Japanese businesses and associations stressed the need to simplify protracted legal regulations, eliminate corruption and the tax system to attract more foreign direct investment (FDI) in Bangladesh.
More than 70% of Japanese businesses view underdeveloped legal systems, lengthy tax and administrative procedures, social and political instability, and ambiguous policy management by local governments as significant risks when investing in Bangladesh.
Moreover, although most Japanese businesses said they were “dissatisfied” or “slightly dissatisfied” with the business environment in Bangladesh.
The data was presented at “Japan-Bangladesh Collaboration: Enhancing FDI and Economic Partnership”, jointly organized by JETRO, FICCI, JCIAD, HSBC, JICA, JBCCI, and the Embassy of Japan in the capital on Tuesday.
Yuji Ando, country representative of JETRO Bangladesh, delivered the first keynote presentation.
According to the presentation, 77.1% of Japanese businesses believe that underdeveloped legal systems and unclear operations are major risks when investing in Bangladesh. Meanwhile, 74.7% indicated that time-consuming tax and administrative procedures present significant challenges.
Moreover, 69.9% identified unclear government policy as a major risk whereas 66.3% marked political or social instability.
Meanwhile, Bangladesh is still the top business destination for 61.2% of Japanese businesses. Currently, there are 350 Japanese enterprises doing business in Bangladesh.
The presentation also suggested recommendations to enhance the business environment in Bangladesh to attract more Japanese FDI such as a review of the complex tax system of Bangladesh and to simplify, speed up, and transparent the administrative procedures, especially, customs clearance and registration.
In his speech as chief guest, Professor Lutfey Siddique, special envoy of the chief advisor, said that Bangladesh does not want to be a country of cheap labour or does not want to be a country with difficult conditions for investment.
He also assured to simplify legal regulations to attract more investment.
Japanese Ambassador to Bangladesh Iwama Kiminori said: “Bangladesh is expected to graduate from the LDC status in 2026, and the country has to resolve all these issues discussed in today's event,” he added.
He also said that the business environment in ASEAN countries has been improving significantly and if Bangladesh lags behind, investment may shift there.
“Now Bangladesh has to focus on this. We have a good relationship with Bangladesh, and we want to assist the country in improving its business ecosystems if needed,” he added.
Ashik Chowdhury, executive chairman of BIDA, said that they have taken the initiative to withdraw import tax on capital equipment for investment in economic zones.
“We have also taken the initiative to increase communication with the NBR and Bangladesh Bank. We will gradually remove all the obstacles to foreign investment,” he added.
Japanese investment in the private sector in Bangladesh is less than $2 billion. Whereas investment in competing countries like Vietnam is about $42 billion, said Tareq Rafi Bhuiyan, president of the JBCCI.
He also said that it became possible as Japan and Vietnam signed EPA but Bangladesh has not any agreements like this with Japan.
In his welcome speech, FICCI President Zaved Akhtar said that this seminar is a landmark event that underscores the deep economic ties and potential between our two nations.
