Business & Investment in Bangladesh

Bangladesh : Business & Investment Promotional Agencies and Their Functions

The government has earmarked private investment as the prime vehicle for economic growth and expansion. Towards this end, a number of agencies have been created with specific promotional roles. These are as follows :

Bangladesh Small and Cottage Industries Corporation (BSCIC)
Bangladesh Export Processing Zones Authority (BEPZA)
Board of Investment (BOI)

Bangladesh Small and Cottage Industries Corporation (BSCIC)

BSCIC was created through an Act of Parliament in 1957 which was later ammended in 1992. It provides a package of services to private sector entrepreneurs in the small and cottage industries sector. Small industries are defined as those engaged in manufacturing or processing or service activities whose total fixed investment is limited to Tk. 30 million (US$ 0.75 million), while cottage industries are those engaged in manufacturing or servicing and generally run by family members with a total investment limited to Tk. 0.5 million (US$ 12,500) only.

BSCIC also provides assistance in all other matters relating to development and expansion of small and cottage industries (SCI). Its major functions are as follows :

Promotion and registration of small and cottage industries
Conducting advisory and industrial promotion services including training of entrepreneurs, skill development of artisans and craftsmen, creation of jobs for SCIs etc.
Construction. and development of industrial estates with necessary infrastructural facilities for SCIs.
Development of linkages between SCIs and large and medium sized industries.

BSCIC has developed a total of 30 industrial estates throughout the country to foster the growth of SCIs in a balanced manner, planning, development and construction works for another 54 estates are under execution so that there is at least one industrial estate in each district of the country.

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Bangladesh Export Processing Zones Authority (BEPZA)

One of the Export Processing Zones in Bangladesh

The Bangladesh Export Processing Zones Authority (BEPZA) was established to setup and operate export Processing zones in Bangladesh under the Bangladesh Export Processing Zones Authority Act, 1980. To begin with, it was decided that the country would have three export processing zones in phases, one each of the port cities of Chittagong and Khulna and one air transportation based zone near the Zia International Airport at Dhaka.

Accordingly two export processing zones - one in Chittagong and the other at Savar near Dhaka - are already functioning. BEPZA develops and services special areas where potential investors would find a congenial investment climate free from procedural complications. The policy making body of the Bangladesh Export Processing Zones Authority is its Board of Governors chaired by the Head of the Government. The Board consists of Ministers and Secretaries of several relevant Ministries and Divisions. Any decision taken by the Board of Governors is deemed to be the decision of the government. For carrying out the day to day functions including implementation of the Board's decisions, there is an Executive Board of BEPZA consisting of an Executive Chairman and three members.

The Chittagong Export Processing Zone (CEPZ), established in 1983, has till the end of September 1994 sanctioned 89 industries with a proposed investment of US$ 154 million of which 47 are wholly foreign owned, 21 joint ventures and the remaining 21 are owned by domestic entrepreneurs. 58 industries are already in operation with an investment of US$ 126 million.

The Dhaka Export Processing Zone (DEPZ) created in June 1993, has in a period of 15 months, sanctioned 27 industries with a proposed investment of US$ 78 million of which 17 are wholly foreign owned, 5 are joint ventures and 5 are owned by local entrepreneurs. 11 units with an investment of US$ 11 million, are already in operation.

Total exports from BEPZA industries stood a US$ 76.6 million in 1991-92 and US$ 127.3 million in 1992-93 and US$ 145.6 million in 1993-94.

Address of BEPZA :
Bangladesh Export Processing Zone
222 New Eskaton Road, Dhaka - 1000, Bangladesh
Tel. : +880 (0)2 405 032, 401 612, 403 007 or 832 961
Fax : +880 (0)2 834 967
Telex : 642 268 BEPZA BJ

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Board of Investment (BOI)

The Government of Bangladesh established the Board of lnvestment for accelerating private investment in Bangladesh. The Board is headed by the Prime Minister. Other members are Ministers and Secretaries of concerned ministries. It is vested with necessary powers to take decisions for speedy implementation of new industrial projects and provide operational support services to the existing ones. The BOI is a high-powered government apex body for promotion and development of foreign and local private investment in the country. The major functions of the Board are as follows :

Promotion of investment
Providing all kinds of facilities for capital investment and rapid industrialization
Registration of industrial projects
Creation of infrastructural facilities for industries
Issuance of work permit to expatriate personnel
Providing import facilities to industrial units
Approval of the terms and conditions for foreign private loans and supplier credits beyond the prescribed limit
Approval of payment of technology transfer fees (royalty, technical know-how and technical assistance fee) beyond the prescribed limits to foreign nationals/organizations
Recommendation for allotment of land in the industrial areas/estates for industrial purpose.

In addition, the BOI assists investors in obtaining the following services expeditiously :

Electricity, gas, water, swerage and telecolnmunication connections, custom clearance for imported machinery, spare parts and raw materials
Clearance regarding environment pollution
All other facilities and services that may be required for speedy setting up of an industry.

The Executive Council of the BOI consists of an Executive Chairman and Members and is responsible for carrying out the day to day functions and decisions of the Board which are deemed to be the decisions of the government.

The number of industries registered/sanctioned till June 1994 by the Board of Investment is 6972 out of which 178 are foreign owned. Since the present government came to power in March 1991 , the Board of Investment has registered a total of 1056 units with a proposed investment of Tk. 18,320 million (US$ 460 million), out of which 80 units are wholly foreign owned or are joint ventures having an investment of about US$ 100 million.

Address of BOI :
Board of Investment
Shilpa Bhaban
91 Motijheel Commercial Area
Dhaka - 1000, Bangladesh

Address of Dhaka Chamber of Commerce :
Dhaka Chamber of Commerce and Industry
Chamber Building
65-66 Motijheel Commercial Area
Dhaka - 1000, Bangladesh
Tel. : +880 (0)2 232 693 (PABX)
Fax : +880 (0)2 833 516

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References :

Bangladesh Handbook 1995
Bangladesh At A Glance, Dec. 1994

For further information/clarification on any of the topics mentioned above or to obtain copies of the referenced literature, please contact your local Bangladesh Mission.

Acknowledgements:
The author, Shabbir A Bashar gratefully acknowledges the un-precedented help and co-operation of the Bangladesh High Commission, London, UK in preparation of this document. He particularly thanks Mr Shihabuddin Ahmed, Minister Press Division, Bangladesh High Commission, London, and late Mr Mizanur Rahman, Senior Vice President and Representative, Arab-Bangladesh Bank Ltd., London Representative Office, for their support.

Dedication:In fond memory of late Mizanur Rahman, a friend who died pre-maturely.

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