Pran Group to invest in India, Nassa Group in Saudi Arabia
Entrepreneurs in Bangladesh are showing a growing interest in making foreign investments, according to Bangladesh Bank.
Some of the entrepreneurs want to use local experience to run business in foreign countries while some entrepreneurs are investing by assessing the demand of the respective countries.
Companies or individuals are also operating foreign office and small factory for business purposes. To do business in foreign countries, entrepreneurs have received approvals of Bangladesh Bank and the government. Many more are also waiting for approval.
People concerned said many individuals, whose companies export finished goods, now want to make wealth at foreign countries.
Many people have laundered money and are now running business abroad as well as amassing huge wealth. They now want to take money from the country through legal channel to legalise their wealth abroad. However, not all entrepreneurs follow it.
Many entrepreneurs are making foreign investment with the authorities’ approval.
Seventeen individuals and companies have been approved for making investment abroad so far. Twelve companies are approved till 2020. They are: Mobil Jamuna Bangladesh Limited, Incepta Pharmaceuticals, DBL Group, Square Pharmaceuticals, Spectrum Engineering, ASM Mohiuddin Monem, Akij Jute, Beximco Pharmaceuticals, ACI Healthcare, BSRM, Summit Power and Takeout Limited.
Five more business firms have been approved for making investment abroad in August. These are: MBM Garments, Renata Limited, Pran Foods, Incepta Pharmaceuticals and Nassa Group's AJ Super Garments.
Akij Jute has been approved to invest the highest amount of 1.7 billion (170 crore) so far. However, all companies receiving approvals didn’t make the investment.
Singapore, Kenya, Malaysia, India, Sri Lanka and Saudi Arabia are the most preferable investment destinations for the local entrepreneurs.
Wising anonymity, a top official of a company making foreign investment told Prothom Alo that it becomes a matter of dignity now to have investment and own wealth abroad. Next generation stays abroad for education and family purposes. They are more interested to do business in foreign countries than the own country. That’s why many people have been compelled to go for running business abroad, the official added.
There is no way to make foreign investment without approval of the central bank. However, an exporter can take upto $30,000 out of the country to expand business. That amount must be from the export earnings.
Any amount of legal commodities can be imported by opening a letter of credit (LC). Up to $12,000 can be spent on travel quota annually. Besides, a certain amount of money can be taken out of the country in several specific sectors including education and medical purposes through legal channel.
Several companies appealed for foreign investment till 2012 but they were refused. Since 2013, the central bank has started allowing local companies to make foreign investment. Most of these companies make it from export earnings but some firms take US dollar from the country.
According to the Bangladesh Bank, Mobil Jamuna Bangladesh invested $440,000 in Myanmar and $100,000 in Singapore, DBL Group $9.5 million (95 lakh) in Ethiopia, Square Pharmaceuticals $10 million (1 crore) in Kenya and Akij Jute invested $20 million (2 crore) in Malaysia.
Beximco Pharma has opened new companies -- Jubail Pharma, formerly Beximco Pharma Saudi Limited, in Saudi Arabia, Biocare Manufacturing in Malaysia and Beximco Pharmaceuticals Ceylon in Sri Lanka. Beximco received approval for foreign investment but the company hasn’t invested as yet. Beximco was cleared for $6 million (60 lakh) investment.
BSRM was cleared for $4.6 million investment in Kenya but the company has invested $27,200 so far.
Pran Foods would invest $2,062,665 or about Tk 175 million (17.5 crore) in the Pinnacle 4S Company Limited of India.
Nassa Group’s AJ Super garment will invest $5 million or about Tk 425 million (42.5 crore) in dates business of the City of Dreams for Dates Company in Saudi Arabia.
Incepta Pharmaceuticals will invest $100,000 or Tk 8.4 million (85 lakh) in the Incepta Pharmaceuticals USA.
Besides, ABM Garments and Reneta Pharma have been cleared for investing $100,000 each in ABM Singapore and Reneta Ireland.
Besides, Bangladesh Bank doesn’t have information whether business firms make profit or loss from foreign investment. As a result, the regulator has no monitoring on these companies.
When asked, central bank spokesperson Serajul Islam told Prothom Alo, “A local firm has made a little profit from foreign investment. Other than this, no firm informed us anything. That’s why we are giving approval for foreign investment after carrying out scrutinisation in consultation with the government.”
*This report appeared in the print and online edition of Prothom Alo and has been rewritten in English by Hasanul Banna