For a business owner, the balance sheet could be one of the most expensive things, second only to wages or electricity. It may be uncertainty.
Do you build a new factory? Import machinery? Hire 500 workers? Sign a five-year supply contract? Bring foreign capital into Bangladesh? Every decision rests on one clear assumption: What will the business look like the day after tomorrow?
That is why predictability can, in some cases, be an incentive in itself.
Bangladesh has the right motivation: creating jobs and attracting investment. The FY2026-27 budget proposed tax and duty concessions to lower business costs. Even more significantly, the government has projected corporate tax rates for five years, with officials calling this a “big deal” because it gives businesses greater certainty for planning and investment.
The distinction matters. An investor can calculate a tax rate. You can compute wage, machine, finance and transport expenses. Of course, it is much tougher to estimate the cost of uncertainty.
Imagine a company looking to build a factory with an investment perspective of 10 years from today. A tax break can improve the project’s financial scenario. However, that incentive becomes harder to value if a company cannot reliably forecast taxation, customs procedures, energy availability or the time required for regulatory approvals.
Bangladesh’s investment authorities have acknowledged this. In August, Ashik Chowdhury, the executive chairman of BIDA, said investors have repeatedly highlighted a lack of policy continuity and political stability as their top concern. Predictable, investment-friendly policies were needed to restore confidence, he said.
The broader business community echoed these concerns. Experts and business leaders have highlighted regulatory bottlenecks, inconsistent policies, weak trust and institutional inefficiencies as additional barriers to investment.
Not that this means we should have no incentives. They can be valuable. The budget also includes concessions for electronics, semiconductors, electric vehicles and battery manufacturing, as well as solar energy, shipbuilding and pharmaceuticals.
However, incentives alone do not develop competitive industries. Other factors include reliable energy, skilled workers, infrastructure financing and logistics, along with contract enforcement mechanisms to ensure services work efficiently. The BIDA chairman has also identified energy — mostly through gas shortages — as a key bottleneck for investors.
The question should not be: “How much tax relief are you bringing?”
Further, it should be: “How predictable will that investment’s surrounding environment be?”
Bouncy nationalism and predictability
Predictable does not mean static. Economies and situations change, which is why governments need space to react. The question is whether changes are open, well communicated and consistently enforced, while allowing enough time for businesses to adapt.
In a large corporation, lawyers and consultants may monitor changing regulations alongside compliance teams. For a small manufacturer, it may be an owner, an accountant and a few staff. So regulatory shocks can become a major, unguided cost.
Another important distinction is between an announced incentive and one that has been implemented.
Bangladesh is well on its way to a single Invest Bangladesh Authority designed to streamline investor services and reduce bureaucratic hurdles. Only when businesses receive faster approvals, without unclear accountability or cumbersome administrative barriers, will it realise its value.
A predictable system also changes how companies operate. Clear rules enable firms to confidently prepare budgets, negotiate contracts, raise financing and make hiring decisions. Ambiguous rules can lead to hoarding, delayed investment decisions or restricted capital deployment. However, that caution carries an economic cost: fewer factories and jobs, slower productivity growth and less risk-taking in the economy.
This is what distinguishes an investment-friendly announcement from an investment-friendly environment.
The first, for example, can be read at a press conference.
The other is experienced at a customs office, bank, power connection desk, tax department, regulatory agency and finally inside the factory.
Bangladesh need not choose between incentives and predictability. Both can reinforce each other. Incentives lower the price of investment; predictable institutions reduce the risk of that investment.
Investors are also comparing Bangladesh with other emerging economies. FICCI President Rupali Chowdhury said foreign investors are comparing Bangladesh more with regional competitors where government services may be more predictable.
Ultimately, when an entrepreneur looks five or 10 years ahead, the question is how well they know the rules of the game before deploying capital.
Businesses can price taxes. They can price wages. They can price machinery.
Uncertainty is what they have a hard time pricing.
Perhaps what Bangladesh can offer most as a business incentive is not another temporary concession, but the assurance that tomorrow’s rules will be clear today.
The writer is a public relations professional
Views expressed are solely those of the author
