Lack of details, support barrier to even more Japanese investment
Japanese companies doing business on Bangladesh are facing challenges through the coronavirus pandemic, including a lack of information and support from authorities, which might dent the flow of investment, according to investors and a recently available survey.
Besides, a way of life of procedural delays in government offices and frequent policy changes discourages Japanese investors from starting a organization in Bangladesh.
Till December 2019, round 310 Japanese firms were conducting business found in Bangladesh, with investments reaching $386 million.
Only a decade ago, there have been merely 82 organizations from Japan operating in the united states.
The latest information on foreign direct investment (FDI) from Japan is yet to be available with the Bangladesh Lender and the Bangladesh Investment Expansion Authority (Bida).
The united states office of the Japan External Trade Organisation (Jetro) recently conducted a study among 75 Japanese companies on the challenges these were facing in running businesses during the pandemic.
It showed around 67 per cent of Japanese corporations were witnessing troubles as a result of suspension or reduced amount of professional flights, and 64 % for 14-evening mandatory self-quarantine after arrival found in Bangladesh.
Another 63 per cent faced difficulties involving coronavirus infection control, 61 % dealing situations of infections (medical program and bed availability), and 61 % in case of inviting organization travellers and complex instructors to Bangladesh.
Sixty % of companies claim they go through difficulties over going outside of Bangladesh, and 57 % to vaccinate Japanese expatriates in Bangladesh.
50 percent of the respondents cited problems while checking the latest information on travel suggestions and business operation from the government.
Thirty-one % faced troubles above delay in exports and imports, 24 % mentioned buy cancellation and reduction, 9 per cent performing capital shortage, and 8 per cent about the overdue letter of credit rating settlement.
"Japanese companies that do come to do organization in Bangladesh face an lack of proper information about related areas initially," explained Prodip Das, managing director of Rohto-Mentholatum (Bangladesh).
The investors do not get information either from the federal government offices or from private consultancy firms, he said, adding that there have been no private firms that can help enable business-to-business connections and partnerships.
For just about any company seeking to start a business, all sorts of employees and employees are available aside from a managerial-level workforce, he said.
They do not possibly get information on banking support, clearing and forwarding agents, and distributors, although they are important to run business, Das said.
Japanese companies need to provide numerous documents and proceed through bureaucratic complexities and intricate rules in filing tax and calculating value-added tax.
"Japanese companies happen to be highly compliant and expect transparency at every stage," Das said.
He believes you will find a considerable scope to make improvement to attract more Japanese investors.
Shah Muhammad Ashequr Rahman, head of finance and commercial at Bangladesh Honda Private, said there is a need to enhance the ease of conducting business for clean business operations.
"If we can easily maintain an operational minimum amount lead time and quicker import clearance, the cost of doing organization and recycleables and capital machinery costs will compete," he said.
Hiroki Watanabe, managing director of Aishin International, said Japanese firms face hassles in acquiring profits back home.
"It is very simple to bring purchase to Bangladesh but troublesome to repatriate the profit to the home region, which is detrimental for investment," he noted.
Companies head out through a lot of official formalities, which are time-consuming, to transfer gains, he said. "The federal government should address this problem."
Besides, the investors think it is hard to control visas and function permits, and in some cases, they need to endure long waiting periods, said Watanabe.
Md Sirazul Islam, executive chairman of the Bida, said investors and foreign experts face no hassles if they make an application for visas through Bida's one-stop service platform.
He also refuted the results that there was a lack of data available, saying the Bida provided all varieties of information on investment.
Paban Chowdhury, executive chairman of the Bangladesh Economic Zones Authority (Beza), said there is room for improving the business environment on Bangladesh and soothing some rules and regulations to attract even more FDI.
The Bangladesh Bank, the National Table of Income, and the commerce ministry have already issued several circulars about the relaxation of investment rules, he said.
"On the other hand, it would take some time to meet all expectations of the investors because they are always concerned about their investment in virtually any country."
Chowdhury said Bangladesh was becoming a lucrative vacation spot for FDI.
About $1.5 billion Japanese investment will be produced at a dedicated economic zone in Araihazar, Narayanganj, which will be ready for setting up factories next year, he explained.
