The Covid-19 episode is changing the world rapidly. New economic and corporate chemistries are ossifying to supplement the future needs. Many European companies are moving their factories out of China, Japan is also following the same footsteps. At the same time, countries like Vietnam Indonesia, India and Myanmar are placing lucrative investment offers to those companies. Bangladesh, being the most suitable investment platform, is also trying to turn the fury of Covid-19 into blessings by attracting foreign investors.
On 10 May 2020, amid the corona virus outbreak, Bangladesh Government has introduced the One Stop Service (Bangladesh Investment Development Authority) Rules, 2020. The 2020 Rules was enacted by dint of the One Stop Service Act, 2018 (OSSA), an Act aimed to ensure expeditious implementation of local and foreign investment projects by providing necessary services, aids, incentives, licences, permissions, approvals within stipulated time and against one application. However, the Act itself did not frame the time schedule and hence, left the Act non-effective.
The demand for expeditious and presumable file processing period in relation to foreign investment formalities was pressing the government for the country’s greater interest. It is commonly said by the foreign investors that they have to face three governments in Bangladesh i.e. the Bangladesh Bank, Commerce Ministry and the NBR! Some of my foreign clients have also had bitter experiences after applying for necessary permissions to do business in Bangladesh. While Bangladesh was trying to attract foreign investments by offering different incentives and facilities; at the same time, irregularities, complex official procedure and unnecessary delay in file processing were some of the common allegations brought by the foreign investors against our system.
The 2020 Rules, nevertheless, will be a game changer to recover foreign investors’ trust in our system. The 2018 Act requires the government to establish as many ‘One Point Service Centre’ all over the country as are necessary to provide smooth and professional services to the investors while setting up their business in Bangladesh. Bangladesh Investment Development Authority (BIDA), Bangladesh Economic Zone Authority (BEZA), Bangladesh Export Processing Zone Authority (BEPZA) and Bangladesh Hi-Tech Park Authority will be the Central One Stop Service Authorities, while, as per demand, there will be many Divisional and/or Local One Stop Service Authorities.
The most interesting part of this 2018 Act is that investors are no longer required to file separate applications to separate authorities for obtaining separate licenses. One duly filed application to any focal point (the person authorized to deal with such application) with all necessary documents is sufficient to obtain all the licenses, permissions, approvals and incentives. In case, any other existing law requires the investor to file separate application for any permission or license that falls within the scope of this Act, that law should be deemed to be ineffective to its extend of conflict with the 2018 Act.
The 2020 Rules has supplemented the 2018 Act by stipulating specific time frame for issuing Trade Licence i.e. within 1 day (Working Day). It also provides time slot for completing formalities with the Registrar of Joint Stock Companies (RJSC). For example- Company Name Clearance or Company incorporation or Certificate of Commencement of Business is to be issued within 1 day, Approval of Articles of Association (AOA) or Memorandum of Association (MOA): 3 days, Share Transfer or amendment of AOA/MOA or Change of Directors: 7 days.
The Rules has also emphasized on BIDA’s services. Industry Registration or Visa recommendation or Import Permit recommendation or License for Importing Capital Machineries or any Amendment to registration certificates is made compulsory to be issues within 1 day. Permission for opening Branch/Liaison offices can now be obtained within 15 days, while most of the BIDA’s Visa Processing services and foreign remittance repatriation approvals are made mandatory to be provided within 7 days. The uncertainty of time in providing security reports has also been removed by making it mandatory to provide SB report for Visa within 21 days, while SB and NSI security clearances is to be issued within 30 days and 3 days respectively.
It is not possible to cover every single head in this article, however, time frame has been fixed for issuing Import-Export licenses, Land Acquisition& Land Registration, Environment & Factory related licences, National Board of Revenue (NBR) governed formalities, BGMEA utilization declaration, and Bangladesh Bank & Stock Exchange concerned formalities.
To avail the facilities of OSS, the investor may either apply online through OSS portal or file manual application. The application must contain, along with necessary government fee submission proofs, all necessary information and documents required for obtaining all the desired licences or approvals. Requirements may be verified from the OSS portal or by direct consultation with Focal Points and/or service authority. Time counting will start from the next working day of submission of the application.
The combination of the 2018 Act and the 2020 Rules is very unique, as it sets requirement for initiating disciplinary action against the focal point or authority who has failed to dispose of any application within stipulated time frame. Any such failure due to negligence, irregularity and/or non-cooperation will be treated as the professional incompetence and misconduct of the concerned officer.
In case of online applications, automatic computer generated notification will be sent to the head of the Authority. On the other hand, failure to deal with manual applications can be taken into consideration on the basis of information provided by the applicant or from the official evaluation reports submitted quarterly and half-yearly. Nevertheless, it is unprecedented in Bangladesh that government officials are being held liable for their failure to provide services within particular time frame and hence, I consider this 2020 Rules as an instrument of new hope for Bangladesh.
Author: Barrister Shaleh Akram Somrat