With an emphasis on supporting the Ready-Made Garments (RMG) industry, a vital component of the country’s economy, the government of Bangladesh is advancing its plans to reward Bangladeshis who contribute to attracting foreign direct investment (FDI).
The Bangladesh Investment Development Authority (Bida) is currently drafting guidelines and a concept paper for this new initiative, which aims to recognise and reward Bangladeshi citisens, both residents and expatriates, who play a significant role in attracting foreign investors. The move was discussed during Bida’s recent Governing Board meeting in April, chaired by Chief Adviser Muhammad Yunus, where the proposal received in-principle approval.
The scheme seeks to democratise FDI promotion by harnessing the global networks and local knowledge of Bangladeshi individuals, especially expatriates who often possess influential contacts in key investment markets. Bida Executive Chairman Chowdhury Ashik Mahmud Bin Harun highlighted that many non-resident Bangladeshis (NRBs) have expressed interest in supporting FDI efforts voluntarily, yet there has been no formal system to recognise their contributions.
While the Government already offers a 2.5 per cent incentive for remittances sent through legal channels, the proposed FDI recognition scheme would provide a 1 per cent tax-free incentive to individuals bringing in direct FDI investments exceeding US $ 5 million. Notably, the focus is on new equity investments, including those made in installments, with existing shareholders excluded.
The incentive scheme is particularly relevant to the RMG sector, which remains vital for Bangladesh’s export earnings and economic growth. Expatriates with strong overseas networks can leverage their contacts to attract foreign investors into garment manufacturing and related industries, potentially accelerating growth and employment.
Applicants will need to apply within 14 days of the investment announcement, submitting necessary documentation and declaring no conflicting relationships with the investors. A dedicated review committee comprising senior Government officials, including representatives from the Ministry of Finance, Bangladesh Bank, and the National Board of Revenue, will evaluate applications.
To operationalise the program, a fund named “FDI Recognition” will be established and allocated to Bida at the start of the fiscal year. Incentives will be disbursed in local currency directly into the applicant’s bank account.
The initiative aligns with broader Government efforts to enhance infrastructure and industrial development, with Finance Adviser Salehuddin Ahmed emphasising the importance of tracking investments and prioritising infrastructure projects to facilitate tangible growth. Additionally, budget allocations for Public-Private Partnership (PPP) projects, amounting to Taka 5,040 crore for FY 2025-26, aim to create a pipeline of potential investments, including in the RMG and industrial sectors.
Chowdhury Ashik Mahmud Bin Harun, who also heads the Bangladesh Economic Zones Authority (Beza), noted that developing investor relationship management systems and incentive schemes are key strategies to attract both domestic and foreign investment, particularly in export-oriented sectors like RMG.
As Bangladesh strives to maintain its competitiveness in the global apparel market, the Government’s move to recognise individual efforts in attracting FDI could serve as a catalyst for further growth in the RMG industry, supporting the sector’s expansion and the country’s economic development.
