After several consecutive years of decline, foreign direct investment (FDI) in Bangladesh has returned to positive growth. Net FDI increased by more than 39 per cent last year, driven largely by reinvested earnings and intercompany loans.
These findings were presented in the latest report on foreign investment published by the Bangladesh Bank (BB).
According to the report, Bangladesh received net FDI worth $1.7704 billion in 2025, compared with $1.2704 billion in 2024. In other words, net FDI increased by nearly $500 million within a year.
A relevant source said that a multinational bank did not repatriate its profits from Bangladesh last year. Instead, the funds were recorded as reinvestment within the country.
In addition, because interest rates remained high, many foreign companies provided loans to their local subsidiaries in Bangladesh, which were also counted as foreign investment.
According to the source, these two factors mainly contributed to the sharp rise in FDI inflows. However, compared with the previous year, new foreign equity capital investment also increased.
Long decline reversed
According to data from the United Nations Conference on Trade and Development (UNCTAD), Bangladesh received net FDI worth $3.613 billion in 2018. The following year, inflows declined to $2.874 billion.
According to the report, Bangladesh received net FDI worth $1.7704 billion in 2025, compared with $1.2704 billion in 2024. In other words, net FDI increased by nearly $500 million within a year.
The UNCTAD report also said after the outbreak of the Covid pandemic, foreign investment suffered a further setback. FDI fell to $2.564 billion in 2020, and then dropped by nearly half to $1.5721 billion the next year.
The downward trend continued in subsequent years. Bangladesh Bank’s latest figures show that FDI declined to $1.5176 billion in 2022, and then further to $1.4641 billion in 2023. The fall persisted in 2024 as well, when investment dropped to $1.2704 billion. After several years of continuous decline, 2025 finally showed a significant turnaround in foreign investment inflows.
An analysis of quarterly data for 2025 shows that the highest inflow, $788.2 million, came during the first quarter, from January to March. In the remaining three quarters, FDI inflows hovered around $300 million each.
What drove the increase
The central bank data shows that FDI increased across three key components: new investment (equity capital), reinvested earnings, and intra-company loans.
The strongest growth came from reinvested earnings. In 2024, reinvestment stood at $621.9 million, which rose by 25 per cent to $781.6 million in 2025.
Speaking about this, a central bank official told Prothom Alo that one multinational bank did not repatriate its profits abroad last year. Instead, they retained and reinvested the money in Bangladesh, which significantly boosted the reinvestment figure.
The headline growth does not necessarily reflect a real surge in fresh foreign investment. The increase is not driven by new equity inflows, which are more critical for expanding economic activity. Reinvestment indicates business continuity but not necessarily new expansion at the desired scale.
Intra-company loans also recorded a sharp rise of around 318 per cent. These increased from $103.8 million in 2024 to $434.1 million in 2025.
Market participants say higher domestic interest rates made local borrowing more expensive, prompting foreign companies to inject funds into their subsidiaries in Bangladesh as internal loans, which are counted as FDI.
New equity investment showed only marginal growth. Fresh FDI increased slightly from $544.6 million in 2024 to $554.6 million in 2025.
What officials and investors say
Bangladesh Investment Development Authority (BIDA) Executive Member Nahian Rahman said that although the base level remains small, growth across all three indicators was encouraging.
He noted that while global equity investment fell by around 10 per cent, Bangladesh’s equity inflows remained relatively stable.
According to him, the rise in reinvestment and intra-company loans signals positive momentum for future investment.
He added that parts of the existing investment pipeline are already being implemented and a significant portion is expected to materialise by 2026.
However, Foreign Investors’ Chamber of Commerce and Industry (FICCI) President Rupali Haque Chowdhury cautioned that the headline growth does not necessarily reflect a real surge in fresh foreign investment.
She said the increase is not driven by new equity inflows, which are more critical for expanding economic activity.
Reinvestment, she added, indicates business continuity but not necessarily new expansion at the desired scale.
To attract genuine new investment, she stressed the need for improved logistics, infrastructure, stable gas and electricity supply, and consistent policy frameworks.