In terms of foreign direct investment (FDI), Bangladesh is attracting more attention from abroad thanks to substantial incentives and huge improvements in the business landscape. Full-service law firm A.S. & Associates has guided many international investors through the complexities of doing business in Bangladesh.
Among the most enticing aspects for foreign investors is a 10-year tax holiday offered by the government. Under this scheme, industrial undertakings established between July 2019 and June 2024 in certain districts will enjoy a 90% tax exemption for the first two years, which will taper gradually down to 10% by the 10th year.
According to a survey conducted by the Japan External Trade Organization, the attraction of Bangladesh for Japanese companies is hard to resist. Around 42% of Japanese companies operating in Bangladesh have expressed plans to expand their business over the next two years, driven by mainly by affordable labor and high profitability.
The same survey by JETRO also said approximately 70% of these companies intend to hire more local workers.
“(Bangladesh) is a winning combination. We have high connectivity, a competitive market, a business-friendly environment, tax breaks, double taxation treaties, modern legislation, and a competitive cost structure that can yield the best returns,” said A.S. & Associates Partner and CEO Ferdaus Rahman.
“We have an industrious and competitive workforce. The people are well-educated, highly adaptive, and industrious, and they come with the lowest wages and salaries in the region. About 57.3% of the population is under 25, providing (investors with) a young group for recruitment,” Rahman added.
