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Dhaka Tribune

Businessmen seek policy option for overseas investment

Update : 21 Oct 2015, 06:54 PM

International Business Forum of Bangladesh (IBFB) has once again sought for a policy option for overseas investment by Bangladeshi entrepreneurs to stop capital flight.

Foreign Direct Investment (FDI) outflow is restricted officially in Bangladesh but money is being invested abroad through informal channel, which is one of the major components of the capital flight, observed businessmen.

They came up with the observation at a view exchange meeting with the journalists on “Overseas Investment by Bangladeshi Entrepreneurs” which was organised by IBFB in the capital yesterday.

At present FDI outflow is strictly restricted by Bangladesh Bank. Only exporters get a little bit access to invest abroad from their foreign currency retention quota.

Former President of Federation of Bangladesh Chambers of Commerce and Industries (FBCCI) A K Azad stated that all the businesses remained stuck in the country due to lack of gas and electricity supply.

“If FDI outflow is not allowed existing business will be threatened,” he feared while addressing the event as a special guest.

He reminded that the business community had already convinced the government to allow them overseas investment under a condition of returning profit into the country.

He also urged the government to fix a certain limit for the investors to invest abroad instead of considering case-to-case basis system.

Mohammed Farashuddin, former governor of Bangladesh Bank, advocated for overseas investment by Bangladeshi entrepreneurs, saying that it is high the time to open up the policy option for FDI outflow. 

Despite having various advantages for foreign investors including tax redemption, repatriation, FDI inflow is slower due to uncertainty in the country, observed Farashuddin while delivering his speech as chief guest.

Muhammad Ismail Hossain of Shah and Associates presented a keynote paper titled “Overseas Investment by Bangladeshi Entrepreneurs.”

According to the keynote paper, over the last four decades, the country lost about U$800m a year on average in capital flight. Among several components of capital flight, foreign direct investment through informal channel is one of the major ones.

Higher forex reserve will facilitate the local investors to invest overseas, said Hossain.

As excess reserve is not always good for the country, he suggested for allowing FDI outflow to keep free flow of forex reserve.

Motiur Rahman, former president of Dhaka Chamber of Commerce and Industry said businessmen wouldn’t be able not survive due to higher cost of doing business in the country. He also urged government to allow entrepreneurs to make profit by investing overseas.

Government has to ensure that money is being properly invested abroad, said Humayn Rashid, a businessman.

He also suggested for turning the second home concept into second investment by legalising investment abroad.

Businessmen should explain the reason why they wanted to invest in abroad when home country needs huge investment, opined the journalists attended at the event. 

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