment export, as competing countries are hastily implementing a lot of such parks to woo global buyers, who look for fully-compliant factories.

Also Read: BEZA to allot 500 acres land to BGMEA in Mirsharai EZ to upsurge apparel export

Later in 2018, the government decided to provide the BGMEA 500 acres of land inside a special economic zone located in Mirsarai of Chottagram in a bid to boost apparel exports in the years to come.

BEZA, which deals with these zones, believes that the move would help garment makers earn $50 billion from exports by 2021. The BEZA and BGMEA signed a memorandum of understanding in this regard in March last year to set up the garment park.

At least 57 garment companies have so far deposited booking money with the BGMEA for 370 acres of land.

The BGMEA said that it would invest $2.0 billion in the zone for setting up the factories, which is expected to generate employment for some 0.5 million people.

If anyone has any feedback or input regarding the published news, please contact: info@textiletoday.com.bd

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