Key Benefits and Advantages
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Key Benefits and Advantages PDF Print E-mail

Key Factors

Opportunities exist for companies that invest their futures with Bangladesh based on a number of key factors.

  • ICT cluster: over 400 well established companies, 150+ exporting worldwide of which two thirds export to North America.
  • Managerial skills: high graduate output with excellent IT and linguistic skills, over 90% fluent in English at managerial level.
  • Workforce: highly skilled, cost-effective, strong work ethic. Employment_in_IT_industry
  • Infrastructure: connected to the high speed international submarine cable network, established IT and e-commerce service. sector - ensuring reduced set-up time and costs, excellent transport links to key markets and suppliers.
  • Supportive fiscal and non-fiscal environment; incentives to ease start-up costs, competitive tax regime, low utility and energy costs.
  • Liberal FDI regime: no prior approval requirements or limits on equity participation or on the repatriation of profits and income.
  • Geographical location: excellent market access and location between the key markets of India and China, and ASEAN* countries.
  • BOI Business support: maximum fast-track help and co-operation from all relevant authorities through BOI-experienced professional advisers to welcome and support incoming businesses.

South Asia has in recent years enjoyed strong economic growth and increased flows of foreign IT investment. Bangladesh has played a key role in this success story and consistently achieved a strong share of investment.  Bangladesh is now a significant country of choice for the location of e-Commerce and IT Services activities. A growing number of national and multinational corporations are investing in Bangladesh, benefiting from a high quality workforce, a first-class telecoms infrastructure and the professional coordinated approach of BOI, delivering a flexible and attractive package to investors.

In addition Bangladeshi IT companies have expressed a desire to become outsource software development suppliers and partners to software developers in higher cost locations around the world, particularly in the EU and United States

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Favored Access to Markets

Bangladesh’s free trade agreements offer duty-free access to the EU’s 27 countries and Japan. In addition, the geographical proximity of the key markets of China and India allows low distribution costs and efficient delivery of IT products and services from Bangladesh. These markets are literally “next door” to Bangladesh and represent an excellent opportunity for investors in the sector to exploit.

As a least developed country (LDC), Bangladesh enjoys tariff and quota-free access under the Generalized System of Preferences (GSP) to the EU market for all its products (apart from arms and armaments) provided that they satisfy the EU rules of origin. These stipulate that manufactured products have to be “sufficiently worked or processed” in exporting country in order to qualify as having originated there.

Bangladesh also enjoys tariff-free access for exports of manufactured products to the USA and Japan under their respective Generalized Preference Systems. The GSP therefore allows Bangladesh tariff-free access to a market of over 500m people for its IT products and services. (European Commission, Office of the US Trade Secretary, US Census Bureau, Japanese Ministry of Foreign Affairs). Bangladesh will also benefit from membership of the South Asian Free Trade Area (SAFTA) which commits India to reduce its tariffs on a wide range of products. Furthermore, Bangladesh belongs to the Asia Pacific Trade Agreement (APTA) and therefore enjoys reduced tariffs on exports of certain goods to China.

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Skilled and Cost Effective Workforce

With tens of thousands of young IT skilled workforce conversant in English, Bangladesh is one of Asia’s most attractive IT outsourcing destinations in South Asia, particularly for clients in the USA and other Anglophone countries.

  • Bangladesh offers significant cost advantages for IT outsourcing , both in terms of labor and infrastructure costs.
  • Salary of programmers in Bangladesh is 40% of that in India, 50% of Philippines and 70% of Vietnam.
  • Charges for Internet bandwidth in Bangladesh are currently the lowest in South Asia (50% of that in India).
  • Rent for office space in Dhaka (capital) is below 20% of that in Delhi and 40% of Manila.
  • Over 15,000 IT engineers are working in more than 400 software and IT service companies. Around 150 of these companies are specialized in servicing overseas clients.

Training and Education

The Bangladesh government and the IT industry have taken up aggressive plans to scale up the number of IT workforce to meet the increasing demand. The plans include national skills assessment and enhancement programs for IT professionals, increasing the number of yearly IT graduates to 10,000 and development of outsourcing focused specific skill-sets.

  • Specialized IT education in Bangladesh is well established at graduation and post graduation levels. Over 90 universities and 700 colleges across the country offer IT education programs. Every year, over 9,000 IT students graduate from these universities and colleges.
  • A large part of these IT graduates also possess global IT vendor certifications (e.g., from Microsoft, Cisco, Oracle, Sun) on top of their academic degrees.
  • Excellence of IT workforce from Bangladesh is a well-accepted fact at home and abroad. Over 10,000 IT professionals from Bangladesh are working successfully in various IT companies throughout the USA including Microsoft, Intel, IBM, Sun, Oracle, Texas Instruments, Cisco, Nortel, and Lucent.

Recent Examples of IT Training Initiatives

  • Paid internship program by government – The Bangladesh Government has a paid ICT Internship Scheme for 500 software programmers each year. The goal is to prepare the IT educated students by developing their skills according to market requirements.
  • Skill development project by EC – European Commission (EC) through Asia Invest programme is funding a project to improve the quality of software by know-how Transfer and Training in the area of software development and production. The project is implemented by BASIS* and two European partners: Bremen University of Germany and Paris Chamber of Commerce and Industry. The two working fields are System Software and Multimedia.
  • Skill development and export promotion by JICA – JICA (Japan International Cooperation Agency) is implementing a project with BASIS to increase Software export to Japan. Objectives of the project are to enhance export competitiveness of Bangladeshi computer software products in the international markets.
*ASEAN=Association of Southeast Asian Nations
BASIS=Bangladesh Association of Software and Information Services