Prospects and Challenges of Japanese FDI in Bangladesh

Due to the increase in production costs in China and ASEAN countries,
Bangladesh has become one of the potential destinations for Japanese FDI. This case study has investigated the prospects and challenges of Japanese FDI in Bangladesh. Analysing primary and secondary data, this qualitative research found that Bangladesh can be a popular destination for Japanese investment, mainly because of its low production costs, growing middle class, and geo-strategic location. However, Japanese companies face several challenges, including VAT, tax, customs and port clearance, remittance and foreign currency conversion rules, and unskilled human resources. Although Japanese investors face multiple challenges, the number of Japanese companies is increasing. This article suggests that Bangladesh can attract more Japanese FDI by providing special facilities and protection to existing Japanese companies, which can have a snowball effect in terms of attracting new investors from Japan. This research contributes to Japanese business, economics, and development studies literature.