#1ECONOMIC TT AUTHORITY ZONES BANGLADESH ECONOMIC ZONES AUTHORITY ** বাংলাদেশ সরকার Special Economic Zones of Bangladesh -Your Safe Destination for Investment ** Mohammed Ayub Additional Secretary Bangladesh Economic Zones Authority Monem Business District, 111, Bir Uttam C.R. Dutta Road, Level 12 Karwanbazar, Dhaka-1205 Bangladesh. E-mail: [email protected], [email protected] Website: www.beza.gov.bd#2গণপ্রজাতন্ত্রী ** বাংলাদেশ ANGLADES ECONOMIC AUTHORIT BANGLADESH ECONOMIC ZONES AUTHORITY Bangladesh has embarked into an ambitious journey of industrial development and economic progress সরকার ** "Vision 2021 incorporates participatory democracy and efficient and honest governance, which, drawing upon a vibrant private sector, will transform Bangladesh into a major commercial hub through creating a competitive economic environment sustained by a well-trained, skilled workforce" 1971 Inception 2016 Industrialization 2021 Transformation Need to transform Bangladesh by 2021 into a middle income country, free from economic disparity, built upon strong democratic foundations and well-governed institutions#3গণপ্রজাতন্ত্রী ** বাংলাদেশ সরকার ** ANGLADES ECONOMIC AVC ZONES AUTHORITE Bangladesh therefore possesses the key ingredients for Investment • Significant access to developed countries • Access to markets of neighbouring countries • Liberal FDI policy • Treaties with countries to avoid double taxation • Industry oriented policy Access Macro Economic to Market Parameters Policy Support Bangladesh Strategic Location • Demographic Dividend- Youth Young Workforce Low Cost of Dong Business • Vibrant pool of talented and qualified young BANGLADESH ECONOMIC ZONES AUTHORITY • Consistent GDP growth • Increase in per capita income • Rising FDI and foreign trade • Located between India and China • Well connected to South East Asian Region • Access to Waterways • May evolve as Trade Hub • Cost of doing business is low among the developing countries and its South Asian counterparts population Economic Zones are placed to harness the potential of Industrial Development#4গণপ্রজাতন্ত্রী বাংলাদেশ ★ ★ সর সরকার ** BANGLADES TROMIC ZONES ALI Why Bangladesh? Macroeconomic Perspective: Growth Trend and Outlook BANGLADESH ECONOMIC ZONES AUTHORITY 7.60 7.40 7.20 7.00 6.46 6.52 6.06 6.55 6.01 5.57 5.05. 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2018-18 2018-19 Actual Projection The Bangladesh economy continues to achieve robust real GDP growth despite the global economic slowdown (average GDP growth for the last 5 years is 6.32 percent). Real GDP growth is expected to remain resilient in the medium term#5গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** BANGLADES ECONOMIC BANGLADESH ECONOMIC ZONES FUTHORITY AUTHORITY 8.0 7.5 7.0 6.5 6.0 5.5 5.0 4.5 4.0 3.5 3.0 4.9 4.6 5.4 5.2 Why Bangladesh? Resilient Growth..... 4.9 5.9 Casualty 650 68% of country affected, 1100 people, FY95 FY96 FY97 FY98 5.3 Severe flooding, FY99 FYOO FY01 Tropical cyclone 17,000 cattle deaths, 26,564 livestock killed, 16,000 km of roads Severe flooding, 38% of country flooded, 36 mil. people affected, 27,970 km of roads damaged Cyclone Sidr: 3406 deaths, 1.5 mil. homes damaged, 1,778,507 livestock killed. Major floods: 831 deaths, 18% of the country affected, 28,723 km of roads damaged, 40,700 livestock killed Source: Towards New Sources of Competitiveness, Volume 1, World Bank, March 2014 Cyclone Aila: 150,131 livestock killed, 8854 km of roads damaged 4.4 5.3 6.3 Severe cyclone East Asian crisis Severe cyclone, Post 9/11 300,000 affected, slowdown MFA phase Oil and food Global recession Oil price rise, MENA 8755 homes destroyed out price unrest, crisis Japan Tsunami 6.6 6.4 6.2 5.7 FY04 FY05 FY06 FY07 FY08 FY09 6.1 6.2 6.0 FY10 FY11 FY12 FY13#6গণপ্রজাতন্ত্রী GLADESH ECONOMIC AIC ZONES AUTHORIT BANGLADESH ECONOMIC ZONES AUTHORITY Macroeconomic Perspective: Inflation Scenario বাংলাদেশ সরকার ★ ★ সর ** 5.5 5 6.5 6 8.5 7.5 7 Jul-14 8 9 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Gener-Mar-15 Apr-15 May-15 Jun-15 Non-Food General inflation has fallen down steadily; On February 2016, average and point-to-point inflation were 6.15 and 5.62 percent respectively; Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 The government's prudent fiscal and monetary management is the determining factors for this moderate inflation. Given the lower oil and commodity prices and domestic crop outlook overall inflation will likely to continue its decline.#740 30.1 গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** GLADESH ECONOMIC AUTHORIT BANGLADESH ECONOMIC ZONES AUTHORITY Why Bangladesh: Demographic perspective Percentage distribution of working age population by sex and age group 5.5 65+ 5.6 Female 3.3 -64 Male 3.4 3.45-59 3.4 4.3 50-54 4.3 4.9 45-49 4.7 5.1 40-44 5.5 6.4 35-39 6.2 7.9 30-34 7.6 9.2 25-29 8.7 10.3 20-24 9.0 9.6 15-19 9.5 0-14 20 10 0 10 20 20 30 20 30 30 WORKING AGE 32.0 40 Working age population: 15+: 106.3 million of which 85.83 million is over 65 years old#8গণপ্রজাতন্ত্রী ** বাংলাদেশ সরকার ** ANGLADES NOMIC ONES ALI BANGLADESH ECONOMIC ZONES AUTHORITY Why Bangladesh: Bangladesh has the lowest wage rate Grade Helper Junior Operator Monthly wage (USD) 70 80.50 85.75 Senior Operator 91 High Skilled 140 Operator#9গণপ্রজাতন্ত্রী ** বাংলাদেশ ** GLADESH ECONOMIC AUTHORITY BANGLADESH ECONOMIC ZONES AUTHORITY Why Bangladesh: Bangladesh is the lowest utility tariff rates provider সরকার Utilities Rate (USD) Electricity 0.107/Kwh Water 0.325/CM Gas 0.095/CM#10গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** GLADESH ECONOMIC AVC ZONES BANGLADESH ECONOMIC ZONES FUTHORIT AUTHORITY Why Bangladesh: Social perspective ✓ Main provisions are: ✓ EZ Workers Welfare Fund will be created for the workers. ✓ The fund will be created from the grant or subscription of the investors, development partners, government grants etc. ✓ Contribution by the investors will be based on the number of workers. ✓ There shall be counselors for grievance handling, compliance monitoring and building of awareness among the EZ workers. ✓ There shall be conciliator for dispute settlement. ✓ Disputes shall be resolved through arbitration. ✓ Skill development initiative will be taken under the fund. ✓ There shall be a separate bank account for the fund.#11গণপ্রজাতন্ত্রী ** বাংলাদেশ সরকার ** GLADESH ECONOMIC MIC ZONES AUTHORIT BANGLADESH ECONOMIC ZONES AUTHORITY BEZA: Committed to Industrial Development BEZA Created through BEZA Act 2010 Responsible for and devoted to organized industrial development in Bangladesh Facilitates private sector participation Fosters industrialization to promote growth in domestic industrialization, foreign trade, employment generation and improving socio- economic status#12গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** Objectives of BEZA BANGLADES ROMIC SONES ALT BANGLADESH ECONOMIC ZONES AUTHORITY BEZA was established by the Bangladesh Economic Zones Act 2010 with broad the objective of structural transformation of the economy of Bangladesh through: Attracting FDI Developing and diversifying export Promoting skill, Sharing knowledge and Generating employment Ensuring dynamic economic benefits for the Social and Environmental sustainability domestic industry#13গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** Our Mission ECONOMIC AUTHORITY BANGLADESH ECONOMIC ZONES AUTHORITY Develop 100 EZs in the next 15 years Create 10 million employment Foster industrialization by increasing additional export of USD 40 billion per year#14বাংলাদেশ সরকার ** Reasons for regime transition Export Processing Zone Static Dynamic GLADESH ECONOMIC AIC ZONES BANGLADESH ECONOMIC ZONES FUTHORITE AUTHORITY Economic Zone (attracting investment and generating (structural transformation of the employment) Labor-intensive Incentive-driven Exploitative Enclave Limited spillover effect economy, diversification, upgradation, knowledge sharing, skill development, R & D) Investment-intensive Service-driven Management-driven Integrated Development Tool Wider spillover effect#15গণপ্রজাতন্ত্রী ** ANGLADES ECONOMIC BANGLADESH ECONOMIC ZONES FUTHORITE AUTHORITY সরকার Potential benefits of economic zones (WB) Direct benefits Indirect benefits বাংলাদেশ ** Foreign exchange earnings FDI Employment generation Government revenue Export growth Skill upgrading Technology transfer Demonstration effect Export diversification Enhancing trade efficiency of domestic firms#16গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** BEZA activities at a glance GLADESH ECONOMIC BANGLADESH ECONOMIC ZONES FUTHOR AUTHORITY Total approved EZs Total planned land for 79 zones (acres) Land owned by BEZA (Acres) Number of approved Private EZS Pre-qualification License awarded to Private EZs PPP License awarded (Mongla and Mirsarai-1st Phase) Private EZ license Number of EZs under Development Total direct investment by Developer (US$ Million) Total number of Jobs created 79 79019 31199 23 11 02 06 15 904 7781#17গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** ANGLADES TROMIC ZONES AL18 BANGLADESH ECONOMIC ZONES AUTHORITY The Regulatory Framework Act (Establishment scheme of economic zone) • The Bangladesh Economic Zones Act, 2010 • . . One Stop Services Act 2018. Policy (regarding development, operation, management and control of private economic zones) Bangladesh Private Economic Zones Policy, 2014. Rules (Qualification of developers, developer's right and obligation cancellation of EZ license, etc.) Bangladesh Economic Zones (Appointment of Developer, etc.) Rules, 2014 Bangladesh Economic Zones (the Procedure of Appointment of Developer) Rules 2016 . EZ construction and building guidelines Guidelines Bangladesh Economic Zones Development Guidelines (draft) Statutory Regulatory Orders for incentives#18BANGLAD GLADESH ECONOMIC MIC ZONES BANGLADESH ECONOMIC ZONES AUTHORITY গণপ্রজাতন্ত্রী ** বাংলাদেশ সরকার ** AUTHORIT Different implementation models of BEZA to deliver on its target and integration of private sector and FDI 1 Economic Zones 2 Private Economic Zones Established through public and private partnership (PPP) by local or foreign individuals, body or organizations Established individually or jointly by local, non-resident Bangladesh or foreign investors, body, business organizations or groups Private sector can participate as developer &/or unit investor Private sector owned economic zones 4 Government Economic Zones Special Economic Zones Established and owned by the Government Established privately or by public-private partnership (PPP) or by the Government initiative, for establishment of any kind of specialized industry or commercial organization 5 G to G Economic To be undertaken at Government to Government Level Zones 6 Government Enterprises Economic Zones On model of BEPZA, where a government entity may act as developer Private sector can participate as unit investor Private sector can participate as developer &/or unit investor Private sector can participate as developer &/or unit investor Private sector can participate as unit investor European investors can participate via PPP route or Private economic zone development or G2G initiatives of zone development#19গণপ্রজাতন্ত্রী ** বাংলাদেশ সরকার BEZs are Regionally Competitive... ** Fiscal Incentives For Developers BANGLADES ROMIC SONES ALT BANGLADESH ECONOMIC ZONES AUTHORITY Income Tax exemption 12 years: First 10 years 100%, 11th year 70%, 12th year 30% Exemption from custom duty on all imports for development of economic zone Exemption from stamp duty and registration fees for land registration for the first time Exemption of stamp duty and registration fees of loan/credit document Exemption from tax on dividend income for 10 years#20গণপ্রজাতন্ত্রী সরকার বাংলাদেশ ** Incentives for Unit Investors ANGLADES BANGLADESH ECONOMIC ZONES FUTHORIT AUTHORITY Tax Holiday for 10 years Duty free import of raw materials Exemption form dividend tax Full Repatriation of capital and dividend No ceiling of FDI 100% Backward linkage raw-materials and accessories to sell for EOI in DTA 20% sale of finished product to DTA by EPA#21Incentives for Unit গণপ্রজাতন্ত্রী সরকার Investors বাংলাদেশ ** GLADESH BANGLADESH ECONOMIC ZONES FUTHORITY AUTHORITY Sub-contracting with DTA allowed Exemption of stamp duty and registration fees Exemption of VAT on all utility services Duty exemption on export Exemption of Custom Duty for import of vehicles Exemption of double taxation subject to Double taxation agreement Exemption of Salary income from IT for expatriates#22গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** Incentives for Unit Investors GLADESH ECONOMIC BANGLADESH ECONOMIC ZONES FUTHORITY AUTHORITY Consider Economic Zone as custom bonded area Foreign loan is allowed in compliance with existing laws FC Account for non-residents FC Account for both local and joint venture industry Foreign investors to be free to inter into JV Tax exemption on capital gains from transfer of shares Provision of transfer of shares by foreign shareholders to local shareholders and investors#23গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** Incentives for Unit Investors Issuance of work permits 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. ANGLADES TROMIC RUNES ALTO BANGLADESH ECONOMIC ZONES AUTHORITY Resident visa for investment of US$ 75,000 or more. Citizenship for investment of US$ 500,000 or more.#24গণপ্রজাতন্ত্রী ** বাংলাদেশ সরকার ** BANGLADESH ECONOMIC ZONES AUTHORITY Non-Fiscal Incentives GLADESH ECONOMIC AIC ZONES AUTHORIT 100% foreign ownership permissible • No ceiling on foreign investment • Full repatriation of capital and dividend Foreign currency loan allowed in compliance with existing laws • Hold nonresident foreign currency deposit account • EZs will enjoy MFN status Sub-contracting with Domestic Tariff Area allowed • Transfer of shares of foreign shareholders allowed • 50 years land lease period with scope of extension#25গণপ্রজাতন্ত্রী বাংলাদেশ সরকার ** Proposal for Investment Import Permit Export Permit Local Sale Permit Local Purchase Permit Sample Permit ANGLADES ECONOMIC AUTHORITY BANGLADESH ECONOMIC ZONES AUTHORITY One Stop Service a. Name Clearance b. Certificate of Incorporation/ Registration a. TIN Certificate b. VAT Registration Sub-contract Permit Permission for Utility Connection No Objection Certifi- cate for Off Shore Banking License License for Service Provider Permission for Installation Of PGP, WTP, CEPT Permission for Installation Of Generator Trade License OSS Building Plan Approval Environment Clearance Fire Safety Clearance a. Clearance on electrical wiring/ plan/ connection b. Clearance on plumbing/water connec- tion Factory Registration with DIFE Boiler Registration Captive Power Plant a. Visa Recommendation b. Work Permit NoC for Bank Loan Customs Clearance#26গণপ্রজাতন্ত্রী ** বাংলাদেশ সরকার ** ANGLADES OMIC ZONES AUTHORIT BANGLADESH ECONOMIC ZONES AUTHORITY Potential Sectors For Investment In Economic Zones Shipbuilding & Ship Repairing, Steel Leather Goods Rerolling Plants Light Engineering & Auto Parts Pharmaceuticals Large-scale Export Oriented RMG Jute and Jute-based product Power Telecommunication IT-enabled services LNG Terminal & Petro- Chemical Plants Agro-Processing including Fish Processing & Cold Chain#27গণপ্রজাতন্ত্রী বাংলাদেশ ★ ★ সর সরকার ** Thank You GLADESH BANGLADESH ECONOMIC ZONES FUTHORITY AUTHORITY