EPZ, Economic Zone or Hi-Tech Park? Choosing and Setting Up in Bangladesh's Special Zones

In this guide: The three at a glance · Export processing zones: the published process · Economic zones after the 2026 merger · Hi-tech parks and the IT-enabled services exemption · Tax holidays: what the brochures say and what the law now does · Foreign exchange, remittances and the choice

The short answer

If you will manufacture mainly for export and want a bonded site with one authority handling permits the same day, apply to BEPZA for a plot or a standard factory building in an EPZ: the process is published, the proposal form costs Tk 3,000, sanction comes in five working days, and the price of a slower route is that only 10% of output may be sold at home. If you will serve the local market as well as export, or need more land than an EPZ plot, look at an economic zone, now under Invest Bangladesh, where the lease runs fifty years and there is no fixed cap on domestic sales, but confirm in writing whether the zone you are offered is a state zone with the June 2024 tax schedule or a private zone whose holiday was withdrawn. If you are in software, IT-enabled services, electronics or data, a hi-tech park gives ready space and a seven-plus-three-year schedule in state parks, and the IT-enabled services exemption to June 2027 applies whether or not you are in a park. Whichever you choose, the company is incorporated at the RJSC first (our company registration guide), the zone registration replaces Invest Bangladesh registration, the zone authority issues the work permits (our work permit guide), and the foreign-exchange rules on equity, loans and dividends are the same as outside, with the advantage that zone companies may keep their equity in foreign currency.

The three at a glance

Export processing zones: the published process

BEPZA is the one authority of the three whose procedure, fees and times are published in full. The sequence: letter of interest and a zone visit; the Project Proposal Form (Tk 3,000) with the RJSC incorporation certificate and constitution, a pro-forma invoice for the machinery, a bank solvency certificate and the directors’ passports; the project sanction letter and plot or building allotment within five working days; the security deposit and lease registration fee set out in the allotment letter (amounts not published; ask for them before applying); the lease executed within two working days; then possession, drawing approval, trade licence, temporary bond registration, construction, machinery import, permanent bond registration and production. A foreign-currency account is opened before the application, and Type A (100% foreign) enterprises may hold non-resident foreign-currency deposits and borrow from offshore banking units. Published rents are US$2.50 to 3.00 per square metre in the Chattogram, Dhaka, Adamjee, Cumilla and Karnaphuli zones, US$2.75 to 3.50 in the BEPZA Economic Zone at Mirsharai and US$1.40 to 1.75 in Ishwardi, Mongla and Uttara; the brochure does not make clear which figure is the annual plot rent and which the monthly building rent, so take the figure in writing. Permits inside the zone (import, export, sub-contract, work permits) come from BEPZA, usually the same day for trade permits and within seven days of the monthly committee for work permits, and the enterprise needs no import or export registration certificate. The EPZ Labour Act 2019 governs employment, with workers’ welfare associations registered by BEPZA in place of trade unions; BEPZA signed a two-year action plan with the ILO in May 2025, and in March 2026 the Government said the EPZ Labour Act would be revised in line with the amended national Labour Act, so expect changes.

Economic zones after the 2026 merger

The Bangladesh Economic Zones Authority was absorbed into Invest Bangladesh by the Invest Bangladesh Act 2026, in force from 23 August 2026, which also brought free trade zones and other declared industrial areas under one framework and kept BanglaBiz as the digital platform. The zone programme itself had already been cut back: in January 2025 the Government reduced the plan from a hundred zones to ten priority zones, and in April 2025 cancelled ten approved zones, leaving about nineteen operating with some 122 companies in construction or production. An investor deals with two licences: the zone developer (which builds and runs the zone and has its own twelve-year tax schedule) and the unit investor (the manufacturer, with the ten-year schedule); in a government zone the developer is the authority itself or a government company, in a private zone a group such as those at Gazipur and Narayanganj. Leases run fifty years; developed land in the Mirsarai zone was priced at US$1 per square metre in 2021 with 1% earnest money and the agreement after 25% is paid, and each zone publishes its own tariff. The current one-stop-service fee schedule for zone licences has not been republished under the new name; we obtain it from the zone office for each file. Because the zone is not bonded by design, an exporter obtains a bonded warehouse licence under the 2024 Rules, and domestic sales bear duty and VAT; the free trade zones introduced by the Finance Act 2026 under the Customs Act 2023 defer duty on domestic sales and need no bond licence, and the first of them are being designated inside the existing zones.

Hi-tech parks and the IT-enabled services exemption

The Hi-Tech Park Authority runs the parks for software, IT-enabled services, hardware and electronics: the Kaliakoir park outside Dhaka, the software technology parks at Jashore and in Janata Tower in Dhaka, and parks at Sylhet, Rajshahi, Chattogram, Khulna and Rangpur, with private parks licensed and district parks under construction; thirty-nine parks were built between 2009 and 2023, and a 2024 decision renamed them after their districts, though an official renamed list has not been published. Investors take land or ready-built space as a developer or a unit; the Authority’s website publishes no rent per square foot or registration fee, and its one-stop service had seven of 148 identified services online in 2026, so the commercial terms are negotiated with the park office and should be in the allotment letter. Work permits for park enterprises come from BHTPA. The tax position has two parts. First, the park schedule under the June 2024 SROs: units 100% exempt for years one to seven and 70% for years eight to ten, developers 100% for ten years then 70% and 30%, for operations beginning by 30 June 2035, with the same reported restriction to state parks from FY2024-25 as for economic zones. Second, and independent of location, the IT-enabled services exemption: income from about twenty listed services (software development and customisation, SaaS, cyber security, data analytics, mobile applications, web development, IT support, GIS, animation, graphic design, e-learning, call centres, document conversion, robotic process outsourcing, IT freelancing and others) is exempt from income tax until 30 June 2027 under the Finance Act 2024, on condition that all income, expenses and investment pass through banks; the Finance Act 2026 did not extend it, so a business relying on it should plan for 2027. The Finance Act 2026 also extended the VAT exemption on manufacturing computers and technology goods to 30 June 2030.

Tax holidays: what the brochures say and what the law now does

Other fiscal points confirmed from the 2024 summaries: capital machinery, equipment and parts for zone and park units exempt from customs duty (and from VAT in the parks); VAT exemption for zone companies on gas, water, electricity and procurement providers; vehicle imports with customs-duty exemption only, for investors above US$5 million or 250 employees (150 in a park); the 2019–2024 amnesty for undisclosed money invested in zone factories was not extended; and the Finance Act 2026 raised the turnover tax on new industrial undertakings in their first three years to 0.2% while giving start-ups a nine-year growth period with no turnover tax. The dividend, capital-gains and royalty exemptions in the 2015 zone package have an uncertain current status. Model a zone project on the duty and VAT reliefs, which are confirmed, and treat the income-tax holiday as a question to be answered in writing by the authority and the NBR for the specific zone before the lease is signed.

Foreign exchange, remittances and the choice

Inside any of the three estates the company remains a Bangladeshi company and the Bangladesh Bank rules in the rest of this category apply, with four easements. Zone companies need not encash foreign equity and may operate foreign-currency accounts; Type A enterprises in EPZs may borrow short-term under the consolidated loan circular’s zone paragraph and medium and long-term with Bangladesh Bank approval through the zone authority (our loan guide); royalty, technical know-how and technical assistance fees are remittable without prior permission up to 6% of the cost of imported machinery for a new project or 6% of the previous year’s sales for an operating one, with specific approval above that; and expatriates may be paid up to 80% of net after-tax salary abroad through the employer’s bank (an older 75% rule for zone employers’ foreign-currency accounts also circulates). Dividends leave through the nominated bank on the same Appendix-9 file as anywhere else (our repatriation guide). The decision, in the end, turns on three facts about the business: how much of the output is for export (an EPZ’s 10% cap is a hard constraint, an economic zone’s open domestic market a real advantage); how much land and tenure the project needs (thirty years versus fifty); and whether the business is manufacturing or services (the parks exist for the latter, and the IT-enabled services exemption follows the business, not the park). The tax holiday, once the dominant reason to enter a zone, is now the item to verify last and rely on least.