#1FDI in Bangladesh: current status and progress BIDA Bangladesh Investment Development Authority বাংলা ZIRATICHNY সরকার * *#2Presentation Outline: . . Economic Vision of Bangladesh Achievements of Bangladesh • Investment Climate of the country . . Regulations . • Incentive Structure Sector to Invest • Global brands in Bangladesh • Investment facilitation: Agencies Recent investment climate improvement in Bangladesh • One Stop Services • . Bangladesh Investment Climate Improvement Program (BICIP) FDI Performance#3Investment is a National Priority POLITICAL COMMITTMENT "We are committed to providing all policy support, including infrastructure, to create an investment friendly environment" OBangladesh Investment Development Authority Sheikh Hasina Hon'ble Prime Minister Of Bangladesh#4Economic Vision of Bangladesh#5Towards Vision 2100 >T GRADUATION FROM LDC BANGLADESH GETS UN RECOMMENDATION လ SUSTAINABLE DEVELOPMENT GOALS +Ⓡ A 2026 2031 2041 2071 MIDDLE INCOME COUNTRY Upper Middle- Income Country DEVELOPED COUNTRY STATUS HIGHEST PEAK OF PROSPERITY DIGITAL TECHNOLOGY OBangladesh Investment Development Authority DELTAPLAN 2100 BANGLADESH 2100 SAFE DELTA FOR PEOPLE INNOVATION SMART IMPLEMENTATION#66 Perspective plan (2021-2041) USD 12500 > 2041 9.0% >2031 9.9% >2041 ค Per capita income Upper Middle-Income country by 2031 Developed Country by 2041 4.5% 2031 3.9% >2041 GDP growth USD 150 bn >2031 USD 300 bn >2041 Economy of Bangladesh will be 25th largest in 15 years (in 2034) USD 40.6% > 2031 USD 46.9% >2041 Inflation rate USD 19.0% > 2031 USD 24.1% >2041 Hv Export earnings Revenue to GDP Investment to GDP The second perspective plan 2021-2041 was approved by the NEC in February 2020 6#7Achievements of Bangladesh#8A New Bangladesh Awaits You 2nd Highest IT Freelancers 2nd Highest RMG Exporter GDP of Bangladesh 100% 图册 Electricity Coverage 100% Mobile Phone Penetration 4 Extreme Poverty Down to 10.5% Ö Self Sufficient in Food 408% Growth in 15 years 2nd Largest Vegetable Producer 462 Billion USD in 2022 91 Billion USD Smart Disaster Management OBangladesh Investment Development Authority 3rd Largest Fish Producer in 2008#9Flagship Projects for Facilitating Investments Matarbari Integrated Development Initiative (MIDI) Matarbari Power Plant Cost $ 4.40 Billion Matarbari Deep Sea Port Cost $ 3.7 Billion JICA is providing loan support of about $2 Billion for construction OBangladesh Investment Development Authority Rooppur Nuclear Power Plant Cost $12.65 Billion উত্তরা-মতিঝিল Dhaka Metro Rail Cost $2.82 Billion Padma Multipurpose Bridge with Rail Link Cost $ 8.28 Billion 00000 0000 Moheshkhali LNG Terminal Cost $ 0.18 Billion 3rd Terminal at Dhaka Airport Cost $2.14 Billion Rampal Coal Power Project Cost $5.00 Billion#10OBangladesh Investment Development Authority Investment Climate#11Secured by law against nationalization and expropriation Bilateral Investment treaties (BITS) signed with 32 countries Investment Climate of Bangladesh Local and Foreign investments are given equal treatment Double taxation treaties with 28 countries including Sri Lanka 100% foreign equity is allowed along with unrestricted exit Bangladesh is a signatory to ICSID, UNCITRAL, OPIC, MIGA, WAIPA, WIPO and WTO Almost all industrial sectors are open for foreign investors All laws, regulations are conducive to investment#12Investment Climate in Bangladesh $608 Bn Investment in Infrastructure till 2040 GROWING ECONOMY L Industries Sector growing 13% faster than GDP AIR, WATER, ROAD CONNECTIVITY LOW UTILITY COST $ HIGH RETURN ON INVESTMENT SKILLED, LOW COST WORKER Min wage $100 (regional average $381) 34 M medium & affluent (MAC) population by 2025. Consumption growing >6% p.a. VIBRANT LOCAL MARKET 38% Urban Population Growing @3.1% per year#1348% Land of profitability, business confidence JETRO Survey on Business Conditions of Japanese Companies Operating Overseas (Asia and Oceania) 2022 62% 26% 60% 22% 2% 2022 2023 2023 Loss Making 2022 2023 Profitability Forecast 2022 Business Confidence OBangladesh Investment Development Authority Forecast Forecast#14Millions Our consumer class is swelling Median age of 28 years and 62% of population is below 35 MAC population projected to grow at 10% to reach 34 million by 2025 Women are more employed creating buying power for consumer goods 200 Bangladesh Income-wise Population 18 150 12 13 15 16 19 21 17 18 19 20 22 96 22 22 23 23 25 28 31 34 24 25 26 27 100 44 60 48 52 56 64 70 75 81 86 92 50 84 80 77 73 79 66 62 59 55 52 48 0 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 BoP Aspirant Emerging Middle Middle and Affluent Forecast 14 Source: Boston Consulting Group#15Regulations#16Investment Policy Framework & Incentives The broader FDI policy & regulatory framework include, among others, the following: Business Stage General Business start-up Protection Industrial Zones Facilitation Corporate / Personal Taxation and incentives International Trade (Export & Import) Sectoral Foreign Exchange Policy & Regulation - Bangladesh Industrial Policy (as undertaken from time to time) - The Companies Act, 1994 - Securities and Exchange Commission Act, 1993 - The Foreign Private Investment (Promotion & Protection) Act, 1980 - Bangladesh Export Processing Zones Authority Act, 1980 (for EPZ) - Bangladesh Private Export Processing Zones Authority Act, 1996 - Bangladesh Economic Zones Act, 2010 (for Economic Zones) - The Bangladesh Investment Development Authority Act, 2016 - Income Tax Act 2023 and related rules and SROS - National Budget - The Finance Act/Bill - Bangladesh Export Policy (as undertaken from time to time) - Bangladesh Import Order (as undertaken from time to time) - Bangladesh Energy Regulatory Commission Act, 2003 (BERC) - Bangladesh Telecommunication Regulatory Commission Act, 2001 (BTRC) - The National Drug Policy, 2005 - PPP Policy and Guidelines 2010 -Bangladesh Foreign Exchange Guidelines (issued from time to time)#17International Treaties: for Protection and Promotion of Investment Bilateral Investment treaties (BITs) signed with 32 countries Double taxation treaties with 28 countries Signatory to ICSID, UNCITRAL, OPIC, MIGA, WAIPA, WIPO, WTO#18Policy Provisions for Incentives NON-FISCAL INCENTIVES . . 100% Foreign Ownership or Joint Venture Allowed No Minimum or Maximum limit on Investment Bonded Warehouse License Full Repatriation of Capital/ Profit/ Dividend Virtual Approval of Visa and Work Permits OBangladesh Investment Development Authority#19Policy Provisions for Incentives FISCAL INCENTIVES Tax Exemption/reduction on: . on export income • Tax on interest of foreign loans . . Remittance of Royalty and other fees Avoidance of Double Taxation • Reduced import Duty Importing Capital Machineries • Reduced duty for import of raw materials. . . Duty Drawback Facilities Cash Incentives on export-oriented industries OBangladesh Investment Development Authority#20OBangladesh Investment Development Authority Global brands#21Existing Major Investors Unilever Nestle Bata M Coca-Cola marico POWERCHINA HONDA HYUNDAI MITSUBISHI MOTORS 中国电建 SAMSUNG S SINGER BRITISH AMERICAN TOBACCO Jera ap asianpaints arcelik HUAWEI TTi Since 1760 Berger Paint your imagination MARKS & SPENCER OBangladesh Investment Development Authority#22Existing Major Investors Chevron ◆◆Sumitomo telenor adani SINOVAC axiata Standard Chartered HSBC HSBC wilmar M Nippon & McDonald Steel Industries Ltd. GILDAN PRAN WALTON OBangladesh Investment Development Authority (R) RED BEXIMCO AC Mgi Meghna Group of Industries Ⓡ#23Global players joining our journey Deutsche Bank OBangladesh Investment Development Authority SMBC XDRS#24Investment facilitation: Agencies OBangladesh Investment Development Authority#25Bangladesh Investment Development Authority ("BIDA") BIDA created under Bangladesh Investment Development Authority Act 2016 as the apex IPA of the country Facilitate Foreign Direct Investment as well as Domestic Investment in Bangladesh Vision To be a leading agency contributing towards Bangladesh's achievement of high income status Mission To promote and support pro-growth private sector investment and foster a world-class investment ecosystem Functions of BIDA Investment Promotions Investment Facilitation Pre-investment consultations Registration of industrial projects Permission for branch/liaison/rep office Visa Recommendations and Work Permits Import permits for capital machineries and raw materials Approval of foreign loans and suppliers credits Investment Aftercare Policy Advocacy Activities Improvement of Investment Ecosystem#26BANGLADESH INVESTMENT DEVELOPMENT Our Functions at BIDA 161074 Range Facilitate Foreign Direct Investment as well as Domestic Investment in Bangladesh Investment Promotions Investment Facilitation Pre-investment consultations Registration of industrial projects Permission for branch/liaison/rep office Visa Recommendations and Work Permits Import permits for capital machineries and raw materials Approval of foreign loans and suppliers credits Investment Aftercare Policy Advocacy Activities Improvement of Investment Ecosystem AUTHORITY 26#27BIDA: Services to Investors Promotional activities Facilitation services First 'point of contact' guidance on doing business in Bangladesh Responding to investment-related queries Investment guidance and advice in sectors Facilitating potential foreign investors to match with local investors Organize visits, meetings with various govt. and private offices Support in forming statutes policies and regulations Registration of new industries Facilitation for getting work permission Support for importing machineries and raw materials Support for obtaining external financing Facilitation of setting up commercial offices Addressees Issues relating to individual companies on their smooth operation#28Economic Zones of Bangladesh 100 Economic Zones planned • Country specific allocation 4 Zones under operation BSMSN is the Flagship Economic Zone 1 Special Zone for Japanese Investors Special and additional incentives for investors Investment underway... HealthCare Pharma 40 acres Bangladesh Auto 100 acres • SQ Cable 40 acres Modern Syntax 20 acres Nippon 100 acres Berger Paints 30 acres And many others BANGLADESH ECONOMIC ZONES BANGLADESH ECONOMIC ZONES AUTHORITY AUTHORITY BSMSN - Countries first Green, Smart Economic Zone! 30,000 acres#29Economic Zones of Bangladesh 10 Zones Operating 90 underway Shirajganj Economic Zone Abdul Monem Economic Zone Hosendi Economic Zone DHAKA CHATTOGRAM Araihazar Economic Zone Kishorganj Economic Zone Cumilla Economic Zone Bangabandhu Sheikh Mujib Shilpa Nagar Maheshkhali Economic Zone Sabrang Tourism SEZ Naf Tourism Park#30Export Processing Zones of Bangladesh L BEPZA 二 9 Zones Export Oriented Industries 2 Zones: Upcoming . 452 Companies Existing 95 Implementation 1 Central ETP Total Investment $6.29 Bn Total Export $101.23 Bn 1 USD investment has created 16 USD of Revenue#31Hi-Tech Parks of Bangladesh 151 Startups Target 109 Parks Reality 28 Parks BANGLADESH HI-TECH PARK AUTHORITY Ready land and space for setting up new industries Infrastructure and other facilities Mix of nature with technology 0 ס' 190 Companies SOFTWARE TECHNOLOGY PARKS ▪ Rentable ready office spaces for IT/ITES companies Co-working facilities for startups ■ Software firms, e-commerce companies, BPO's are currently operating#32VISION 2021 TOWER GOPTWARE TECHNOLOGY PARK Vision 2021 Tower - 1 Software Technology Park, Dhaka (1100+ Employments) Operational Hi-Tech Facilities Nationwide Sheikh Hasina Software Technology Park, Jashore (1500+ Employments) Heroic Freedom Fighter Lieutenant Sheikh Jamal Software Technology Park, Chottogram (1200+ Employments) Oryx Bio-tech (Country's First Bio-Tech Company) Solaris Building, Kaliakoir (1000+ Employment)#33Sectors to invest#34Sectors Open for Investment Energy & Infrastructure ICT & Electronics Textile & Clothing Agribusiness & Food processing to Pharma & Chemicals Healthcare & Others ■ Power ■ Ports and Logistics ■ Economic Zones ■ ICT and ITES Computer software & ICT ■ Home Textiles ■ Textiles industry ■ Agro-based/processing ■ Jute & Jute goods. ■ Flower cultivation ■ Commercial plantation ■ Pharmaceuticals ■ Herbal medicines ■ Plastics & Ceramics ■ Health care ■ Footwear ■ Oil and gas ■ Tourism Transport Infrastructure ■ Electronics Light engineering incl. automobiles Readymade garments industry High value added RMG ■ Silkworm & Silk Industry ■ Furniture & Handicrafts ■ Integrated shrimp cultivation ■ Frozen Food & Horticulture ■ Leather & leather goods ■ Textile Dye & chemicals ■ Basic chemicals Jewelry and diamond cutting polishing ■ Cosmetics and toiletries Reserved Sectors: Arms & ammunitions, Nuclear Power, security printing and minting, afforestation and mechanize extraction within the boundary of reserved forest#35Industries 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 and other 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 other minerals 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 E#36Agribusiness | Achieving Next Level Growth#37• Agribusiness: Achieving Next Level Growth 1 of 2 Agribusiness market in Bangladesh will grow to US$ 8 billion by 2023. Over 3,600 new agriculture professionals enter the job market every year The agro-processing market is worth US$ 3.5 billion and is growing at 8%. Bangladesh's jute has an export market worth US$ 1.2 billion and growth rate is 6.5%. The seed market, currently valued at US$ 500 million, is growing annually by 6%. The fertilizer market is worth US$ 1,600 million and is import dependent. Farm mechanization market is worth US$1.35 billion (machines/spare parts/services) and 50%-70% subsidy is available.#38Agribusiness: Incentives & Key Players 50% of income derived from export is exempted from tax 15-100% tax exemption depending on crops 5-20% export subsidies/cash incentives SQUARE TRANSCOM PRAN Food & Beverage Ltd Nestlé Tradition in Excalanca 2 of 2 adani wilmar Forshealthy growing nation CP GOLDEN Olympic New Zealand Dairy HARVEST Mgi Unilever PERFETTI Fan Melle#39IT & ITeS | Building Smart Bangladesh 406 1 1717 C 66 Sauptwache?#40IT & ITeS: Building Smart Bangladesh 1 of 2 Bangladesh is one of the world's fastest growing digital economies. 89% mobile phone penetration, 181 million registered MFS clients and average daily transaction of USD 319 million 4th in affordable internet service in South Asia and 18th globally. 5th in terms of internet usage in Asia. Bangladesh has the world's 2nd largest pool of IT talent with 700,000 active professionals. 22,000 CSE professionals graduate every year. IT/ITES market size is $200 million (domestic) and $800 million (export). IT/ITeS market set to double in next 5 years. E-commerce market will reach US$ 5 billion by this year.#41IT & ITeS: Incentives & Key Players 2 of 2 Fiscal incentives Tax holiday for software development, telecommunication transmission, ITeS until 30th June 2024 10-year tax holiday for producers of computer hardware (if COD before 30 Jun 2030) 5-10 year tax exempt for automation and robotics design/Nanotechnology (if COD before June 30, 2024) Export/cash incentives 10% export subsidy is available for the export of Software, ITeS, and hardware. Locally owned Software, ICT and hardware industries at the high-tech park will get 4% incentives for product and market diversification (if value addition is at least 30%) NTT DATA tos wipro IBM#42RMG & Textile| Weave the Way Forward#43. . . RMG & Textile: Weave the Way Forward Bangladesh has the world's 2nd largest RMG exporter, exporting to 167 countries. Highest number of green factories, with 150 LEED-certified factories and another 500 in pipeline. Employs 5 million workers, 60% of whom are women Apparel exports earned USD 46 billion in FY 2022-23, recording a growth of 10.27% 99% accessories are sourced locally. 73% of Bangladesh's exports enjoy duty free access as LDC. Top buyers are US, Germany, UK, Spain, France, Poland etc.#44. RMG & Textile: Incentives 10% corporate tax for RMG factories with green building certification Duty free import of raw materials for 100% export oriented RMG industries 0.5% reduced tax deducted at Source from Export earnings • 50% cash incentive is available against the export amount. another 4% incentives as expansion support. another 4% incentives as expansion support for producing a new item or can export to a new destination. additional 1% special cash incentive from the above-mentioned export incentives#45Pharma & Medical Device | Afforda 8 Wellbeing 80600 CAROAD aD#46. Pharmaceuticals: Affordable Wellbeing Bangladeshi pharmaceuticals meet nearly 98% of domestic demand Exported to over 131 destinations, including USA, Europe and Australia Bangladesh's domestic market for pharmaceuticals will reach US$ 5 billion by 2024. Proven capabilities in diverse dosage delivery systems and growing capability in bio-similiars, vaccines, oncology drugs etc. API Park established to promote domestic production 15% lower production cost than India and China#47Medical devices: Affordable Wellbeing • 85% of medical equipment and devices are imported. ⚫ 10.2% CAGR for importing of medical equipment and devices during the last five years. . • USD 442 million domestic market will reach USD 820 million in 2025, with a CAGR of 13%. ⚫ Market dominated by the instruments/appliances segment and diagnostic imaging equipment. . More than 4,000 types of medical devices & equipment used.#48• . . Pharma & Medical devices: Incentives For 5 API molecules producers 100%, and 3 API molecules producers will get 75% tax holiday. If API molecules produced domestically, API and laboratory reagent producers, will enjoy tax holiday No AIT will be applicable for import of chemical compounds (Technical Grade/Chemically pure). Eligible for phased or partial tax exemption from 5 up to 10 years for Concessional import duty on raw material import of medical equipment 50% tax exemption for income derived from export No VAT imposition on export of goods • 10% cash incentive on export value#49Tourism and Hospitality | Discover Serenity#50Tourism and Hospitality I Discover Serenity World's longest beach in Cox's Bazar, world's largest mangrove forest the Sundarbans, forests and swamp forests, hills and island, archaeological sites, religious landmarks etc. Tourism contributes 3.02% to the GDP and 8% of total employment. International hotel chains expanding business include Hotel Sheraton, Holiday Inn, JW Marriott, Swissotel, Hyatt Regency, Element Hotel, Saint Regis Hotel and Dusit Hotels. Bangladesh Tourism Reserved Area and Special Tourism Zone Act, 2010 focus on creating tourism protected areas and special tourism zones. BEZA is developing tourism parks at Sabrang, Naf and Sonadia#51Leather and Leather goods Step it Up#52Leather and Leather goods | Step it Up • Growing domestic market of USD 2 Billion. ● • Footwear is the major product segment. Per capita consumption is 3 pairs, up from 1.7 pairs 5 years back. 220 tanneries, 3500 SMEs, 105 Big Enterprises 12th highest cattle population in the world. Bangladesh produces 310 million sq. feet of raw hides annually. Over 450,000 pieces of rawhide sold during Eid-ul-Azha in 2023 Scope of producing and exporting wet blue leather by establishing appropriate industries.#5353 Recent govt initiatives to improve Investment#54BIDA One Stop Service: OSS Act 2020 ✓ Digital document submission ✓ End-to-end online service ✓ Time-bound service delivery ✓ E-payment enabled ✓ No physical visit required www.bidaquickserv.org > Login + Create OSSPID account Call Center No. : +8809678771353 Need help? Contact us = N Online Payment MyCart VISA bKash • Debit/Credit Card •Mobile Banking RTGS/BEFTN • Sonali Bank OSSE 67 services available 23 agencies integrated 100,000+ services 99% Time delivered efficiency#55BICIP Structure: 7 Pillars after EODB 1. Business Entry, Exit, and Technology Adoption 2. Industrial Infrastructure and Logistics 3. Cross Border Trade and Business 4. Commercial Dispute Resolution and Labor Regulations 5. Tax Regime 6. Financial and Non-financial incentives 7. Access to Finance#56FDI Performance#57FDI Inflows (Net) by Areas and Components Non-EPZ EPZ EZ Total year Equity Capital Reinvested Intra- Sub- Equity earnings company Total Capital Reinvested earnings Loans Intra- company Loans Sub- Equity Reinvested Total Capital earnings Intra- Sub- company Total Loans 2021 1105 2022 997 1277 2084 119 2501 -8 3074 34 285 75 394 0 0 0 0 2896 25 431 -52 404 0 0 2 2 3480#584500 4103 4000 3500 3000 2712 2500 2000 1500 1000 500 0 United States of America... COUNTRY WISE FDI STOCK (in million USD) 1840 1458 1346 1269 1255 913 729 687 676 562 377 367 311 281 United... Singapore Korea,... People's... Hong Kong: SAR of China Netherlands Malaysia Australia India Japan United Arab Emirates (UAE) Sri Lanka British Virgin... Norway Thailand Mauritius 267 263 245 Taiwan:... Saudi Arabia 216 Pakistan Other... 1279#59FDI Performance -Inflow 2022 Chemicals and... Trading, 112 Construction, 112 Food, 137 Fertilizer, 138 Telecommunications, 214 NBFI, 267 Banking, 311 Gas & Petroleum, 322 Power, 446 Textile and Wearing, 692 Other Sectors, 468 Textile and Wearing Power Gas & Petroleum Banking NBFI ■Telecommunications Fertilizer Food ■ Construction Trading Chemicals and Pharmaceuticals Agriculture and Fishing Leather and Leather Products Computer Software and IT Cement Other Sectors#60■ Gas & Petroleum FDI Performance -Stock 2022 Textile and Wearing ■ Banking Power ■Telecommunications ■ Food ■ Trading ■Chemicals and Pharmaceuticals ■ NBFI ■ Leather and Leather Products ■Construction ■ Agriculture and Fishing Insurance Other sectors, 2568 Gas & Petroleum, 3872 FDI Stock Dec 2022 Vehicle and Transport Equipment, 247 Cement, 279 Insurance, 280 Agriculture and Fishing, 312 Construction, 332 Leather and Leather Products, 369 NBFI, 409 Chemicals and Pharmaceuticals, 447 Trading, 610 Food, 893 Cement Vehicle and Transport Equipment Other sectors Telecommunications, 1428 Textile and Wearing, 3840 Power, 2460 Banking, 2812#61THANK YOU! BIDA wwwwwww 11 Bangladesh Investment Development Authority 111. www.bida.gov.bd বাংলাদেশ 11