UK Remains Top FDI Source but Flows Drop
In terms of cumulative foreign direct investment (FDI) stock, the United Kingdom remains the largest source of investment in Bangladesh. However, net FDI inflows from the UK fell by 40.71% in the 2024-25 fiscal year compared to 2023-24.
Earlier this March, Chowdhury Ashik Mahmud Bin Harun, Executive Chairman of the Bangladesh Investment Development Authority (BIDA), visited the UK to attract investment. During his stay in London, he met with senior officials of the UK government, leading British companies, and the expatriate Bangladeshi community.
US Visits Focus on Business-Friendly Environment
After assuming his role as Principal Advisor, Ashik visited the United States in September last year. He highlighted the creation of a business-friendly environment in Bangladesh and the implementation of necessary financial sector reforms. He also assured that foreign business interests in Bangladesh would not be harmed.
He returned to the US in January this year to sign an energy supply agreement with Louisiana-based Argent LNG. According to updated data from Bangladesh Bank, more investment was repatriated than newly received from the US during 2024-25.
China’s FDI Sees Slight Decline
China remains one of the largest sources of FDI stock in Bangladesh. Ashik visited Beijing in March, and the following month, numerous Chinese investors participated in an investment conference in Dhaka.
In July, he led a BIDA delegation to Shanghai and spoke at the Bangladesh-China Investment Seminar 2025, inviting Chinese investors to invest in electricity, textiles, and IT sectors. Despite visible interest and commitments, net FDI from China fell by 3.3% last fiscal year.
Net FDI Surges from the Netherlands
In 2024-25, investment from the Netherlands increased abnormally, with net FDI rising by over 1,800%. Representatives of the Dutch-Bangla Chamber of Commerce and Industry stated they could not yet determine which companies contributed most to this growth.
Most Dutch investors partner with local Bangladeshi firms. Notable Dutch investments include Omera LPG, ACI Motors, and BM LP Gas. However, no new large-scale investments have been reported in the past year or so.
According to Bangladesh Bank, most of the net FDI from the Netherlands came as payment for the acquisition of Akij Group’s tobacco business. This payment was made from Japan Tobacco’s or JTI’s office in the Netherlands, based on a contract signed in August 2018. The current interim government’s promotional efforts played no role in this investment inflow.
Overall FDI Growth Driven by Reinvestment and Intra-Company Loans
Despite declining investments from major source countries, net FDI in Bangladesh increased in 2024-25, primarily due to payments from the Netherlands, reinvestment, and intra-company loans.
Bangladesh Bank reports that net FDI rose by 19.13% compared to 2023-24, based on equity capital, reinvested earnings, and intra-company loans. Reinvested earnings increased by 23.30%, intra-company loans by 180.66%, but equity capital declined by 16.90%.
Experts note that while net FDI rose, it mainly reflects reinvestment and intra-company loans. Companies are borrowing from their own sources and reinvesting earnings rather than making new investments in Bangladesh.
Expert Concerns Over Declining New Investments
Dr. M Mashrur Riaz, CEO of Policy Exchange Bangladesh (PEB), said, “Recent FDI trends present a mixed picture. According to UNCTAD’s World Investment Report, FDI inflows fell in calendar year 2024. BIDA and Bangladesh Bank data indicate growth from July 2024 to June 2025, largely from reinvestment and intra-company loans, signaling Bangladesh is lagging in attracting new or greenfield investments.”
He added that foreign companies have faced challenges repatriating profits due to foreign exchange pressures and complex procedures, leading to higher reinvestment. Consequently, growth from last year may not reflect true economic advancement.
Auditors and experts confirm that real FDI growth comes from equity capital, while reinvested earnings and intra-company loans fluctuate. Reduced equity suggests fewer new investors are entering Bangladesh.
Top FDI Source Countries and Trends
As of June 2025, the top ten FDI stock source countries were the UK, Singapore, the Netherlands, South Korea, China, Hong Kong, the US, India, Malaysia, and Australia. However, half of these countries saw lower net FDI in 2024-25 compared to 2023-24, including the UK, South Korea, China, India, and Sri Lanka.
Conversely, net FDI increased from Singapore, Hong Kong, Malaysia, and Japan. Experts caution that although overall growth appears positive, the lack of new investments remains a concern.
Calls for Structural Reforms
Dr. Khandakar Golam Moazzem, Research Director at the Centre for Policy Dialogue (CPD), stated, “The 19% growth is largely due to intra-company loans. Considering Bangladesh’s potential as an emerging economy, this level of investment is insufficient. Low equity capital reflects weaknesses in the domestic business environment. Political stability, elections, and investor-friendly conditions are crucial.”
BIDA acknowledged the growth, emphasizing Bangladesh’s resilience post-political upheaval, with FDI rising 19.13%, contrary to global trends where investment typically falls after major political changes.
Country-Wise FDI Visits
Since taking office, Ashik traveled to the US, Japan, UK, Qatar, China, Malaysia, Turkey, and Korea. In January he visited the US, February Japan, March UK, and April Qatar. No investment came from Qatar, and two countries saw net FDI decline.
New Investments Remain Low Despite Overall FDI Growth
While overall FDI increased, equity investment fell by 16.90%, suggesting new investors remain hesitant. Experts urge policy and structural reforms, citing complex and time-consuming procedures as a deterrent.
In February, Ashik led the “Invest Bangladesh Roadshow 2025” in Tokyo and Osaka, with FDI from Japan rising 17.05%. In April, he visited Doha, Qatar, which was not a major FDI contributor. In August, he attended the Bangladesh-Malaysia Business Forum in Kuala Lumpur, explaining incentives in Bangladesh’s special economic zones. FDI from Malaysia increased by 49.21% in 2024-25.
In October, a BIDA-led high-level delegation visited Turkey, participating in multiple G2B meetings. Net FDI from Turkey fell 74.95%. A similar delegation visited Korea in late October, with FDI declining 12.33%.
