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Investment climate andOpportunities in BangladeshDirector, Bangladesh Investment Development AuthorityPrime Minister’s Office
Presentation Outline: Growth Story of BangladeshInvestment ClimateRelevant policiesInvestment Promotion Agencies (IPA)Investment Performance of BangladeshEngagement with investorsReform Initiatives Bangladesh Investment Development Authority2
Growth Story of Bangladesh Bangladesh Investment Development Authority3
How does the World look at Bangladesh?“Bangladesh the NextChina”McKinsey & Company“Bangladesh will be the12th economic power ofthe world in 2050” UBS“Bangladesh one ofthe Frontier 5economies”“Low cost and highreturn manufacturingdestination in Asia”JP MorganJETRO“The Next Eleven”Bangladesh among the11 nations, have higheconomic potential”“28th & 23rd largesteconomy of Worldby 2030 & by 2041” PwCGoldman Sachs Bangladesh Investment Development Authority4
Economy of Bangladesh: OverviewWorld’s44th LargestEconomyby World Bank23rd LargestEconomy by2041Poverty ratedropped to 12.9%from 44.2%GDPUSD831Billion(PPP)Each yearBangladeshcreates around1.2 million jobsGDPGrowth6% - 7%Last 10 YearsGDP PerCapitaUSD 1,888Share ofInvestmentto GDP30.3%Export reachesto 37 billion in FY18 from 16 billionin FY102nd in RMGExport afterChinaFDI jumps to3.61 billion inCY18 from 1.2billion in FY10Source: Bangladesh Economic Review 2016, Ministry of Finance, World Bank, Digital Year Book 2016, World Development Indicators, World Bank and 7th five year plan, GoB Bangladesh Investment Development Authority5
A Country in Rapid TransformationParametersWhat we wereWe are nowLiteracy Rate29.23% (1981)73% (2017 Est.)Per Capita (USD)129.71 (1971)1,827 (June, 2019)GDP Growth4.62% (1976)8.13% (2019)Export (USD)0.4 Billion (1976)37 Billion (2017/18)FDI (USD)7 Million (1977)3,613 Million (2018)Forex Reserve (USD)7.5 Billion (2009)31.94 Billion (Apr, 2019)Electricity Gen. Capacity (MW)3,362 (2009)20,000 (2019 Feb) Bangladesh Investment Development Authority6
Trends of economic growth One of the fastest growing economy in South Asia with 7.86%GDP growth Bangladesh is among the 10 fastest growing economies in theworld and has made commendable progress on humandevelopment The apparel industry, employer of 40 million workers, mostlyrural women, contributed 83.49% to Bangladesh’s total export Bangladesh is now the 3rd largest producer of vegetables, the4th largest producer of rice, and the 3rd largest producer ofinland fisheries in the world ICT sector is thriving on 136 million mobile phone users, 73million of them using mobile data Bangladesh has a vision to become a middle income countryby 2021 and a developed country by 2041 Bangladesh classified as a "Next 11" emerging marketidentified by Goldman Sachs
Bangladesh :a Journey to Development and prosperityMiddle Income CountryDevelopmentJunction yearDevelopedCountrySDG2041by202150th year of independence Bangladesh Investment Development Authority2030Rise to Apexin DevelopingBangladesh2071100th year of independencePeaceful Delta2100Delta Plan
Visions to GrowVISION 2021VISION 2041GDP (USD)335 Billion2,580 BillionGDP Growth8%8%GDP Per Capita (USD)2,00012,600Investment to GDP34.4%36.0%Share of Industry to GDP34.0%40.0%FDI (USD)9.56 Billion153 BillionExport earnings (USD)70.0 Billion350 BillionInfra. Investment (USD)100 Billion1,150 Billion Bangladesh Investment Development Authority9
Investment Climate ofBangladesh Bangladesh Investment Development Authority10
Big name in Business World already in Bangladesh Bangladesh Investment Development Authority11
Investment Climate of BangladeshSecured by lawagainst nationalizationand expropriationLocal and Foreigninvestments are givenequal treatment100% foreign equity isallowed along withunrestricted exitAlmost all industrialsectors are open forforeign investorsBilateral Investmenttreaties (BITs) signedwith 32 countriesDouble taxationtreaties with 28countries including SriLankaBangladesh is asignatory to ICSID,UNCITRAL, OPIC,MIGA, WAIPA, WIPOand WTOAll laws, regulationsare conducive toinvestment Bangladesh Investment Development Authority12
Competitive Edge of Bangladesh in Investment nce of competitive work-force, Lowest Wage in Asia, DutyFree Market Access, Bond Facilities, EZs/EPZsPopulation of more than 160 Million, along with 3 billion regionalmarket with Young and Brand Conscious ConsumersInfrastructure/EnergyNumber of Mega Projects, Volume of ODA, external financeStart-Ups/ ITHigh Mobile Density, Internet Density, Tech Savvy YoungGeneration, Digital Bangladesh Policy Bangladesh Investment Development Authority13
Opportunities Unbounded (1/3)InfrastructureManufacturingCommunication, Energy, Power,Ports, Economic ZonesCompetitive manufacturingsupporting global value chainsCompetitive ServicesSkillsIT & ITES, BPOs Logistics, HealthEducation, Training, HRdevelopmentAll Modes ofInvestments Bangladesh Investment Development Authority 100% FDIJoint VenturesPartnershipsPPPs Non-equity modes (Technologytransfer, licensing Franchising,Contracting etc.) Foreign Lending14
Opportunities Unbounded (2/3)Sectors Open for FDIEnergy &Infrastructure PowerPorts and LogisticsEconomic Zones Oil and gasTourismTransport InfrastructureICT & Electronics ICT and ITESComputer software & ICT ElectronicsLight engineering incl. automobilesTextile & Clothing Home TextilesTextiles industry Readymade garments industryHigh value added RMG Agro-based/processing Silkworm & Silk Industry Jute & Jute goods Furniture & Handicrafts Flower cultivation Integrated shrimp cultivation Commercial plantation Frozen Food & HorticulturePharma &Chemicals PharmaceuticalsHerbal medicinesPlastics & Ceramics Leather & leather goodsTextile Dye & chemicalsBasic chemicalsHealthcare& Others Health careFootwear Jewelry and diamond cutting polishingCosmetics and toiletriesAgribusiness & FoodprocessingReserved Sectors: Arms & ammunitions, Nuclear Power, security printing and minting, afforestation and mechanize extraction within theboundary of reserved forest Bangladesh Investment Development Authority15
Opportunities Unbounded (3/3)Industries Separately Regulated Fishing in the deep sea Bank/financial institution & Insurance (Private Sector) Generation, supply and distribution of power in the private sector Exploration extraction and supply of Natural gas/oil, coal andother mineral resources Large-scale infrastructural project (e.g. flyover, elevated expressway,monorail, economic zone, inland container depot/container freight station) Crude oil refinery (recycling/refining of lube oil used as fuel) Medium and large industry using natural gas/condescend and otherminerals as raw material Telecommunication Service (mobile/cellular and land phone) Satellite channel Cargo/passenger vessels Sea bound ship transport Sea-port/deep sea-port VOIP/IP telephone Industries using heavy minerals accumulated from sea beach Bangladesh Investment Development Authority16
Roadmap to Investment in BangladeshSetting upof IndustrySetting up ofCommercial OfficesOpening a Bank AccountCompany Formation and incorporationTrade License from Local Govt. BodiesSubmit application for approval tohttp://eservice.bida.gov.bdObtain TIN, VAT Certificate from NBROpening a Bank AccountObtain TIN, VAT Certificate from NBRLand purchase or leaseApplication for BIDA RegistrationImport of Machinery Open Letter of Credit(LC) or as Equity InvestmentIndustrial ad-hoc IRC from CCI&E being recommendedby BIDA for raw material and spare partsDocumentation Required Company’s decision for opening of office in Bangladesh Proposed organogram of the office Detail activities of the principal company & activities to be performedin Bangladesh Name and nationality of the Directors/owners of the principalcompany Memorandum and Articles of Association of the principal company Certificate of Incorporation Audited Accounts of the last financial year of the principal companyDOE ClearanceLicense from Department of explosives Bangladesh Investment Development Authority17
Attractive Incentive Schemes to InvestorsTax HolidaysTaxes5 – 10 Years for some sectors and up to10 Years for Infrastructure andEconomic ZonesFinancialFast TrackApprovalsfor Capital Machines and import of RawMaterialsExportEquityCashDevelopment ed WorkPermits Bangladesh Investment Development AuthorityTariff dance of DoubleTax under DTIsAcceleratedDepreciationIn lieu of tax holidaysQuickImmigrationNRBPreferences18
Competitive Factor Cost among the Peer Cities: Utilities1.33KarachiIn USD0.20.160.16Mumbai0.55New ce: 27th Investment cost survey JETRO 2017 Bangladesh Investment Development Authority0.20.40.6Water rate for general use (per cu.m)0.811.21.41.6Electricity rate for general use (per kWh)19
Competitive Factor Cost among the Peer Cities: Wages134Karachi1251In USD208130Mumbai1593260159New aka5821110Source: 27th Investment cost survey JETRO 2017 Bangladesh Investment Development Authority200400600Legal minimum wage8001000Manager's salary12001400160018002000Workers wages20
Investment Promotion andFacilitating Agencies Bangladesh Investment Development Authority21
Investment Promotion and Facilitating AgenciesPrime Minister’s OfficeBIDAKey ServicesKey Services Investment promotion Counseling/ Advisory Investment facilitation Regulatory Approvals Policy Advocacy Foreign borrowing Match-making Investors aftercare Sector briefings Project Structuring Bangladesh Investment Development Authority22
Bangladesh Investment Development Authority (“BIDA”)BIDA created under Bangladesh Investment Development Authority Act 2016 as theapex IPA of the countryVisionMissionTo be a leading agency contributing towardsBangladesh’s achievement of high incomestatusTo promote and support pro-growth privatesector investment and foster a world-classinvestment ecosystem Promoting Investment in home and at abroad for the countryFunctionsofBIDA Investment Facilitation (approval, recommendations andaftercare) Policy advocacy Improving investment climate ‘Ease of Doing Business’ Facilitate creating entrepreneurs and skill for industry needs Facilitate private investment to make Bangladesh MIC by2021 and developed country by 2041 Bangladesh Investment Development Authority23
BIDA: Services to InvestorsPromotional activitiesFacilitation servicesGuidance on doing business in BangladeshRegistration of new industriesResponding to investment-related queriesFacilitation for getting work permissionInvestment guidance and advice inspecific sectorsSupport for importing machineries and rawmaterialsSupporting potential foreign investors tomatch with local investorsSupport for obtaining external financingOrganize visits, meetings with various govt.and private officesFacilitation of setting up commercial officesSupport in forming statutes policiesand regulationsAddressees Issues relating to individualcompanies on their smooth operation Bangladesh Investment Development Authority24
Relevant policies Bangladesh Investment Development Authority25
Policy Framework for investmentThe broader policy & regulatory framework for catering investment includes:Business StagePolicy & Regulation1. General- Bangladesh Industrial Policy (as undertaken from time to time)1. Business start-up- The Companies Act, 1994- Securities and Exchange Commission Act, 1993 and others1. Protection- The Foreign Private Investment (Promotion & Protection) Act, 19801. Export Zones- Bangladesh Export Processing Zones Authority Act, 1980- Bangladesh Private Export Processing Zones Authority Act, 1996- Bangladesh Economic Zones Authority Act, 20101. Facilitation- The Bangladesh Investment Development authority Act 20161. Corporate /Personal Taxationand incentives- Income Tax Ordinance 1984 and related rules and SROs- National Budget- The Finance Act/Bill1. International Trade - Bangladesh Export Policy (as undertaken from time to time)(Export & Import)- Bangladesh Import Order (as undertaken from time to time)1. Sectoral- Bangladesh Energy Regulatory Commission Act, 2003 (BERC)- Bangladesh Telecommunication Regulatory Commission Act, 2001 (BTRC)- The National Drug Policy, 2005 and others1. Foreign Exchange- Bangladesh Foreign Exchange Regulation Act and Guidelines (issued from time to time) Bangladesh Investment Development Authority26
Investment Performance ofBangladesh Bangladesh Investment Development Authority27
180001579116732Investment Promotion, Facilitation Outcome 2009-2018 (Million 004000551280000ForeignBorrowingFDI nvestment Bangladesh Investment Development Authority28
GLOBAL FDI FLOWS : trends Bangladesh Investment Development Authority29
Bangladesh FDI StatisticsIn USD MillionsIn USD MillionsDistribution by SectorsFDI InflowFDI INFLOWS (NET) BY MAJOR SECTORS DURING CALENDER YEAR 2018(IN MILLION US )Other Sectors, 961.11,27%Power, 1012.01, 28%Telecommunication,219.87, 6%Banking, 282.54, 8%Food, 729.69, 20%Textile & Wearing, 408.08,11%Source: Enterprise Survey, Bangladesh Bank Bangladesh Investment Development Authority30
FDI Stock FDI Stoock from 2010 to 1
Foreign borrowings: complementing the FDI inflow:USD in millionForeign 11397.339500302.7702009 Bangladesh Investment Development Authority20102011201220132014201520162017201832
Presentation Outline: Growth Story of BangladeshInvestment ClimateRelevant policiesInvestment Promotion Agencies (IPA)Investment Performance of BangladeshEngagement with investorsReform Initiatives Bangladesh Investment Development Authority33
Engagement with investors Bangladesh Investment Development Authority34
Possible engagement with the investors 1. Meet potential foreign investors, investment organizations/associations and tradebodies/organizations disseminate investment related information and promotionalmaterials;2. Identify potential foreign investors to initiate dialogue for investment in Bangladesh.3. Collect information of prospective investors and provide them with analysis onbusiness opportunities of Bangladesh;4. Meet the heads of the targeted companies to apprise them with sector specificinvestment opportunities;5. meetings with regulatory agencies and trade and investment promotion agencies inregular interval to collect inward and outward investment related information anddisseminate them;6. Engage actively in connecting domestic with foreign investors physically and/orvirtually;7. Act as a member of marketing team of investment promotion agencies (IPA) ofBangladesh to circulate widely the unique selling proposition of the investment potentialof Bangladesh based on country reality, growth trajectory, and pro-investment edge; Bangladesh Investment Development Authority35
Possible engagement with the investors 8.Attend investment related discussions, seminars, conferences, symposiums, roadshows, fairs, workshops and similar other activities to exchange and share investmentrelated information and promotional materials;9.Follow up regularly the leads generated in any type of networking activities ofinvestment and facilitate to launch investment project;10.Provide after care support to investors for continuing and expanding investmentventures in Bangladesh;11.Prepare data base on sector specific investors, foreign markets of goods andservices to identify the comparative advantage of Bangladesh in expanding investment.Provide the information to concerned ministries/divisions/IPAs and all investors.12.Disseminate widely the evidence of successful foreign investments made inBangladesh;13.Create a dedicated page on investment info in the website of concerned missionwith information on potential sectors/ areas of investment, incentives and opportunitiesand so on. This site can be linked with the website of all IPA’s. Bangladesh Investment Development Authority36
Reform Initiatives Bangladesh Investment Development Authority37
Initiatives to facilitate investors services:Investors require various services as: Now in mostdone centrallyand manually Bangladesh Investment Development Authorityclearances,certificates,licenses and approvals,sanctions and permits,recommendations,The changing approach : OSS a virtual and cloud based services 150 services of 34 agencies are identifiedfor Online 19 services of 5 Agencies are Online fromone point. All payment will be paid Online Majoroverhaulingisunderwayreducing redundant and repetitivestages No fee for company registration up topaid up to capital of BDT 10 lac All process of RAJUK will be completed in4 steps from 16 steps Investors globally can get their servicesOnline38
Thank You!Bangladesh Investment Development Authority (BIDA)Peoples Republic of BangladeshPrime Ministers’ OfficeGovernment of the People's Republic of BangladeshEmail: info@bida.gov.bdWeb: www.bida.gov.bd
McKinsey & Company “Bangladesh one of the Frontier 5 economies” JP Morgan “The Next Eleven” Bangladesh among the 11 nations, have high economic potential” Goldman Sachs “Bangladesh will be the 12th economic power of the world in 2050” UBS “Low cost and high return manufact
