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Last update: March 2009

Bangladesh

Competitive Advantages

Business Environment

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.

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Economic Outlook

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

Although Bengali is the official language,  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.

A combination of reforms and privatisations is spurring interest. Economic growth at around 7 per cent in real terms seems maintainable - but perhaps it could do with more diversification away from agriculture and textiles and infrastructural investment is needed. The currency seems OK with solid reserves and record foreign worker remittances.

International investor interest is also growing. Citigroup's acquisition of a licence for investment banking is a sign of huge potential as is the entrance of many other multinationals (Shell, Unocal, BP, Mobil, HSBC, Citibank, Samsung, Toshiba, Cemex, Singtel, Orascom) into local markets. Research from JP Morgan also includes Bangladesh in their "Frontier Five" group of countries in mid 2007 (alongside Kazakhstan, Kenya, Nigeria and Vietnam) and Goldman Sachs also included Bangladesh in their 'Next 11 countries to watch.' "The scale and potential for Bangledesh is obvious - a population of 150m, strong demographics, a hard working people and the early signs of an emerging middle class."

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.

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Investment Policies

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).

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.

Source: Board of Investment

 

Last update: March 2009

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