The report cited Bangladesh's sustained economic growth over the past decade with a large population of young and hard-working workforce, strategic location between the vast South and Southeast Asian markets, and the presence of a vibrant private sector.
The government's efforts in Bangladesh were promising, but implementation has yet to materialise, says the report that analyses the investment climate in more than 170 global economies that are current or potential markets for US companies.
The US report, however, says that inadequate infrastructure, limited financing instruments, bureaucratic delays, lax enforcement of labour laws, and corruption continue to hinder foreign investment.
Slow adoption of alternative dispute resolution mechanisms and sluggish judicial processes impede the enforcement of contracts and the resolution of business disputes, as per the report.
Buoyed by a young workforce and a growing consumer base, Bangladesh has enjoyed consistent annual GDP growth of more than six per cent over the past decade, with the exception of the Covid-induced economic slowdown in 2020, the report mentions.
Bangladesh's FDI stock was $16.9 billion in 2019, with the US being the top investing country with $3.5 billion in accumulated investments.
Bangladesh received $1.6 billion FDI in 2019. The rate of FDI inflows was only 0.53 per cent of GDP, one of the lowest rates in Asia, according to the US report.
Capital markets in Bangladesh are still developing, and the financial sector is still highly dependent on banks, says the US report.