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Bangladesh

Bangladesh, is a democratic commonwealth republic in the Indian sub-continent.

Bangladesh currency is Taka. Exchange rate approx Uk£=110.

Growth rate is averaging near 7% for last 10 years.

Large infrastructure projects are in pipeline e.g. Payra Port, Bridge on river Padma, 40,000 mw of electricty generation, transport link for regional connection, river dredging.

Bangladesh launched Bongobondhu communication satellite in 2018..

Core information:

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Principal business entities

Public and private limited companies, branches of foreign enterprise, liaison offices, joint ventures, partnership and sole traders are all allowed to operate in Bangladesh.

Foreign exchange control

Investments of up to 100 percent are allowed in all, except a few restricted areas. Remittance of profit, dividend and repatriation of capital is also allowed through an application process by Bangladesh Bank (Central Bank).

Accounting standards

Bangladesh has adopted International Accounting Standards and International Auditing Standards. Financial Statements must be filed by all Public companies, private companies, branches of Foreign companies and liaison offices.

Residence for tax

Any entity registered in Bangladesh is resident in Bangladesh. Any other company where its management is in Bangladesh is also resident in Bangladesh. Resident entities are taxed on Global income. Non-resident entities are taxed on Bangladesh-sourced income. Branch and liaison offices of a foreign entity is treated as a foreign entity and taxed on Bangladesh-sourced income.

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Taxable income

Business income is taxed under business income, capital gains and other income. expenses may be deducted from income. Normal corporation tax rate is 35%, reduced to 25% for publicly traded companies. Financial institutions including Bank and insurance companies are taxed at 42.5%, reduced to 40% if listed. Mobile phone and cigarette manufacturing companies are taxed at 45%. Dividends are normally taxed at 20%. Capital gains tax rate is 15%. There are some exemptions.

Work permit

Work permits for non-Bangladeshi individual is mandatory for working in Bangladesh. Penalties of 50% additional tax or Taka 5000 if higher applies.

Transfer pricing

OECD style transfer pricing regulations are in force in Bangladesh. A tax payer engaged in international transactions exceeding Taka 30 million in a year is required to maintain documentation and is required to provide a certificate in a prescribed format from a Chartered Accountant. The certificate needs to set out methods to determine arm's length transaction, and detail any related party transaction.

Double Taxation Treaties

Bangladesh has double taxation treaties in place with main trading partners including UK, USA, Canada, France, germany among others.