Solve land lease issues, gas crisis for further investment: Chinese entrepreneurs

Highlights:

• Chinese entrepreneurs face land-related issues, visa and work permit extension complexities in Bangladesh
• The ongoing gas crisis is another headache for foreign as well as local investors
• Until 2019, China was the single largest investor in Bangladesh but investment slowed after the pandemic

Chinese entrepreneurs in Bangladesh face land-related issues, visa and work permit extension complexities and customs hurdles as main barriers in the way of further investment while the ongoing industrial gas crisis is another headache for foreign as well as local investors, said stakeholders at a seminar. 

The Chinese Embassy in Bangladesh and the Bangladesh-China Chamber of Commerce and Industry (BCCCI) jointly organised the seminar "Stakeholder Consultation with Chinese Investors: Challenges, Expectations and Prospects" in the capital on Saturday. 

Chinese Embassy Commercial Counselor Song Yang and China Enterprises Association of Bangladesh (Ceab) President Ke Changliang also spoke at the seminar.

Members of the BCCCI and Ceab highlighted various issues they had been experiencing while conducting business in Bangladesh.

A Chinese entrepreneur highlighted the issues foreign entrepreneurs face while buying or leasing land in Bangladesh. 

In response, Mohammad Mahboob said, "I do not have any solution for this." 

The Bida DG, however, advised entrepreneurs to buy land from Beza's Economic Zone and Bepza's Export Processing Zone, BSCIC's Industrial City or Hi-Tech Park Authority.

"Land laws in Bangladesh are very complicated. The Ministry of Land is working on them," said Mohammad Mahboob.

The Akij Group, which applied to Titas Gas for a connection after setting up the Akij CNG plant in Tangail 13 years ago, is still waiting for that, said the group's Director Aminuddin Milon.

"Since then, Akij Group extended the bank guarantee twice and revised the security deposit four times as per instructions of Titas officials. We have sought help from the Titas managing director and other officials but still have not got the gas connection," he told officials of the Titas Gas and Bangladesh Investment Development Authority (Bida) present at the event.

Aminuddin said the Akij Group has invested $1 million to import machinery and set up the Tangail CNG plant. However, the plant could not be started due to the non-availability of gas.

In response, Engineer Swagatam Kumar Saha, deputy general manager (DGM) of Titas Gas Transmission and Distribution Company, said, "Gas connection to industries is very important for attracting fresh investment. But we have a supply shortage. Petrobangla is trying to import LNG and set up LNG terminals to overcome the crisis. I hope connections will be provided within a short time."

Moreover, Bida Director General Shah Mohammad Mahboob advised the director of Akij Group to visit the Bida office on Sunday, saying, "Come to the Bida office and we will work to solve your issue."

Another Chinese entrepreneur said, "It is quite complicated and time-consuming to get a one-year visa and work permit in Bangladesh. Could Bida take the lead to simplify the visa policies and approval/renewal process?"

In response to this question, Shah Mohammad Mahboob advised the questioner to read the Bida guidelines and said, "For security clearance, we send the documents manually to the Ministry of Home Affairs, and from there, documents are manually sent to the Special Branch of the police, which takes time. But we have taken an initiative to introduce digital file transferral, which will take less time."

BCCCI President Gazi Golam Murtoza also said entrepreneurs have to wait for a long time to get work permit extensions, which creates frustration among them.

"There is a lot of frustration among them. Chinese investment in Bangladesh will increase if their problems can be solved," said Murtoza.

In response, Bida officials said the security agencies take up to a year to issue clearances.

An entrepreneur wanted to know about the solution to the problem with the HS code at Customs.

Khandakar Nazrul Haque, secretary of Customs Valuation and Reward of the National Board of Revenue (NBR), said, "About 90% of the products are getting customs clearance within a day. We are focusing on the Post Clearance Audit to improve the investment environment."

Speaking as the chief guest at the event, Avijit Chowdhury, executive member of Bida, said, "We know that after registering the investment proposal, the entrepreneurs may face many problems in terms of taxes, customs, including getting gas-electricity connection and buying land. To solve those problems, we have introduced an aftercare service. We have already solved many problems of various companies, including BSRM and Lafarge Cement, through the aftercare service."

"A huge amount of Chinese investment is required to meet the challenges before Bangladesh after its LDC graduation. We have to ensure that our foreign investors can come to Bangladesh with full security and safety," he said.

BCCCI Secretary General Al Mamun Mridha said that until 2019, China was the single largest investor in Bangladesh. Due to Covid and China's zero Covid policy, Chinese investment has been low for several years. But now a lot of investment is coming in. By increasing Chinese investment, it will be easier for Bangladesh to deal with the existing foreign exchange reserve crisis.

Praising Chinese companies for their role in Bangladesh's human resource development and technology transfer, Mamun Mridha said that in 2003, bilateral trade between Bangladesh and China was worth $1.4 billion, which now stands at around $25 billion. Investments in the private sector have also increased significantly over the past 10 years from $26 million in 2013 to over $465 million in 2022.

"In 2016, over $40 billion was promised to Bangladesh as part of the Belt and Road Initiative (BRI). Already, around $5 billion was disbursed. Many projects have already been implemented and some milestone projects are about to be inaugurated. The BCCCI has acted as the strongest catalyst for the huge growth of trade and investments," the BCCCI general secretary added.

Shah Mohammad Mahboob presented an article on the investment situation in Bangladesh in the seminar. 

In the article, he noted that political stability, tax exemption facilities and other issues are important for increasing investment in a country — all of which are available in Bangladesh. To become a developed country by 2040, Bangladesh needs around $608 billion in investment in the infrastructure sector.

He said around 70.42% of the total foreign investment in Bangladesh is reinvestment. That means that the foreign entrepreneurs who are doing business here are making a profit and reinvesting.

In a report, titled 'The Future of Chinese Investors', The Economist said Bangladesh is number one on the list of countries where the risk is low and the benefits are high. In 2013, Bangladesh was ranked 52nd in receiving Chinese investment'. The ranking is 12th this year.

"This proves that Chinese investors are interested in investing in Bangladesh. If you invest $1 in the export processing zone, you get a return of $16," said Shah Mohammad Mahboob.

Bida has invited Chinese entrepreneurs to invest in agro-processing and machinery, high-end products of the readymade garment industry, recycling and circular fashions, men-made fabric, IT, health and medical devices, automobiles and parts, blue economy, hospitality and tourism and the leather industry.