Bangladesh offers an abundant supply of disciplined, easily trainable and low-cost work force suitable for any labor-intensive industry. Of late, there is an increasing supply of professionals, technologists and other middle and low level skilled workers. They receive technical training from universities, college, technical training centers, polytechnic institutions etc. The expenditure incurred by an employer to train his employee is exempted from income tax.
The minimum age for workers in Bangladesh is 16 years in factories and establishments. Contracts are made in the form of a letter of offer. Workers may also be engaged on verbal agreements. In government organizations and in some private organizations as well, a probationary period exists for skilled or semi-skilled workers varying between three month's to one year. During this period either party may serve one month's notice for termination from or giving up to the job. In the private sector, the dignity of labor is ensured in accordance with the principles enunciated in the International Labour Organization (ILO) convention and recommendations.
Employment Status (in million)
|Labor force characteristics||MES 2009 (m)*||LFS 2005-06 (m)*|
|Economically active population (15 years+)||53.7||49.5|
|Self employed/own account workers||20.0||19.9|
|Unpaid family helper||10.8||10.3|
*MES = Monitoring on Employment Survey
LFS = Labour Force Survey
m = million
According to the survey Report on monitoring and employment survey-2009, the labor force increased from 49.5m in 2006 to 53.7m in 2009. The growth rate has been 2.7% a year. 62.7% of the population are of age 15 years and over and out of them 59.3% are economically active and 40.7% are economically not active.
Labor Force 2009-10, by sector, %
Source: Bangladesh Economic Review-2010 (Bangla version), Ministry of Finance
In Bangladesh the following major labor laws are now in operation:
- Labor Acts 2006
- Private Road Transport Labor Welfare Fund Law 2005
- Labor Welfare Foundation Law Law 2006
- Minimum Wages Board Laws
The main labor policies are:
- Child Labor Policy
- Domestic Worker Protection and Welfare Policy 2010
Note: For more detailed please visit Ministry of Labour and Employment, GOB
Step By Step Procedure for Investment in Bangladesh
Implementing a private sector industrial project in Bangladesh either local, joint venture or 100% foreign follows a rather simplified process. Once an investor to do business in Bangladesh, the first thing is to have relevant, sufficient and reliable information on the investment and business climate, opportunities, competitive strengths, industry structure etc.
Trade Bodies of Bangladesh
There are many trade bodies in Bangladesh. The Federation of Bangladesh Chambers of Commerce and Industry (FBCCI) is the apex representative organization safeguarding the interest of the private sector in trade and industry in Bangladesh. The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) is the officially recognized apex apparel export trade body of 4,490 apparel manufacturing units.
The BGMEA also acts as a pressure group to protect the interests of the RMG sector and acts as a facilitator of trade negotiations with global trade bodies such as the WTO, ILO, and UNCTAD. MCCI, established in 1904, is the oldest and most representative trade organization of Bangladesh having in its membership roll most leading commercial and industrial organizations including almost all the public sector corporations and all multinational companies. The services of the Chamber’s Tribunal of Arbitration, which has been adjudicating commercial disputes for a long time, have earned wide-spread recognition within the country and abroad.
Chambers of Commerce
Dhaka Chamber of CommerceAIndustry
65-66 Motijheel C/A
Phone : 880-2-9552562
Fax : 880-2-9560830
E-mail : firstname.lastname@example.org
URL : www.dcci.org.bd
Metropolitan Chamber of Commerce and Industry
122-124, Motijheel C/A, Dhaka-1000, Bangladesh
Phone : 9565208-10
Fax : 9565211, 9565212
E-mail : email@example.com, firstname.lastname@example.org
URL : http://www.mccibd.org/
The Federation of Bangladesh Chambers of Commerce & Industry (FBCCI)
60, Motijheel C/A., Dhaka, Bangladesh
Tel : 9560482, 9560102-3
URL : www.fbcci-bd.org
Association of Air Cargo Agents of Bangladesh (AACAB)
House 45 (3rd Floor), Road 17, Banani Dhaka
Tel: 9881663, Fax: 9881664
Association of Travel Agents of Bangladesh (ATAB)
Sattara Center (15th Floor), 30/A Naya Paltan
VIP Road, Dhaka-1000, Bangladesh
Phone : 9332728, 9332712
Mobile : +880-1715-228953
Fax : 88-02-8355595
E-mail : email@example.com, firstname.lastname@example.org
URL : www.atab.org.bd Bangladesh Association of International Recruiting Agencies (BAIRA)
BAIRA Bhaban, 130, New Eskaton Road, Dhaka-1000, Bangladesh
Tel : 8359482, 9345587, 9331244
Fax : 880-2-9344979
E-mail : email@example.com
URL : www.hrexport-baira.org
Bangladesh Garment Manufacturers & Exporters Association (BGMEA)
BGMEA Complex, 23/1 Pantha Path Link Road, Kawran Bazar, Dhaka-1215
Tel : 8140310-20
Fax : 8140322, 8140323
URL : www.bgmea.com.bd
Foreign Trade Bodies in Bangladesh
American Chamber of Commerce in Bangladesh
Room # 319, Ruphoshi Bangla Hotel, Dhaka, Bangladesh
Tel : 880-2-8330001, 8358060,
Fax : 880-2-8312975, 9349217,
E-mail: firstname.lastname@example.org, email@example.com
URL : www.amchambd.org
British Trade Center
United Nation Road, Baridhara, Dhaka-1213, Bangladesh
Tel : 8822705-9
Fax : 8823437
Foreign Investor's Chamber of Commerce and Industry Bangladesh (FICCI)
"Shama Homes", Apt. # C-3
House # 59, Road # 1, Block # I,
Phone: 9893049, 9892913 Fax: 9893058
E-mail: firstname.lastname@example.org, email@example.com
Japan External Trade Organization (JETRO)
Sharif Plaza 3rd Floor
39, Kamal Ataturk Avenue, Banani, Dhaka-1213, Bangladesh
Tel: 8818222, 8818223
Fax : 8818224
E-mail : Liton_Sarker@jetro.go.jp, Shariful_Alam@jetro.go.jp
Mobile : +880-191-9539640 (Liton Sarker), +880-191-9199884 (Shariful Alam)
Korean Trade Center, Dhaka (KOTRA)
Molly Capita Centre, 7th Floor,
76 Gulshan Avenue, Gulshan-1, Dhaka-1212, Bangladesh
Tel : 8824218
Fax : 8823068
E-mail : firstname.lastname@example.org
URL : http://www.kotra.org.bd/index.jsp
Trade Center of China
Plot # 2 & 4, Block-1, Road # 3, Baridhara, Dhaka-1212, Bangladesh
Tel : 8824862, 8825272
Fax : 8823004
- export-oriented industries;
- industries in the Export Processing Zones;
- high technology products that will be either import-substitute or export-oriented;
- undertaking in which more diversified use of indigenous natural resources is-possible;
- basic industries based mainly on local raw materials;
- investment towards improvement of quality and marketing of goods manufactured and/or increase of production capacities of existing industries;
- and labour intensive/technology intensive/capital intensive industries
The gradual liberalization of industrial policy in Bangladesh started with the announcement of Industrial Policy, 1982. This was followed by successive reforms and amendments within the broad theme of a liberalized and competitive market economy.
Salient features of the policyThe Industrial Policy, 1991 (Revised in 1992) is based on the philosophy of market economy. The objectives of the Policy are to:
- develop the industrial sector in order to increase its contribution to the gross domestic product, income, resources and employment;
- expand industries by putting more emphasis on development of the private sector and in this respect to make the role of the government 'promotional' rather than 'regulatory';
- encourage domestic and foreign investment in overall industrial development;
- develop export-oriented, export-linkage and efficient import-substitute industries
- encourage specially the development of small & cottage industries;
- expedite development of labour intensive industries through acquisition and improvement of appropriate technology;
- encourage the development of agro-based and agro-supportive industries;
- stimulate development of industries based on indigenous raw materials and indigenous technology;
- motivate investment in the intermediate and basic industries;
- confine the role of the Government particularly in establishing strategic and heavy industries and to improve efficiency of the public sector;
- create possible opportunities for revitalizing and rehabilitating sick industries;
- make effective arrangements for improving standards and controlling quality of products; and
- take appropriate measures for preventing environmental pollution and maintaining ecological balance.
Board of Investment (BOI)
BOARD OF INVESTMENT (BOI) The Government of Bangladesh established the Board of Investment (BOI) in 1989 for accelerating private investment in Bangladesh. The Board, headed by the Prime Minister of the Republic and represented by Ministers and Secretaries of the concerned Ministries, is vested with necessary powers to take decisions for speedy implementation of new industrial projects and provide operational support services to the existing ones.The major functions of the Board are as follows:
- promotion of investment;
- providing all types of facilities for capital investment and rapid industrialization
- registration of industrial projects, foreign loan agreements, royalty, technical know-how; technical assistance agreement wherever required;
- providing assistance to avail infrastructure facilities for industries;
- issuing work permit to expatriate personnel working in private sector industrial enterprises;
- providing import facilities to industrial units in the private sector;
- approval of the terms and conditions of foreign private loan and suppliers' credit beyond the prescribed limit;
- approval of payment of royalty, technical know-how and technical assistance fee to foreign nationals/organizations beyond the prescribed limits; and
- Recommendation for allotment of land in the industrial areas/estates for industrial purpose.
- In addition, BOI assists the investors in obtaining the following services:
- electricity, gas and water connection;
- sewerage connection;
- all kinds of telecommunication facilities;
- custom clearance for imported machinery, spare-parts and raw materials;
- clearance regarding environment pollution; and
- all other facilities and services that may be required for speedy setting up of an industry.
There is an Executive Council of BOI consisting of an Executive Chairman and Members entrusted with the responsibility of creating a congenial climate for industrial investment in Bangladesh by simplifying the procedural matters and providing necessary facilities and services to the investors.
The decisions of the Board are deemed as decisions given by the Government and are required to be implemented by all concerned agencies.
Public / Reserve SectorIn the Industrial Policy, 1991 (revised in 1992) industries earmarked for only public sector investment are included in the Reserve Sector. These are:
- Arms, ammunitions and other defiance equipment and machinery;
- Production of nuclear energy;
- Forest plantation and mechanized extraction within the bounds of reserved forests
- Security printing (currency notes) and minting; and
- Air transportation and railways.
All sectors excepting the aforementioned reserved industries are open for investment by the private sector. Air transportation to certain routes within Bangladesh has been opened for private sector investment.
Role of the Private Sector
In the Industrial Policy, the role of the private sector has been recognized as a predominant one. Except reserve sectors, private sector investment has been kept open without any ceiling and with the only formality for automatic registration. . Private investment both local and foreign or under joint venture between local and foreign or with public sector is allowed.
To protect environment, public health and national interest the Government may frame rules from time to time for certain industries and such industries can be established subject to these rules. These industries will be treated as Regulated Industries.
Sanctioning / Registration Authorities
|of Investment||of all industrial projects in the private sector outside the authorities of BSCIC and BEPZA.
For institutional facility purposes, registration of industrial projects financed by Commercial Banks or by different financing institutions outside the authorities of BSCIC & BEPZA.
|Small and Cottage Industries Corporation (BSCIC)||of industrial projects having capital investment not exceeding Tk. 30.00 million (for BMRE maximum Tk. 45.00 million)|
|Export Processing Zones Authority (BEPZA)||of all projects to be located in the EPZs|
|Institutions (FI) and Commercial Banks (CB) including Development Financing Institutions (DFI) and Nationalized Commercial Banks (NCB).||and financing of projects having investment of any amount.|
Sponsoring Agencies and Their Areas of Responsibilities
The term 'Sponsoring Agency' means an agency engaged in promoting, assisting, supervising and administering as well as offering pre & post-registration assistance to industries. The list of sponsoring agencies responsible for private sector industrial development and their respective areas of responsibilities are as follows:
|Name of the Sponsoring Agencies||Areas of Responsibilities|
|of Investment (BOI)||Industries under private sector other than mentioned at serial nos. 2 and 3 below.|
|Export Processing Zones Authority (BEPZA).||Located in EPZs.|
|Small and Cottage Industries Corporation (BSCIC).||and cottage industries|
To know more details Investment in Bangladesh, please visit the website of Board Investment of Bangladesh:
Export Processing Zones (EPZs)
Export Processing Zones (EPZs) are export oriented industrial enclaves which provide the infrastructures, the facilities, administrative and support services for a wide variety of enterprises. Bangladesh’s highly successful EPZs in Dhaka and Chittagong are now complemented by new EPZ developments and other valuable real estate developments around the country.
The Bangladesh Export Processing Zones Authority (BEPZA) is the official organ of the government to promote, attract and facilitate foreign investment in the Export Processing Zones. The primary objective of an EPZ is to provide special areas where potential investors would find a congenial investment climate, and location free from cumbersome procedures. Businesses from 32 countries have so far invested in the existing zones.
There are currently eight zones with others due to open in the next few years.
If you are interested in setting up your business in an EPZ, the Board of Investment will be pleased to advise you and introduce you to BEPZA.
Incentives & Facilities
- 10 years tax holiday for the Industries to be established before 1st January, 2012 and Industries to set up after 31st December, 2011 tax holiday period will be:
- Duty free import of construction materials
- Duty free import of machineries, office equipment & spare parts etc.
- Duty free import and export of raw materials and finished goods
- Relief from double taxation
- Exemption from divident tax
- GSP facility available
- Accelerated depreciation on machinery or plant allowed
- Remittance of royalty, technical and consultancy fees allowed
- Duty & quota free access to EU, Canada, Norway, Australia etc.
|Tax exemption period||Rate of tax exemption|
|First 02 years (1st and 2nd Year)||100%|
|Next 02 years (3rd and 4th Year)||50%|
|Next 01 years (5th Year)||25%|
- 100% foreign ownership permissible
- Enjoy MFN (most favored nation) status
- No ceiling on foreign and local investment
- Full repatriation of capital & dividend
- Foreign Currency loan from abroad under direct automatic route
- Non-resident Foreign Currency Deposit (NFCD) Account permitted
- Operation of FC account by 'B' and 'C' type Industries allowed.
- No UD, IRC, ERC and renewal of Bond license
- Work permits issued by BEPZA
- Secured and protected bonded area
- Off-Shore banking available
- Import on Documentary Acceptance (DA) basic allowed
- Bank of Back L/C
- Import and Export on CM basis allowed
- Import from DTA (Domestic Tariff Area)
- 10% sale to DTA (Domestic Tariff Area)
- Customs clearance at factory site
- Simplified sanction procedure
- Sub-contracting with export oriented Industries inside and outside EPZ allowed
- Relocation of foreign industries allowed
- Accords Residentship and Cityzenship
- One Window same day service and simplified procedure.
Year-wise Investment in EPZ
|2011-12 ( March,12)||264.68||2382.38|
Overview of EPZ
|Name of EPZ||No. of industries||Investment (m US$)||Export (m US$)||Employment|
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