Summary

Aspiring entrepreneurs in Bangladesh are encountering significant challenges, as the country’s business environment is being stifled by political instability and worldwide uncertainties. The number of registered corporations has declined, and only a small minority of them can successfully get off the ground. These hurdles have made it increasingly difficult for entrepreneurs to navigate the competitive market and establish themselves as viable contenders.

Content

During the period of July-December in the current fiscal year, a total of 4,516 companies were registered, including public, private, one-person companies (OPCs) and partnership firms. In comparison, the same period in the last fiscal year saw 8,314 new company registrations, according to data from the Office of the Registrar of Joint Stock Companies and Firms (RJSC) – an agency responsible for company registration under the Ministry of Commerce. When asked about the decrease in new company registrations, Commerce Minister Tipu Munshi acknowledged that the ongoing political situation may have had an impact. 

The 12th general elections were held in Bangladesh on Sunday, but the polls were boycotted by the main opposition party BNP and its allies.

The minister stated that the number of new company registrations for the first half of the fiscal year was 4,516, and he hopes that the business climate will improve after the general elections. He also anticipates significant growth in the remaining months. According to RJSC, there were 10,523 company registrations in FY23, 13,218 in FY22, 14,826 in FY21, and 11,128 in FY20.

According to RJSC sources, there has been a significant reduction in the number of new companies in the pipeline compared to the previous fiscal year. While around 3,000 applications were being processed by December 2022, only about 1,050 were processed by December 31st, 2023. Officials from 20 new companies revealed that despite completing registration in the last and current fiscal year, none of them have started operations yet. 

The economic impact of the pandemic, the ongoing conflict between Russia and Ukraine, and political uncertainty have all taken a toll on fledgling businesses in Bangladesh. The ongoing dollar crisis has made it difficult for many companies to properly open letters of credit, leading to a decline in investment proposals and a drop in revenue from company registration. To attract foreign investment, the government and other relevant agencies must take steps to create a more business-friendly environment in the country. While a post-election economic rebound is anticipated, many newly registered companies are still facing obstacles to production due to a challenging business environment, which includes a shortage of dollars, political instability, and external disruptions to import and export. Despite these immediate difficulties, business leaders remain optimistic about the future. 

According to Mr. Jibon Krishna Saha Roy, the Director General of the Bangladesh Investment Development Authority (BIDA), the organization’s primary objective is to foster a conducive environment for businesses and ensure that they have all the necessary resources at their disposal. Nevertheless, BIDA does not concern itself with the investment decisions of potential investors. 

Picture and Article Sources: The Business Standard