General Profile

Geographical Location
Bangladesh lies across the Tropic of Cancer, in the northeastern part of South Asia between 20o.34' and 26.38' north latitude and longitudes 88.01' and 92.41' east. The country is bordered by India on the west, north and the northeast, Myanmar is on the southeast and the Bay of Bengal is on the south. Strategically located, Bangladesh is virtually a bridge between South and Southeast Asia.

Population
The population of the country currently stands at around 133 Million. Around 75 percent of the people live in rural areas while 60 percent of the population depend on agriculture for their livelihood.

History in Brief
Recorded history is traceable to 4th century B.C. and shows clear evidence of a flourishing civilization with cities, palaces, temples, forts, seats of learning and monasteries;

• 1200 A.D.:  Advent of the Muslims, periods of prosperity under Muslim rule;
• 17th century - A time of economic well-being;
• 1757: Beginning of British colonial rule;
• 1947: Departure of the British from Indian subcontinent;
• Bangladesh becomes "East Bengal/East Pakistan";
• 1971: Emergence of the sovereign state of Bangladesh through an armed struggle for freedom.

Official Language
Bengali

Capital City
Dhaka

Standard Time
GMT plus 6 hours

Currency
Taka/TK(US$1=Tk.60) approximately

Mineral Resources
Natural gas, limestone, hard rock, coal, lignite, silica sand, white clay, etc.

Politics
The People's Republic of Bangladesh is an independent and sovereign republic comprising three basic organs: The Executive, The Legislature, and The Judiciary. The President is the head of state and is elected by members of parliament for a term of five years.

On 4th Oct 1975, Bangladesh and China established formal diplomatic relations. Since then, a bilateral friendly cooperative relation has developed smoothly. The two countries share common views in a series of important international and regional issues. High-level exchanges have been frequent, with ever-increasing contacts and expanding cooperation areas.

In Jan 2002, the former Chinese Prime Minister Zhu Rongji visited Bangladesh. It was the first visit at this level after a long gap of 13 years and its high point was the reassurance given by the former Chinese Premier that China shall forever remain a trusted, reliable friend and a development partner. The number of important bilateral accords signed during the visit underlined the depth of the bilateral cooperation. The fact that China has emerged as an ally of Bangladesh was evident from the timing of this visit and its content.

Former Prime Minister Begum Khaleda Zia also paid an official visit to China in Nov, 2002.The two countries have reiterated their common objectives of consolidating friendship and deepening cooperation. Bilateral visits from both Prime Ministers are historical events in Bangladesh-China relations, which have built a sound base for further development of bilateral relations in the new century.

Economy at A Glance

Bangladesh has an agrarian economy with 25% of GDP coming from the agriculture, forestry and fisheries sector. Major agricultural products are rice, jute, wheat, potato, pulse, tobacco, tea, sugarcane, and etc. The country is the largest exporter of jute and jute goods in the world. Readymade Garments occupy the topmost position among the exportable items. Tea, frozen shrimps, leather goods, fish and vegetables ceramic-ware flowers and handicrafts are also major exportable commodities.

Economic Relations with China
In recent years, the commercial relations between China and Bangladesh have grown significantly, with cooperative-areas expanding. In 2003, bilateral trade volume was 1.098 billion US$, up 13.1%. China's export volume was 1.068 billion US$, up 11.6%, and import volume was 32million, up 93.8%.

The Joint Commission of Economic and Trade Cooperation between Bangladesh and China was established in Nov, 1983.In principal, the annual session is to be held in the two capitals by turn. Up to now, 10 sessions have been held. The main items China imports from Bangladesh are leather, textiles and fishery products, and the main export items being textiles, mechanical-electrical products, cement, fertilizers, tires, corn, etc.

Investment from China is flowing into Bangladesh. The Government of China has completed a large number of infra-structure projects, which include important 'friendship bridges', highways, roads and an international conference centre. China is now building fertilizer factories, developing coal mines and improving telecommunications through governmental and private sector agreements.

Procedures for Importing into Bangladesh

1. Import License not required: No import License will be necessary for import of any item.

1. Import against LCA From: Unless otherwise specified, all imports transacted through a bank (L/Cs, bank drafts, remittances etc.) shall require LCA forms irrespective of the source of finance.

1. Import against L/C: Unless otherwise specified, import shall be made only by opening irrevocable letter of credit (L/C). However, L/C is not required for import of each consignment, by road, of easily perishable item bolded from US$ five thousand to Seven thousand five hundred and for import of capital machinery & raw materials for industrial use without any price limit. Existing conditions regarding import on deferred payment under L/C shall be applicable in this case also and importers shall be required to register with Bangladesh Bank for importation without L/C.

1. Import against LCA Form but without opening of Letter of Credit (L/C): Import against LCA Form may be allowed without opening of letters of credit in the following cases :

(a)  Import of books, journals, magazines and periodicals on sight draft or stance bill basis;
(b)  Import of any permissible item for an amount not exceeding US Dollar Five thousand only during each financial year against remittance made from Bangladesh. However, permissible item valued up to US Dollar five thousand in a single consignment from Myanmar shall be importable without opening L/C and in that case above mentioned annual ceiling of US Dollar five thousand shall not be applicable.
(c)  Import under commodity aid, grant or such other loan for which there are specific procurement procedures for import of goods without opening any L/C;
(d)  Import of "International Chemical References" through Bank drafts by recognized pharmaceutical (allopathic) industry on the approval of Director, Drugs Administrators for the purpose of quality control of their products.

1. Import against Import Permits and in special cases against Clearance Permit (for clearance of goods on payment of fine) : In the following cases, neither LCA Form non opening of L/C will be necessary; but Import Permit (IP) or Clearance Permit (CP) will have to be obtained by the importer for:

(a) Import of books, magazines, journals, periodicals and scientific and laboratory equipment against surrender of UNESCO Coupons;
(b)  Import under Pay-As-You-Learn-Scheme in the following cases only on the basis of clearance of the Bangladesh Bank:
(i)  New or not exceeding twelve years old plant and machinery of permissible specification;
(ii)  New or not exceeding five years old motor cars;
(iii)  Cargo or passenger vessel of steel or wooden bodies, including refrigerated vessel of any capacity either new or not exceeding fifteen years old; but in case of ocean going ships, old ship, not exceeding twenty years old shall be importable;
(iv)  Import of plant and machinery for export-oriented industrial units with the clearance of the competent sanctioning authority, wherever necessary; and
(v)  Trawlers and other fishing vessels, either new or not exceeding twenty years old:
For import under this scheme the sanctioning authority of such import shall forward a copy of sanction letter to the Chief Controller and the importers shall apply to the CCI & E along with necessary paper for prior permission.

1. Import of item by passengers coming from abroad in excess of the permissible limits as per the relevant baggage rules, provided the import of the item concerned is permissible under the relevant baggage rules;
2. Import of free samples, advertising materials and gift items above the ceiling prescribed as per paragraph 13 of this Order;
3. Import of only drugs and medicines (allopathic) under product bonus system subject to the condition that it shall be obligatory on the part of the importers concerned to pass on the benefit to the consumers. The Director, Drugs Administration shall devise appropriate mechanism in this behalf;
4. Import of capital machinery as share of capital of the foreign share-holder for an approved joint venture industrial unit already set up or to be set up;
5. Import of any other goods, not specifically exempted from permit.

1. Import on Deferred Payment Basis or Against Supplier's Credit: Subject to restriction and prohibitions contained in this order, import on differed payment basis or against Suppliers, Credit may be allowed on the basis of procedure laid down by the Bangladesh Bank in this behalf.

1. Import against direct payment abroad: Only Bangladeshi nationals living abroad may send any importable item irrespective of value ceiling against direct payment abroad in the name of any Bangladeshi living in Bangladesh . The name and address of the consignee shall be mentioned in the import documents. For such import, no permission or import permit from the Import Control Authority shall be necessary.

1. Time limit for opening of L/C : Unless otherwise specified, for import under cash foreign exchange, letter of credit shall be opened by all importers within one hundred and fifty days from the date of its issue or from the date of its registration. The above time limit may be extended up to such time as deemed fit by the Chief Controller. For import under foreign aid/grant and barter/STA. L/C shall be opened within the time limit as may be notified by the Chief Controller.

1. Validity of LCA for shipment:

(a)  Unless, otherwise specified, shipment of goods shall be made within seventeen months in the case of machinery and spare parts and nine months in the case of all other items from the date of issuance of LCA From by bank or registration of L/C Authorization Form with Bangladesh Band Registration unit, as the case may be, Shipment of goods under commodity aid/grant, and barter/STA shall be effected within the time limits as may be notified by the Chief Controller;
(b)  In case where shipment could not made within the validity of the LCA Form due to circumstances beyond the control of the importer, the Chief Controller may extend the time limit for shipment of goods on the merit of each case;

1. Restriction on L/C after imposition of ban/restriction: No extension of the date of shipment in any letter of credit or amendment to letter of credit or enhancement of the value or quantity of goods shall be allowed by the nominated bank or by the Import Control Authority after the import of the item or items has been banned or restricted;

1. Document required to be submitted along with LCA Form: Importer in both public sector and private sector shall submit to their nominated banks the following documents along with the L/C Authorization Form for opening Letter of Credit:

(a)  L/C application form duly signed by the importer;
(b)  Indents for goods issued by indenter or a Performa invoice obtained from the foreign supplier, as the case may be; and
(c)  Insurance cover note.

1. Addition documents to be furnished by public sector importers: In addition to the documents mentioned in sub-paragraph 11 above public sector importers shall submit the attested photocopy of sanction letter from the Administrative Ministry or Division or Authority, wherever applicable;

1. Additional documents to be furnished by private sector importers: In addition to the documents, mentioned in sub-paragraph (11) above private sector importers will be required to submit the following documents:

(a)  valid membership certificate from the registered local Chamber of Commerce and Industry or any Trade Association, established on all Bangladesh basis, representing any special trade/business;
(b)  proof of payment of renewal fees for the Import Registration Certificate for the concerned financial year;
(c)  a declaration, in triplicate, that the importer has paid income-tax or submitted income-tax return for the preceding year;
(d)  proof of having Tax Identification Number (TIN) in all cases of import excepting personal use;
(e)  insurance cover note either from Shadaran Bima Corporation or from Bangladeshi Insurance Company and stamped insurance policy against this cover-note;
(f)  any such documents as may be required as per this Order or Public Notice, or instruction issued by Chief Controller, from time to time under this Order;

Violation of the requirement of LCA/LC: Shipment effected before authentication of the L/C Authorization Form by the nominated bank and registration with the Bangladesh Bank, wherever necessary, and before opening of L/C or after expiry of the validity of the L/C Authorization Form or L/C shall be treated as import in contravention of this Order. L/C Authorization Form obtained on the basis of false or incorrect particulars or by adopting any fraudulent means shall be treated as invalid and void abinitio.

Import against indent and Performa invoice: L/C may be opened against an indent issued by a local registered indenter or against a Performa invoice issued by a foreign manufacturer/seller/supplier.

Investment Environment of Bangladesh

Scope of Foreign Investment
All industries except six sectors covered in the reserved list, viz, arms and ammunitions, atomic energy, air transport, telecommunication, generation and distribution of electricity and forest extraction are open for investment and placed in the Industrial Investment Schedule under 13 broad groups. The private sector, barring the above six sectors, can invest in all sectors without any ceiling.
The government has taken further steps to ease the flow of local and foreign investments into the economy. The private sector is given great priority in all economic endeavors. As a consequence economic policies focus on creating a more conducive atmosphere for foreign and local investment.

Priority Sectors

• export-oriented garment industry
• leather goods
• electronic equipment
• chemicals and petrochemicals
• agro-based industry
• green jute pulp
• cement
• paper
• rayon
• frozen food
• tourism
• light industry
• computer software
• data processing

Comparative Advantages for Foreign Investment

• Low cost easily trainable labor is abundantly available in Bangladesh. Out of the total population of 127 million, the labor force comprises more than 50 million.
• Bangladesh is one of the three Asian countries (the other two being Sri Lanka and China) which offers unconditional 100 percent foreign equity or ownership in industrial investments.
• Inflation rate is the lowest (1.3 percent) among the Asian countries.
• There is no restriction on issuing work permit to a foreign national.
• Bangladesh is most liberal in granting permanent residentship and citizenship to foreigners. A nonrepatriable investment of only US$ 75,000 in an industrial project is the only condition for granting permanent residentship and a minimum investment of US$500,000 or transferring US$1,000,000 to any recognized financing institution which should be nonrepatriable, is the condition for granting Bangladesh citizenship.
• Tax holiday allowed for new investment in Bangladesh is at the minimum 5 to 9 years in most of the areas on some conditions, and 12 years in special economic zones.
• Bangladesh enjoys Most Favored Nation (MFN) status from a number of countries including the USA with whom bilateral treaty of trade and investment has been signed. The countries with which Bangladesh has so far signed bilateral investment treaties are the USA, UK. Germany, Romania, Belgium, Republic of Korea, Thailand, Turkey, France and Italy.
• As one of the least developed countries, Bangladesh enjoys Generalized System of Preference (GSP) facilities for favorable export to the U. S.
• Avoidance of double taxation agreements have been signed with Japan, U.K., Italy, Canada, Sweden, Malaysia, Singapore, the Republic of Korea and others.
• Legal protection to all foreign investments in Bangladesh is provided by an Act of Parliament passed in 1980 against nationalization and expropriation. Non- commercial risks of investment in Bangladesh are also covered by the Multilateral Investment Guarantee Agency (MIGA).
• Foreign Exchange regulations have been relaxed to the maximum limit by the recent introduction of the free convertibility of taka, the Bangladesh currency. This has accelerated the free flow of international business transactions.
• Repatriation of foreign capital investment along with profits/dividends has been made easy and simplified. Now no prior permission of any authority is required for such repatriation.
• Cost of land and energy prices are one of the lowest in the region. There is a huge proven and recoverable deposit (about 11 trillion cubic feet) of natural gas in Bangladesh. A potential reserve of 50-70 trillion cubic feet is known.
• Bangladesh has two seaports with modern facilities. Internal transport and communication system has vastly improved over the years.
• Most importantly, Bangladeshi people are hospitable, friendly and resilient and greatly value the role of foreign investment in their country.