Building confidence to boost Japanese investment in Bangladesh: JBCCI president

Japan-Bangladesh Chamber of Commerce and Industry (JBCCI) President Tareq Rafi Bhuiyan (Jun) has said Japanese investment in Bangladesh has grown nearly threefold over the past decade, but there is significant room to grow, compared to the broader landscape of Japanese investments in Asia.

“More than 20,000 Japanese companies operate in China, about 6,000 in Thailand, and nearly 2,500 in Vietnam. In contrast, the number of Japanese enterprises in Bangladesh remains relatively small (nearly 330),” he told FE.

“This disparity is not due to a lack of interest, but rather a mix of structural challenges and policy uncertainties that often make investors cautious.”

JBCCI President says Japanese companies that have already established operations here continue to face hurdles — from inconsistent regulations to difficulties in maintaining high standards of corporate governance with local partners.

“When potential investors consult existing Japanese businesses in Bangladesh, they often hear mixed feedback. Many highlight opportunities, but they also express concern about unpredictability in regulatory frameworks, customs procedures, and VAT policies, which can change abruptly through SROs.”

“For Japanese companies, which plan takes a time, as they prefer policy predictability for at least 10 years is a condition for sustainable investment.”

“Equally important is corporate governance. Japanese investors are rigorous in their due diligence and compliance processes, which take time because they focus on long-term engagement rather than short-term profit.”

“Unfortunately, many local firms still show reluctance in maintaining transparent financial reporting and strong governance practices. Bridging this gap is essential if Bangladesh wants to attract more high-quality Japanese investments,” Tareq Rafi Bhuiyan (Jun) adds.

“To the current government’s credit, several encouraging steps have been taken in recent years. The One Stop Service (OSS) and Single Window initiatives under the Bangladesh Investment Development Authority (BIDA) are simplifying bureaucratic procedures. The Public-Private Economic Dialogue (PPED) is also proving effective in identifying and resolving investor challenges. Such measures, if implemented consistently, can significantly improve investor confidence.”

The ongoing Economic Partnership Agreement (EPA) negotiations between Bangladesh and Japan mark another milestone in deepening bilateral ties. The relationship is gradually evolving from “aid to trade,” with bilateral trade expected to rise from the current $3 billion to between $5 and $10 billion in the coming years. Alongside this, investment inflows are likely to grow — provided there is a clear, long-term roadmap and consistent policy framework.

Government incentives under BEZA and BEPZA should remain stable to ensure investor confidence. However, Bangladesh still faces a high cost of doing business, particularly due to the absence of a fully operational deep-sea port. The Matarbari Deep Sea Port, once completed, will be a game-changer for logistics efficiency and cost reduction. At present, it is partially operational, primarily handling coal imports, but its full potential will unfold once container operations commence.

Another crucial factor for future growth lies in human capital development. To attract high-value Japanese investments, Bangladesh must focus on skill development and language training. Vietnam, for instance, made Japanese a second language nearly two decades ago, which helped it secure strong investor confidence from Japan. If Bangladesh can strengthen Japanese language education and develop qualified trainers, it could open doors for skilled employment and greater economic collaboration.

Japanese cos bid for business in diverse BD sectors

Japanese investors have already found success in Bangladesh’s light engineering and motorcycle sectors, with companies such as Honda, Yamaha, and Suzuki performing well in the CKD segment. With the right policy environment, Bangladesh could also attract investment in automobile manufacturing, bringing with it supporting industries like plastics and components.

Moreover, Japanese investment could play a transformative role in emerging areas such as agritech, artificial intelligence, robotics, and renewable energy. Collaboration in these fields could drive greater automation and productivity in sectors like RMG and beyond.

The Honda investment stands as a flagship example of Japanese confidence in Bangladesh. However, to draw more such long-term investors, Bangladesh needs to offer targeted policy incentives such as long-term tax holidays and export-oriented policies.

Finally, if Bangladesh can join major trade blocs ASEAN and RCEP, it would gain access to duty-free markets, further enhancing its competitiveness. The interim government’s ongoing efforts to strengthen trade diplomacy and create a stable investment environment are therefore crucial.

In short, the path to deeper Japanese investment lies in a predictable policy environment, strong corporate governance, skilled manpower, and sustained government commitment. If these factors align, Bangladesh can indeed position itself as the next frontier for Japanese investment in Asia.