Can Invest Bangladesh live up to the expectations?

On August 23, Invest Bangladesh, formed by merging the Bangladesh Investment Development Authority (BIDA), the Bangladesh Economic Zones Authority (BEZA) and the Public-Private Partnership Authority (PPPA), formally started its journey. This is expected to bring an end to the ordeal investors trying to build a factory in Bangladesh had to bear for years, walking between four offices, each with its own portal, paperwork, and unwritten rules. Invest Bangladesh undoubtedly opened a new door, but what services can be received by walking through it remains to be seen.

In 2016, when BIDA was born from a similar merger of the Board of Investment and Privatisation Commission, it carried the same promise of simplifying the investment process. Yet, there has been little significant improvement in the country’s investment and privatisation landscape. This time the law—Invest Bangladesh Act, 2026—has sharper teeth: one digital platform, binding deadlines for land, utilities, customs, and environmental approval. This is real progress, but it must be noted that a law creates the possibility of change, not the change itself. Culture does that, and so does whoever’s in charge.

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So, what can this authority actually do? Replace three doors with one. Attach legal weight to deadlines that used to be mere proposals. Place one accountable body, answering directly to the prime minister, in charge. However, what Invest Bangladesh cannot do is fix a banking sector where non-performing loans have been over 30 percent of all disbursed loans as of the end of March this year. Neither can it lift a tax-to-GDP ratio stuck under 7 percent. A better portal doesn’t change what investors face once the paperwork’s completed: the same fragile banks and weak infrastructure.

There is one more figure worth considering. In 2025, FDI rose to $1.78 billion, up 45 percent from the previous year, but, per the UN Conference on Trade and Development (UNCTAD), most of that rebound came from reinvested earnings—companies already here plowing profits back in, not fresh capital from new investors. In other words, existing investors stayed; new ones mostly didn’t.

Besides, a 2023 World Bank paper on investment agencies found that the more mandates an agency carries, the worse it performs at attracting FDI. Narrowly focused agencies outperform ones jumping back and forth from zone management to PPP negotiations to domestic industrial policy.

Bangladesh should weigh this carefully. BEZA has years of ground-level expertise running economic zones; the PPP Authority has built a $41 billion pipeline, and investors notice when the institution they negotiated with changes overnight. The smarter move is letting these bodies keep their identity and staff under the new umbrella, rather than flattening everyone into one generic structure. As has been noted in an article published by the Organisation for Economic Co-operation and Development (OECD), agencies cope best when mandates match their actual skills and resources.

Rewriting investment laws is not enough, as is evident in Tanzania’s case. It has rewritten its investment law three times in 1997, 2022, and again in 2025 and each rewrite came with identical promises. Yet, the US State Department’s reporting shows the Tanzania Revenue Authority routinely refuses to honour incentives approved by the Tanzania Investment Centre. One office says yes, another says no, and investments stall for years. The law kept changing; the institutions never did.

Rwanda took a different route. In 2008, eight government bodies merged into the Rwanda Development Board, reporting straight to the president. Within a decade, Rwanda ranked 29th among 190 countries on ease of doing business. The merger wasn’t the magic ingredient; an anti-corruption drive, presidential accountability, competitive pay, and a stable mandate were.

These cases provide one lesson: structure does matter, but governance decides the outcome. Therefore, what Invest Bangladesh needs to do is hire on merit, not connections. If leadership is drawn from the same patronage networks that shaped Bangladeshi public institutions for decades, no legislation will change investor expectations. Second, enforce deadlines from day one. BIDA’s 2016 attempt partly failed because it couldn’t enforce its own timelines. This law hands real power; it must be used visibly, before old habits return.

Third, cut the number of approvals, don’t just move them online. Twenty sign-offs online are still 20 sign-offs; the queue just moves to a screen. Fourth, fix the macroeconomic backdrop. The bad-loan crisis and thin tax base aren’t the new authority’s job to fix, but the strength of these factors is what brings investors in.

Manufacturers diversifying from China is an opportunity for Bangladesh. But readiness must be demonstrated, not announced. Rwanda didn’t stop at signing a law; it kept doing the unglamorous work for years. Bangladesh now has a new law and an authority. How the authority is governed using that law is what matters most now.

Rupayan Sarker is executive engineer in the Technology Division at the Bangladesh Small and Cottage Industries Corporation under the Ministry of Industries.

Views expressed in this article are the author's own. 

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