SPECIAL ECONOMIC ZONE

Export Processing Zone

Export processing zones (EPZs) are industrial estates that are fenced in for producing
manufactured goods for export. In short, they are trade enclaves that import raw materials,
process them, and then export to the world market.
EPZs are created under specific circumstances–developing countries have abundant labor
resources, while capital becomes mobile in the global economy. The combination of labor and
capital in EPZs provides a chance for developing countries to absorb foreign direct investment
(FDI) and be linked to the global economy with the minimum impact on the domestic economy,
as the goods produced in EPZs are exported.
Enterprises in the Bangladesh EPZA fall into the three categories depending on the sources of
investment:
a. Type A: 100 percent foreign investment made by Bangladesh living abroad.
b. Type B: Joint venture between foreign investors and Bangladeshi entrepreneurs residing
in the country.
c. Type C: 100 percent investment made by Bangladeshi entrepreneurs resident in the
country.
EPZs often bring in foreign technology, knowledge, skills and work practices that can be
transferred to the rest part of the country. EPZs companies are freely allowed to buy from and
sell to the local market, technology and knowledge transfer will follow suit by learning new
skills and technologies, and ultimately becoming more competitive in the global market.

The development of EPZs is justified by a number of motivations

 Provide foreign exchange earnings by promoting non-traditional exports.
 Provide jobs to alleviate unemployment or under-employment problems in the host
country; assist in income creation.
 Attract foreign direct investment (FDI) to the host country.
 To generate employment
 To promote exports
 To provide a catalyst effect on local firms about how to export to the world market
 To use trade enclaves to diffuse knowledge, know-how and management skills to local
firms
 To stimulate industrial development in the host country.
WTO rules are against subsides for export, which requires the phasing out of EPZs’ tax
incentives. Some EPZs are taking this chance to evolve into industrial and science parks and
beginning to integrate with their local economies.

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Disadvantages of the Export Processing Zone
Groups such as the International Labor Rights Forum (ILRF) have found that in some developing
nations the majority of the workers in the EPZ's are female and comprise as much as ninety
percent of the cheap labor pool.
Many economists have concluded that employment in EPZ's means low wages, high work
intensity, unsafe working conditions and suppression of labor rights. It is often true that the
wages in EPZ' s are higher than those available in rural areas of the same country, especially for
women, it is not always the case that wages in EPZ's are higher than those for comparable work
outside the EPZ's.
Many families in rural areas depend on the wages sent back by female workers within the EPZ.
Many governments that have created EPZ's have acted against labor movement activities within
EPZ's. The various restrictions on labor movements that governments have taken include a total
or partial ban on trade union activities, restriction of the scope of collective bargaining, and
banning trade union organizers. Most recently in Bangladesh, the government's policy of
banning unions has only softened after the building collapse that killed over 1100 workers.
Unsafe working conditions are a negative factor that is often associated with EPZ's. Workers are
expected to work long hours in physically dangerous conditions, including excessive noise and
heat, unsafe manufacturing equipment, and uninspected buildings. With no access to union
representation, there is little that is done to change the situation in some factories. As more and
more EPZ's are created, there is an incentive to keep costs as low as possible to be competitive
against other developing nations. This means that the workers continue to suffer the
consequences of unsafe working conditions.
Incentives and facilities enjoyed by the EPZs
The Government offers numerous incentives for sitting up factories in EPZs. The major Fiscal
and Non- Fiscal incentives are listed below:
A. Fiscal Incentives
Tax Exemption
1. 10 years tax holiday for the industries established before January 1, 2012. Separate tax policy
is applied to the industries set up afterwards are listed below:
Period and rate of tax exemption for Mongla, Ishwardi & Uttara EPZ for the industries set up
after January 01, 2012:
Duration of Tax Exemption Rate of Tax Exemption
First 03 years (1st , 2nd and 3rd year) 100%
Next 03 years (4th , 5th and 6th year) 50%
Next 01 year (7th year) 25%

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Period and rate of tax exemption for Chittagong, Dhaka, Comilla, Adamjee and Karnaphuli EPZ
for the industries set up after January 01, 2012:
Duration of Tax Exemption Rate of Tax Exemption
First 02 years (1st and 2nd year) 100%
Next 02 years (3rd and 4th year) 50%
Next 01 year (5th year) 25%
2. Exemption from income tax on salaries of foreign technician for 3 years (in case of Projects
approved before March 22, 2009).
3. Relief from double taxation subject to bilateral agreement.
4. Complete exemption from dividend tax for tax holiday period for foreign nationals.
Duty Free Facilities
1. Duty free import of machineries, equipment’s, and raw materials.
2. Duty free import of two/three vehicles for A & B type industries subject to certain
conditions (Projects approved before March 22, 2009).
3. Duty free import of materials for construction of factory buildings in the zones.
4. Duty free export of goods produced in the zones.
5. Full repatriation of profit, capital, & establishment.
B. Non-Fiscal
Investment
1. All foreign investments are secured by the foreign Private Investment (Promotion and
Protection) Act-1980.
2. No ceiling on extent of foreign investment.
3. 100% foreign ownership is permissible.
4. Repatriation of investment including capital gains, if any, is permissible.
5. Overseas Investment Corporation (OIC) insurance and finance programs facilities is
available.
6. Security and safeguards under the provision of Multilateral Investment Guarantee
Agency (MIGA)
7. Arbitration facility under the provision of the International Center for the Settlement of
Investment Dispute (ICSID)
8. Remittances allowed in following cases:
- All post tax profit and dividend on foreign Capital.
- Savings from earnings, retirement benefits, personal assets of individual on
retirement/termination of services.
- Approved royalties and technical fees.

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Project Financing and Banking
1. Off-shore banking facilities
2. Foreign currency loan from abroad under direct automatic route (OBU facilities).
3. Non-resident Foreign Currency Deposit (NFCD) allowed for 'A' type industries
4. Local and international banking facilities also wide-open.
Export & Import
1. Enjoys GSP benefits in EU countries, Japan, Australia, [ USA ] & Canada etc.
2. No UD (Utilization Declaration), IRC (Import Registration Certificate), ERC (Export
Registration Certificate), & renewal of bond license is required.
3. 100% backward linkage raw materials and accessories are allowed to sell for export
oriented industries inside and outside EPZs.
4. Import from Domestic Tariff Area (DTA) and 10% export to DTA are permitted.
5. Freedom from national import policy restrictions.
6. Import of raw materials also allowed on Documentary Acceptance (DA) basis.
7. Advantage of opening back to back LC for certain types of industries for import or raw
materials.
8. Import of goods from the domestic tariff area is permissible.
Operation
1. Re-location of existing industries from one zone to another within the country is
permissible.
2. Sub-contracting within EPZ is allowed.
3. No permission required for expansion of the project or product diversification.
4. Inter-zone and intra-zone export are permitted
5. All customs formalities are done at the gate site of the respective factory building
within the zone.
6. Permission for import/export is given in the same day.
7. Repairing and maintenance of machinery and capital equipment from domestic tariff
are allowed.
Employment
1. Liberal employment of foreign technicians/experts is allowed.
2. Foreigners employed in the zones enjoy equal rights similar to those of Bangladesh
nationals.
3. Law forbids formation of any labor union in the zones. Strike within the zones is
prohibited.
One Stop Facilities
1. BEPZA offers One Window Same Day service.
2. Simplified project approval procedure.
3. Work Permits issued by BEPZA.
4. Import and Export Permits issued by BEPZA within the same day through automation
system.

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 5. Customs clearance is done at the factory site.
6. Investors are required to deal only with BEPZA for Investment and all other
operational needs.
Factory Setup Process in EPZs
1. Collect BEPZA Project Proposal Form on payment of Taka 3000.00. (Payment to be
made in the Accounts Department of Executive office, BEPZA, Dhaka.
2. Submit the filled in BEPZA Project Proposal Form along with some required
documents mentioned in the Project Proposal with a forwarding letter addressing to the
Executive Chairman, BEPZA.
Required Documents
1. Letter addressed to the Executive Chairman
2. Filled in Project Proposal for investment in EPZ
3. Pro-forma invoice of machinery and equipment to be imported
4. Bank solvency certificates of the Shareholder Directors
5. Copy of Money Receipt
6. Memorandum & Articles of Association along with Certificate of Incorporation duly
certified by the RJSC
7. Joint Venture Agreement (If applicable)
8. Copy of Passport of Shareholder Directors
9. Recent Photograph of Shareholder Directors
10. Deceleration of the re-location of machinery (if applicable)
Required Time for disposal: 05 working days

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 Bangladesh Export Processing Zone Authority (BEPZA)
BEPZA is the official organ of the government to promote, attract and facilitate foreign
investment in the EPZs. In another, Bangladesh Export Processing Zone Authority (BEPZA) is
an agency of the Government of Bangladesh and is administered out of the Prime Minister's
Office. Besides, BEPZA as the competent authority performs inspection and supervision of the
compliances of the enterprises related to social and environmental issues, safety and security
at work place in order to maintain harmonious labour management and industrial relations in
EPZs.
 BEPZA currently oversees the operations of eight export processing zones (EPZ).
 A ninth zone is scheduled to open in the future.
 Recently government has announced that in 15 years 100 new EPZ and SEZ will be
established.
 The Government provides numerous incentives for investors for opening factories in
EPZs. For example, new factories enjoy tax holidays for 5 years.
Objectives of Bangladesh Export Processing Zone Authority
 Its main objective is to manage the various export processing zones in Bangladesh.
 Boost up foreign and local investment
 Accelerate volume of export
 Create job opportunity
 Poverty alleviation
 Transfer of technology and skill development
 Development of backward and forward linkage industries
 Promote accessories and supportive service enterprises
List of export processing zones run by BEPZA
1. Adamjee Export Processing Zone, Siddhirganj, Narayanganj
2. Chittagong Export Processing Zone, South Halishahar, Chittagong
3. Comilla Export Processing Zone, Comilla
4. Dhaka Export Processing Zone, Savar, Dhaka
5. Ishwardi Export Processing Zone, Ishwardi, Pabna
6. Karnaphuli Export Processing Zone, North Patenga, Chittagong
7. Mongla Export Processing Zone, Mongla, Bagerhat
8. Uttara Export Processing Zone, Nilphamari
Recently Government has approved 37 new Economic zones, which consists governmental, non-
governmental and Specialized Economic zone. Bangladesh government also announced 50pc tax
relief in Hi-Tech parks, Economic Zones.
Rent of Land and Space
Land Readymade Factory Building
EPZs Name (US$/SQM/YEAR) Space
(US$/SQM/MONTH)

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Chittagong, Dhaka, Comilla, Adamjee,
2.20 2.75
Karnaphuli
Mongla, Ishwardi, Uttara 1.25 1.60
01 Square Meter= 10.76 Square Feet
Published date: 18-Sep-2014

BEPZAs Board of Governors

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REF.:
1. EPZ of Bangladesh &
2. BEPZA website

Industry Available in EPZs

S/N Name Of Enterprise Investing Country Products

1 A-One (BD) Ltd. ITALY Knitting & other Textile pdt.

2 Actor Sporting Ltd. HONGKONG,CHINA Caps

3 Alfa Packages (BD) Ltd. BANGLADESH Paper Products

4 Alfa Patterns (Bangladesh) Ltd. MALTA Garments

5 Alleiance Stitches Ltd. UNTD KINGDOM Knitting & other Textile pdt.

6 Austan Ltd AUSTRALIA Footwear & Leather goods

7 Avant Garde Fashion Ltd. SINGAPORE Knitting & other Textile pdt.

8 Bangla German Latex Co. Ltd. GERMANY Miscellaneous

9 Baxter Brenton (Bd.) Clothing Mfg. Co. Ltd. THAILAND Garments

10 Ben Bangladesh(Pvt) Ltd. BANGLADESH Plastic goods

11 Bengal Petrochem and Synthetic Textiles Ltd. BANGLADESH Textile

12 Bengal Windsor Thermoplastics Limited. U.S.A. Plastic goods

13 Beximco Fashions Ltd. PANAMA Garments

14 Bureau Veritas Consumer Prod.Serv(BD)Ltd U.S.A. Service Oriented Industries

15 Charming Trim & Packaging (BD) Ltd. CHINA Garment Accessories

16 Cherry Intimate Limited BR. VIRGIN. IS Garments

17 D-Water C.E.T.P Ecosystems (BD) Ltd. SINGAPORE Service Oriented Industries

18 Daeyu Bangladesh Ltd. S. KOREA Textile

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19 Dhaka-Beijing Dyeing and Weaving CHINA Garment Accessories

20 Dhakarea Ltd. S. KOREA Caps

21 Dong Bang Facilities(BD) Ltd. S. KOREA Miscellaneous

22 DongA Leather Limited S. KOREA Footwear & Leather goods

23 EOS Textile Mills Limited ITALY Textile

24 Epic Garments Manufacturing Co. Ltd. Unit-2 HONGKONG,CHINA Garments

25 Etacol Bangladesh Ltd. FRANCE Garment Accessories

26 Everway Chemicals (BD) Ltd. S. KOREA Chemical & Fertilizer

27 Experience Accessories Co. Ltd. UNTD KINGDOM Garment Accessories

28 Experience Clothing Company Ltd. UNTD KINGDOM Garments

29 FCI (BD) Limited UNTD KINGDOM Garments

30 FEM Accessories Limited BANGLADESH Garment Accessories

31 Geebee Garments Industries Ltd. INDIA Garments

32 German Chemicals Ltd. BANGLADESH Miscellaneous

33 Global Labels (Bangladesh) Ltd. SPAIN Garment Accessories

34 Globalmax Textile Co. Ltd. CANADA Garment Accessories

35 Goldtex Garments Ltd. CHINA Garments

36 Goldtex Ltd. CHINA Textile

37 Grameen Knitwear Ltd. BANGLADESH Knitting & other Textile pdt.

38 Gunze United Limited Japan-Bangladesh Sewing Thread

39 Hangers Plus (Bangladesh) Ltd. UNTD KINGDOM Garment Accessories

40 Helicon Limited ITALY Garment Accessories

41 Hin Getah Bangladesh Ltd. JAPAN Miscellaneous

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42 Hop Lun (Bangladesh) Ltd. SWEDEN Garments

43 Hop Yick (Bangladesh) Ltd. BR. VIRGIN. IS Garments

44 Hyopshin Company Limited S. KOREA Textile

45 IL Kwang Co. Ltd. BANGLADESH Textile

46 Intimate Suppliers Ltd. HONGKONG,CHINA Garment Accessories

47 J & J Medical (Bangladesh) Ltd. S. KOREA Miscellaneous

48 Jae Mee Embotitch (Pvt.) Ltd. S. KOREA Garment Accessories

49 Ju Hyung Ind. Co. Ltd. South Korea Garments Accessories

50 Juksan (BD) Ltd. S. KOREA Garment Accessories

51 K.B Iinterlining Ltd. BANGLADESH Garment Accessories

52 KBC Chemicals Limited BANGLADESH Miscellaneous

53 Kryolan (BD) Ltd. GERMANY Miscellaneous

54 Kung Keng Textile (BD) Co. Ltd. TAIWAN,CHINA Textile

55 Lasting Spring Metal Industries Ltd. TAIWAN,CHINA Garment Accessories

56 Lenny Apparels Ltd. INDIA Garments

57 Lenny Fashions Limited HONGKONG,CHINA Garments

58 LSI Industries Ltd. TAIWAN,CHINA Garment Accessories

59 Mainetti Bangladesh Pvt. Ltd. NETHERLAND Garment Accessories

60 Mee Tick Hangers(Dhaka) Ltd. CHINA Plastic goods

61 Multimax International BANGLADESH Garment Accessories

62 New Star Hilon Co. Ltd. S. KOREA Garments

63 New Star Oriental Ltd. S. KOREA Textile

64 Osaman Interlinings Ltd. BANGLADESH Garment Accessories

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65 Ospinter Garments Limited GERMANY Garments

66 OTL-Doublegull Manufacturing Co. Ltd. CHINA Miscellaneous

67 Paddocks Jeans Ltd. GERMANY Garments

68 Paxar Bangladesh Ltd. U.S.A. Garment Accessories

69 Queen South Textile Mills Ltd. HONGKONG,CHINA Textile

70 Rancon Sweater Ltd. MALTA Metal Products

71 Redpoint Jackets Ltd. GERMANY Garments

72 Regency Packaging Ltd. INDIA Garment Accessories

73 Ring Shine Textiles Ltd. MALAYSIA Textile

74 Satexco Limited BELGIUM Garments

75 Savar Dyeing & Finishing Ind. Ltd. S. KOREA Textile

76 Savar Industry (Pvt) Ltd. BANGLADESH Footwear & Leather goods

77 Savar Sportswear Company Ltd. S. KOREA Garments

78 SBC Garments Accessories Mfg (BD) Ltd. CHINA Garment Accessories

79 SBF Limited JAPAN Electronics & Electrical goods

80 Screenline Embellishers (Bangladesh) Limited SRILANKA Garment Accessories

81 SGWICUS (BD) Limited S. KOREA Garments

82 Shanta Denims Limited HONGKONG,CHINA Garments

83 Shanta Industries Limited UNTD KINGDOM Garments

84 Shanta Washworks Ltd. HONGKONG,CHINA Garments

85 Shasha Denim Ltd. BANGLADESH Textile

86 Shine Fashion Co. (Pvt.) Ltd. INDONESIA Knitting & other Textile pdt.

87 Softex Sweater Industry(Pvt.) Ltd. BANGLADESH Textile

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88 South China Bleaching & Dyeing Factory Ltd. HONGKONG,CHINA Textile

89 Sungnam Textile Mills Ltd. S. KOREA Textile

90 Swan Interlining Co. Ltd. S. KOREA Garment Accessories

91 Swan Lon Co. Ltd. S. KOREA Garments

92 Taiwan Bangla Specialized Textile Ltd. BANGLADESH Garment Accessories

93 Talisman Ltd. UNTD KINGDOM Garments

94 The Accessories Ltd. BANGLADESH Garment Accessories

95 Tigerco Limited BELGIUM Garments

96 United Power Generation & Distribution Company Ltd BANGLADESH Power Industry

97 Welform Apparels Limited HONGKONG,CHINA Garments

98 YKK Bangladesh Pte Ltd. JAPAN Garment Accessories

99 Young Optics (BD) Ltd. CAYMAN ISLDS Plastic goods

100 Young-A Textile Co. Ltd. BANGLADESH Textile

101 Youngone Hi-Tech Sportswear Ind.ltd S. KOREA Garments

102 Youngone Synthetic Fibre Products S. KOREA Plastic goods

103 Zong Sine Textile Ind. Ltd. TAIWAN,CHINA Textile

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