(Yicai) Oct. 8 -- Bangladesh is moving to cut red tape for foreign investors as the government seeks to attract overseas capital and diversify its economy, a policy researcher told Yicai.

The government is working toward a one-stop service system for foreign investors and is also considering consolidating taxes as part of broader tax reforms, Mohammad Ashique Rahman, a senior researcher at the Bangladesh Institute of International and Strategic Studies, a state-owned policy think tank, told Yicai.

The push comes after Prime Minister Tarique Rahman took office in February, with foreign investors increasingly assessing opportunities in the South Asian country. Complicated approval procedures have long been a major obstacle to investment.

The reforms are intended to allow investors to obtain approvals from a single government agency rather than navigating multiple departments, although industry insiders say their effectiveness remains to be seen.

Cutting Investment Red Tape

Foreign investors have frequently complained about Bangladesh's cumbersome administrative procedures. Some told Yicai that setting up a business requires repeated visits to different government departments to obtain various approvals and documents.

“That's a huge hindrance for us, or indeed for investment, that you have to go to a lot of offices and get different kinds of government papers," Rahman said, adding that "foreign investors are really fed up with this kind of situation." To address these concerns, the government plans to consolidate approvals under one department, allowing investors to obtain the necessary clearances for investment and land acquisition in one place, he added.

In August, the government reportedly merged the Bangladesh Investment Development Authority (BIDA), Bangladesh Economic Zones Authority (BEZA), and Public Private Partnership Authority (PPPA) into Invest Bangladesh Authority, a centralized investment promotion agency directly under the prime minister's office. The new agency began operations that month.

However, some industry insiders told Yicai that while the restructuring addresses foreign investors' longstanding calls for a unified service platform, it remains in a transitional phase, and its effectiveness in improving administrative efficiency has yet to be seen.

Diversifying Exports and Deepening Ties With China

Bangladesh, mainly known for its garment industry, is seeking to diversify its exports.

Bangladesh is the world's second-largest exporter of ready-made garments, after China, with the industry accounting for more than 80 percent of the country's total exports. In fiscal 2026, which ended in June, the industry's total export value edged down almost 1 percent from a year earlier, while net export revenue rose 4 percent.

Despite the garment industry's generally solid performance, Bangladesh is prioritizing export diversification. The government has identified leather and leather goods, jute, shipbuilding and ship dismantling, light engineering, and information technology as key sectors for development.

Bangladesh's central bank has introduced a BDT30 billion (USD244 million) export diversification refinancing program to provide financial support for emerging industries and strengthen production capacity.

China, Bangladesh's largest trading partner, is key to its efforts. Bangladesh signed numerous agreements with China in June, including an investment and development agreement for the China Economic and Industrial Zone (CEIZ), reflecting the government's eagerness to accelerate economic development, Liu Zongyi, director of the Center for South Asian Studies at the Shanghai Institutes for International Studies, told Yicai. The CEIZ, an industrial park located in Chittagong, Bangladesh, held its groundbreaking ceremony in July.

Chowdhury Ashik Mahmud Bin Harun, now chairman of Invest Bangladesh, previously said the authority would shorten the approval process for business licensing from six months to a year to within 14 days. The move aims to ease investment and strengthen industrial and supply chains within the zone.

Editor: Emmi Laine