FOREIGN INVESTMENT POLICY AND REGULATIONS

The  policy  framework  for  foreign  investment  in  Bangladesh  is  based  on  the Foreign  Private  Investment  (Promotion  and Protection)  Act,  1980,  which  ensures legal  protection  to  foreign  investment  in  the  country  against  nationalization and expropriation.   It  also  guarantees  non-discriminatory  treatment  between  foreign  and local investment and repatriation of proceeds from sales of shares and profit.

Other  major  laws  affecting  foreign  investment  are  the  Bangladesh  Export Processing Zones Authority Act (1984), the Companies Act (1994) and the Industrial Policy   (1999).     In   addition,   foreign   investors   are also   required   to  follow   the regulations of Bangladesh Bank and NBR for taxation and customs matters.

The  Government's  role  is  that  of  a  facilitator  to  help  create  an  enabling environment for expanding private investment, both domestic and foreign.   The BOI was  established  by  the  Government  to  accelerate  private  investment  and  provide institutional support services to investors.

Bangladesh   does   not   request   prior   approval   requirements   for   foreign investment.     There  are  no limits  for equity  participation  or  restrictions  on  the repatriation of foreign profits and income.  There are no restrictions to the acquisition of   local   enterprises   by   foreign   investors   who   may   also   buy   those   enterprises earmarked for privatization.

Investment is welcome in all sectors, with the exception of (a) manufacturing of  arms  and  ammunition  or other  defence equipment,  (b)  forest  plantation  and mechanized extraction of reserved forests, (c) the production of nuclear energy, and (d) security printing (currency notes) and minting.  Additionally, foreign investment is discouraged in the following areas: ready-made garments, banks, insurance companies and other financial institutions.

The Government of Bangladesh particularly encourages foreign investment in the following areas:

·    Export-oriented industries;

·    Industries in the EPZ;

·    High  technology  products  which  are  either  import  substitutes  or  export oriented;

·    Undertakings   in   which   more   diversified   use   of   indigenous   natural resources are possible;

·    Basic industries depending mainly on local raw materials;

·    Investment  towards  improvements  in  quality  and  marketing  of  goods manufactured   and   the   increase   of   production   capacities   of   existing industries;

·    Labour intensive/technology intensive/capital intensive industries.

Areas  where  Bangladesh  offers  investment  opportunities  are  natural  gas, fisheries and low-cost labour.  The upgrading of the infrastructure sector also offers opportunities  for  foreign  investment,  especially  power, telecommunications,  ports, roads and railways.

Bangladesh is a signatory to MIGA, Overseas Private Investment Corporation (OPIC)  of  the  United  States, International Centre  for  Settlement  of  Investment Disputes (ICSID) and a member of the WIPO Permanent Committee for Development Cooperation Related to Industrial Property.

The main flows of FDI into Bangladesh originate from India, the Republic of Korea,  Malaysia,  the  United Kingdom  and  the  United  States.   The  power  and  gas sectors account for the bulk of FDI. Institutions  facilitating  and  promoting  foreign  investment  in  the  country  are the BSCIC for small industries, the BEPZA for industries located in these areas and the Privatization Commission and BOI.  Two other government companies have been set   up to facilitate investments in private sector infrastructure,   namely, the Infrastructure Investment Facilitation Center (IIFC) and the Infrastructure Development Company Limited (IDCL).

Further details: FOREIGN INVESTMENT POLICY AND REGULATIONS Source: Board of Investment