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HomeTechThe Swiss Eyes FDIs in Bangladesh’s Technology Sectors

The Swiss Eyes FDIs in Bangladesh’s Technology Sectors

Switzerland pledges to explore bilateral trade and foreign direct investment with Bangladesh at the Department of Foreign Affairs Bern Switzerland this month.

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Switzerland pledges to explore bilateral trade and foreign direct investment with Bangladesh at the Department of Foreign Affairs Bern Switzerland.

During the latest round of political consultations between the Ministry of Foreign Affairs of Bangladesh and the Federal Department of Foreign Affairs (FDFA) in Bern Switzerland, the latter expressed interest in FDI in Bangladesh’s innovation and tech sector.

Foreign Secretary (Bilateral-East and West) Ambassador Dr Md Nazrul Islam and Ambassador Heinrich Schellenberg, Head of the Asia Pacific Division of FDFA led the respective sides during the roundtable in May 2024.

During the consultations, a representative from the Ministry of Foreign Affairs office says a broad range of bilateral relations between the two friendly countries was discussed, including issues relating to trade and investment, development cooperation in knowledge enhancement and SMEs development, cooperation in ICT and cyber security as well as mutual legal assistance, and humanitarian aid for the forcibly displaced Rohingyas.

Several multilateral issues of mutual interest such as overview of the UN system, UN Security Council, human rights, sustainable development, and climate change were also discussed.

Both Bangladesh and Switzerland also exchanged their views on regional developments in South Asia and Europe, and global affairs.

On the topic of growth and funding in the tech sector, in early May, Bangladesh’s tech entrepreneurs called on the Government to extend the tax holiday till 2041.

The Bangladesh Association of Software and Information Services Team Leader Mustafa Fafiqul Islam Duke says that this is necessary to realise the Smart Bangladesh vision.

“Tax exemption should be ensured until 2041 in order to save the artisans and the emerging information technology sector of building Smart Bangladesh,” says Duke.

The government’s 13-year tax exemption for these digital services is set to expire on 30 June, 2024 as per the prescription of the IMF.

“The technology sector has been kept in the dark about policymaking. However, I have spoken to senior officials of the IMF and learned that they have not directly given any opinion on the tax holiday in the technology sector as such. We want to hold a roundtable with IMF and the government to clarify the issue. If we stop patronizing the technology sector at this stage, we will lag behind. If the tax exemption is stopped, the government will get only four to five billion Taka as revenue, and this decision may sabotage the enter technology golden goose era. If the golden goose of the technology sector dies at a nascent stage, the next promising sector of this country will die,” says Duke.

Referring to the success of the garment industry, Duke says that this sector is now proving positive results due to policy support from forty years prior and argues that similar policies will help boost the tech sector too.

“The technology sector can create employment for around 2.5 million people in the next seventeen years if the government provides a tax holiday. The annual turnover for salary in the technology sector will be TK1.2 trillion per year with an average Tk 50,000 monthly salary of 2 million people. NBR would be able to collect 25 percent income tax from these knowledge workers, the quantum can be in tune of Tk 30,000 crore from the Technology sector. The tech sector can be another example like RMG to fetch more foreign currencies in the next decade if entrepreneurs get policy support now,” says Duke.

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