|Year||Total FDI Flow to Bangladesh||FDI from the UK||FDI from UK as % of Total|
Foreign investment is encouraged in all sectors except for the following four sensitive sectors:
A foreign company needs to register its entity to the office of the Registrar of Joint Stock Companies and Firms (RJSC) and also has to obtain a trade license from the local City Corporation office and get an income tax and VAT certificates from the National Board of Revenue for operating in Bangladesh.
To register a company it has to submit the following papers to the RJSC office along with applicable registration fee. However, it does not need to have the Name Clearance from RJSC which is however mandatory for a local companies.
Note: All the above mentioned forms are available the RJSC website at:http://www.roc.gov.bd/site/forms/1a138a8a-7a30-4f11-adc8-a2db55a773dc/Company/TO-forms
A company has to pay the required fees for registering with RJSC. For filing 6 documents (5 filled in forms @ BDT 200.00 per document plus 1 Memorandum & Articles of Association, @ BDT 200.00) BDT 1,200.00).
Similar to the local entities, foreign companies and investors are liable to pay income tax and corporate tax as per existing rules and procedures.
7a. Income Tax
Income tax is dependent on whether an individual is classified as resident or non-resident in a given tax year. An individual is classified as a resident if they stay in Bangladesh for at least 182 days in one income year, or for 90 days if they have previously resided in Bangladesh for more than 365 days in the four preceding years. Residents are subject to progressive rates of income tax, which range from 10% to 30%. Non-residents, with the exception of Bangladeshi non-residents, are subject to pay a flat rate of 30%.
7b. Corporate Tax
The following table provides a description of corporate tax rates presently prevailing in Bangladesh:
|Sl. No.||Nature of the Company||Rate (%)||Condition/Rebate|
For publicly traded companies (except bank, insurance, leasing and other financial institutions)
Any listed company which declares a dividend at 20% or higher, will benefit from a tax abatement at 10%.
Any listed company which declares a dividend at 10% or lower, or does not distribute a dividend approved/ declared by SEC, will be required to pay tax at 37.5%.
For non-publicly traded companies (except bank, insurance, leasing and other financial institutions)
Bank, insurance, leasing and other financial institutions
|04||For mobile phone operator companies||
|If the mobile phone operator company transforms to a publicly traded company offering at least 10% of paid up capital in an IPO, then the tax rate will be 35%.|
Source: Bangladesh Board of Investment Guidelines (Page 60)
A non-resident may open a Non-Resident Taka Account (NRTA) in the name of the proposed company/enterprise of foreign investors wishing to invest or set up a business in Bangladesh, without requiring prior approval from Bangladesh Bank. However, the account may only receive inward remittances from abroad.
After registration/commencement of the business, a new account in the name of the company may be opened following usual procedures and the account opened previously should be closed immediately and balances lying therein shall be transferred to the new Foreign Currency (FC) accounts and Non-Resident Foreign Currency Deposit (NFCD) accounts with foreign exchange brought from outside. Balance of these accounts are freely transferable abroad.
If for any reason, the proposed investment/incorporation does not take place, then the balance of the account, after meeting the required expenses, may be allowed to be repatriated without prior approval from Bangladesh Bank.
A foreign investor may also open and operate a Taka account freely with any bank while he is a resident in Bangladesh..
Non-residents may also open a Non-Resident Investor’s Taka Account (NITA) with any Authorized Dealer (AD) bank in Bangladesh with foreign exchange remitted from abroad through normal banking channel or by transfer of funds from non-resident investor’s foreign currency account for portfolio investment in Bangladesh.