BEPZA's Contribution in FDI in Bangladesh

  

©Md. Abdur Rahman Miah, Additional Executive Director (Admin), BEPZA, Dhaka

  

Foreign Direct Investment (FDI) is widely recognized as a catalyst for economic development, particularly in emerging economies like Bangladesh. Since gaining independence in 1971, Bangladesh has made significant progress in attracting foreign investment, with cumulative FDI inflows surpassing USD 30 billion by 2025. Among the key institutions facilitating this growth, the Bangladesh Export Processing Zones Authority (BEPZA) has played a pivotal role since its inception in 1983. As of March 2025, BEPZA has contributed an impressive USD 4.99 billion in cumulative FDI—signifying its strategic importance in the nation's industrial and economic landscape.

 

The Genesis of BEPZA

 

Established under the Bangladesh Export Processing Zones Authority Act of 1980, BEPZA was created to attract foreign and local investment, create employment opportunities, diversify exports, and promote transfer of technology. The Authority operates under the Chief Adviser’s Office/Prime Minister’s Office and administers the country's Export Processing Zones (EPZs)—dedicated industrial enclaves with special regulatory, fiscal, and infrastructural incentives for investors.

 

BEPZA officially began operations with the opening of the Chattogram EPZ in 1983. Over the years, the success of this model led to the establishment of additional EPZs in Dhaka, Cumilla, Mongla, Ishwardi, Uttara, Karnaphuli, Adamjee, and recently in BEPZA Economic Zone (BEPZA EZ) located at Mirsarai, Chattogram.

 

Strategic Objectives and Operational Model

 

BEPZA’s core mission revolves around:

 

1. Promoting and facilitating FDI through the establishment and expansion of EPZs.
2. Generating employment, to contribute to inclusive growth.
3. Boosting exports by offering world-class facilities and simplified procedures for export-oriented industries.
4. Encouraging technology transfer and upskilling the local workforce.
5. Establishing environmentally sustainable and socially responsible industrial zones.

 

By offering a favorable investment climate—including tax holidays, duty-free import of capital machinery, full repatriation of profits, and one-stop services—BEPZA has become a trusted gateway for international investors.

 

Quantitative Contributions to FDI

 

As of March 2025, BEPZA has attracted USD 4.99 billion in cumulative foreign direct investment since 1983. This figure represents a substantial share of the national FDI pool, accounting for over 16% of the total FDI inflow into the country.

 

Key Highlights:

 

• Number of Enterprises: Nearly 500 enterprises from 38 countries have invested in the EPZs.
• Employment Generation: More than 500,000 jobs have been created directly, with women constituting over 60% of the workforce.
• Export Contribution: EPZs contribute nearly 20% of Bangladesh's total annual export earnings, predominantly from the ready-made garment (RMG), leather, electronics, and textile sectors.
• Diversification of Investment: While RMG remains dominant, recent trends show increasing FDI in electronics, automobile parts, packaging, and IT-enabled services.
• Countries with Major Investments: South Korea, Japan, China, India, the USA, Germany, and the UK are some of the top investing nations in EPZs.

 

Sectoral Diversification and Value Addition

 

Though the EPZs were initially garment-centric, the evolution of industrial diversification has been impressive:

 

• Electronics and Electrical Equipment: Companies like Samsung, Sumitomo, and others are investing in manufacturing and assembling electronic goods.
• Agro-processing and Food Products: There has been an increasing interest in processed food and agricultural export ventures.
• Pharmaceuticals and Medical Equipment: A growing sector within EPZs, benefiting from Bangladesh’s competitive cost structure and skilled labor.
• Green Industrialization: Several factories within the EPZs are LEED-certified, contributing to sustainable industrial practices.

 

BEPZA Economic Zone: A New Frontier

 

The latest milestone in BEPZA’s journey is the establishment of the BEPZA Economic Zone (BEPZA EZ) within BSMSN, the country’s largest industrial city. Spanning 1,138.55 acres, BEPZA EZ aims to host more than 100 industrial units, with projected investment exceeding USD 2 billion in the coming years. As of 2025, over 30 companies have already begun operations or are under construction in this zone.

 

The BEPZA EZ marks a paradigm shift—from purely EPZ-based investments to integrated economic zones that offer comprehensive facilities, multimodal connectivity, and sustainable infrastructure.

 

Institutional Efficiency and Investor Confidence

 

BEPZA is renowned for its efficient governance and investor-friendly services. Key success factors include:

 

• One-Stop Service (OSS) for licensing, customs clearance, utility connections, and other regulatory support.
• Simplified customs procedures under bonded warehouse privileges.
• Security and labor compliance, ensuring social harmony and operational continuity.
• Strong coordination with local and international stakeholders, including donor agencies, embassies, and development partners.

 

This institutional effectiveness has built significant investor confidence, evident from the reinvestment trends of existing companies and growing new interest from emerging economies.

 

Women Empowerment and Social Impact

 

One of BEPZA’s hallmark contributions lies in gender-inclusive employment generation. With a large majority of the workforce being women, especially in the RMG and light manufacturing sectors, BEPZA has contributed immensely to women’s empowerment, poverty reduction, and rural-urban migration balance.

 

Beyond employment, BEPZA also facilitates:

 

• Onsite healthcare and daycare centers for workers.
• Training and skill development programs.
• Residential and recreational facilities.

 

Such socio-economic benefits extend beyond the confines of industrial parks, making EPZs a model for inclusive development.

Challenges and Opportunities

 

Despite its significant success, BEPZA faces several challenges:

 

Challenges:

 

• Limited land availability in existing EPZs for expansion.
• Infrastructure bottlenecks, particularly in logistics and port connectivity.
• Global economic uncertainties, which impact FDI flow.
• Rising wage pressures and cost of doing business.

 

Opportunities:

 

• Digital and smart manufacturing investments in the Fourth Industrial Revolution (4IR) era.
• Deeper integration with regional value chains—such as through the Belt and Road Initiative (BRI), BIMSTEC, and BCIM corridor.
• Public-Private Partnerships (PPPs) for developing specialized zones (e.g., Hi-Tech Parks within EPZs).
• Green investment incentives for climate-friendly industrial practices.

 

Policy Support and Government Vision

 

The Government of Bangladesh has been proactive in supporting BEPZA’s initiatives:

 

• National Industrial Policy and FDI Strategy emphasize EPZs as key vehicles for industrial development.
• Incentive packages for reinvestment, technology transfer, and infrastructure modernization.
• Linkages with SME sectors, ensuring that FDI benefits trickle down to the grassroots economy.

 

Additionally, BEPZA has aligned its strategies with the Vision 2041 and the Eighth Five-Year Plan, ensuring coherence with national development priorities.

 

 

BEPZA stands as a cornerstone of Bangladesh's FDI success story, contributing not just quantitatively in terms of billions of dollars in investment, but qualitatively in terms of employment, empowerment, export diversification, and sustainable industrialization. As Bangladesh aspires to become a high-income country by 2041, BEPZA’s role will be even more crucial in building globally competitive, resilient, and inclusive economic zones.

 

The journey from USD 0 in 1983 to nearly USD 5 billion in 2025 under BEPZA’s stewardship is not just a statistical achievement—it is a narrative of vision, strategy, and commitment. Strengthening BEPZA’s capacity, expanding economic zones, and fostering investor confidence will be vital for scaling greater heights in the decades to come.

 

Bibliography

 

Bangladesh Bank. (2024). Foreign Direct Investment (FDI) in Bangladesh: Quarterly Report, January–March 2024. https://www.bb.org.bd

 

BEPZA. (2025). BEPZA at a glance. Bangladesh Export Processing Zones Authority. http://www.bepza.gov.bd

 

BEPZA. (2024). Annual Report 2023–2024. Bangladesh Export Processing Zones Authority. http://www.bepza.gov.bd

 

General Economics Division (GED). (2021). Eighth Five Year Plan: July 2020 – June 2025 (Vol. 1). Planning Commission, Government of the People’s Republic of Bangladesh. https://www.plancomm.gov.bd

 

Islam, R., & Mamun, M. Z. (2020). Foreign direct investment and economic growth in Bangladesh: An empirical analysis. Journal of Economic Development Studies, 8(2), 23–34. https://doi.org/10.11648/j.jeds.20200802.12

 

United Nations Conference on Trade and Development (UNCTAD). (2023). World Investment Report 2023: Investing in Sustainable Energy for All. https://unctad.org/webflyer/world-investment-report-2023