How to Invest in a company in Bangladesh

[Reyed Mia (Apprentice, DIU)]

How to Invest in a company in Bangladesh

The Board of Investment (BOI) is the first point of contact for a potential investor. They have a wealth of information on the investment opportunities in Bangladesh and the incentive packages on offer. Their Investor's Guide provides information on 'Business Setup at a Glance'.

BOI contains information on the procedures required to establish a company in Bangladesh and the time that registering and establishing a company will most likely take. The step by step procedure can be consulted for exact details.

Information is provided on the types of companies that can be formed, the general costs of doing business in Bangladesh, how to obtain the necessary work permits, remitting funds to Bangladesh amongst others. The BOI further provides the Roadmap to Investment service for new investors to facilitate the process from first enquiry through registration to implementation.

Registration with BOI can be managed electronically, through the BOI Online Registration process.

If the investor is to locate in an Export Processing Zone (EPZ) then BOI will introduce the company to the Bangladesh Export Processing Zones Authority, who will facilitate the early start up processes.

Other Issues

Local Capital Sources

Bangladesh has a large number of banks, including both state-owned (4) and private commercial banks (30) and foreign banks (9). There are also specialized banks (4), which are state-owned institutions for development finance. In addition, there are leasing and finance companies, as well as other co-operative, public and specialized institutions. Foreign investors have access to local capital sources. Trade finance, term loans and working capital are easily available, especially to major foreign investors. Interest rates vary from 9 to in some cases more than 20 per cent.

Real Estate

Investors can buy or lease land or buildings either from the government or from private parties. Purchasing land from private hands may be risky unless the ownership is properly checked. The safest method is to purchase land from the Government or to set up in Government-designated industrial zones. Transfer of ownership requires the purchase of Government stamps for legal authorization. Once land is purchased, there is no restriction on its transfer or sale. Ownership, Property and Management Control. There is no general restriction on equity participation, acquisition of property or management control by a foreign firm.

Location

Many foreign offices are located in the Gulshan district. This has to do mainly with infrastructure as this district is very nearly the only place in Dhaka where expats can live comfortably with a view to safety, but also for example power and water supplies, schools, supermarkets, etc. that are not always readily available elsewhere in the city. It is strongly advised to seek housing here in connection with unrest, demonstrations and 'hartals' because this area is fairly remote. Having an office located in down-town Dhaka can create tremendous journeys. Especially during peak hours it can take up to 2 hours (one way). Businesses therefore choose mostly for office locations in close proximity to the housing areas. That said, many IT-related offices for example are centered around the BASE sector organization in the Motijheel area.

http://www.nbbp.org/EstablishingACompany