Nearly 11,000 Bangladeshi firms members of Dubai chamber
The number of new Bangladeshi companies joining the Dubai Chamber of Commerce has surged 47 percent year-on-year to 1,044 in the first half of this year, said the chamber.
With the latest addition, the total number of Bangladeshi firms registered as members of the Dubai chamber rose to 10,975, the chamber said earlier this month.
The United Arab Emirates (UAE) chamber unveiled the list of nationalities behind new member companies amidst widespread allegations in Bangladesh of illegal fund transfers abroad.
The transfers are allegedly being made mainly through trade misinvoicing and hundi, an informal mechanism of money transfer to redirect remittances sent by Bangladeshis abroad.
And the name of Dubai as a lucrative hub for business comes up quite frequently among the local business community.
Officially, Bangladeshi companies are not allowed to transfer funds without approval from Bangladesh Bank and a very small number of local businesses have so far received approval from the central bank to invest abroad.
Until January this year, the central bank has allowed 17 companies to invest abroad and gave the go-ahead for roughly $40.15 million to be invested abroad globally.
The Dubai chamber has not disclosed the amount invested by the foreign companies.
The central bank has not given permission to any company here to invest in Dubai, said Bangladesh Bank Executive Director and Spokesperson Md Mezbaul Haque.
The chamber's figures, alongside estimates of Washington-based Global Financial Integrity (GFI) and anecdotal information regarding capital flight, raise questions and call for investigations by the authorities, said Mustafizur Rahman, distinguished fellow of the Centre for Policy Dialogue (CPD).
Bangladesh lost approximately $8.27 billion on an average annually between 2009 and 2018 from misinvoicing of values of import-export goods by traders to evade taxes and illegal movements of money across international borders, said the GFI earlier.
A portion of the Dubai investment could have been made legally by Bangladeshis working in the UAE and other Middle Eastern countries based on their income there, he said.
Dubai is a very investment friendly place and there are likely to be cases of investment by Bangladeshis working in the region, he said.
Apart from them, a section of Bangladeshis may have sent money through unlawful means such as hundi or hawala and trade misinvoicing, he said.
"The inflow of remittances has dropped even though nearly 24 lakh migrant workers went to the Middle East in the last two and half years. This requires special attention," said Rahman.
"On the one hand, foreign exchange reserves are falling. On the other, the number of new firms linked with Bangladeshi nationals becoming members of the Dubai chamber has increased significantly. This should be investigated," he said.
He also called upon the central bank to gather information about the businesses by collaborating with the authorities in the UAE.
"The authority should investigate whether loan and tax defaulters have invested there; whether the money invested there has been transferred illegally. Such step will send a message to the wrong doers," he said.
"If nothing is done, illegal money transfers will be encouraged," he said.
This correspondent tried to reach the head of Bangladesh Financial Intelligence Unit, Md Masud Biswas, to know whether the agency would take any step.
He could not be reached despite several phone calls and a text message.
The Dubai chamber said 30,146 new companies joined the chamber in the first six months of 2023 and Indian businesses topped the list, followed by United Arab Emirates and Pakistan.
In total, Indian companies accounted for 22.3 percent of the firms registered until the end of June 2023.
Some 6,717 new Indian-owned companies signed up for membership in the January-June period of 2023, up 39 percent year-on-year, said the chamber.
It said 3,395 new companies from Pakistan joined the chamber, representing an increase of 59 percent. The total number of Pakistani companies registered at the Dubai chamber rose to 40,315.
Also, companies from Egypt, United Kingdom and China topped the list of new members of the Dubai chamber.
Jordanian and Lebanese companies were also among the highest-ranking new member companies, according to the chamber.
The Dubai chamber said 42.4 percent of new companies are engaged in trade and repair services while 30.8 percent specialise in the real estate, renting and business services sector.
Businesses in the construction industry took third place with 7.2 percent while the transport, storage, and telecommunications sector ranked fourth, accounting for 6.3 percent of all the activities of new companies joining the chamber during the first half of the year.
"The diversity of nationalities represented among the new companies joining the chamber reflects the vibrancy of Dubai's dynamic business environment," said President and CEO of the Dubai chamber Mohammad Ali Rashed Lootah.
"…together with the emirate's strong ability to consistently attract a broad range of foreign direct investment," he said.
He highlighted that the number of new chamber members increased by 43 percent during the first half of 2023.
The chamber said the list of countries with the highest growth rates in new member company ownership during the first half of 2023 included Japan, which increased by 253 percent to reach 60.