FISCAL INCENTIVES

  1. The private power companies shall be exempt from corporate income tax for a period of 15 years.

  2. The companies will be allowed to import plant and equipment and spare parts up to a maximum of ten percent (10%) of the original value of total plant and equipment within a period of twelve (12) years of Commercial Operation without payment of customs duties, VAT (Value Added Tax) and any other surcharges as well as import permit fee except for indigenously produced equipment manufactured according to international standards.

  3. Repatriation of equity along with dividends will be allowed freely.

  4. Exemption from income tax in Bangladesh for foreign lenders to such companies.

  5. The foreign investors will be free to enter into joint ventures but this is optional and not mandatory.

  6. The companies will be exempted from the requirements of obtaining insurance/reinsurance only from the National Insurance Company, namely Sadharan Bima Corporation (SBC).

    Private power companies will be allowed to buy insurance of their choice as per requirements of the lenders and the utilities.

  7. The Instruments and Deeds required to be registered under local regulations will be exempted from stamp duty payments.

  8. Power generation has been declared as an industry and the companies are eligible for all other concessions which are available to industrial projects.

  9. The private parties may raise local and foreign finance in accordance with regulations applicable to industrial projects as defined by the Board of Investment (BOI).

  10. Local engineering and manufacturing companies shall be encouraged to provide indigenously manufactured equipment of international standard to private power plants.
OTHER FACILITIES AND INCENTIVES FOR FOREIGN INVESTORS

  1. Tax exemption on royalties, technical know-how and technical assistance fees, and facilities for their repatriation.

  2. Tax exemption on interest on foreign loans.

  3. Tax exemption on capital gains from transfer of shares by the investing company.

  4. Avoidance of double taxation in case of foreign investors on the basis of bilateral agreements.

  5. Exemption of income tax for upto three years for the expatriate personnel employed under the approved industry.

  6. Remittance of upto 50% of salary of the foreigners employed in Bangladesh and facilities for repatriation of their savings and retirement benefits at the time of their return.

  7. No restrictions on issuance of work permits to project related foreign nationals and employees.

  8. Facilities for repatriation of invested capital, profits and dividends.

  9. Provision of transfer of shares held by foreign shareholders to local shareholders/ investors.

  10. TAKA, the national currency, would be convertible for international payments in current account.

  11. Re-investment of remittable dividend to be treated as new foreign investment.

  12. Foreign owned companies duly registered in Bangladesh will be on the same footing as locally owned companies with regard to borrowing facilities.

 

Source :
 Power Division - Ministry of Power, Energy and Mineral Resources Government of the People's Republic of Bangladesh