Salahuddin Kasem Khan, Managing Director & CEO, AK Khan & Co. Ltd.
Bangladesh Economic Zones Authority (BEZA) was constituted under Prime Minister’s Office in August 2010, with an aim to establish economic zones in potential areas of Bangladesh for employment generation, FDI and inclusive growth of the country. Bangladesh Economic Zones Act 2010 was promulgated under which Bangladesh Economic Zones Authority was established, with broad objectives to:
Identify and select sites for Economic Zones for industrial activities
Acquire land for Economic Zones
Ensure off-site infrastructure development or the Economic Zones
Establish Economic Zones through Public-Private partnership (PPP)
Provide One Stop Service
BEZA’s vision is to establish one hundred Economic Zones in the next fifteen years with an employment generation of 10 million and development of 30,000 hectares of land.
Furthermore, BEZA has positioned itself to contribute in achieving the vision through regulatory reforms and facilitating support to the investors and developers. BEZA would also provide multiple incentives, other than infrastructure provision, to the developer of the Economic Zone as well as to a particular manufacturing unit.
BEZA Incentives for Developers
- Income Tax exemption in a block of 10 years out of 15 years
- VAT Exemption on electricity or taxes on sale (for 10 years)
- VAT Exemption on local purchase excluding petroleum products
- Exemption from custom/excise duties
- Exemption of stamp duty and registration fees for land registration for the first time
- Exemption of stamp duty and registration fees for land registration of loan/credit document
- Exemption from dividend tax
- Exemption from Tax on Income from service charges
BEZA Incentives for Unit Investors
- Tax Holiday up to 100%
- Duty free import of raw materials etc.
- Exemption from dividend tax (after tax holiday period is elapsed)
- Full repatriation of capital and dividend
- No ceiling of FDI
- 100% backward linkage raw-materials and accessories to sell for EOI in DTA
- 20% sale of finished product to DTA
- Sub-contracting with DTA allowed
- 50% exemption of stamp duty and registration fees
- Exemption of VAT on all utility services
- Duty exemption on export
- Exemption of CD for import of vehicles
- Exemption of double taxation subject to Double taxation agreement
- Exemption of Salary income from IT for expatriates
- Consider Export Processing Area of Economic Zone as custom bonded area
- Foreign loan is allowed in compliance with existing laws
- FC Account for non-residents
- FC Account for both local and joint venture industry
- Foreign investors to be free to enter into JV
- Tax exemption on royalties, technical fees etc.
- Tax exemption on capital gains from transfer of shares.
- Provision of transfer of shares by foreign shareholders to local shareholders and investors
- Issuance of work permits to foreigners is allowed up to 5% of total officers/employees of an industrial unit
- Re-investment of remittable dividend to be treated as new foreign investment
- Resident visa for investment of US$ 75,000 or more
- Citizenship for investment of US$ 500,000 or more
Profile AK Khan & Company
A.K. Khan & Company Ltd. is one of the oldest and most renowned private sector organizations in Bangladesh. Late Janab Abul Kasem Khan, popularly known as A.K. Khan, established the company after the Second World War in 1945. Janab A.K. Khan started his business from Chittagong and after India and Pakistan separated in 1947, Chittagong emerged as the foremost port city and business center of the country.
Within a decade, A.K. Khan & Company Ltd. became a leading industrial powerhouse and a major contributor to the national economy. In the early 1950s, Janab A.K. Khan established an Insurance Company, Financial Institution as well as manufacturing industries in Textiles, Jute, Plywood, Tannery, Heavy Electrical Goods, Shipping and Irrigation. From 1980s the Company started to grow through Joint Ventures (JV) with renowned Multinational Companies in Textile, Telecommunication and Deep Sea Fishing. Presently, the Group employs over 7000 people including its JV Companies.
A.K. Khan & Company Ltd., a 67 years old conglomerate has been portraying a major player role inthe highly competitive business arena of Bangladesh with its wings spread all over the globe through various joint ventures. The Bangladeshi economy has been growing well at 6.3% in the past 5 years. However, Bangladesh now needs to accelerate GDP growth 8% to 10% to reduce the poverty level from 40% (now) to 15% and to become a Middle Income Country by 2021.
AKKEZ- An Ideal Business Jurisdiction
Bangladesh Government released the “Bangladesh Economic Zones ACT 2010” to boost and promote the development of industry with allowance of “Special Economic Zone” in the country. This will be a prospective momentum of industry development to prepare the shift of industrial modernization from low labor based industry to a high-tech high-valued industry. Also, around area of the AKKEZ Project Site, north part of Dhaka, such as Narayanganj, Narsingdi, Gazipur, Tongi and Savar have no more capacity to accept the demand of Economic Zone. These existing Economic Zones are using Dhaka-Chittagong Road to transport their cargoes with trucks. It seems that the cost will be very high cause of delayed transportation time more than 4 and 5 days. The most beneficial merit of AKKEZ will be that AKCT (AK Khan Container Terminal) is developing in the same site to make easy the mass transportation between Dhaka and Chittagong Port with container ships without any traffic congestion. This special circumstance of AKKEZ will stimulate lots of potential investors who want to escape, relocate and establish their factories to Dhaka area because of their countries’ higher labor costs and transportation costs.
AKKEZ has a gross area of 200 Acres and highly suitable to facilitate multi-sector industries such as mobile handsets, telecom towers etc., pharmaceutical, agro-based industries, chemicals, aircraft instruments, watch, digital equipment, electrical appliances, BPO operation, electrical equipment including computer, hard disk, printer etc., TV/monitors, toys, medical, surgical & biological instruments, plastic products, IT development & computer/telecom accessories, and IT related services such as call centers. AKKEZ is expected to create employment for more than 100,000 workers. Also, with the successful completion of AKKEZ, the following effect can be realized:
- i) Attract FDI into the country.
- ii) Cost effective production facilities
iii) Create Employment opportunity.
- iv) Technology transfer and skill development
- v) Development of Backward & Forward linkages.
Vision of AKKEZ
AK Khan Private Economic Zone (AKKEZ) at Danga, Palash, Narshingdi is a regional hub for maritime transportation and logistics services; a safe haven for investments in import and export processing industries based on a multitude of industries which may include vehicle components and machineries, electrical and electronics, metal-nonmetal, plastic and general processing, Agro, Garments and IT related services ; thus acting as an important lever for the economic growth of Bangladesh, the enhancement of the quality of life of the local communities and having catalyst effects to increase the economy keeping parity with global growth.
Mission of AKKEZ
To improve the business environment of AKKEZ ; develop its infrastructure services; manage its strategic assets and facilities; and build its human-resource capabilities in order to attract local inward and foreign direct investments in transportation and logistics services, high-value-added industries with the approved master plan, best international practices, good governance and the sustainable use of natural resources.
Core Values of AKKEZ
Transparent, streamlined and proactive business environment in line with the needs of investors and established businesses. Optimal and sustainable use of financial, natural and environmental resources. Equal treatment for foreign and local investors. Maximizing private sector participation in the development of the Zone. Good corporate governance that values individual responsibility, timeliness of decision making, and institutional accountability based on achieved results.
Why Invest in AKKEZ ?
This project site is located approximately 56 km northeast of Dhaka city, and confronted with the River. The site is bounded by R301 (Kaligonj-Ghorashal Rd) to the north, R301 (Panchdona-Ghorashal Hwy) to the east, Z2047 (Panchdona-Danga Rd) to the south which is connected with the Danga-Kaligonj Road which is leading to the site. There is Soheed Moyez Uddin Bridge passing through R301 to the 6km upstream of the Shitalakhya River from the site, and just adjacent to the north Ghorashal Railway Bridge. Furthermore, the site location of AKKEZ will portray spectacular advantages due to the connectivity of the surroundings through both waterways and road; such as Chittagong Port, railway station, Narayangonj & Narshingdi industrial zones and EPZs’.
Other highlights include
Distance from Dhaka by Road about 56 km (via Narsingdi).
Distance to Dhaka-Chittagong Highway about 40 km.
From Narayangonj, an industrial zone, about 57 km.
Distance from Narsingdi industrial zone about 15 km.
Tongi, industrial area, main town 44 km.
Gazipur, the main industrial zone, is about 55 km away.
New satellite town Rajuk Residential plots “Purbachal” is about 5 km, on the other side of the river for local/foreign management.
Directly connected with the river Meghna & thus well connected with Chittagong & Mongla port.
To cover all the industrial areas around the Dhaka district i.e. Narayanganj, Narsingdi, Gazipur, Tongi & Savar, won’t have the need to cross Dhaka city area from the proposed land.
Key Information
Access Connectivity
By road: 56 km from Dhaka, 57 km from Narayangonj, 15 km from Narshingdi, 44 km from Tongi, 55 km from Gazipur, 270 km from Chittagong port.
By river: 320 km (171 nautical miles) from Chittagong port, directly connected with he river Meghna & thus well connected with Chittagong & Mongla port
Land
Gross Area 200 Acres-
Estimated cost of Infrastructure
$ 70 Million for on-Site and $8 million for off-site
Employment Projection
Approximately 100,000 workers
Suitable Industies
Aircraft instruments, watch, digital equipment, electrical appliances, BPO operation, electrical equipment including computer, hard disk, printer etc., TV/monitors, toys, medical, surgical and biological instruments, plastic products, IT development and computer/telecom accessories such as mobile handsets, telecom towers etc., and IT related services such as call centers, pharmaceutical, agro-based industries, chemicals, garments and garments accessories .
Conclusion
AK Khan Private Economic Zone (AKKEZ) program is aiming to achieve the above goals by attracting private investment (FDI & DI), accelerating GDP growth & creating new employment. AKKEZ has many competitive advantages to its credit which qualify it to become a logistic and major business hub not only for Bangladesh but for the South Asian region on the Bay of Bengal Sea. The area will house advanced IT based industries along with Agro-based industry, and garments complex that will have catalyst effects on the Bangladeshi economy’s growth. It will also house many other integrated manufacturing industry area that utilize the available natural resources of Bangladesh.
AKKEZ will also provide a remarkable business environment by securing an advanced stable logistics market through its in-house port facility creating transportation means from inland to waterway, which will have the effects of reducing transport time, optimize transport cost and safe handling of transport cargo.
Considering the above mentioned advantages, I hereby enthusiastically welcome and invite all the potential investors (national and international) to our AK Khan Private Economic Zone, which aims to provide the best environment for your investment and business in Bangladesh.
