PROCESSING
ZONE
BANGLADESH UNIVERSITY
OF
BUSINESS & TECHNOLOGY
(BUBT)
Program: BBA
Intake: 15th
Section: 04
Group Name: MEGH
Introduction:
In order to stimulate rapid economic growth of the country, particularly
through industrialization, the government has adopted an Open Door Policy
to attract foreign investment to Bangladesh. 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, free from
cumbersome procedures. Two EPZs, one in Chittagong and the other near
Dhaka are now operational.
In the wake of increasing demand of the investors, the Dhaka EPZ has been
expanded. Development work of the EPZ at Mongla, a southern port of
Bangladesh is progressing fast. It is expected to be operational soon. Two
other EPZs - one at Comilla and the other at Ishurdi are in implementation
stage.
boost
exports
through
the
establishment
of
export-oriented
industries in special zones with special facilities. Earlier in 1980, the Foreign
Private Investment (Promotion and Protection) Act was passed by parliament
for promotion and protection of foreign investments. As per these acts,
BEPZA, an autonomous statutory body, came into being in 1983. It was
entrusted with the responsibilities of setting up and operating EPZs in the
country.
Utility Services :
Water Supply: From Chittagong WASA.
Utility
Services :
Water Supply : Own supply network.
Tariff : Tk. 17.71 / cm.
Gas Supply : From Gas Transmission Company Ltd.
( Western Zone Project, Proposed )
Tariff : Tk. 5.43 / cm.
Power Supply : 11 kv, 3 phase, 50 cycles / sec.
Tariff : Tk. 4.18 / kwh.
Utility Services :
Water Supply : Own water supply system.
Tariff : Tk. 17.71 / cu-m.
Gas Supply : From Titas Gas Field.
Tariff : Tk. 5.76 / cu-m.
Power Supply : 11 kv, 3 phase, 50 cycles / sec.
Tariff : Tk. 3.98 / kwh.
Utility Services :
Water Supply : Own water supply system.
Tariff : Tk. 18.47 / cu-m.
Gas Supply : From Bakhrabad Gas system Ltd.
Tariff : Tk. 5.76 / cu-m.
Power Supply : 11 kv, 3 phase, 50 cycles / sec.
Tariff : Tk. 4.18 / kwh.
(Utilities will be charged at the current rate of US $)
Utility
Services :
Water Supply : Own water supply system.
Tariff : Tk. 17.71 / cm.
Gas Supply : From Gas Transmission Company Ltd.
(Western Zone Project, Proposed).
Tariff : Tk. 5.43 / cm.
Power Supply : 11 kv, 3 phase, 50 cycles / sec.
Tariff : Tk. 4.18 / kwh.
Utility Services :
Water Supply : From Chittogong WASA & Own water supply by treatement
plant.
Tariff : Tk. 17.71 / cm.
Gas Supply : From Bakhrabad Gas System Ltd.
(Western Zone Project, Proposed).
Tariff : Tk. 5.76 / cu-m.
Power Supply : 11 kv, 3 phase, 50 cycles / sec.
Tariff : Tk. 3.98 / kwh.
Introduction:
1. Acceleration of production and expansion of trade result in growth of
national wealth. Increased production in export sectors may become the
prime mover in the development cycle in a densely populate of Bangladesh
like our as this will generate employment opportunities which in turn will
generate savings and investment on consequent flow of capital. The prime
national objective of poverty alleviation will thus be materialized. As a first
step towards reaching this goal we need to look at the country's production
infrastructure.
2. Our export trade is featured by the dominance of a few commodities in a
narrow market. Such dependence on at limited number of export items
targeted a limited market is not desirable for economic development. We
must, therefore, aim both at product and market diversification or else our
export trade will become stagnant in the near future.
3. Our export trade must keep pace with the projected GDP growth @ 7%
and make due contribution through increased export earnings. In this
exercise it is imperative to identify new thrust sectors, increased export of
higher value added items, diversify product wise , ensure products quality,
improve packaging, attain efficient productivity. We should aim at marketing
quality products at competitive price at the correct time.
4.. The Export Policy 1997-2002 has been designed to operate in the
imperatives and opportunities of the market economy with a view to
maximizing export growth and narrowing down the gap between import
payment and export earnings.
Objectives:
The principal objectives of this policy are :
1. To achieve optimum national growth through increase of export in
regional and international market;
2. To narrow down the gap between the country's export earning and import
Strategies:
The following strategies shall be undertaken to attain the objectives of the
export policy 1997 - 2001 :
1. Simplifying export procedures, and helping the private sector achieve
efficiency. The Govt.. desires more and more involvement of the private
sector while the govt. will continue to play its facilitating role;
2. Enhancing technological strength and productivity and facilitating reduce
cost and attain internationally accepted standard of quality of exportable
products and thereby consolidate their competitiveness ;
Target:
For the policy period Export targets have been set at US dollar 5020
million for the fiscal year (F.Y.) 1997-98, US dollar 5,630 million for the
F.Y.1998-99, US dollar 6,340 million for the F.Y. 1999-2000, US dollar
7,175 million for the F.Y. 2000-2001 and US dollar 8,100 million for the
F.Y. 2001-2002. Details of the export targets have been shown at
annexure 'A'.
Thrust Sector:
1. Leather and leather goods industries, high and high value added
readymade garments, computer software and agro-processing sectors have
been identified as thrust' sectors in this export policy. Although the leather
and leather goods sector has enormous export potential the sector has not
been able, till date, to achieve desired results. On the other hand, the
readymade garments sector is expected to stage a breakthrough in the
export of high-priced, high value added garments of newer categories after
having survived successfully the initial phase of exporting low-end
garments. Likewise computer software and agro-processing sectors could
not record the desired level of export through the sectors offer bright
prospects for earning foreign exchange. These -four sectors have been
declared, 'Thrust Sectors', in this policy to ensure priority with the following
lines of actions :
2. Leather & Leather Goods :
2.1. Leather manufacturing units shall be modernized in order to enable
them to produce increased quality of finished leather out of raw hides.
2.2. With a view to reducing cost of production, steps shall.
Investment Guarantee:
ELIGIBLE INVESTORS:
Type - A
100% foreign owned including Bangladesh nationals ordinarily resident
abroad.
Type - B
Join venture between foreign and Bangladesh entrepreneurs resident in
Bangladesh.
Type - C
100% Bangladesh entrepreneurs resident in Bangladesh.
MODE OF INVESTMENT:
Investment in convertible foreign currencies by foreign investors. Option to
establish public/private Ltd. Companies or sole proprietorship/partnership
concerns.
INVESTMENT GUARANTEE:
Foreign Private Investment (promotion and Protection) Act, 1980secures all
foreign investment in Bangladesh.
OPICs (Overseas Private Investment Corporation, USA) insurance and
finance programmes operable.
Security and safeguards available under Multilateral Investment Guarantee
Agency (MIGA) of which Bangladesh is a member. Arbitration facility of the
International Center for the Settlement of investment Dispute (ICSID)
available.
TELE-COMMUNICATIONS:
E-mail, Internet, Telex, Fax and International Dialing Services connected
through satellite system available.
COMMUNICATIONS:
Apart from that local bank of Bangladesh also provide off-shore banking
like:
1.
2.
3.
4.
5.
6.
More local Bank in the pipe-line to have off-shore Banking license from
Bangladesh Bank (Central Bank).
Standard of schedule charge are practicing among the off-shore
Banking units.
WORKING HOURS:
48 hours a week in a factory.
39 hours a week in an office.
6 working days a week.
EMPLOYEES LEAVE:
10 days Casual leave.
17 days Annual leave.
INCENTIVES FISCAL
I. Tax Exemption
Tax holiday for 10 years.
Exemption of income tax on interest on borrowed capital.
Relief from double taxation subject to bilateral agreement.
Complete exemption from dividend tax for tax holiday period for
foreign nationals.
Exemption of income tax on salaries of foreign technicians for 3 years
subject to certain conditions.
II. Duty Free Import and Export
Duty free import of machineries, equipment and raw materials.
Duty free import of three motor vehicles for use of the enterprises in
EPZs under certain conditions.
Duty free import of materials for construction of factory buildings in
the zones.
Duty free export of goods produced in the zones.
GSP facilities available for export to USA, European and Japanese
markets.
Export from Bangladesh to USA enjoys Most Favoured Nation (MFN)
status.
NON- FISCAL
I. Investment
All foreign investments secured by law.
No ceiling on extent of foreign investment.
Full repatriation of profit and capital permissible.
Repatriation of investment including capital gains, if any, permissible.
Remittances allowed in following cases :
I.
All post tax profit and dividend on foreign capital.
II.
Savings from earnings, retirement benefits, personal assets of
individual on retirement/ termination of services.
III.
Approved royalties and technical fees.
II. Project Financing and Banking
Off-shore banking facilities available.
Local and international banking facilities also wide-open.
III. Import
Freedom from national import policy restrictions.
Import of raw materials also allowed on Documentary Acceptance (DA)
basis.
Advantage of opening back to back LC for certain types of industries
for import of raw materials.
Import of goods from the Domestic Tariff Area (DTA) permissible.
Enterprises can sell their 10% of the product to the DTA on payment of
duties and taxes under certain conditions.
IV. Project Implementation
Re-location of existing industries from abroad allowed.
Re-location of industries from one zone to another within the country
permissible.
V. Operation
Sub-contracting within EPZ allowed.
Inter-zone and intra-zone export permitted.
All customs formalities done at the gate site of the respective factory
GAS
WATER
(US $ / KWH)
(US $ / CUM)
(US $ / CUM)
Chittagong,
Ishwardi,
Adamjee &
Karnaphuli EPZ
0.05
0.08
0.25
Dhaka, Comilla,
Mongla & Uttara
EPZ
0.06
0.08
0.25
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ELECTRICITY
GAS
WATER
(US $ / KWH)
(US $ / CUM)
(US $ / CUM)
0.05
0.08
0.25
0.06
0.08
0.25
ZONE
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CONCLUTION
Export Processing Zone(EPZ) is very important for economic
development of a country. Mostly the developing countries must be
needed an EPZ to develop their economical power. In BANGLADESH
there are many opportunity to develop by EPZ. There have MAN
POWER that must be needed establish to an EPZ. At last we can say
that, EPZ can be maintain the economical balance of a country.