Japan has recommended Bangladesh streamline the process for foreign investors if it wants the Asian economic giant to increase its investment here.
“Our experience says that new foreign investors are always puzzled by the variety of permissions, that too under different authorities, that are required,” a Japanese investment delegation said in a report to the Board of Investment.
All the countries in Asia that are attractive as investment destinations have succeeded in making their respective investment promotion organisations like the BoI a single window for obtaining all sorts of permissions or licences.
Subsequently, the investment cost and hassles for investors were significantly reduced, they said.
“The Japanese investment community has been consistently pursuing this particular burning issue but, unfortunately, no visible development has been noticed so far.”
The report was sent this month by the Japanese government as a follow-up to Prime Minister Sheikh Hasina's pleas to increase investment during her visit to Japan in May.
Shiro Sadoshima, Japan's ambassador to Bangladesh, representatives of Japan External Trade Organisation and Japan International Cooperation Agency were present from Japan's side, while officials from BoI, the National Board of Revenue, commerce and other relevant ministries represented the home side.
The minutes of the meeting, which was chaired by BB Governor Atiur Rahman, were forwarded to the Prime Minister's Office so that the suggestions are seen through.
To attract more FDI and to retain the existing investors, Bangladesh should bring all the agencies pertinent to foreign investors under the umbrella of BoI, said the Japanese investment delegation.
It also strongly requested the BoI to be responsible for at least the major permissions needed -- such as trading, import, bond and factory licences; environmental clearance; TIN and VAT registrations; certificates for fire safety and tax exemption -- to set up a business.
The BoI, in response, said it will request the related agencies to assign officers with adequate decision-making authority to BoI headquarters so that the foreign investors' needs can be addressed at one place and promptly.
Furthermore, the BoI and the BB governor will follow up with the PMO the issues of upgrading and expanding the physical facilities, logistics and manpower at BoI for efficient service delivery to foreign investors. The delegation has also called for a dedicated economic zone that is free from flood and within 1.5 hours drive from the centre of Dhaka city.
The zone should be at least 300 acres, with future expansion possibility of 250-500 acres. The incentives provided and the price of land should be similar to that in other Asian countries.
All the rules and regulations of business should be taken and controlled by the government authority.
The delegation cited the foreign garment manufacturers' current incapacity to obtain the utilisation of declaration (UD) certificate as a case in point.
The certificate is only issued by the BGMEA or BKMEA, the garment sector's apex bodies, for their members' export or import businesses.
“This is another burning issue that directly contradicts the government's policy of welcoming foreign direct investment in all sectors except the reserved sectors. This implies that FDI in the garment sector is welcome by the government of Bangladesh.” The BoI said it will request the commerce ministry to authorise the Export Promotion Bureau to issue UD for foreign investors.