Korean Young One Group is the largest overseas investor in Bangladesh. The group grew up with investment in Bangladesh. Unfortunately, they are forced to relocate some of their investment in Vietnam due to the higher cost of products manufactured in Bangladesh. Although Bangladesh offers significantly lower labour costs, with garment worker wages ranging from US$0.60 to US$1.30 per hour, compared to Vietnam’s US$2.00 to US$3.00 per hour. The Chairman of the Young One group said in an interview that their further investment will switch between Bangladesh and Vietnam based on ease and cost of Doing Business.
Many overseas investors are withdrawing from the Bangladesh market and relocating to more comfortable locations in other countries, citing the reasons of regulatory barriers, an increase in the cost of doing business and corruption. Bangladeshi media and social media were flooded with news that a Bangladesh-born Australian billionaire, Robin Khuda, has announced plans to invest $30 billion in India. Bangladesh continues to trail its regional competitors in attracting Foreign Direct Investment (FDI), according to a report by the United Nations Conference on Trade and Development (UNCTAD). Between 2019 and 2024, Bangladesh received an average of $1.5 billion in FDI a year, less than half the level of Cambodia. Vietnam attracted more than $17 billion a year on average over the same period.
The outdated legislation, including the Investment Act of 1980, does not clearly define investor protection or consolidate FDI rules. Entry procedures remain complex and require multiple approvals, while digitalisation efforts are undermined by continued reliance on manual processes. Challenges such as foreign exchange repatriation, access to land, infrastructure shortages and limited skilled labour mobility continue to weigh on investor confidence. A recent report by the US administration has identified precisely what’s holding the country back – corruption, bureaucracy, an anti-competitive procurement system, violation of intellectual property rights, unreliable logistics, and lack of skilled labour, among others.
Corruption is a pervasive and long-standing problem in Bangladesh. The anticorruption law is inadequately enforced. The Code of Criminal Procedure, the Prevention of Corruption Act, the Penal Code, and the Money Laundering Prevention Act criminalise attempted corruption, extortion, active and passive bribery, bribery of foreign public officials, money laundering, and use of public resources or non-public state information for private gain. However, bribery and extortion in commercial dealings have been common features of business despite the illegality of facilitation payments and gifts.
There have been continuous efforts to curb the independence of the Anti-Corruption Commission (ACC), the main institutional anticorruption watchdog. The Sarkari Chakori Ain Bill (Government Job Act), enacted in October 2018, requires the ACC to seek permission from the authorities concerned before arresting any government official and limits the ACC’s ability to investigate corruption allegations against government officials. While the ACC has increasingly pursued cases against government officials, mainly lower-level officials and some higher-level officials, there remains a large backlog of cases.
Policy uncertainty remains one of the key barriers hindering both local and foreign direct investment. For example, fiscal and taxation policies are unpredictable. Foreign investors wanted to see predictable long-term policies extending at least 10 years ahead to plan their business operations. Strengthen investment promotion and facilitation activities through a single national agency with delegated windows for zones and sectors, supported by inter-ministerial focal points. Focus on the priority sectors identified by the FDI Heatmap, adopt targeted measures to enhance their growth and engage with other institutions to develop a shared understanding. Mitigate the impact of losing preferential LDC status by engaging with key investment and trade partners and by strengthening the capacities of the local private sector.
The high cost of capital, distorted tax incentives, lack of transparency, and supply chain and infrastructure challenges – including access to power, electricity and water – were among the other major obstacles. Bangladesh must address key bottlenecks to investment by improving access to land and infrastructure.
According to the World Bank findings, key constraints to creating a business environment that delivers jobs include a heavy regulatory burden, with senior managers spending around 13 percent of their time complying with regulations. The report suggested smart deregulation, creating a level playing field, enabling private capital, and enhancing productivity for SMEs and informal firms as the way forward. The country has a young and expanding workforce, but a shortage of skilled labour, especially in technology-driven sectors, which is a major concern for investors.
In the Bangladesh Investment Summit 2025, it has been said that efforts to attract more FDI are often undermined by the ease of doing business in Bangladesh for foreign investors. The arbitrary changes in investment policies create difficulties for investors in getting clear guidance on tax policies, environmental clearances, and land acquisition procedures. Regulatory authorities in Bangladesh frequently impose barriers on profit repatriation, making it difficult for investors to access their earnings and dividends.
Bangladesh undoubtedly possesses strong economic potential and strategic advantages. However, durable investor confidence depends less on conference branding and more on credible institutions, regulatory consistency, and administrative readiness.
Bangladesh has not yet implemented the recommendation of the Bangladesh Investment Summit 2025 and organised another ‘Trade, Economic Growth and Economic Diplomacy Conference’ on 13 June 2026 in Dhaka. The present and past future governments are fond of local and overseas ‘investment summit’ at different locations around the world. The outcomes and recommendations of such expensive investment conferences are similar, but past governments were not keen to implement decisions from previous summits.
Let the Bangladesh Investment Development Authority (BIDA) do the homework on the recommendations of previous summits.
The writer is the CEO, Bangla Chemical & Legal Economist. E-mail: [email protected]
