Investment Climate

Bangladesh – The Next Asian Tiger

Bangladesh has made outstanding progress in raising incomes, reducing poverty and improving social indicators and has been graduated as a “Middle-Income Country” under the Visionary leadership of the current Prime Minister Sheikh Hasina.

To promote and to facilitate foreign investment and business relation Bangladesh has ensures institutional support directly from the government. Board of Investment in Bangladesh (http://www.boi.gov.bd/), a specialised agency which extends all sorts of legal, fiscal and institutional support for foreign investment initiatives and promotes business relations. Land and other infrastructural support for foreign investment are also available from Bangladesh Export Processing Zones Authority (http://www.epzbangladesh.org.bd/), Bangladesh Economic Zone Authority (http://www.beza.gov.bd/) and other privately operated Economics zones.

Bangladesh has experienced average GDP growth rate of around 7 percent in recent years. The seventh five year perspective plan of Bangladesh has forecast the average economic growth rate of Bangladesh over the next five years will be 7.4 percent.

The country has been projected as very promising economy of the world in a number rating projections accomplished by globally reputed institutions. Bangladesh was classified as a "Next Eleven" emerging market and one of the "Frontier Five" emerging economies in the world by Goldman Sachs and JP Morgan respectively. The World Bank, International Monetary Fund and Other Intergovernmental organizations also projected the stable, prosperous and shiny outlook of Bangladesh.

To facilitate investment Bangladesh allows duty free import of machineries, office equipment & spare parts, raw materials (of major items) and other ancillary items. 100% foreign ownership and Remittance of royalty, technical and consultancy fees is allowed. There is no ceiling in foreign and capital Investment and repatriation of capital and dividend is permitted.

Foreign Investments and enterprises in Bangladesh enjoys ``Most Favoured Nation (MFN) treatment. Bangladeshi manufactured products also enjoys duty free and quota fee access in the most of major consumer markets of the world including European Union, Canada, India and other others parts of world.

Foreign Currency loan from abroad might be avail under direct automatic route. Non-resident Foreign Currency Deposit (NFCD) Account is also permitted.

Bangladesh also ensures very potential local consumption and human resource abundance. The number of Middle income people is rising rapidly and would be around one third of the total population within a few years. The huge demographic dividend has created tremendous economic potential for Bangladesh. Poverty has been reducing in an accelerated scale in every year.

The country of 160 million people is characterized by a vibrant domestic consumer market Bangladesh is a largely homogeneous society with no major internal or external threats. The presence of low cost manpower with enthusiasm, hardworking ability is suitable for any labour-intensive industry.

The Bangladesh textile industry is the second-largest in the world and has been forecasted to exports to the value of United States Dollar 50 billion by 2021. Other key sectors including different type of leather, leather products, raw Jute, Jute goods, Agricultural products, pharmaceuticals and Engineering products have been growing rapidly.

Being located in between South and South-East Asia, Bangladesh has a great advantage of her presence in harnessing the economy of scale throughout the region.

Bangladesh has achieved a consistent annual export growth rate of 13.6 % over the last ten years - a testimony to its export competitiveness. The Export basket is diversified and gradually transforming from labour-intensive to capital-intensive industry.

Fiscal-and-Non-Fiscal-Incentives

Bangladesh offers some of the world’s most competitive fiscal and non-fiscal incentives. Board of Investment in Bangladesh (http://www.boi.gov.bd/) a specialised agency for investment promotion might be directly consulted for further suggestions. The salient feature of incentives includes (but not limited to):

Remittance of royalty, technical know-how and technical assistance fees.

Repatriation facilities of dividend and capital at exit.

Tax holidays

In the Dhaka & Chittagong Divisions: 100% in first two years: 50% in the year three and four: and 25% in the year five.

In the Rajshahi, Khulna, Sylhet, Barisal Divisions and three Chittagong Hilly Districts: 100% for first three years, 50% for next three years, and 25% for year seven.

Depreciation allowances

Accelerated depreciation for new industries is available at the rate of 50%, 30% and 20% for the first, second and third years respectively, on the cost of plant and machinery.

Cash and added incentives to exporting industries

Businesses exporting 80% or more of goods or services may qualify for duty free import of machinery and spares, bonded warehousing.

90% loans against letters of credit and funds for export promotion.

The availability of Export credit guarantee scheme.

Domestic market sales of up to 20% is allowed to export oriented business located outside the Export Processing Zones (EPZ`s) on payment of relevant duties.

Cash incentives and export subsidies are granted on the ``Free on Board (FOB)’’ value of selected exports ranging from 5% to 20% on selected products.

Investment Guarantee

Foreign Private Investment (Promotion and Protection) Act, 1980 secures all foreign investment in Bangladesh.

OPIC's (Overseas Investment Corporation, USA) insurance and finance programmes operable.

Security and safeguards for the foreign investments in Bangladesh is also available under Multilateral Investment Guarantee Agency (MIGA) of which Bangladesh is a member.

In case of any dispute or grievance the Arbitration facility of the International Centre for the Settlement of Investment Dispute (ICSID) is also available.