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Buying from Bangladesh                      

The textile and apparel industry in Bangladesh occupies a prominent position within the country’s industrial structure.

It is the largest manufacturing sector, providing jobs for some 50% of the total industrial workforce and contributing 9.5% of the country’s GDP.

Also, it accounts for almost 77% of total exports, making it Bangladesh’s leading foreign exchange earner.

In the early 1980s exports were dominated by jute while garment sales were insignificant. But today garment exports are by far the leading export category. In 2001/02 the clothing sector generated as much as US $4.58 bn in foreign exchange.

The industry benefits from special access to markets in the EU, Canada, Norway and Japan. Because Bangladesh is a less developed country, its textile and clothing exports enter these countries quota-free and duty-free. This concession, together with low labor costs, provides the garment sector with a strong competitive advantage.

But in order to produce garments for export, the sector has to purchase a large share of its yarn and fabric needs from abroad, especially woven fabrics. Few local textile firms are able to produce materials of the required quality or in adequate quantities.

The Bangladeshi government is attempting to remedy this situation. To reduce the country’s import bill, it is offering tax concessions and incentives aimed at encouraging investors to develop the necessary backward linkages.

 

Overview

A nation of more then 120 million people Bangladesh covers 144,000 sq. km of the fertile Gangetic delta between India and Myanmar. The country, after a long and bloody struggle under the leadership of the Father of the Nation Bangabandhu Sheikh Mujibur Rahman, acheived independence from Pakistan through the War of Liberation in 1971. Since then Bangladesh has been moving fast towards capitalising on its great workforce and wealth of natural resources.

Official Name : The People's Republic Of Bangladesh
Capital : Dhaka (Area 414 sq. km. Master plan 777 sq.km.)
Currency : Currency unit is Taka. Notes are of 1,2,5,10,20,50,100 and 500 Taka. Coins are of 1,5,10,25,50 and 100 Poisha (100 Poisha = 1 Taka)
Language : Bangla is the state language. English is also widely spoken and understood. Arabic is read and spoken for religious purposes.
Population : Total estimated population 130 million.
Religions : Muslim 88.3%, Hindu 10.5%, others 1.2%.
Area Total : 144,000 sq km Land: 133,910 sq km Water: 10,090 sq km
Location : Latitude from 20 degree 34' to 26 degree 38' north. Longitude from 88 degree 01' to 92 degree 41' east.
Climate : Tropical; cool, dry winter (October to March); hot, humid summer (March to June); cool, rainy monsoon (June to October).
Major Industries : TEXTILES, Jute, sugar, paper, textiles, fertilizers, cigarette, cement, steel, natural gas, oil-refinery, newsprint, power generation, rayon, matches, fishing and food processing, leather, soap, carpet, timber, ship-building, telephone, etc.

Tourist Attractions

COX'S BAZAR : A small town founded in 1798 A.D. by Captain Cox of East India Company and named after him, Cox's Bazar has one of the longest sea beaches in the world. Well protected by Greendale jungle slopes on one side and the sea shore on the other, it is a small exquisite town with a mixed population speaking Bangla and Burmese. The female folk of Burmese origin in their traditional costume is a common sight. Good accommodation and eating facilities are available at the tourist motels, cottages and hotels. Cox's Bazar is connected with Chittagong and Dhaka by road and air.

RANGAMATI :  Rangamati, the headquarters of Chittagong Hill Tracts region, is on the eastern bank of the famous Kaptai lake. It is inhabited by colourful and hospitable tribal folks. Rangamati is connected with Chittagong by road and with Kaptai by launch. Accommodation is available at a reasonable cost with the tourist motels and cottages situated at scenic spots on the bank of the lake. Mechanised and country boats are available for cruise in the lake.

SUNDARBAN : Fascinating tropical forest covering 2,316 square miles of deltaic swamp alongwith the coastal fringe of the southern most part of Bangladesh, Sundarban is the natural habitat of many of the wild life like crocodile, dotted deer , python, wild bear, monkey and the famous Royal Bengal Tiger.

SYLHET : The land of tea gardens, it is also a playground for naturalists and game watchers. Sylhet is famous for its Manipuri tribe and their dances. Its cane and cane products are equally fascinating. The hills in the north add to its natural beauty. It is connected with Dhaka by rail, road and air.

MAINAMATI : Five miles to the west of Comilla town, lies a range of the low hills known as the Mainamoti-Lalmai range. It was an important seat of Buddhist culture. Large scale excavations have revealed valuable facts about Buddhist rulers who flourished here as independent kings during the 7th and 8th centuries. The whole range of hillocks, about 11 miles in length, is believed to be studded with more than 50 Buddhist archaeological sites. Comilla is also famous for Khadi (cotton dress) and bamboo products.

KUAKATA : Kuakata, situated in the district of Patuakhali, is a wonderful picturesque spot. The 25 KM long sea beach situated at the periphery of the southern part of Patuakhali is a potential tourist resort. It provides a unique opportunity to witness both sun rise and sun set. The local Rakhain population have rich cultural tradition and their hospitality is well known. The 200 acres dense forest gives the beach a pleasant look and it serves as a wall against tidal bore. A Buddhist pagoda is located at the sea-shore and a Buddhist statue weighing over 1.5 metric tons is preserved inside the Pagoda.

 

Transportations

Air By air Bangladesh can be reached from any part of the world. Biman Bangladesh airlines is the national air service authority that connects Dhaka, Chittagong and Sylhet with 28 major cities of the world. International carriers like British Airways, Thai Airways, Saudia, Kuwait Airways, Singapore Airlines, PIA, Cathy Pacific, Indian Airlines, Emirates, Gulf Air, Aeroflot, Myanmar Airways, Royal Nepal Airlines, Uzbek Airways, Qatar Airways, Oman Air and Malaysian Airlines fly to and from Dhaka . Biman Bangladesh airlines also operates domestic route services. Presently private sector airlines are also operating in domestic routs.

Bus/Coach Services Road transport in Bangladesh is a private sector affair operating predominantly in domestic routes. Rates are among the cheapest in the world. Express and non stop services are available to principal towns from Gabtoli, Saidabad and Mohakhai bus terminals in Dhaka. The Bangladesh Road Transport Corporation (BRTC) also maintains a countrywide network of bus services. Recently they have introduced Dhaka - Calcutta - Dhaka direct daily bus services via Benapole, Jessore.

Car Rental Private car hire service is available in Dhaka and some other major cities. Bangladesh Parjatan Corporation (BPC), a government organization, has a fleet of air-conditioned and non air-conditioned cars, microbuses and jeeps. Besides they offer transfer service for tourists between Dhaka airport and main city points or hotels.

 

Bangladesh Economy

The county was one of the major exporters of textiles, silk and sugar till the eighteenth century but the industrialization process was subsequently halted during the 200 years of colonial exploitation. As a result, Bangladesh inherited a narrow industrial base when it became independent in 1971.

It has a good number of large, medium and small-sized industries in both public and private sectors based on both indigenous and imported raw materials. Among them are jute, cotton, textile, fertilizer, engineering, shipbuilding, steel, oil-refinery, paper, newsprint, sugar, chemicals, cement and leather. Jute Industry has traditionally played an important role in the national economy. But in recent years, Ready Made Garments Industry has replaced Jute as the principal export-earner for the country. Considerable progress has been attained in the past few years in industries such as leather, ceramic, shrimp, fish, pharmaceuticals and frozen food.

With the development of infrastructures, supportive policies for trade and investment and comparative advantage in labour-intensive Industries, excellent prospects for investment exist in Bangladesh today. Industrial growth was recorded at 81% during 1997-98. Foreign investors are pouring into the country in greater numbers everyday, especially in the export processing zones special facilities existing at Dhaka and Chittagong.

To attract local and foreign investors, the present government has introduced a number of perks and incentives. These include provision for setting up export processing zones in the private sector, initiatives to set up new EPZs in the public sector, tax holiday for export—oriented industries, scope for 100 percent foreign investments and repatriation of profits. Etc.

Due to the present economic necessity and past experiences, privatization of state—owned enterprises is being geared up by the present government.

Investment info of Bangladesh

BANGLADESH *120 million population *50 million civilian labour force *trained and educated workforce at low wage rate *sizeable domestic market *political stability *steady growth of GDP * stable rate of exchange *low interest rate *low rate of inflation *comfortable foreign exchange reserve INDUSTRIAL POLICY REFORMS Liberalized Industrial Policy Export-oriented, private sector-led growth strategy No limitation pertaining to equity participation i.e. up to 100 per cent foreign private investment allowed Except five reserve sectors, all industries are open for private investment> Industries earmarked for public sector investment are included in the reserve sector namely: (I) arms, ammunition and other defence equipment and machinery (ii) production of nuclear energy (iii) forest plantation and mechanized extraction within the bounds of reserved forests (iv) security printing (currency notes) and minting, and (v) railways and air transportation (except certain domestic routes and air cargo) No permission of the Government required to set up new industries For obtaining institutional facilities like procurement of land, electricity, gas and sewerage connection, importation of capital machinery and raw materials, tax rebate, duty drawback facilities etc., industries need only to be registered with the Board of Investment (BOI) in a simple prescribed from

REFORM and LIBERALIZATION OF POLICIES Creation of Law Reform Commission to update existing Laws Setting up Administrative Reform Commission to modernise the administrative system and to remove bureaucratic roadblocks Enactment of law allowing private sector to establish export processing zones Approval of policy parameters and incentives for private power generation Identification of road blocks on the way of implementation of projects and measures to remove them Updating of Companies Act and relevant laws INVESTMENT GUARANTEE Foreign Private Investment (Promotion and Protection) Act, 1980 ensures legal protection to foreign investment in Bangladesh against nationalization and expropriation. It also guarantees repatriation of capital and dividend and equitable treatment with local investors. Adequate protection is available for intellectual property rights, such as patents, designs and trade marks and copyrights. Bilateral Investment Guarantee Agreements have been signed with a number of countries. Bangladesh is signatory to MIGA, OPIC of USA, ICSID and member of WIPO Permanent Committee on development co-operation related to industrial property.

FACILITIES INCENTIVES tax holiday from 5-10 years depending on location of industries 15 year's tax holiday for private power generation companies facilities for repatriation of invested capital, profit and dividend exemption of tax on interest on foreign loan tax exemption on royalties, technical know-how and technical assistance fees avoidance of double taxation on the basis of bilateral agreement six months multiple entry visa for the investors TAKA, the nation's currency, is convertible for international payments in the current account Re-investment of repatriable dividend treated as new investment Working capital loan, as well as term loan, from local commercial banks allowed to the industries set up with foreign capital Citizenship by investing a minimum of US$ 5,00,000 or by transferring US$ 10,00,000 to any recognized financial institution (non repatriable)

INCORPORATION OF A COMPANY IN BANGLADESH In Bangladesh, business may be carried on by a locally incorporated company and a foreign company incorporated outside but registered in Bangladesh.

Textile: export market of US$ 2 billion from the garments sector and a large domestic market.

POTENTIAL AREAS FOR INVESTMENT Investments in areas of manufacturing and services are welcome. Investors are free to choose fields of investment. However, from the point of view of comparative advantage, the following are potential areas for investment. Infrastructure: energy, telecommunication, oil and gas, ports, highways and bridges. Agrobased Industry: dairy of poultry, processing of fruits and vegetables, shrimp, fish culture and processing, shrimp feed plants etc. Labour-intensive Industries: electronics, data processing and software development, electrical goods and accessories, light engineering goods, toys, jewellery and others.

COMMUNICATION FACILITIES Adequate sea, rail, road and air services to facilitate both domestic and international transportation. TELECOMMUNICATIONS Internet, telex, fax, international direct dialing services and e-mail facilities.

MAJOR EXPORTABLE ITEMS Readymade garments, leather and leather products, frozen shrimp/prawn and fish, raw jute and jute goods, tea, newsprint, urea fertilizer, furnace oil, naphtha etc.

TOURISM Bangladesh has a rich tradition, history and architecture. Incredible greenery, mighty rivers and attractive rever cruises, sunny beaches, colourful tribal life and attractive cultural functions offer great tourist attractions.

FACILITIES TO NON-RESIDENT BANGLADESHI Non-resident Bangladeshi investors enjoy facilities similar to foreign investors Allowed to buy newly issued shares/debentures of Bangladeshi companies Quota of 10% reserved for non-resident Bangladeshis in primary shares (IPO) Foreign currency deposits in the Non-resident Foreign Currency Deposit (NFCD) account.

BANKING AND FINANCING Bangladesh offers adequate banking facilities to the investors for establishment of industries and to facilitate their business transactions. 14 private and 13 foreign commercial banks, 10 financing institutions and 3 nationalized commercial banks having network of correspondents and branches operating all over the country and abroad.

EXPORT PROCESSING ZONES Export Processing Zones in the port city Chittagong and capital city Dhaka with necessary fiscal and infrastructure facilities for export oriented enterprise. Another Export Processing Zone, near the capital city (at Gazipur) is under implementation. COURTESY SERVICE Board of Investment extends courtesy service such as airport reception, hotel and transport booking and fixing appointment with the Government and Chamber official is accordance with the needs of foreign entrepreneurs visiting Bangladesh. For availing courtesy service, entrepreneurs need to contract BOI in advance.

TELEPHONE and FAX NOS. OF RELEVANT ORGANIZATIONS

Board of Investment Prime Minister's Office 91 Motijheel C.A. Dhaka Bangladesh Tel : 880-2-9563573, 9563570, 9567541, 9563782 Fax : 880-2-9562312,E-mail : ecboi@bdmail.net

Bangladesh Export Processing Zones Authority (BEPZA) Tel: 880-2-832553, 835325 Fax : 880-2-834967

 

 

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