General Features

Bangladesh offers an unparalleled investment climate compared to the other South Asian economies.

•  Bangladesh is a largely homogenous 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 and mostly a one race and one religion country. The population of this country irrespective of race or religion have been living in total 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.

•  Geographic location of the country is ideal for global trades with very convenient access to international sea and air route.

•  Bangladesh is endowed with abundant supply of natural gas, water and its soil is very fertile.

•  Although Bengali is the official language, but English is generally used as second language. Majority of even moderately educated population can read, write and speak in English.

•  As a result of low per capita GDP of only US$ 386, present domestic consumption is not significant. However, it should always be considered that there exists a middle class with some purchasing power. As economic growth picks up, the purchasing power will also grow substantially. And in a country of more than 130 million people, even a small middle class may constitute a significant market. Furthermore, Bangladesh 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 policy regime of Bangladesh for foreign direct investment by far the best in South Asia.

•  Most Bangladeshi products enjoy complete duty and quota free access to EU, Japan, USA, Australia and most of the developed countries. However, for apparel export to USA, we have certain quota regime which is generally favorable to Bangladesh.

Legal Framework for Foreign Investment

Investment in Bangladesh is well protected by law and by practice. Major laws affecting foreign investment are the Foreign Private Investment Act of 1980, TheIndustrial Policy of 1991, the Bangladesh Export Processing Zones Authority Act of 1980, the Companies Act 1994. In addition foreign investors are also required to follow the regulations of the Bangladesh Bank (central Bank), the National Board of Revenue (for taxation and customs matters).

Bilateral Investment Agreements

The Foreign Investment Act includes a guarantee of national treatment. National treatment is also provided in bilateral investment treaties for the promotion and protection of foreign investment which have been concluded with 14 countries: the USA, Belgium, China, France, Germany, Italy, Malaysia, the Netherlands, Pakistan, Romania, South Korea, Thailand, Turkey and the UK.

Separate bilateral agreements for avoidance of double taxation have already been signed with 20 countries which include: Belgium, Canada, China, Denmark, France, Germany, India, Italy, Japan, Malaysia, Pakistan, Poland, Romania, Singapore, South Korea, Sri Lanka, Sweden, Thailand, the Netherlands and the UK. Double taxation avoidance negotiations are also being held with USA, Iran, the Philippines, Qatar, Australia, Nepal, Turkey, Indonesia, Cyprus, Norway, Finland and Spain.

Credit Rating of Bangladesh

The creditworthiness of Bangladesh is regularly quantified on a monthly basis by the various export Credit Rating Agencies (ECAs). Some of these ECAs are linked below:

www.oekb.co.at
www.hermes-kredit.com
www.ecgd.gov.uk
www.ekn.se
www.isace.it
www.cofac.com
www.ekf.dk
www.finnvera.fi

Source: BOI