Why Set Up Your Business in Bangladesh?
Bangladesh is the eight most populous country in the world with approximately 168.28 million people. It is bordered by India on all sides except for a small border it shares with Myanmar. Over the years, the country’s economy has seen vast improvement since Bangladesh attained independence in 1971. Agriculture remains it’s main sector and the government has since been trying to make the country more investor friendly to attract more foreign trade. The country has also been showing greater self reliance as foreign aid continues to decline and greater growth seen in it’s exports. The government has targeted the country to become a middle income nation by 2021. They hope to achieve this through huge investments in infrastructure, skills development and trade.
Strong Demand and Competitive Labour Force
For those seeking to set up businesses in Bangladesh, one major advantage is that English is widely used in business dealings, while there is strong consumer demand for products, equipment and services. The country’s annual growth rate has been hovering about 5.3% for the last 15 years and efforts by the government have successfully reduced poverty by half in the last decade. There is also a huge competitive labour force available in the country.
However, corruption is still rife and Bangladesh is ranked 145th in Transparency International’s Corruption Perceptions Index. Corruption affects many aspects of daily life in Bangladesh and is often cited as a barrier to private sector development. Despite this, there has been over 119% growth in bilateral trade in goods and services between 2007 and 2012. Of late, to further entice investors, the government has put in place a list of goodies, which include:
– No ceiling on investment
– Tax holidays
– Tax exemption and duty free importation of capital machinery and spare parts of 100% for export-oriented industries
– Residency permits for foreign nationals
– Capital, profit and dividend repatriation facilities
-100% foreign equity allowance
– Exemption on income tax for up to three years for expatriate employees
– Term loans and working capital loans from local banks allowed
– Re-investment of repatriable dividends treated as new investment
– Double- taxation avoidance, as per bilateral agreements already concluded
– Tax exemption on the interest payable on foreign loans and on royalties
– Investors can take advantage of the generalised system of preference, which allows duty-free access to American, European and Japanese markets
Foreign investment is particularly welcome in export-oriented industries and high-technology products or industries which are labour as well as technology intensive. The country’s drive for foreign investment is being spearheaded by the Board of Investment, which was created to facilitate the setting up of manufacturing and other industries in the private sector, both local and foreign. It is a promotional organisation dedicated towards providing investment assistance to all investors. Implementing a wholly owned or joint venture industrial project in Bangladesh is a fairly simple process.
Business in Bangladesh may be carried on by a company formed and incorporated locally or by a company incorporated abroad but registered in Bangladesh. The incorporation or registration is carried out by the Registrar of Joint Stock Companies and Firms under the provisions of the Companies Act 1994. Companies can be classified into limited companies (company limited by shares) or unlimited companies. The entire registration process can take up to 11 days. If you are looking to set up a business in Bangladesh, contact us.