Bangladesh is one of the fastest growing economies in the world, and that in itself is already one of the top benefits if you register company in Bangladesh. This rapid economic growth definitely comes with secondary benefits for your business as well, alongside the other benefits of registering a company in Bangladesh. Furthermore, it represents the transition of Bangladesh from an inward-focused, agrarian-dependent economy to a more modern Digital Bangladesh focused on economic growth through export-oriented industrialization. This transition brings about greater opportunities and benefits for companies in Bangladesh, and the high degree of openness means that even foreign companies are able to capitalize on such benefits. Let us go through the top 5 benefits of registering a company in Bangladesh.
Large consumer market
Possessing the eighth largest population in the world means that Bangladeshi companies have a larger consumer market to tap on. Gross Domestic Product (GDP) per capita has doubled in the past decade, from US$2,592 in 2010 to US$5,228 in 2019. The current 2019 figure is also a tenfold increase from the 1980 figure of US$500. With these increases in personal wealth, consumption in the country would naturally be expected to increase as well, providing a possible opportunity and benefit that your company can capitalize on.
Openness to foreign ownership and investments
Openness to foreign ownership
Beyond its growing domestic consumer market, Bangladesh also has a high degree of openness to foreign ownership, ensuring that both domestic and foreign corporations are able to capitalize on these economic opportunities. You can easily incorporate your company with full foreign ownership, and not face regulatory barriers whilst doing so. Being fully owned, you will have the independence to freely operate and manage its own affairs and will not need to source for a local partner. Sourcing for a local partner can often be difficult when you do not have the appropriate business networks in the country. Additionally, unlike most countries, your company’s directors and shareholders can be of any nationality, and do not need to be Bangladeshi residents, making it even easier for foreigners to set up and own businesses.
Openness to foreign direct investments
In terms of foreign direct investment, the East Asian region has performed significantly better than the rest of the world even in this pandemic period, showing the strong potential for growth that Bangladesh holds not only within the region, but also on a global scale. Even though the 2020 Global Investment Trends Monitor by the United Nations Conference on Trade and Development showed that global foreign direct investment inflows fell by 42%, inflows for East Asia rose by 12% instead. This shows the potential for Bangladesh to play a key role in the economic development of the East Asian region and its ability to attract and retain foreign direct investment despite the uncertain economic outlook.
Overall economic growth
Bangladesh is one of the few economies in the world that can actively pursue economic growth through internal and external means due to its large consumer market with rising income, as well as the high level of openness towards foreign ownership and investments. This creates diversity in the economy that allows it to better weather possible risks or disruptions to a single market. Overall, this strategy has also reaped dividends for Bangladesh as it has been able to enjoy rapid and constant economic growth, creating economic opportunities for the businesses within.
Terence James O’Neill, Baron O’Neill of Gatley, the British economist behind BRIC (an acronym used to refer to Brazil, Russia, India and China) earmarked Bangladesh as part of the Next Eleven. These 11 economies were identified as potential candidates to challenge the economic dominance of the traditional economic superpowers. They were chosen for their promising outlook for investment and future growth, based on criteria such as macroeconomic and political stability, quality of education and openness to trade and investment policies. O’Neill made this prediction all the way back in 2005, and despite the many disruptions to the global economy since then, Bangladesh has lived up to the expectations that came with their inclusion in the Next Eleven, achieving an annual real GDP growth rate of 8.3% in the first quarter of 2019. This was the seventh highest in the world. Apart from this, it also has the fastest real GDP growth rate in Asia, whilst also maintaining consistent real GDP growth since 1980.
Digital Bangladesh
Another policy that supports the openness of the Bangladeshi economy is the Digital Bangladesh initiative. This was proposed by the current ruling party, the Bangladesh Awami League Party in their 2008 national elections campaign. Digital Bangladesh aims to encourage the use of technology and foster innovative ideas for businesses, and through this, ultimately improve the general welfare of the people. Key elements of this plan are development of human capital and increasing the usage of information communication technology in businesses, a sector that Bangladesh is already doing relatively well in.
Businesses in Bangladesh can also expect to benefit from online access to government services due to the increasing adoption of e-Governance and e-Services solutions. Bangladesh company registration can even be done online. This is a key benefit that offers great synergy with Bangladesh’s openness to foreigners since it allows them to more easily incorporate and manage their business from abroad.
Also see: The Benefits of Establishing a Company in Hong Kong
Lucrative international trading opportunities
Being geographically close to major economies such as India, China and the United Arab Emirates, offers lucrative trading opportunities for your Bangladeshi business. Naturally blessed with a strategic location along the Bay of Bengal, it also provides access to maritime trading routes for landlocked countries such as Bhutan and Nepal.
These benefits are further enhanced through the creation of Bangladesh Economic Zones and Free Trade Agreements which have reduced barriers to trade, making it even more attractive as a regional maritime hub and trading centre. Even though The Bangladesh Economic Zones Act was only enacted in 2010, the Bangladesh Economic Zones Authority has implemented 88 zones to date, signifying their ability to deliver economic growth to all parts of Bangladesh. Running complementary to this is Bangladesh’s membership in several world and regional forums, in particular free trade agreements which include the Asia-Pacific Trade Agreement and the South Asian Free Trade Area. This allows your company to easily and cheaply export goods or engage in international trade.