The fragmented structure of investment promotion ecosystem in Bangladesh and poor coordination among investment promotion agencies, regulatory bodies and service providers, outdated laws, weak enforcement of intellectual property rights and a number of other issues were major barriers to attracting investments in Bangladesh.
The observation was made in the white paper on the state of Bangladesh economy submitted to chief adviser Muhammad Yunus on December 1.
Although the Bangladesh Investment Development Authority was established as the central agency to support investments, its effectiveness was hampered due to insufficient collaboration with other IPAs, regulatory institutions and service providers, the paper said.
BIDA鈥檚 regional offices also faced infrastructural challenges that hindered the full implementation of its one stop service platform, aimed at streamlining investment procedures.
Policy inconsistencies and procedural delays further deterred foreign investments. For instance, the paper said, discrepancies between BIDA鈥檚 work permit guidelines and the residency definition under the Income Tax Act 2023 created confusion among investors.
Additionally, the work permit approval process could take up to 12 months, frustrating investors. The report recommended integrating visa and work permit procedures, similar to practices in India and Thailand, to improve efficiency.
The paper noted that automation efforts in Bangladesh were also incomplete. Initiatives like the VAT online and income tax automation projects still require dual submissions for approvals and registrations, undermining their effectiveness.
鈥楩urthermore, the monitoring and evaluation system remains weak, as BIDA depends on estimated data from its investor relationship management system, which is not systematically utilised,鈥� it said.
The legislative framework also complicated the investment landscape. Outdated laws such as the Foreign Private Investment Promotion and Protection Act 1989 and the Transfer of Property Act 1882 posed challenges, while the Bangladesh Flag Vessels (Protection) Act 2019 created logistical bottlenecks by mandating 50 per cent of goods be transported via Bangladeshi vessels, despite the limited capacity of national shipping lines.
In the pharmaceutical sector, reliance on imported active pharmaceutical ingredients and new regulatory requirements under the Drugs and Cosmetics Act 2023 created operational hurdles.
Weak enforcement of intellectual property rights further exposed investors to risks.
The report urged the government to strengthen IPR protection and train enforcement agencies like customs and police to improve investor confidence.
The absence of a centralised master OSS, originally intended to integrate services from agencies such as the Bangladesh Export Processing Zone, the Bangladesh Economic Zone Authority and the Hi-Tech Park Authority, has led to data inaccuracies and coordination issues.
Moreover, duplications in registration processes across multiple agencies could be resolved by introducing a unique investor identification system, the paper suggested.
The report also pointed out that BIDA鈥檚 registration system included numerous small-scale projects with investments below Tk聽15 crore, raising questions about their necessity for BIDA registration when a trade licence could suffice.
It called for streamlining processes and reducing the excessive number of regulatory approvals required, which currently stands at 150 across 23 government agencies.
