The United Kingdom has urged Bangladesh to address the existing trade barriers and other structural problems to help attract more foreign direct investments including those from British companies.
“Foreign direct investment brings many benefits. And for Bangladesh, it will help achieve its goal of becoming a developed nation by 2041,” British High Commissioner Robert Chatterton Dickson wrote to Commerce Secretary Md. Jafar Uddin recently.
He added: “But the business climate is a challenge for many foreign investors. I understand there are structural problems that make these issues difficult to address and they are ones faced by many countries, not just Bangladesh.”
For instance, he said, high import tariffs and discretionary use of regulations protect well-established sectors but at a cost to the Bangladeshi economy.
The British envoy also mentioned that British companies face problem with regard to tax when operating in Bangladesh.
“We ask that the government offers a transparent, fair and predictable tax regime for UK firms, and that DTA provisions are implemented promptly,” Mr Dickson said in the letter.
The British high commissioner suggested withdrawing the existing 10 per cent cap on allowable head office expenses.
He also suggested strengthening Bangladeshi intellectual property regime as British companies operating in and exporting to Bangladesh suffer from counterfeiting and grey imports.
Currently, British banks are reluctant to accept letters of credit (LCs) for defence payment issued by Bangladesh’s state-owned banks due to anti-money laundering concerns.
Mr Dickson suggested allowing private banks instead of state-owned banks to issue LCs on defence payment.
Citing restrictions imposed on imports of UK’s pharmaceutical products, he requested the authorities concerned to allow imports of drug items in Bangladesh.
“There is a reluctance to enforce the Customs Valuation Rules-2000 instead of applying valuation based on historical or similar goods. This becomes problematic for UK companies and bulk materials which are traded in the open market.”
In this regard, the high commissioner viewed to take a risk-based approach for reputed compliant companies to address under-invoicing issue.
Mr Dickson also expressed the hope for some positive progresses before the strategic dialogue which is likely to be held at the beginning of July next.
The volume of Bangladesh’s export to UK was around US$3.4 billion and the volume of imported goods from UK was nearly US$410 million last year.