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Why you Invest in Bangladesh

Bangladesh is now one of the most promising emerging markets in the world and foreign investors are slowly starting to recognize it as a market to keep an eye on. In this article, we will show you reasons why you should consider to invest in Bangladesh, among other things the world’s second largest fabric exporter and a rising player in the pharmaceutical industry.

#1 continuously rapid economic growth

One of the most notable indicators of Bangladesh’s rapid economic development is its surging GDP. The GDP of Bangladesh continued to increase at 7.3% in 2017, it continued to grow 7.86 in 2018 and 8.13 in 2019 respectively and total GDP USD $274 Billion (FY 2017-18).

According to the IMF, the average GDP Growth for emerging and developing countries is 4.9%. Therefore, compared to other emerging markets, the GDP growth of Bangladesh has been outstanding.

#2 Strategic location

Located on the border of South and Southeast Asia, Bangladesh is close to other major markets in the region, such as China.

Bangladesh’s capital city Dhaka has easy access to its neighboring countries. It is also the commercial and financial hub of Bangladesh and the largest economic center of Eastern South Asia.

Furthermore, Bangladesh is situated on the coast of Bay of Bengal which offers good conditions for doing trading business within Asian and Middle Eastern markets.

#3 Young and skilled workforce

One of the main driving forces of Bangladesh’s economic growth is its young workforce. As a matter of fact, in 2018, the median age in Bangladesh is just 26.0.

The country also shows potential in technical education. 15,000 Bangladeshi fresh graduates get into top IT firms such as IBM, Microsoft, and Google every year.

The European Commission listed Bangladesh as an ideal destination for outsourcing. There are Tech Parks to promote the progress of the ICT sector to create Digital Bangladesh.

#4 growing population

As of June 2018, the population of Bangladesh is 166,340,956 according to the United Nations. This makes Bangladesh the 5th most populous country in Asia and the 8th in the whole world. In addition, the UN estimates Bangladesh’s population to reach 265 million by 2050.

By 2025, the middle class of Bangladesh is also expected to grow to 34 million, triple the number of today’s middle-class of 12 million. Two million Bangladeshis join the middle class of Bangladesh every year.

#5 Competitive labor costs

In fact, increasing costs in developed countries such as China has become the main reason why many companies are moving their manufacturing to other destinations and Bangladesh could the destination.

#6 Openness to foreign investment

Bangladesh has shown a very welcoming attitude towards foreign investors, allowing foreign investment in most sectors and providing favorable conditions for doing business.

Some of the incentives Bangladesh is offering to foreign investors are:

  • Tax holidays and exemptions
  • Simplified import of raw materials and machinery
  • Facilitation of utility connections

The Bangladesh Economic Zone Authority (BEZA) is also planning to create 100 economic zones all over Bangladesh in the next 15 years.

The foreign direct investment has been continuously growing, reaching US$ 2.4 billion in 2017 and USD $2.151 (Net) Billion (June, 2018), Total exports:USD $36.67 Billion (FY 2017-18) and Total imports:$54.46 Billion (FY 2017-18).

#7 Trade agreements

Bangladesh is also a member of the World Trade Organization.

Signed memberships and agreements include:

  • Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Free Trade Area.
  • Pakistan-Bangladesh Free Trade Agreement
  • Trade Preferential System of the Organization of the Islamic Conference
  • Asia-Pacific Trade Agreement
  • Preferential Tariff Arrangement-Group of Eight Developing Countries
  • South Asian Free Trade Area

Furthermore, one of the main trading partners of Bangladesh has been the European Union. Signed in 2001, the EU-Bangladesh Cooperation Agreement provides better conditions for trading by offering duty-free exports.

#8 Increasing number of Internet users

As confirmed by the latest reports by the Bangladesh Telecommunication Regulatory Commission (BTRC), and We Are Social and Hootsuite, there are over 80 million Bangladeshis using the Internet in 2018. That makes up 49% of the total population of Bangladesh.

Among countries with the highest Internet penetration percentage in South Asia, Bangladesh ranked 3rd next to Maldives and Nepal.

In fact, Bangladesh’s Internet penetration has surpassed the average of 36% of Southern Asia and it is close to the world’s average of 53%.

Therefore, Bangladeshis are now gaining more access to the Internet, providing excellent opportunities for online businesses, such as banking services and e-commerce, to thrive in Bangladesh.


Time is the friend of the wonderful company, the enemy of the mediocre. – Warren Buffett

Grow your business in Bangladesh

OUR investment consultancy services are available for the investor of any sector but focus of the investors that have interest in investing Bangladesh on the following sectors:

  • Infrastructure
  • Power and Energy
  • Real Estate of all kinds
  • Hotel and Tourism
  • ICT
  • Education
  • Healthcare

Potential sector for Investment Identified by the Government

Agribusiness
Ceramics
Frozen Foods
Garments & Textiles
ICT Sector
Leather & Leather Goods
Light Engineering
Electric Sector
Health Care Sector
Renewable Energy
Medical Equipment Sector
Power Sector
Ship Building Sector
Plastic Sector
Tourisum Sector

 

Incentives in General

 

Tax Holiday and Tax Exemption

  1. 5 to 10 years of Tax Holiday and reduced tax depending on area
  2. Dhaka and Chittagong divisions, excluding Dhaka, Mymensingh, Narayanganj, Gazipur, Chittagong, Rangamati, Bandarban and Khagrachari districts, for a period of five years
  3. Rajshahi, Khulna, Sylhet, Barisal and Rangpur divisions (excluding City Corporation area) and Rangamati, Bandarban and Khagrachari districts, for a period of ten years
  4. 100% tax exemption on income and capital gain for certain projects under Public Private Partnership (PPP) for 10 years.
  5. 100% tax exemption from software development, Nationwide Telecommunication Transmission Network or Information Technology Enabled Services.
  6. 50% of income derived from export is exempted from tax
  7. Tax exemption on royalties, technical knowhow and technical assistance fees and facilities for their repatriation
  8. Tax exemption on interest paid on foreign loan

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Accelerated Depreciation  : Accelerated depreciation for machinery and plants.

Exemption on Import Duties:       Exemption of customs duties on capital machineries. Exemption of import duties on raw material used for producing export goods

Tariff Refund:  Tariff (if paid) refund on import of raw materials for export

Double Taxation Prevention: Benefits for countries with double taxation avoidance treaty.

Bonded warehousing Facilities:   For export oriented industries. For large import for local selling in certain items.

Ownership:   100% ownership is allowed.

Repatriation of invested capital and dividend: Full repatriation of capital invested from foreign sources will be allowed. Similarly, profits and dividend accruing to foreign investment may be transferred in full. If foreign investors reinvest their dividends and or retained earnings, those will betreated as new investment.

Others

No restrictions on issuance of work permits to project related foreign nationals and employees

Facilities for repatriation of invested capital, profits and dividends

Provision of transfer of shares held by foreign shareholders to local investors

Reinvestment of remittable dividends would be treated as new investment

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

The Foreign Private Investment (Promotion & Protection) Act. 1980 ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation

Equal treatment of both local and foreign investment.

Bilateral and multilateral investment agreements ensure protection of investment

100% FDI, Joint Ventures, Partnerships, PPPs, Non-equity mode (Technology transfer, licensing Franchising, contracting etc.), and Foreign Lending are allowed

100% FDI or Joint Venture FDIs are allowed to participate in the primary and secondary stock markets.

Foreign Investors are allowed to have access to local banks for working capital requirements.

Intellectual Property right is protected by Law.

List of “Industrial undertakings” entitled to Tax Holiday and Reduced Taxation:

Active pharmaceuticals ingredient industry and radiopharmaceuticals industry;

Automobile manufacturing industry;

Barrier contraceptive and rubber latex;

Basic chemicals or dyes and chemicals;

Basic ingredients of electronic industry (e.g. resistance, capacitor, transistor, integrator circuit);

Bi-cycle manufacturing industry;

Bio-fertilizer;

Biotechnology;

Boilers;

Brick made of automatic Hybrid Hoffmann Kiln or Tunnel Kiln technology;

Compressors;

Computer hardware;

Energy efficient appliances;

Insecticide or pesticide;

Petro-chemicals;

Pharmaceuticals;

Processing of locally produced fruits and vegetables;

Radio-active (diffusion) application industry (e.g. developing quality or decaying polymer or preservation of food or disinfecting medicinal equipment);

Textile machinery;

Tissue grafting;

Tire manufacturing industry;

Visit : http://bida.gov.bd/?page_id=133