Bangladesh: Next rising star in South Asia for foreign investment

In recent years, the economy of Bangladesh has been taking a fair turn.
Economic expansion is persistent for a decade registering 6 percent growth promising to reach 7 percent in years to come.
Bangladesh is now trying to establish itself as the next rising star in South Asia for foreign investment.
The government has implemented a number of policy reforms designed to create a more open and competitive climate for private investment, both foreign and local.

Why Bangladesh?

A winning combination
Bangladesh is a winning combination of competitive market, business-friendly environment and competitive cost structure.

Strong growth prospects:
The economy of Bangladesh is currently $180 billion which according to IMF will rise to $322 billion by 2021 creating enormous economic opportunities

Large educated and motivated youth
57 percent of the population is under 25 years old
High literacy rate (72 percent) among youths, aged 15-24
Inspired young, hungry for work and growth
2 million youth entering the job market each year

Strategic location, regional connectivity and worldwide access
Bangladesh is strategically located next to India, China and ASEAN markets.
As the South Asian Free Trade Area (SAFTA) comes into force, investors in Bangladesh enjoy duty-free access to India along with EU, Japan and other developed countries.

Strong local market and growth
Bangladesh has proved to be an attractive investment location with its 160 million populations and consistent economic growth for a decade leading to strong and growing domestic demand.

Low cost of energy
Energy prices in Bangladesh are most competitive in the region

Proven export competitiveness
Bangladesh enjoys tariff-free access to the European Union, Canada and Japan.
In Europe, Bangladesh enjoys 60 percent of RMG market share and is one of the top manufacturing exporters.

Competitive incentives
Bangladesh offers the most liberal FDI regime in South Asia, allowing 100 percent foreign equity with unrestricted exit policy, remittance of royalty and repatriation of equity and dividend.

Export and economic Zones
Bangladesh offers export oriented industrial enclaves with infrastructural facilities and logistical support for foreign investors. New Economic zones are created.
The country is also developing its core infrastructures, roads, highways, surface transport and port facilities for a better business environment.

Why Invest in Bangladesh?

Policies and reforms
• Continued reforms taking place embracing global best practices
• A positive attitude among policy makers toward undertaking reforms for business growth
• A special high-level committee works for policy and regulatory improvement
• Connected through rail and road with India and China (to be implemented soon).

Appealing incentives
• Offering a whole range of investment incentives and benefits
• All fiscal, financial and other types of incentives are competitive among similar locations

Market access
• Bangladesh has a large domestic market of more than 160 million people
• Middle class (with purchasing power) is growing fast
• It has access to regional market of about 3.0 billion people through regional and bilateral integration in South Asia and South East Asia via BIMSTEC and BCIM-EC.
• Bangladesh has preferred market access (global reach) to large developed markets
• ASEAN /East Asian investors can utilize Bangladesh as an export springboard to the world

Attractive incentives schemes:
• Bangladesh offers most attractive investments incentives across sectors and locations.

Fiscal and tax incentives:
• Tax holiday: 5 to 7 yrs for selected sectors Upto 10 yrs for infrastructure Upto 12 years for EZs
• Accelerated depreciation in lieu of tax holiday
• Double tax avoidance under DTTs
• Tariff concessions on importing capital machinery and import of raw materials
• Bonded warehousing
Others:
• Fast Track Approvals of Citizenship
• Permanent Residency
• Quick Immigration
• Skilled work Permits
• NRB Preferences

Financial Incentives:
• Cash incentives
• Exporting selected products
• Export Development Fund
• Equity Entrepreneurship Fund
• Access to infra fund facilities (IPFF)

Country credit ratings:
Moody’s Investors’ service has rated Bangladesh BA3 and Standard and Poor’s has rated it BB- for the consecutive 6th year.

Economic Zones:
To mitigate land crisis for industrial use and to create fully serviced industrial zone govt. has taken measures to build Economic Zones in the country.





As of now 22 zones are selected comprising 17,000 acres of land were demarcated in which 19 are in the public sector and 3 are in the private sector.
The government of Bangladesh has undertaken efforts to build 100 economic zone in the country.

• The regulatory framework for the EZ is as under:
• Bangladesh EZ Act, 2010
• Bangladesh Economic Zones (Appointment of Developer, etc) Rules,2014
Policy of Private EZ, 2014

Key features:

♣ Comprehensive industrial Infrastructure
• ♣ Development under PPP (Private Public Partnership) model
• ♣ Owned and regulated by the government, but managed by the private sector
• ♣ Encompasses multiple business sectors within each zone
• ♣ Combines both bonded and non-bonded area
• ♣ EZ includes non processing and domestic area
• ♣ includes FDI and local investment

Conclusion

Bangladesh is an ideal destination for Saudi entrepreneurs as it has a very dynamic young talented Muslim population.
Please do visit Bangladesh and contact the embassy in Riyadh at [email protected] or visit Board of Investment (BOI) at boi.gov.bd for further details.
The embassy and the BOI are eagerly waiting to assist Saudi brothers and sisters to explore the enormous potentialities in investment opportunities in different sectors, tourism industry, IT, ship-building, pharmaceuticals, etc. in Bangladesh.