BUSINESS WITH BANGLADESH RESOURCES
Your complete guide on how to start and do business with Bangladsh.
Information such as import/export regulations, customs information,
tax , currency, copyrights, etc.
TRADE REGULATIONS AND STANDARDS
Bangladesh has made significant progress in liberalizing its trade
regime. Customs duty rates have been compressed to a range of 0.0-37.5%%.
The 2.5% import permit fee is the only other protective instrument
for most imports (a trade neutral 15% value-added tax is also applied).
The import permit system is now automatic & the cumbersome procedure
for opening letters of credit has been simplified.
are levied on all imports except raw cotton, textile machinery,
certain machinery used in irrigation and agriculture, animal feeds
used by the poultry and dairy industries, and certain drugs and
medical equipment. Duty rates are determined along the following
- Few essential
- Basic raw materials
- Intermediate products
- Finished products
A 3.0% Development
Surcharge is levied on imports along-with 2.5% Licence fee and 2.5%
Advance Income tax (AIT). A supplementary duty is levied on luxury
items like cars with engine capacity greater than 1,000 cc and "undesirable"
items like cigarettes. Excise duties have been abolished on all
items except on manually prepared cigarettes, bank accounts, and
textiles. Certain products are exempt from the value-added tax.
Ready-made garments manufacturers who are 100% export-oriented can
free through bonded warehouses. Other export-oriented industries
and indirect exporters can claim a duty-drawback at stated rates.
With the introduction of the PSI (pre-shipment inspection) system
Bangladesh has abandoned the traditional tariff value method to
determine the price of import items on the basis of which customs
duties were levied. From February 15, 2000 onwards items imported
through Letter of Credits will be taxed on the basis of certificate
of clean report of findings (CRF) issued by three designated PSI
Agents. For a list of countries showing their respective CRF Issuing
Companies, please see annexure.
Duties are generally assessed on the basis of the CIF (cost, insurance,
freight and other charges) cost of goods. Duties are collected in
Bangladesh currency by Customs authorities under the Bangladesh
Customs and Excise Departments of the Ministry of Finance's National
Board of Revenue.
Import of goods into Bangladesh is regulated under three broad categories:
Banned List: Unless otherwise specified, items
included in the list cannot be imported
Restricted List: Any item included in this
list shall be importable only on fulfillment of the
conditions specified therein against the item
Free List: Unless otherwise specified, any
item which doesn’t appear either on the
banned or restricted list shall be freely importable
are not required for any imported items except those on the restricted
list. However, importers need to use Letter of Credit Authorization
(LCA) forms to import goods.
Unless otherwise specified, all imports transacted through a bank
require a Letter of Credit Authorization (LCA) Form. Obtaining an
LCA is not onerous, and many of the documents required for submission
by importers can be kept on file with their banks. At present, there
is no lack of foreign currency for import transactions. However,
as a safety cushion against currency fluctuation, banks prefer to
source foreign currency for L/Cs over $ 500,000 from the central
bank. Typically, 1-2 days is required to obtain registration from
the Central Bank. Unless otherwise specified, all imports must be
made through opening of an irrevocable letter of credit.
an LCA may be made without opening an L/C in the following areas:
- import of books, journals, magazines, and periodicals on sight
draft of issuance bill basis;
- import of any permissible item for an amount not exceeding $ 5,000
only during each local fiscal year against remittances made from
- imports under commodity aid, grant or such other loan for which
there are specified
procurement procedures for import of goods without an L/C;
- imports of "International Chemical References" through
bank drafts by recognized
pharmaceutical (allopathic) firms on the approval of the Director,
Drug Administration, for
the purpose of quality control of their products. Importers must
submit to their nominated banks the following documents along with
- L/C application form duly signed by the importer;
- indents for goods issued by indentor or a proforma invoice obtained
from the foreign supplier;
- insurance cover note.
are allowed to import permissible commercial items against prior
permission from the Chief Controller of Import and Export and need
to provide following documents:
- photocopy of the valid Import Registration Certificate;
- photocopies of invoices, bill of lading, and import permit duly
certified by the bank;
- original or copy General Index Register (GIR) certificate from
Income Tax Authority;
- certified copy of the last income tax assessment order; and
- name and description of each item to be imported with quantity
and approximate C&F value.
importers also need to provide the following documentation:
- attested photocopy of allocation letter issued by the
- allocating authority in favor of the concerned public sector
- agency specifying the source, amount, purpose, validity, and the
- terms and conditions;
- attested photocopy of sub-allocation letter, if any, issued in
favor of the importing agency or unit;
- attested photocopy of sanction letter from the administrative
ministry or authority where
- a declaration by the authorized officer of the importing agency
indicating the amount of
utilized/unutilized government funds and that imported raw materials
will not be sold.
importers need to furnish the following additional documents:
- valid membership certificate from the registered local chamber
of commerce and industry or any trade association, established on
an all-Bangladesh basis, representing any special trade or business;
- proof of payment of renewal fees for the Import Registration Certificate
(IRC) for the concerned fiscal year;
- copy of a "TIN Certificate" issued by the tax authority.
The TIN (Tax Identification No.)
Certificate is a new requirement aimed at ensuring collection of
income tax, VAT and other revenues from importers.
- a declaration, in triplicate, that the importer has paid income
tax or submitted an income tax return for the preceding year; and
- any such documents as may be required by import policy order or
public notice, or instruction issued by the Chief Controller of
Imports and Exports.
In the following
case, neither an LCA nor the opening of an L/C will be necessary,
but an import permit (IP) or clearance permit (CP) will have to
be obtained by the importer:
- import of books, magazines, journals, periodicals and scientific
and laboratory equipment against surrender of UNESCO coupons;
- imports under pay-as-you-earn scheme for a limited number of cars,
fishing vessels, cargo or passenger vessels, and new machinery on
the basis of clearance from the Bangladesh Bank;
- import of items by passengers coming from abroad in excess of
the permissible limits as per permitted allowance; and
- import of free samples, advertising materials, and gift items
above prescribed ceilings.
Agents and representatives of foreign manufacturers are allowed
to import machinery and equipment from their principals for purposes
of demonstration or exhibition, subject to the following conditions:
- the goods brought into Bangladesh will be re-exported within a
period of one year;
- the importer shall execute a bond and furnish a bank guarantee
or understanding or a legal instrument to the satisfaction of Customs
at the time of clearance indicating that the goods will be re-exported
in a timely manner; and
- if the goods include any banned or restricted items, prior permission
is required from the Chief Controller of Imports and Exports.
Equipment or machinery imported on a temporary basis is exempt from
duty if the importer obtains an import/export permit.
Imported goods (including their containers) must not bear any words
or inscriptions of a religious connotation, the use or disposal
of which may injure the religious feelings and beliefs of any class
of the citizens of Bangladesh. In addition, imported goods should
not bear any obscene pictures, writing, inscription, or visible
representation. Milk food can be imported in cans and in bulk. The
container must indicate the ingredients in Bangla as well as the
manufacturing and expiration dates (in Bangla or English).
A measuring spoon must be supplied in all containers of baby food.
Non-fat dried milk is importable only in airtight containers, with
the date of manufacture and expiration noted in Bangla or English.
Pesticide containers must be able to withstand" handling by
sea," indicate the chemical contents, and meet other specifications.
Bangladesh's Import Policy Order 1997-2002 places controls on some
imports. Items banned from import include:
maps, charts and geographical globes, which indicate the territory
of Bangladesh but do not do so in accordance with the maps published
by the Bangladesh Government's Department of Survey;
- horror comics, obscene and subversive literature;
- printed material, posters, video tapes, etc. containing matters
likely to outrage the religious feelings and beliefs of any class
of the citizens of Bangladesh;
- unless otherwise specified, old, second-hand and reconditioned
- unless otherwise specified, all kinds of waste; and
- goods bearing pictures or writing which is obscene or of a religious
connotation which may injure the religious feelings of any class
of Bangladesh citizens.
completely banned are:
- live pigs and poultry fat, poppy seeds and dried posto dana, grass,
opium, tendu leaves, lard, lard and tallow oil, solid or semi-solid
palm oil, raw sugar, un-denatured ethyl alcohol (80% or higher)
and other spirits denatured of any strength, wine, artificial mustard
oil, selected petroleum products, woven fabrics of silk or silk
waste, pig hair, some kinds of cloth, selected insecticides, nylon
and polyethylene ropes, fishing nets (gillnets), used or new rags,
vessels more than 15 years old, motorbikes more than three years
old, and single phase electricity meters.
In addition, the import of goods from Israel and the import of goods
of Israeli origin are prohibited, as is the shipment of goods on
Israeli flag vessels. All types of imports are also banned from
Serbia and Montenegro.
Quality standards are set and monitored by the Bangladesh Standards
and Testing Institute. Bangladesh also recognize and accept goods
bearing certification from standard institutions of other countries.
Standards for pharmaceuticals are controlled by The Department of
Drugs Administration, under the Ministry of Health and Family Welfare.
The Bangladesh Atomic Energy Commission tests all imported food
items to ensure that the prescribed standard for radioactivity is
- To narrow down gap between export earning and import payment through
achievement of export target set by the government
- Develop marketability through product diversification and quality
- Establish backward linkages for utilization of local materials
- Encourage and use appropriate technology and formulate suitable
strategy for development in the context of free market economy
- Increasingly involve the private sector in the expansion of export
The following items are banned for export:
- all imported goods in their original or unprocessed form
- petroleum and petroleum products except naphtha, furnace oil and
- oil seeds and edible oils except kapok seeds
- jute seeds and sunn-hemp seeds
- gur and khandseri sugar
- animals, animal skins and wildlife covered by the Bangladesh
- wildlife Preservation Order, 1973
- arms and ammunition, explosives, and ingredients thereof
- fissionable materials
- raw and wet blue leather
- rare items of archaeological interest
- human skeletons
- eggs and poultry
- prawns and shrimp, except frozen and processed
- feature films not certified by the Bangladesh Film Censorship
- Board as fit for export
- rice bran (except de-oiled rice bran)
- shrimp of count 71/90 and sizes below for sea water and 61/70
and sizes below for fresh water, excluding two varieties (Harina
- bamboo and cane in whole form and wood log
- frogs of all species (live or dead) and frog legs
- human blood
- chemical weapons
In addition, the following items are restricted for export, requiring
Ministry of Commerce permission on a case-by-case basis:
- molasses, de-oiled rice bran, wheat bran and urea fertilizer.
Quality control licenses issued by the Bangladesh Standards and
Testing Institute are required to export the following items:
- cane molasses, shrimp and prawns (except frozen de-veined or cooked),
oil cake, wet batteries and dry battery cells, electric fans and
other select electric appliances, biscuits, and PVC electric cables.
- an inspection certificate is required for exports of raw jute.
- all plants and plant materials for export must be inspected and
certified that they are free of insects or disease.
The Bangladesh banking sector is made up of:
Nationalized commercial banks
Domestic private commercial banks
Specialized banks & development financial institutions
The Bangladesh Bank (the central bank) regulates all banking institutions.
these banks make up the “scheduled “ banking system.
Bank is controlled by the Ministry of Finance. The Bangladesh Bank
is headed by a governor, who reports to the Secretary, Banking Division
of the Ministry of Finance.
The Bank of Nova Scotia has been granted a license to operate in
Bangladesh and has a full-fledged branch in Dhaka.
Bangladesh has two Export Processing Zones (EPZ's), one in Chittagong
and one in Savar (near Dhaka).
The EPZ's offer tax breaks, a relatively secure power source, the
duty-free import of capital machinery, warehouse facilities, and
other benefits to 100% export-oriented industries. Chittagong port
has 116,375 square meters of covered warehouse space, with a capacity
to hold 50,000 metric tons. The port also has a warehouse for hazardous
cargoes (102 metric tons) and for cold storage (500 tons). Mongla
port near Khulna (southwest Bangladesh) also has warehouse facilities.
For industries outside the EPZ's, the National Board of Revenue
provides bonded warehouse facilities to 100% export oriented industries
or to industries whose raw materials/ components are mainly imported.
Production within bonded areas is free of import duties, with a
minimum of customs formalities. Privately owned and operated EPZ's
are now legal though none is in operation; Korean investors have
been planning one in Chittagong for the last two years but have
faced implementation and other hurdles.
IN FREE TRADE ARRANGEMENTS
Bangladesh is a member of the South Asia Preferential Trade Agreement
(SAPTA) under the umbrella of the South Asia Association for Regional