QS Study

Types of Industries to be set up in Export processing zones (EPZ)

Export processing zones (EPZs) are areas within developing countries that offer incentives and a barrier-free environment to promote economic growth by attracting foreign investment for export-oriented production.

Based on the ownership, the factories in the EPZ can be classified into three categories. They are as follows:

Group-A: The industries under foreign ownership fall into this category. The Bangladeshi with the foreign citizenship can also establish them.

Group-B: The industries developed tinder joint ownership by both foreign and local investors tall under this category.

Group-C: The industries under 100% local ownership and investment are in this Category.

Conditions for establishing industries in these three categories in EPZ are as follows:

Conditions for Group-A:

  • Investment must be done with the investors
  • 95% of the export earnings can be sent abroad. The remaining 5% can be sent after tax and other liabilities.

Conditions for Group-B:

  • The expense for the heavy machineries must be bourn by the foreign investor.
  • The foreign investor will pay for all the raw materials.
  • The local capital must be supplied by the investor or by loan.
  • If the profit of the foreign investor is equal to the expenses he has bourn then he can send his part of profit to the abroad.

Conditions for Group-C:

  • The cost of the raw materials, machineries and other imported materials and wages of the foreign workers can be paid through wage earners scheme, export performance licensee etc.
  • The total export license must be given to the Bangladesh Bank.

The types of permitted industries based on the product type:

  • Knit and garment industries ready-made garments, hosiery, knitting and embroidery, carpet, blanket etc.
  • Household Items, household utensils, machineries, and furniture.
  • Sports Items- Sports items, toys and plastic products.
  • Electronics- electronic items and parts.
  • Leather and Shoes industries- Shoes and leather goods.
  • Artificial ornaments and optical items.
  • Medical materials- various types of biological, surgical, and dental machineries.
  • Engineering Industry- various types of engineering materials, scientific measurement machines and measuring scales.
  • Medicine and canned fish.
  • Fruit processing industry.