Korean investors in Bangladesh on Sunday raised concerns about the country’s business environment, highlighting existing tax policies, labour regulations, and customs procedures as significant obstacles for foreign investors.

At a seminar ‘Korea-Bangladesh Economic Cooperation’ at the Westin Hotel in the capital Dhaka, organised by the Foreign Investors’ Chamber of Commerce and Industry and the Korean Embassy, Korean investors also mentioned political instability, bureaucratic hurdles in customs and licensing, transparency issues, high operational costs, electricity shortages, and reduced productivity and workforce motivation as the other challenges.

Industries ministry adviser Adilur Rahman Khan said that strengthening economic ties with Korea was essential for Bangladesh’s development.

Prime Cap (BD) Limited managing director Suk Min Ko mentioned several growth obstacles, including political instability and frequent road disruptions, which have resulted in production halt and worker absence.

While Suk Min Ko praised Bangladesh’s young and affordable workforce along with its strategic location as a viable alternative to China in the global supply chain, he also highlighted that time-consuming customs procedures and inconsistent licensing and auditing systems led to higher operational costs and delays.

Samsung Electronics representative Hwan Seong Woo highlighted the challenges facing Bangladesh’s mobile phone industry, particularly the rise of the grey market and unauthorised phones that evade taxes.

Despite the considerable growth potential in Bangladesh’s mobile phone market, where 55 per cent of consumers still use basic phones, grey market devices, often 30–50 per cent cheaper than authorised products, have captured a substantial market share, particularly in premium segments, he said.

Local manufacturers, including Samsung, have been facing difficulties due to a high tax burden of over 40 per cent on both authorised imports and locally assembled phones, widening the price gap, Hwan Seong Woo said.

He calls for government support to improve tax conditions and reintroduce the National Equipment Identity Register (NEIR) to curb unauthorised imports, which would benefit authorised businesses, reduce production costs, lower smartphone prices for consumers, and ensure tax revenue for the government.

Korean ambassador Park Young-sik emphasised the vital role of Korean companies in Bangladesh’s growth, especially in manufacturing and infrastructure, and underscored the importance of foreign direct investment as the country approaches its 2026 graduation from least developed country status.

The envoy mentioned Bangladesh’s low FDI compared to other countries and emphasised the need for effective policy implementation, reduced operational costs, and stable regulations to attract foreign investment.

He also advocated for discussions to enhance cooperation in sectors like ICT, pharmaceuticals and agriculture, combining Korean technology with local potential.

The ambassador also highlighted the need for Korea-Bangladesh economic partnership agreements and discussed the implications of Bangladesh’s accession to the Regional Comprehensive Economic Partnership.

Bangladesh Investment Development Authority executive chairman Chowdhury Ashik Mahmud Bin Harun said that Korea had successfully transformed itself and excelled in attracting foreign direct investment in sectors like automobiles and electronics.

‘The opportunities in shipbuilding and electronics you highlighted provide valuable insights and best practices, particularly regarding your many free trade agreements, while we currently have only a few FTAs in our country,’ he said.

Acknowledging the challenges investors are facing, the BIDA chairman said that to address the challenges the National Single Window would be launched on February 28, 2025.

‘We have successfully advocated for the introduction of the authorised economic operator programme, set to commence on January 1, 2025. This programme will implement a green channel concept, enabling reputable operators to be randomly audited at their premises instead of at the port, thereby significantly reducing time lost in customs processes,’ he said.

Korea Trade-Investment Promotion Agency director general Samsoo Kim presented a talk on ‘Increasing FDI in Bangladesh through Korea’s success factors’.

He shared insights into effective foreign direct investment policies derived from Korea’s experiences and highlighted the significance of strengthening trade and investment relations between the two countries.

FICCI president Zaved Akhtar said that the collaborative approach was crucial to driving innovation and development, which would unlock new investment opportunities.

Korea-Bangladesh Chamber of Commerce & Industry president Shahab Uddin Khan said that seminars like these served as vital platforms for driving economic cooperation.