Bangladesh

2. Bilateral Investment Agreements and Taxation Treaties

Bangladesh has signed bilateral investment treaties with 29 countries, including Austria, the Belgium-Luxembourg Economic Union, Cambodia, China, Denmark, France, Germany, India, Indonesia, Iran, Italy, Japan, Democratic People’s Republic of Korea, Republic of Korea, Malaysia, the Netherlands, Pakistan, the Philippines, Poland, Romania, Singapore, Switzerland, Thailand, Turkey, the United Arab Emirates, the United Kingdom, the United States, Uzbekistan, and Vietnam.

The U.S.-Bangladesh Bilateral Investment Treaty was agreed to in 1986 and entered into force in 1989. The Foreign Investment Act includes a guarantee of national treatment, granting U.S. companies the equivalent of domestic status.

Bangladesh has successfully negotiated several regional trade and economic agreements, including the South Asian Free Trade Area (SAFTA), the Asia-Pacific Trade Agreement (APTA), and the Bay of Bengal Initiative for Multi-Sectoral, Technical and Economic Cooperation (BIMSTEC). Bangladesh signed its first bilateral Preferential Trade Agreement (PTA) with Bhutan in December 2020 while it is in discussions with several countries for PTAs and Free Trade Agreements (FTAs). A joint study on the prospects of a bilateral Comprehensive Economic Partnership Agreement (CEPA) between Bangladesh and India is underway. In addition, PTA negotiations with Nepal and Indonesia are in advanced stages.

Bangladesh has signed Avoidance of Double Taxation Treaties (DTT) with 36 countries: Bahrain, Belarus, Belgium, Burma, Canada, Czech Republic, China, Denmark, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Kuwait, Malaysia, Mauritius, Nepal, the Netherlands, Norway, Pakistan, the Philippines, Poland, Romania, Saudi Arabia, Singapore, Sri Lanka, Sweden, Switzerland, Thailand, Turkey, the United Arab Emirates, the United Kingdom, the United States, and Vietnam.

Bangladesh met all three criteria required to graduate from the United Nations’ (UN) list of Least Developed Countries (LDC) for the first time at the triennial review of the United Nations Committee for Development Policy (CDP) in March 2018. In February 2021, the CDP confirmed Bangladesh’s eligibility to graduate from LDC status. The country is scheduled to officially graduate from LDC status in 2026 instead of 2024 as earlier planned to allow it two additional years for smooth transition in view of the adverse impact of COVID-19 on the economy. Bangladesh will lose duty-free quota-free (DFQF) access to several major export markets after the graduation. However, the European Union’s Generalized System of Preferences Plus (GSP+) program may allow Bangladesh DFQF access for an additional three-year transition period following the country’s effective date of graduation. To be eligible for the EU’s GSP+ program, Bangladesh must ratify additional international conventions on human and labor rights, the environment, and governance, and show it has plans to amend and enforce its laws accordingly.

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