The organization says the limitation is hindering the country from increasing trade and investment
Japan External Trade Organization (JETRO) has asked to lift the limitation of telegraphic transfer (TT) remittance for imports to attract more Japanese investment in Bangladesh.
The organization says the limitation is hindering the country from increasing trade and investment.
TT remittance for import trade is the international standard and the process can play a vital role to increase investment in the country, said JETRO Country Representative Yuji Ando.
The government is now annually allowing $200,000 for importing through TT remittance, he said, adding that import through letters of credit (LCs) takes a lot of time, but import through TT remittance saves time and is easier.
To this end, Deputy Secretary of the Commerce Ministry Mohammad Monir Hossain Hawlader said the government is considering the issue positively and necessary steps have already been taken in the draft import policy for 2021-24 to make the TT remittance process for importing easier.
Yuji Ando said Bangladesh is one of the major destinations for Japanese entrepreneurs and they are investing in different fields, including ready-made garments (RMG), textile, IT, and infrastructure, taking the advantage of competitive human resources and a huge domestic market.
“The number of Japanese companies operating in Bangladesh has increased around four times in 10 years. A total of 321 Japanese firms are currently running their businesses in the country which was 83 in 2010,” he said.
Many Japanese entrepreneurs are expanding their businesses in different fields, including electric and consumer products, he added.
Though the flow of Japanese investment is now slow due to the ongoing pandemic, he hopes that investment will increase in a bigger way as the Bangladesh government is implementing different projects, including the Japan Economic Zone at Araihazar upazila under Narayanganj district.
Many Japanese infrastructure development companies are coming to Bangladesh for working on the Japanese Official Development Assistance (ODA) projects, including the Matarbari Deep Sea Port.
Japanese entrepreneurs are also showing their keenness to invest in the country’s manufacturing, fast-moving consumer goods (FMCG), infrastructure development, and tech and digital startups, he added.
He said Japanese firms are also investing in different projects under the Public-Private Partnership (PPP) method.
However, Yuji Ando mentioned that many challenges still exist for Japanese and other foreign companies in Bangladesh, citing examples of infrastructure and taxation.
For attracting more Japanese investors, the Japanese trade diplomat said Bangladesh will have to remove the bottlenecks of investment and improve its position in the ease of doing business index.
He urged the authorities to change the foreign exchange regulations for ensuring smooth foreign remittance by a branch office and foreign loans for working capital from the parent company.
Lifting limitations for royalties or technical assistance remittance and TT remittance for import is also important, Ando said.
He urged the government to ensure smooth services in tax and VAT systems and an easy registration process.
Ando mentioned that Japan has been significantly contributing to Bangladesh’s socio-economic development since its independence with the trading relationship getting stronger and productive day by day.
To attract more Japanese investment, Bangladesh must prioritize issues such as corporate governance and a more investment-friendly environment, he further said.
Japan and Bangladesh have maintained friendly relations since February 10, 1972, through economic and technical cooperation, cultural exchanges, and mutual visits.