Regulatory Framework for Pharmaceutical Investment
Investment Modalities and Licensing
Foreign investors may establish a wholly-owned subsidiary or a joint venture. Under the Drugs and Cosmetics Act 2023, no person or entity shall manufacture, stock, or sell drugs without a valid license issued by the Directorate General of Drug Administration (DGDA).
| Regulatory Milestone | Primary Authority | Statutory Reference |
|---|---|---|
| Company Incorporation | RJSC | Companies Act 1994 |
| Investment Registration | BIDA | Investment Board Act 1989 |
| Drug Manufacturing License | DGDA | Drugs & Cosmetics Act 2023, Sec 6 |
| Product Registration (MA) | DGDA | Drugs & Cosmetics Act 2023, Sec 12 |
| Import of Raw Materials | DGDA / BB | Import Policy Order 2021-24 |
Drug Registration and Marketing Authorization
- Site Clearance: Before establishing a factory, the investor must obtain site clearance from the DGDA as per the Drugs (Control) Ordinance 1982 (provisions saved under the 2023 Act).
- Recipe Approval: Under Section 12 of the Drugs and Cosmetics Act 2023, every drug must be registered. The applicant must submit the formulation (recipe) to the Drug Control Committee (DCC).
- Pricing: For 'Essential Drugs', the government fixes the Maximum Retail Price (MRP) under Section 30 of the 2023 Act. For other drugs, indicative prices are set by the manufacturer but must be approved by the DGDA.
Tax Incentives and TRIPS Flexibility
Bangladesh, as a Least Developed Country (LDC), currently benefits from the TRIPS waiver for pharmaceutical products. Furthermore, the Income Tax Act 2023 provides specific tax holidays for high-tech manufacturing industries, including active pharmaceutical ingredients (API).
Consult Barrister Liton Asaduzzaman Sarkar
For specialized advice on pharmaceutical licensing and cross-border M&A in the healthcare sector.
Schedule ScopingFrequently Asked Questions
Is 100% foreign direct investment (FDI) allowed in the Bangladesh pharma sector?
Yes, 100% FDI is permitted under the Foreign Private Investment (Promotion and Protection) Act 1980, provided the entity complies with the licensing requirements of the Drugs and Cosmetics Act 2023.
What are the penalties for manufacturing drugs without registration?
Under Section 41 of the Drugs and Cosmetics Act 2023, manufacturing, importing, or selling drugs without registration is punishable by imprisonment for up to 10 years or a fine of up to 10 lakh BDT, or both.
How is the repatriation of profits handled for foreign investors?
Profit repatriation is guaranteed under Section 8 of the Foreign Private Investment (Promotion and Protection) Act 1980 and regulated by the Foreign Exchange Regulation Act 1947 through authorized dealer banks.
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