"BUSINESS & INVESTMENT in BANGLADESH"
Why Bangladesh?
China and India between them have vast and increasingly prosperous populations, which are projected to grow to three billion by 2050. Bangladesh is well situated in every sense to take advantage of this opportunity. With improving education, technology and economic growth, Bangladesh’s own market of 146.6 m people is becoming increasingly attractive to business and foreign investors. The cost of doing business in Bangladesh has significantly and visibly decreased in recent times.
Advantageous Trading Agreements
All Bangladeshi products (other than armaments) enjoy complete duty and quota free access to EU, Japan, Canada, Australia and most other developed countries.
Bangladesh is a signatory to the Multilateral Investment Guarantee Agency (MIGA); Overseas Private Investment Corporation (OPIC), USA; International Center for Settlement of Investment Disputes (ICSID); World Intellectual Property Organization (WIPO).
Bilateral agreements to avoid double taxation have been signed with 28 countries with a further nine countries under negotiation.
Attractive Business and Investment Climate
Bangladesh inherits a largely homogeneous society, in which people live in harmony and peace, irrespective of race and religion. It is a democratic country, providing broad and non-partisan political support for market-oriented reforms and for active encouragement of foreign investors.
The Foreign Private Investment (Promotion & Protection) Act 1980 provides protection for investments made in Bangladesh.
Doing Business in Bangladesh:
The Board of Investment (BOI) is the government agency responsible for promoting business opportunities in Bangladesh to investors everywhere. We are here to facilitate the process from first enquiry through registration to implementation and beyond. We can do the following for you:
Help with information tailor made to your business area.
Advise you about the best place to locate your business.
Introduce you to the most relevant organizations, government agencies and BEPZA, the agency responsible for the export processing zones (EPZ).
Help you register your investment intentions with the BOI (unless your investment qualifies to be best located in an EPZ), so that you are eligible for all the various incentives on offer you need.
The chart shows the five basic steps you will probably want to go through to start your business in Bangladesh.
Step 1. Information Searches and Registration
There are many information sources. These days you will probably start with the internet. BOI can also help and suggest other government agencies, chambers of commerce, and professional associations, international organisations such as the World Bank, Asian Development Bank, UNCTAD and IFC. There are independent consultants too.
Register your intentions. Investors are advised to apply to the BOI for registration as early as possible in order to benefit from the many incentives and tax concessions available. The application form can be found online at this website.
Step 2. A Fact-Finding Visit
Make a physical verification of your researches by visiting Bangladesh. Make your own travel arrangements or let BOI arrange things for you and benefit from our Welcoming Service.
Business travellers may request a visa for limited or multiple entries which can vary from one month to fice years. Given certain conditions there is also the possibility of a landing permit and visa on arrival. BOI or the Bangladesh diplomatic mission in your country can advise you on this.
Counseling. On arrival investors can take advantage of in-depth BOI counseling. Professional investment and business counsellors can offer advice and practical assistance over the phone, via email or fax or, best of all, at a personal meeting in the BOI offices here in Dhaka, Chittagong, Sylhet, Rajshahi, Khulna and Barisal.
Step 3. Getting Started
You will need to set up an appropriate company structure. By this stage you will know if you are going to operate as a branch/liaison representative office (or Buying House) or if you will be establishing an industrial project. This is relevant to the type of business structure you will then need to form.
Incorporation. Business in Bangladesh can be carried out by a company formed and incorporated locally or by a company incorporated abroad but registered in Bangladesh.
The incorporation or registration is done by the Registrar of Joint Stock Companies and Firms (RJSC&F).
Companies may be private or public limited companies or unlimited companies. In establishing a place of business of a foreign company, the company has to be registered with the RJSC&F as the place of business. Such registration is required in respect of capital issue and obtaining clearance from the Bangladesh Bank.
To open or extend a branch/liaison representative office of a foreign company, the company has to apply to the BOI.
Step 4. Business/Plant Set-up
BOI can help with the following:
Obtaining industrial plots.
Approval of foreign loans, supplier’s credit, PAYE schemes etc.
Obtaining utility connections: water, gas, electricity, phones.
Registration for certification for importing raw materials.
Work permits for foreign nationals and key staff.
Registration with the Factories Act which regulates work conditions.
Registration with environmental legislation.
Remittance of royalty, technical know how and technical assistance fees.
Step 5. Commercial Operation
After starting commercial operations BOI will be following up with what you need subsequently.
Investors need to a submit half-yearly performance report to the BOI on production and employment in their projects. Any changes to the information provided in the registration should be indicated to the BOI.
Implementing a private sector industrial project in Bangladesh either local, joint venture or 100% foreign follows a rather simplified process. Once an investor to do business in Bangladesh, the first thing is to have relevant, sufficient and reliable information on the investment and business climate, opportunities, competitive strengths, industry structure etc.
Step by Step Procedure
Investment Climate:
Bangladesh offers an unparalleled investment climate compared to the other South Asian economies. Here are eight key pointers to Bangladesh’s investment climate today.
Bangladesh is a largely homogeneous society with no major internal or external tensions and a population with great resilience in the face of adversity (e.g. natural calamities).
Bangladesh is a liberal democracy. The population of this country irrespective of race or religion have been living in harmony and understanding for thousands of years.
Broad non-partisan political support for market oriented reform and the most investor-friendly regulatory regime in South Asia.
Trainable, enthusiastic, hardworking and low-cost (even by regional standards) labor force suitable for any labor-intensive industry.
The geographic location of the country is ideal for global trade, with very convenient access to international sea and air routes.
Bangladesh is endowed with abundant supply of natural gas, water and its soil is very fertile.
Although Bengali (Bangla) is the official language, English is generally used as a second language. The majority of the educated population can read, write and speak in English.
As a result of low per capita GDP, present domestic consumption is not significant. However, it should always be considered that there exists a middle class with over 10% of the population. As economic growth picks up, the purchasing power will also grow substantially.
Bangladeshi products enjoy duty free and quota free access to almost all the developed countries. This access to the global market is further helped by the fact that the policy regime of Bangladesh for foreign direct investment is by far the best in South Asia. Most Bangladeshi products enjoy complete duty and quota free access to EU, Canada, Australia and Norway. Though in limited scale, Bangladesh products already found their access with lower duty in the markets of Thailand, India and Pakistan. However, talks are underway with China, Russia, Malaysia and other neighbouring countries in this regard.
Potential Sectors:
Agri Business:
The abundance of natural resources available in Bangladesh supports a range of highly profitable investment opportunities in agribusiness. Over 90 varieties of vegetable are grown in Bangladesh, yet in this fertile land there is under utilisation of the country’s agricultural capacity. This presents many opportunities for investors seeking to export agricultural products, or to meet the rapidly growing local demand.
Ceramics:
The global ceramics industry is worth in excess of $10bn. Bangladesh is perfectly positioned to expand rapidly in this sector with its high quality cost ratios and creative human resource base. The country has key advantages in technical expertise and skilled manpower in tableware and other ceramics. It has clean gas reserves in certain locations to fire kilns for competitive cost advantage. Bangladesh ceramic tableware has a good reputation in the international markets like North America and EU countries.
Electronics:
The high skill, low cost labor resource of the electronics sector in Bangladesh offers companies great returns on investment. Whilst the global market for semiconductors is worth in excess of $200bn and is dominated by the Asian economies, Bangladesh has significant financial and economic factors in its favor that make it the best choice for many companies.
Frozen Foods:
Frozen foods are the second largest export sector of the economy. The massive natural resources available in Bangladesh make this sector particularly promising for investors looking to supply in international as well as in domestic markets.
Garments & Textiles:
From spinning to weaving, from knitwear to leisurewear and high street fashions, the textiles and clothing industry is Bangladesh’s biggest export earner with value of over $ 16 bn of exports in 2009-10. Our factories design and produce for the world’s leading brands and retailers. This rapidly growing sector of the Bangladeshi economy offers a unique competitive edge that supports profitable expansion into new strategic markets.
ICT Business Services:
ICT and its related business services in Bangladesh are a vibrant sector supported by an enthusiastic culture and a government committed to providing a pro-business climate for all investors. Over 400 IT companies are now thriving in the country supplying to local and international markets worldwide.
Leather and Leather Goods:
Bangladesh has a long established tanning industry which produces around 2-3% of the world’s leather from a ready supply of raw materials. The country is therefore an established and attractive location to source and outsource the manufacture of finished leather products. The leather industry is ideally suited to Bangladesh with its abundance of labor and natural resources at internationally competitive rates.
Light Engineering:
The burgeoning domestic market and the prospect of significant cost reductions for companies sourcing components and finished goods for international markets makes Bangladesh a compelling choice for investors.
Power Industry:
Bangladesh is progressing through a phase of development where automation is the key to its economy and business. As the country continues to industrialize the importance of power generation and electricity supply becomes a key government priority.
Life Science:
The pharmaceutical sector in Bangladesh has developed fast. Originally set up to cater for local needs as a manufacturer of patent medicines, the industry now exports drugs to highly regulated markets. Expansive international companies have established operations in the country as they seek to grow, promote exports, drive down manufacturing costs, and undertake research and development into reverse engineering of patented medicines.
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