How to Invest in Bangladesh?

Md. Joynal Abdin
Founder & Chief Executive Officer, Trade & Investment Bangladesh (T&IB)

Editor, T&IB Business Directory; Executive Director, Online Training Academy (OTA)
Secretary General, Brazil Bangladesh Chamber of Commerce & Industry (BBCCI)

Bangladesh is one of South Asia’s largest consumer and production markets, supported by a sizable domestic demand base, an export-oriented industrial structure, and an expanding services economy. Recent World Bank data puts Bangladesh’s GDP at around USD 450.12 billion (2024) with GDP per capita around USD 2,593 (2024) and GDP growth around 4.2% (2024) figures that highlight both scale and continued momentum despite global headwinds. For investors, the opportunity is not limited to any single sector. Bangladesh offers multiple entry points manufacturing for exports, domestic consumption-driven services, infrastructure-linked investments, and technology-enabled business models provided the investor approaches the market with clear compliance planning, realistic timelines, and strong local execution.

2) Understanding Bangladesh’s Investment Landscape

Investors typically evaluate Bangladesh through four lenses:

Market demand and competitiveness: Bangladesh’s large population and fast-growing urbanization support demand across consumer goods, healthcare, education, logistics, housing, and digital services. On the supply side, Bangladesh has established industrial depth in textiles and apparel and is expanding capability in light engineering, plastics, agro-processing, pharmaceuticals, and ICT/ITES.

Policy and institutions: Bangladesh has dedicated investment institutions and zone-based industrial models. Investors often structure projects around economic zones, export processing zones, and sector-specific incentives.

FDI and investment trend signals: FDI inflows can fluctuate year to year. UN sources report Bangladesh’s FDI inflows around USD 3.0 billion (2023) (UNCTAD World Investment Report 2024 coverage) and around USD 1.27 billion (2024) in later UN reporting (World Investment Report 2025 coverage, cited by local business press), indicating recent softness and a need for stronger facilitation and confidence-building.

Business environment benchmarking: The World Bank’s newer Business Ready (B-READY) framework replaced the discontinued Ease of Doing Business approach, and Bangladesh is now being measured under this updated structure.

3) Choosing the Right Investment Entry Route

Your entry route determines your legal responsibilities, tax exposure, and operational flexibility. The common routes include:

1. Greenfield investment (new setup): Best for manufacturing, large service operations, logistics hubs, and technology platforms where you want full control and long-term brand equity.

1. Joint venture (JV) with a Bangladeshi partner: Effective when local market access, distribution, regulatory navigation, land access, or public-private coordination is important. A good JV needs clear governance, IP protection, dividend policy, and exit clauses.

1. Acquisition or strategic stake: Suitable for investors who want immediate licenses, trained manpower, and existing cash flows. This route demands rigorous commercial, tax, and legal due diligence.

1. Zone-based investment (EPZ/EZ/Hi-Tech Parks): A preferred route for export-oriented and scale manufacturing, because zones often offer structured services and incentive packages (subject to eligibility and government rules).

4) Priority Sectors and Where Investors Usually Win

While “best sector” depends on your risk appetite and horizon, Bangladesh typically rewards investors in areas where the country has cost advantage, a strong labor base, export demand, or unmet domestic demand. Examples include:

Export manufacturing: ready-made garments and textiles (and their backward linkage industries), packaging, accessories, home textiles, leather goods, footwear, light engineering, plastics, and certain processed foods.

Domestic consumption and services: modern retail supply chains, logistics and warehousing, healthcare services and diagnostics, affordable housing ecosystems, education and skill development, and specialized B2B services.

Agro and food value chains: cold chain, storage, processing, branded packaged foods, and export-grade agro-processing.

ICT and digital economy: software, BPO, digital marketing, e-commerce enablement, fintech-adjacent services (within regulation), and platform-based service exports.

A strong approach is to start with one “anchor” product/service line, then expand into adjacent categories once distribution and compliance are stable.

5) Incentives and Facilities: What to Explore (and How to Qualify)

Bangladesh’s incentive ecosystem is often most practical when your investment is aligned with priority sectors and/or located within approved zones.

Economic zones and specialized zones: Depending on location and sector, companies may be eligible for tax and other benefits. BIDA’s public guidance notes that companies located in economic zones and export processing zones can have different incentive packages, including tax-related facilities for certain categories.

Export Processing Zones (EPZ) incentives: Bangladesh EPZ authorities highlight incentives such as tax holidays (often cited as 5–10 years), duty-free import of machinery and raw materials, relief from double taxation, and other facilities (eligibility and rules apply).

Fiscal incentive overview: Government-linked sources summarize incentive types such as corporate tax holidays (sector/area-based), accelerated depreciation in lieu of holidays for some cases, tariff concessions on capital machinery, and bonded warehousing for export-oriented industries.

Because incentives can be sector- and time-sensitive, investors should validate the latest SROs/circulars, eligibility conditions, and documentation requirements before finalizing a financial model.

6) Step-by-Step Process to Invest and Set Up Operations

A disciplined setup plan reduces delays and prevents costly compliance mistakes.

Step 1: Pre-feasibility and market entry plan
Define your target customers (domestic/export), supply chain design, import dependency, FX exposure, and your pricing advantage. Include a realistic timeline for approvals, construction, hiring, and test production.

Step 2: Company structure and shareholding
Select the appropriate form (subsidiary, branch/liaison office where allowed, JV company, or acquisition vehicle). Decide governance, board structure, share transfer rules, and exit plan.

Step 3: Regulatory registration and licensing map
Prepare a “license matrix” based on sector: company registration, tax/VAT, import/export registration (where needed), sector regulator permissions, environmental clearances, and local authority permissions.

Step 4: Banking, capital injection, and FX planning
Set up banking channels for capital remittance, working capital, and supplier payments. Ensure documentation supports lawful repatriation of dividends and service fees under the prevailing foreign exchange regulations.

Step 5: Location strategy and land/utilities
Choose between industrial zones and private land based on your need for utilities, speed, and compliance. Confirm power capacity, gas availability (if relevant), water, ETP needs, and logistics connectivity.

Step 6: Contracts, procurement, and construction
Use enforceable contracts for EPC/civil works, machinery supply, logistics, and key service vendors. Include delay penalties, performance guarantees, and dispute resolution clauses.

Step 7: Talent, HR compliance, and productivity system
Establish HR policies aligned with Bangladesh labor rules, build training plans, and implement productivity and quality systems early (especially for export manufacturing).

Step 8: ESG and compliance readiness
Environmental compliance, waste management, and workplace safety are not optional especially for export buyers and international investors. Plan compliance costs upfront.

7) Managing Risks: What Investors Should Plan For

Every market has risks; successful investors plan controls, not excuses.

Policy and regulatory risk: Keep documentation clean, engage qualified local counsel, and avoid “shortcuts” that create future liabilities.

FX and repatriation planning: Structure revenue and costs to reduce currency mismatch; document all inward remittances and service arrangements clearly.

Supply chain concentration risk: Diversify critical raw materials and logistics routes where possible.

Partner and governance risk (for JVs): Use strong shareholder agreements, defined reserved matters, audited accounts, and clear decision rights.

Dispute resolution and enforcement: Use well-drafted contracts with arbitration and governing law clauses suitable for cross-border investments.

8) How to Evaluate a Real Project: Due Diligence Checklist (Practical)

Before committing capital, investors typically validate:

Commercial: market size, pricing, competitor structure, customer contracts, route-to-market.
Operational: utilities, staffing, production readiness, vendor reliability.
Legal: land title (or lease rights), permits, corporate documents, litigation.
Tax: VAT posture, withholding tax, customs duties, transfer pricing risk (if applicable).
Financial: working capital needs, payback period, sensitivity to FX and raw material price.

A strong due diligence process is often the difference between “investment” and “expensive learning.”

9) How Trade & Investment Bangladesh (T&IB) Supports Investors

Trade & Investment Bangladesh (T&IB) supports both local and foreign investors with end-to-end facilitation focused on practicality, compliance, and business outcomes. Typical support areas include:

• Investment feasibility and market intelligence (sector assessment, competitor mapping, demand validation).
• Business setup guidance (entry strategy, partner identification, entity formation pathway, compliance roadmap).
• Buyer–seller and partner matchmaking (distributors, suppliers, OEM/ODM partners, strategic JV matches).
• Export and import readiness support (documentation planning, product-market fit for export destinations).
• Investment promotion and visibility support (company profiling, digital presence enhancement, lead generation support).

Business directory-based credibility and discoverability via T&IB Business Directory (for visibility to partners and buyers).

10) Contact Details of T&IB

Trade & Investment Bangladesh (T&IB)
Phone/WhatsApp: +8801553676767
Website: https://tradeandinvestmentbangladesh.com
T&IB Business Directory: https://tnibdirectory.com

11) Closing Remarks:

Bangladesh remains a significant investment destination because of its market scale and the breadth of investable sectors. World Bank data shows an economy of roughly USD 450.12 billion (2024) with GDP per capita around USD 2,593 (2024) and GDP growth around 4.2% (2024) a foundation that can reward investors who enter with disciplined compliance and strong execution.

At the same time, recent FDI figures reported by UN-linked sources and business press highlight that investor confidence and facilitation quality matter as much as incentives. The most successful investors typically do three things well: they choose the right entry route, they build a realistic compliance-and-operations roadmap, and they partner with capable local support to reduce friction and accelerate execution. If you would like structured guidance from planning to implementation, T&IB is ready to support your investment journey in Bangladesh.