Bangladesh: A lucrative investment destination for Saudi entrepreneurs

Since its birth Bengal has harbored the free spirit of entrepreneurs. The muslin, spices and other premium produces have its exclusive market over the globe. Before the colonial accession by British, Bengal was considered the fourth largest exporting country in the world. The balance of trade was always tilted to Bengal since colonization. Things have changed as the economic instruments were destroyed. In recent years the economy of Bangladesh is taking a fair turn. The growth of economy is persistent for a decade registering 6% growth promising to reach 7% in years to come. Bangladesh is now trying to establish itself as the next rising star in South Asia for foreign investment. The government has implemented a number of policy reforms designed to create a more open and competitive climate for private investment, both foreign and local. Bangladesh has been quick to undertake major restructuring for establishing a market economy, with the key role played by the private sector. Its current development strategy is based on the creation and distribution of wealth through the acceleration of growth driven by competitive market forces, with the government facilitating the process. The government has moved speedily to translate its vision of becoming MIC (Middle Income Country ) by 2021 through policy plans such the ‘7th Five Year Plan’, ‘Perspective Plan’, National Social Security Strategy (NSSS), appropriate Sustainable Development Goals etc. The World Bank has, on July 1, 2015, categorized Bangladesh as a Low Middle Income Country (LMIC), up from Low Income Country (LIC). Bangladesh has been consistently pursuing an open-door investment policy and playing a catalytic role to augment private investment. For that regulatory controls and constrains have been reduced to a minimum. The government has steadily liberalized its trade regime. Significant progress has been achieved in reducing non-tariff restrictions on trade, rationalizing tariff rates and improving export incentives. Incentive Package Offered to the Investors Without attractive incentive package, no investors will come forward to invest in economic zones. Keeping this in mind and considering the incentive package offered by other competitor countries, Bangladesh has been offering multiple incentives to the developers as well as to the unit investors in the economic zones:- For Developers: Income Tax exemption in a block of 10 years out of 15 years. Exemption from custom and excise duties; Exemption of stamp duty and registration fees for land registration for the first time; Exemption of stamp duty and registration fees for land registration of loan/credit document; Exemption from dividend tax Exemption from Tax on income from service charges. VAT Exemption on electricity or taxes on sale (for 10 years) VAT Exemption on local purchase excluding petroleum products For Unit Investors: Economic Zones: To mitigate land crisis for industrial use and to create fully serviced industrial zone govt. has taken measures to build Economic Zones in the country. As of now 22 zones are selected comprising 17,000 acres of land that were demarcated in which 19 are in the public sector and 3 are in the private sector. Government of Bangladesh has undertaken efforts to build 100 economic zones in the country. The regulatory framework for the EZ is as under: Bangladesh EZ Act, 2010 Bangladesh Economic Zones (Appointment of Developer, etc.) Rules, 2014 Policy of Private EZ, 2014 Key Features: Comprehensive industrial Infrastructure Development under PPP (Private Public Partnership) model Owned and regulated by the government, but managed by the private sector Encompasses multiple business sectors within each zone Combines both bonded and non-bonded area EZ includes non-processing and domestic area includes FDI and local investment Govt EZs: 19 EZ comprising 17,051 acres of land Mongla, Mirsharai, Anwara-1, Sherpur, Sirajganj Sadar and Belkuchi, Shreepur, Taknaf, Anwara-2, Karanigonj, Jamalpur Sadar, Sonarga, Bhola Sadar, Ashugonj, Debiganj, Narsingdi Sadar, Shibaloy, Bheramara, Agailjhara, Nilphamari Sadar. Private EZs: 3 EZs comprising 908 acres of land Polash (AK Khan), Gajaria (Abdul Monem PEZ), Gajaria (Garments Shilpa Park BGMEA, PSEZ). Conclusions: Bangladesh is an ideal destination for Saudi entrepreneurs as it has a very dynamic, young and talented Muslim population (almost 90% population is Muslim) with above incentives. Why then wait, please do visit Bangladesh and contact the Embassy in Riyadh at [email protected] or visit Board of Investment (BOI) at www.boi.gov.bd for further details. Bangladesh is eagerly waiting to receive Saudi brothers and sisters who would like to explore the enormous potentialities in investment opportunities in different sectors, tourism industry, IT, shipbuilding, pharmaceuticals, etc. in Bangladesh.