An opportunity not to be missed, Foreign Investment has never been easier in Bangladesh
Foreign investors would like to invest in Bangladesh only on the condition of deriving profit at one point of time, in fact who would invest without the assurance of making profits. Bangladesh seems to be a country of opportunity in the light of the recent initiatives taken by the Government, specially in matters related to enacting foreign investment friendly provisions and promoting the same on diplomatic stage.
Businesses throughout the world is encroaching in every sector to come out of their jurisdiction and expand on international boundaries, the trend has never been more accessible than ever before in countries like Bangladesh. Despite the fact that several security concerns in regards to safe financial gateways and political turmoil’s are an ongoing issue, and are getting addressed before thinking of investing in Bangladesh, the Government is very willing to bring Foreign Investment in Bangladesh through easing the process of investing in Bangladesh via easier legal compliances, tax provision, procedural hassle and heavy documentation.
For empowering an economy to grow rapidly, clasping with a strong balance of payment position, and a stable exchange rate, foreign investment is imminent and momentous. Bangladesh predominantly offers adequate banking and other relevant facilities to investors, both domestic and foreign, for establishment of industries and to facilitate their business transactions.
The Government of Bangladesh has established several Export Processing Zones (hereinafter be referred to as “EPZs”) to promote the foreign investment and generate employment opportunities in Bangladesh. The primary objective of an EPZ is to provide special areas where potential investors would find a congenial investment climate free from cumbersome procedures. The Government offers numerous incentives for sitting up factories in EPZs such as exemption from income tax on salaries of foreign technician for 3 (three) years, relief from double taxation subject to bilateral agreement, complete exemption from dividend tax for tax holiday period for foreign nationals, liberal employment of foreign technicians/experts is allowed, foreigners employed in the zones enjoy equal rights similar to those of Bangladesh nationals, law forbids formation of any labor union in the zones, Strike within the zones is prohibited, all customs formalities are done at the gate site of the respective factory building within the zone etc.
Price is what you pay. Value is what you get.
Role of Bangladesh Bank in Foreign Investment
Bangladesh Bank, as the central bank, has legal authority to supervise and regulate banking companies and financial institutions in Bangladesh. It performs the traditional central banking role of note issuance and also acts as a banker to the government and banks. It formulates and implements monetary policies, manages foreign exchange reserves and supervises banks and non-bank financial institutions.
Bangladesh Investment Development Authority – The regulatory body for Foreign Investment in Bangladesh
By way of Bangladesh Investment Development Authority Act, 2016 an authority called Bangladesh Investment Development Authority was established for encouraging domestic and foreign investment in the private sector, providing the necessary facilities and assistance for setting up industries, and for integrating government industries or commercial institutions and its unused land or establishment in more suitable economic activities, for the purpose of coordinating the administration and providing better services.
Reasons for Investments in Bangladesh
In our experiences, for over a decade, while dealing with foreign investors in Bangladesh, the below mentioned are the reasons among many others which may attract the investors to come in Bangladesh:
- Non-discriminatory legal provisions between foreign investors and national investors.
- Easier outward remittance procedure of the profits.
- 50-50 ratio for foreign investors as to owner ship in public joint venture.
- “Royalty”, “technical know-how” tax exemption.
- Foreign Loan tax exemption.
- Repatriation of full invested capital, profit and dividend.
- Easier visa procedure for investors.
- Permanent resident-ship on a certain amount of investment.
- Duty free import of machineries and spare parts unto 10 percent of the value for such capital machinery for industrial use.
- Export oriented companies shall be provided with special benefits and facilities.
- Ensuring security of the foreign investors and individuals with special importance by the government bodies.
How to do foreign investment in Bangladesh?
In order to do the foreign investment in Bangladesh, followings are the three most significant modes by which foreign investment can be made:
Usually, an entity needs to be registered in Bangladesh to conduct business transaction under the title of a Limited company or Branch office. However, one may opt for Liaison office or Representatives office, which means simply coordinating with the principal and the potential clients. Liaison office best work to conduct research and analysis of the potential market and cannot conduct business or financial transactions.
Al Amin Rahman & Associates and its Foreign Investment Services
Al Amin Rahman & Associates, having years of experiences in advising and dealing with foreign investors, maneuverer comfortably the best practical and legal aspect of the sector and has ushered its clients to better legal position no matter how pivotal the issue is in existence.