Bizbd News: Published: March 22, 2024:

Shaikh Yusuf Harun, the executive chairman of the Bangladesh Economic Zones Authority, stated that the government’s initiative to establish 100 planned economic zones in the country successfully attracted the attention of local and foreign investors, and investment gained momentum by now.

Due to a liberalised policy, including fiscal and non-fiscal incentive packages, the Bangladesh Economic Zones Authority received foreign direct investment proposals worth $1.5 billion so far, he said.

BEZA already made commendable progress in establishing the zones through various methods, including public-private partnerships, government-to-government agreements, and solely under government initiative, Yusuf Harun said.

‘Our policy to provide support to investors under one roof through a one-stop service has been improving the ease of doing business situation, and the influx of FDI will increase further in the economic zones,’ he mentioned in an interview with New Age Business magazine.

Despite global economic and geopolitical tensions, many foreign companies expressed their interest in setting up their manufacturing units in Bangladesh, and hopefully, the influx of FDI would exceed expectations in the coming days, BEZA’s executive chairman said.

The Bangladesh Economic Zones Authority was established by the government in 2010 under the Bangladesh Economic Zones Act, 2010, and the authority commenced its work in 2015 to establish economic zones in the country.

BEZA so far approved the establishment of 97 economic zones across the country.

A total of 41 industries were established in 12 zones, and 41 of them already commenced production, creating employment for 45,000 people, while the development of 29 other zones was in progress.

According to the BEZA executive chairman, the total investment proposals of $26 billion were approved in all these economic zones, with an estimated new employment of more than one million people.

Out of the 97 approved economic zones, 29 were private zones, and the EZs received investments worth $4 billion, he said.

Yusuf Harun mentioned that the economic zones under BEZA had so far received foreign direct investment proposals from 32 foreign companies worth $1.5 billion.

Out of these 32 companies, five have already commenced production in different economic zones.

These companies are the Australia-based TIC Group, the German-based Siegwerk, the Chinese company Meigo, the Norway-based Jotun, and the Japan-based Honda.

Moreover, two Indian companies, Asian Paints and Sakata Inx, the Japanese company Nippon, and Bangladesh-China joint venture companies Bay Sports and UK Bangla Paper, remain under construction.

The planned industrial zones under BEZA, with 61,000 acres of land bank, dedicated one-stop services, and full-fledged policy support by the government, had already captured the attention of local and foreign investors, he mentioned.

Inviting more local and foreign investors, BEZA’s executive chairman said that the authority offered an attractive package for the developers of the Economic Zones as well as for the manufacturing unit investors.

According to Yusuf Harun, investors in the zones would receive exemptions from taxes, customs/excise duties, and non-fiscal incentives such as no FDI ceiling, issuance of work permits, and recommendations for residence or citizenship.

Among the fiscal benefits, investors in EZs will receive a 100 per cent income tax exemption for the first three years, and 80 per cent to 20 per cent exemption from the 4th to the 10th year, 100 per cent tax exemption on dividends for 10 years, exemption from capital gains tax for 10 years, exemption from royalties, technical know-how, and technical assistance fees for 10 years, and VAT exemption on gas, electricity, and water.

Investors in EZs would also benefit from various non-fiscal incentives, including duty-free import and export of raw materials, separate customs procedures in EZs, 100 per cent repatriation of dividends earned from investments, and 100 per cent repatriation of sales proceeds from investments.

He mentioned that the comprehensive package offered by BEZA to investors would enhance the country’s investment climate, attracting a significant amount of FDI to the zones.

The BEZA executive chairman stated that investors from China, India, the UK, Germany, Australia, Japan, the USA, and Norway had already invested in 12 operational economic zones.

The products from these zones are being exported to the US, Europe, China, Japan, India, Nepal, and Bhutan.

‘We have received FDI proposals beyond our expectations, despite the global economic slowdown, and we anticipate a substantial influx of foreign investment in economic zones established on a government-to-government basis,’ said the BEZA executive chairman.

He added that they were currently collaborating with three countries, including Japan, China, and India, to establish four economic zones under G2G agreements.

BEZA has allocated land for the Japanese Economic Zone in Arihajar Upazila, Narayanganj District, a special economic zone for India in Mongla, and the Chinese Economic and Industrial Zone in Anwara, Chattogram. Another economic zone for India will be established in Kushtia.

‘Apart from Japanese companies, we are receiving significant inquiries from investors in Turkey, Italy, Switzerland, and Germany for the Japanese Economic Zone. Hopefully, the zone will become a modern world-class economic zone,’ Yusuf Harun said.

BEZA has allocated 800 acres of land in Anwara, Chattogram, to establish the Chinese Economic and Industrial Zone, and development work is set to commence after signing an agreement with China Road and Bridge Corporation, a construction company. The signing ceremony is expected to be held on October 25.

‘To achieve the goal of a developed Bangladesh by 2041, industrialization and employment generation are key, and we are working towards producing goods and services for the local and export markets worth $40 billion, with new employment for 10 million people in the EZs,’ he said.

BEZA was functioning as a promoter and service provider to ensure sustainable development and improve the quality of life for people by establishing 100 international standard economic zones in the country, Yusuf Harun added.

He pointed out that BEZA was providing land and utility services to local and foreign investors at lower prices to attract investment.

However, the value-added tax (VAT) on land leases has become a concern. According to the BEZA executive chairman, investors have expressed dissatisfaction with the 15 per cent VAT on land leases for industrial setup in the economic zones, while other government agencies like RAJUK and private companies in the housing sector pay a 2 per cent VAT on land for constructing flats or other buildings.

‘We have sent letters to the National Board of Revenue and held a meeting on the issue; hopefully, the government will address the matter,’ he said.

Nonetheless, BEZA continues to provide land to investors at lower prices than many other countries and is working closely with the power and energy division to ensure the provision of quality electricity and gas to investors.

‘We have already started providing gas and electricity to the industries established in Bangabandhu Sheikh Mujib Shilpa Nagar, Jamalpur Economic Zone, and Srihatta Economic Zone, meeting their requirements,’ he added.

To facilitate investment, BEZA established a one-stop service centre and provided 27 services to investors, including trade licences, land registration, mutation, environmental clearance, and utility services under one roof.

Investors are receiving 125 services from OSS, of which 54 services are being provided online. ‘We are yet to bring all the services under one roof, but work is ongoing to make OSS fully functional as a single window,’ said Yusuf Harun.

Bangabandhu Sheikh Mujib Shilpa Nagar in Chattogram was the government’s first initiative to establish a planned industrial zone in the country. After commencing land development and establishing infrastructure for gas and electricity in 2018, Xinyuan Chemical Industry, a Chinese company, began construction of its factory in the zone.

As of now, five industries have commenced commercial production in BSMSN, with 21 industries still under construction.

BSMSN is the largest economic zone in the country, and BEZA intends to transform it into a smart city with civic amenities.

The BEZA executive chairman is hopeful that a significant number of local and foreign companies will establish their manufacturing units in the zone, producing both import-substitute goods and export items.

TK Group has been investing $141 million in setting up an industry in BSMSN to produce man-made fibre.

Bangladesh largely fulfils the demand for MMF through imports, and the TK Group unit will account for 33 per cent of the item’s imports. The import-substitute industry is expected to begin production in November.

Yusuf Harun noted that private EZs, including Meghna Economic Zone, Abdul Monem Economic Zone, and Bay Economic Zone, made substantial progress in attracting significant FDI.

Meghna Group of Industries has established a Polyvinyl Chloride (PVC) manufacturing industry in its economic zone in Narayanganj, with an investment worth $400 million. The unit has already been recognised as an import-substitute industry, as Bangladesh was fully reliant on PVC.

According to Yusuf Harun, a total of 770 acres of land were allocated to four companies in the Maheshkhali Economic Zones of Cox’s Bazar district.

In the Srihatta Economic Zone, 227 acres of land have been allocated to six companies with a proposed investment of $1.5 billion.

Double Glazing Industries Limited has initiated production in the economic zone, while four other industries are still under construction.

In Jamalpur Economic Zone, BEZA allocated 201 acres of land to 23 companies with a proposed investment worth $270 million.

Out of the 23 companies, four have commenced construction, and two of them will begin production by the end of this year.

BEZA is also developing a tourism park, namely Sabrang Tourism Park, in Teknaf, with a total land area of 940 acres.

The authority has already allocated 112.29 acres of land to 27 investors, including three foreign companies, with a proposed investment worth $413 million.