Some tax holiday and reduced-rate regimes remain, but their scope has narrowed. The Income Tax Act 2023 and later Finance Acts have limited eligibility to particular sectors, locations and time windows, and many older schemes have lapsed or been closed to new entrants. Whether a holiday is available for a particular project depends on the activity, the start of commercial operation, the location and the current SROs. We review the latest instruments for each client, since relying on older summaries or a competitor's experience is one of the most common errors investors make when they budget for tax incentives.

The merger of BIDA, BEZA and the PPP Authority into Invest Bangladesh, operating since 23 August 2026, changed the administering authority, not automatically the underlying fiscal benefits. Incentives granted under existing laws and approvals generally continue according to their terms, but new applications, amendments and certificates now go through Invest Bangladesh. Implementing rules and guidance are still being issued, so investors should check how pending matters will be processed. We review each zone allotment and approval to confirm what benefits the investor holds and what steps are needed to keep them. Keep copies of existing approvals and certificates.

In most cases the incentive regimes apply by reference to the activity, location and entity type rather than the nationality of shareholders, so a Bangladeshi subsidiary of a foreign group can usually claim the same benefits as a locally owned company. Some sector policies and zone regimes have specific rules for foreign investment, and certain benefits relate to the remittance of profits or the import of capital. Foreign investors must also comply with foreign exchange and registration requirements. We confirm the position for the specific sector and structure, and how it fits the investor's group tax position.

Records should show that each condition was met throughout the period of the incentive. That usually means separate accounts for exempt and taxable activities, evidence of the commercial operation date, import and production records, proof of investment, board approvals and correspondence with regulators. Where an incentive depends on cashless transactions or export earnings, bank records are critical. Records should be kept for at least the period during which the tax authorities can reopen an assessment. We help clients design a simple evidence file that auditors and in-house teams can maintain year after year without disruption to the business.

It may. Some incentives are tied to a specific entity, undertaking or approval and do not pass automatically on a merger, amalgamation or transfer of business. A change in shareholding may not affect an incentive at all, or may trigger an approval condition. The answer depends on the wording of the relevant instrument and the structure of the deal. We review the incentive conditions as part of due diligence, advise on structuring that preserves them where possible, and draft contractual protections that allocate the risk of loss fairly between buyer and seller. Request the incentive instruments early.

Concessionary customs duty rates for capital machinery and certain spare parts are generally granted through SROs, and they are often limited to particular industries, project types or importers holding the right registration. The importer must show that the goods fall within the concession and will be used for the approved purpose. Customs may require certificates from the relevant authority and will check classification and valuation. If machinery is later sold or diverted, duty may become payable. We review the SRO, prepare the documents and advise on clearance and later use of the goods. Retain certificates for audit.

Yes, the legislature can amend tax incentives through later Finance Acts, and the National Board of Revenue can revise SROs. Some changes protect existing beneficiaries until their entitlement period ends, while others apply from a fixed date. Bangladesh's LDC graduation and revenue pressures make further rationalisation likely. Investors cannot remove this risk, but they can reduce it by documenting eligibility early, monitoring each budget, and including change-in-law provisions in shareholder, project and offtake agreements. We advise on drafting those provisions and on the legal options if a withdrawal appears unfair or unlawful. Monitoring each budget is essential.

The tax authorities may issue queries, reopen an assessment or raise a demand if they consider that a condition was not met. The business should respond promptly, provide the evidence on file and keep records of every exchange. If an assessment is made, there are statutory routes of objection and appeal to the commissioner and the tribunal, with further recourse to the High Court Division on questions of law. Alternative dispute resolution may also be available. We assess the merits, prepare the written response and represent the business at each stage, working with its auditors and tax practitioners.