Includes the barriers (tariff and non-tariff) that U.S. companies face when exporting to this country.
Last Published: 12/10/2018

In addition to high tariff rates and supplementary duties, Bangladesh has registration procedures and other regulatory requirements that often impede market access. 

Foreign companies are allowed to provide services in Bangladesh except in sectors that are subject to administrative licensing processes.  Yet new market entrants face significant restrictions with respect to most regulated commercial fields (including telecommunications, banking, and insurance), and the process for establishing legal entities such as financial institutions is subject to strict regulatory requirements.  There have been reports that licenses are not always awarded in a transparent manner.  Transfer of control of a business from local to foreign shareholders requires prior approval from the Bangladesh Bank (control is defined as the ability to control the board of directors or a majority of the directors).  In 2016, the Bangladesh Investment Development Authority (BIDA) was formed from the merger of the Board of Investment and the Privatization Commission.  BIDA’s goal is to push for implementation of a One-Stop Service Act and to become Bangladesh’s one-stop private investment promotion and facilitation agency.  On February 5, 2018, the Parliament passed the One Stop Service Bill 2018.  BIDA prepared the rules, which will be formulated under the Act.  After the formulation of the rules, the authority will able to implement the Act properly.  BIDA is currently developing an automation-based business model, which is fully virtual.

Bureaucratic inefficiencies often discourage investment in Bangladesh. Overlapping administrative procedures and a lack of transparency in regulatory and administrative systems can frustrate investors seeking to undertake projects in the country.  Frequent transfers of top- and mid-level officials in various Bangladeshi ministries, directorates, and departments are disruptive and prevent timely implementation of both strategic reform initiatives and routine duties.

Repatriation of profits and external payments are allowed under current law.  But U.S. and other international investors have raised concerns that outbound transfers from Bangladesh remain cumbersome and that applications to repatriate profits or dividends can be held for additional information gathering or otherwise delayed, if tax disputes arise.  Government officials cite concerns that allowing even limited outward transfers would lead to a flood of capital from Bangladesh.

U.S. and other international companies have raised concerns that the National Board of Revenue has arbitrarily reopened sometimes decades-old tax cases, with particular targeting of cases involving multinational companies.

Extortion of money from businesses by individuals claiming political backing is common in Bangladesh.  Other impediments to business include frequent transportation blockades called by political parties, which can both keep workers away and block deliveries, resulting in productivity losses.  Vehicles and other property are at risk from vandalism or arson during such blockades, and looting of businesses has also occurred.

Land disputes are common, and both U.S. companies and citizens have filed complaints about fraudulent land sales.  For example, sellers fraudulently claiming ownership have transferred land to good faith purchasers while the actual owners were living outside of Bangladesh.  In other instances, U.S.-Bangladeshi dual citizens have purchased land from legitimate owners only to have third parties make fraudulent claims of title to extort settlement compensation.

Likewise, corruption remains a serious impediment to investment in Bangladesh.  While the government has established legislation to combat bribery, embezzlement, and other forms of corruption, enforcement is inconsistent.

For more information and help with trade barriers please contact:
International Trade Administration Enforcement and Compliance
(202) 482-0063
ECCommunications@trade.gov
 

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