Bilateral Investment

Bilateral Investment

In addition to the broad policies encouraging foreign investment, the government of Bangladesh has entered into bilateral investment treaties with eight countries: Belgium, Britain, Federal Republic of Germany (West Germany), France, the Republic of Korea (South Korea), Romania, Turkey and the United States. As of early 1988, similar treaties were at various stages of negotiation with ten other countries. These treaties included such assurances as unrestricted currency transfers, compensation for expropriation, dispute settlement procedures, and taxation treatment. In addition, Bangladesh has signed agreements for the avoidance of double taxation with Britain, Canada, Sweden, Singapore, and South Korea.

Even with a reasonably attractive framework in place, the flow of private capital to Bangladesh has been slow. Estimates from the Organization for Economic Cooperation and Development indicated that for the 1980-84 period foreign direct investment in Bangladesh averaged only US$3.4 million per year. The Bangladesh Ministry of Industries listed just sixty-eight existing and forty-one "sanctioned" joint venture and multinational companies in Bangladesh in 1987. The largest amounts of foreign private investment were from other Asian countries--Japan foremost, with smaller amounts from South Korea, Singapore, Taiwan, and Hong Kong--and from Britain and other countries in Western Europe. American investment of about US$20 million in 1987 was concentrated in the physical assets of a life insurance company, the manufacturing operations of three pharmaceutical firms, and a vegetable oil processing and storage plant.


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