FDI Automation in Bangladesh
The meaning of FDI is Foreign Direct Investment. The Government of Bangladesh has put a comprehensive array of policies aimed at bringing about significant socio-economic improvements to the people of Bangladesh and ultimately, self-reliance, for the nation. In recognition of the private sector’s ability to contribute towards the achievement of the goals set in the long run, the government has implemented some significant policy reforms also on recent and previous years. These are designed to create a more open and competitive climate for foreign investment in Bangladesh.
Investment in Bangladesh has been taking a sharp rise along with sustained growth from 2009. Also, policy regimes are becoming more conducive. From the very beginning, Bangladesh has harbored the spirit of free enterprise and innovative entrepreneurship, which we believe will well-knit into the economic fabric of Bangladesh. Then, ‘Vision 2021’ envisions a Bangladesh which “will be a middle income country where poverty will be drastically reduced, where our citizens will be able to meet every basic need, and where development will be on fast track, with ever-increasing rates of inclusive growth and to see that vision see executed by 2021 we need a lot good investments in private sectors. In 2013, Bangladesh received FDI of USD 1,599 million which is 24 percent higher than 2012. Since 2009, FDI has been growing by 20 percent on average.
Many reform initiatives have been taken by this government to raise investment and to ease further conducting business in Bangladesh.
Investor registration processes at BOI Automation
In December 2010, BOI introduced an automated registration system for both local and foreign investors in Bangladesh. The online platform enabled potential investors to complete the entire registration process, including submitting the application, attaching relevant documents, tracking the registration status, providing interactive feedback and seeking approval, without visiting the BOI office or using an intermediary. This, as a result, has reduced the time needed from 42 days to 12 days in 2012 to less than a week in recent times, while the average cost to register has reduced by 81.8% additionally. Automation of registration services has yielded USD 16 million in total aggregated compliance cost savings (USD 0.14 million in direct compliance cost savings and USD 15.9 million in indirect compliance cost savings). Recent surveys show that 18% of industrial projects are now being registered within ten days. This has benefited all industrial projects (local, joint-venture and foreign) that obtained registrations post-automation.
Export permit issuance at DEPZ Automation
Bangladesh Export Processing Zones Authority (BEPZA) introduced an automated export permit issuance process at the Dhaka Export Processing Zone in June 2010. Once the export permit application gets submitted, the system automatically notifies the applicant through a return email or an SMS as soon as it is approved. Thus, the average time to issue an export permit has also reduced by 33%. The number of interfaces between companies and DEPZ authority has reduced to zero from four in obtaining export licenses. As of 2011, 77 firms used the automated export permit system which is 91% of companies operating in DEPZ, and a total 48,871 export permits were issued by BEPZA for that year.
Automated export permit issuance system is expected to save USD 1.9 million in direct compliance cost in four years. Beneficiaries of the system include all active firms currently operating in DEPZ.
Company Registration with RJSC & F Automation
Registrar of Joint Stock Companies & Firms introduced online name clearance in February 2009 and automated business registration in March 2009. The automated system allows companies to complete the entire registration process online. This process has reduced the number of visits by 40 percent since initiation. Furthermore, there has been a 26% reduction in time required for registration (23 days in 2009 to 17 days in 2012) and 98% reduction in time required to obtain name clearance (nine days in 2009 to 1.58 hours in 2012). This will for sure benefit all businesses (public, private, partnerships, societies and associations) that obtained registrations post-automation and all future business registration applicants.
Case study of FDI automation by Brain Station-23
Companies who have taken foreign investments need to submit a quarterly report to Bangladesh Bank through local Banks whether it’s running with 100% investment or can be a joint venture company. Companies usually provide the report through that bank in which they are the corporate client. That report which the companies need to submit is a predefined excel form in which there are segments for liabilities, investment, equipment purchase and profit loss documents.
Previously the companies required to fill the whole form manually with the help of bank people, but that was all carefully copied and needed a lot of human effort and a waste of time & resources if any mistake was there unintentionally.
We have digitized and automated this process for one of the largest banking and financial services organizations in the world which operate in Bangladesh as well. Before the automation, their clients needed to go through a very lengthy process of filling up hand written forms regarding personal information & business info which took way too time and effort. And due to these long processes often the clients get puzzled. We have provided them with such an app which has two parts, one is admin panel & another is customer panel. With customer panel companies or clients can register and put all the info needed for the excel form through their panel and then after submitting the data it’ll go to admin panel where the bank people will investigate the data thoroughly. And once the data are perfect they will then ask the customers to submit the Form in hard copy in the Bank within a preferred day.
Now with our application, they get Bangladesh Bank preformatted reports in hard copy and RIT format reports as soft copy. Also, the information, once they put on the personal account, got saved automatically and if they want can start or put information there where they left the inscribing the data previously.
The significant advantage that the bank have now is that they can generate the RIT format report for Bangladesh Bank from their web application.
And the process has benefited them and their clients by
- Minimizing manual contribution
- Ensuring accuracy
- Enhancing monitoring
- Reducing extra time and effort
…
Originally published at http://www.brainstation-23.com
