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COUNTRY PROFILE: BANGLADESH

The People's Republic of Bangladesh

Area: 147,570 square km. (territorial water-12 nautical miles)

Capital: City Dhaka, Metropolitan Area 522 sq.km.

Boundaries:
North - India (West Bengal & Meghalaya)
West - India (West Bengal)
East - India (Tripur & Assam) and Myanmar
South - Bay of Bengal

Standard Time: GMT + 6 hours

Population: 133.4 million

Language: 95% Bangla, 5% other dialects English is widely spoken.

Government:
Parliamentary system
President: Prof. Dr. Iazuddin Ahmed
Prime Minister: Begum Khaleda Zia

History:
Recorded history traceable to the 4th century B.C. with clear evidence of flourishing civilization consisting of cities, palaces, temples, forts, seats of learning and monasteries.

1200: Advent of the Islam, enjoying periods of prosperity under
Muslim rule 1757.

1757: Beginning of British colonial rule;

1947: Departure of the British colonial rule; Present Bangladesh territory (East Bengal) became East Pakistan as part of Pakistan;

1971: Emergence of the sovereign state of Bangladesh through a
9-month long armed struggle.

Religion: Muslim (88.3%), Hindu (10.5%), Buddhist (0.6%), Christian (0.3%) and Animists and believers in tribal faiths (0.3)%

Principal Rivers: Padma, Brahmaputra, Jamuna, Meghna, Karnaphuli, Teesta, etc. (total 230 rivers including tributaries)

Mineral resources: Natural gas, limestone, hard rock, coal, lignite, silica sand, white clay, radio-active sand, etc. (there is strong possibility of oil deposit)

Climate: Sub-tropical monsoon

Rainfall: 1,194 mm to 3,454 mm. (average during monsoon, mid June-mid August).

Principal crops & fruits: Rice, wheat, jute, tea, tobacco, sugarcane, vegetables, pulses, banana, mango , pineapple, coconut, jack fruit, fish and meat.

Principal Industries: Jute, tea, textiles, garments, paper, newsprint, fertilizer, leather and Leather goods, sugar, cement, fish processing, pharmaceuticals, chemical industries, light engineering & ceramics.

Traditional Export Items: Raw jute, jute manufactures (hessian sacking carpet backing, carpets), jute products, tea, leather, leather products, etc.

Non-traditional Export Items: Garments, frozen shrimps, other fish products, newsprint, paper, naphtha, furnace oil, urea, ceramic tableware etc.

Principal Import Items: Wheat, oil seeds, crude petroleum, raw cotton, edible oil, petroleum products, fertilizer, cement, staple fibers, yarn, iron and steel, capital goods and machinery etc.

Airports:
 
International Airports:
Zia Inter national Airport, Dhaka,
Chittagong International Airport, Chittagong and
Osmani International Airport, Sylhet.

Domestic Airports:
Dhaka, Chittagong, Sylhet, Cox's Bazar, Comilla, Thakurgaon,
Syedpur, Rajshahi, Jessore, Ishwardi and Barisal.

Sea and Inland River Ports:

Sea Ports: Chittagong and Mongla
Inland river ports: Dhaka, Chandpur, Barisal, Khulna, Bhairab, Narayanganj, Sirajganj etc.

ECONOMY
{Out of 129 million population there are 50 million civilian
labour force; trained and educated workforce is available at
low wage rate; (labour rates between 1.5-2.0 US$ per day),
and sizeable domestic market}

Some Economic Indicators

2004 - 2005
* GDP growth rate 5.4%
* Per capita GDP 445 US$
* Rate of Inflation (CPI) 6.32%
* foreign exchange reserve 3025 million US$
* average exchange rate 61.00 Tk./ US$
* Exports 8800 million US$
* Imports 13,360 million US$

Source: MCCI

Exchange rates with major International currencies as on 22nd August, 2005
(T.T. CLEAN)
 
Currencies Buying Selling
1 US$ Tk. 53.99 Tk. 55.86
1 G.B. Pound Tk. 117.47 Tk. 121.58
1 EUR Tk. 79.38 Tk. 82.60
1 J. Yen Tk. 0.59 Tk. 0.61

Source: Commercial Bank of Ceylon Limited

Industrial Policy Reforms

  • Liberalized Industrial Policy
     

  • Export-oriented, private sector-led growth strategy
     

  • No limitations pertaining to equity participation i.e. up to 100 per cent foreign private investment allowed
     

  • Except five reserve sectors, all industries are open for private investment, Industries earmarked for public sector investment are included in the reserve sector namely:
     

  • i) arms, ammunition and other defence equipment and machinery ii) production of nuclear energy iii) forest plantation and mechanized extraction within the bounds of
    reserved forests iv) security printing (currency notes) & minting, and v) railways & air transportation (except certain domestic routes and air cargo)
     

  • No permission of the government required to set up new industries
     

  • For obtaining institutional facilities like procurement of land, electricity, gas and sewerage connection, importation of capital machinery and raw materials, tax rebate, duty drawback facilities etc., industries need only to be registered with the Board of Investment (BOI) in a simple prescribed form.

Investment Guarantee

Foreign Private Investment (Promotion & Protection) Act, 1980 ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation. It also guarantees repatriation of capital & dividend and equitable treatment with local investors. Adequate protection is available for intellectual property rights, such as patents, designs & trade marks and copyrights. Bilateral Investment Guarantee Agreements have been signed with a number of countries. Bangladesh is signatory to MIGA, OPIC of USA, ICSID and member of WIPO Permanent Committee on development co-operation related to industrial property.

Facilities and Incentives

  • Tax holiday from 5-10 years depending on location of industries
     

  • 15 years' tax holiday for private power generation companies
     

  • exemption of tax on interest on foreign loan
     

  • Tax exemption on royalties, technical know-how & technical assistance fees
     

  • Avoidance of double taxation on the basis of bilateral agreements
     

  • 6 months' multiple entry visa for the investors
     

  • TAKA, the nation's currency, is convertible for international payments in the current account
     

  • Re-investment of repatriable divided treated as new investment
     

  • Working capital loan, as well as term loan, from local commercial banks allowed to the industries set up with foreign capital
     

  • Citizenship by investing a minimum of US$ 500,000 or by transferring US$ 1,000,000 to any recognized financial institution (non repatriable)
     

  • Permanent resident ship by investing a minimum of US$ 75,000 (non-repatriable)

Incorporating a Company in Bangladesh

In Bangladesh, business may be carried on by locally incorporated company and a foreign company incorporated outside but registered in Bangladesh.

Potential Areas for Investment

Investments in areas of manufacturing and services are welcome. Investors are free to choose fields of investment. However, from the point of view of comparative advantage, the following are potential areas for investment.

Textile: Export market of US$ 2 billion from the garments sector and large domestic
market.

Infrastructure: energy, telecommunication, oil & gas, ports, highways and bridges,

Agro based Industry: dairy & poultry, processing of fruits & vegetables, shrimp, fish culture and processing, shrimp feed plants etc.

Leather & leather products: wet blue leather, crust and finished leather, footwear and other leather products.

Labour-intensive Industries: electronics, data processing & software development, electrical goods & accessories, light engineering goods, toys, jewelry and others.

Communication Facilities: Adequate sea, rail, road and air services facilitate both domestic and international transportation.

Telecommunication: Internet, telex, fax, international direct dialing services and e-mail facilities

Traditional Export Items: Raw jute, jute manufacturers, (hessain sacking, carpet backing, carpets), jute products, tea, leather, leather products, etc.

Non-traditional Export Items: Ready-made garments, frozen shrimps / prawn and fish, newsprint, urea fertilizer, furnace oil, naphtha newsprint, paper etc.

Principal Import Items: Wheat, oil seeds, crude petroleum, raw cotton, edible oil, petroleum products, fertilizer, cement, staple fibers, yarn, iron and steel, capital goods and machinery etc.

Banking and Financing: Bangladesh offers adequate banking facilities to the investors for establishment of industries and to facilitate their business transactions. 14 private and 13 foreign commercial banks, 10 financing institutions and 3 nationalized commercial banks having network of correspondents and branches operating all over the country and abroad.

Export Processing Zones: Export Processing Zones in the port city Chittagong and capital city Dhaka with necessary fiscal and infrastructure for export oriented enterprises. Another Export Processing Zone, near the capital city (at Gazipur) is under implementation.

Courtesy Service: Board of Investment extends courtesy service such as airport reception, hotel & transport booking and fixing appointments with the Government and Chamber officials in accordance with the needs of foreign entrepreneurs visiting Bangladesh. For availing courtesy service, entreprerneurs need to contact BOI in advance.