Real estate is sturdier than any other sector and has the capability to change the entire fabric of the economy of a country. Some of the largest economies in the world such as Canada and India rely strongly on it. It is one of the most promising sectors in Bangladesh as well. But why so? A closer inspection will reveal that investing in real estate is the safest way to make money. Unlike other sectors, real estate assets don’t depreciate in value over time. As a result, investors all over the world have an affinity to dedicate their money to real estate. But, the fact is, not always do foreign investors become interested in investing their hard-earned money just because of the booming nature of a sector. There are a lot of factors to consider. That being said, here are 3 ways to attract foreign real estate investors in Bangladesh.
Proper regulations
Lack of proper regulations and guidelines can become a hurdle for foreign investors. When real estate investors find something to invest their money in, they expect it to be a smooth experience throughout. But sadly that is not the case in Bangladesh. For an investor to invest in real estate from outside, one must open a joint account first. But, as it turns out, the process is not as easy as they have to face many obstacles along the way. This is mainly because of the foreign exchange control policy of Bangladesh which does not allow foreign loans to be used in real estate.
As a result, it forces foreign investors to limit their investment to a certain amount. Now if we look at the real estate landscape of other countries around the world, the policy for foreign property investments not only maintains strict guidelines, they also offer affordable financing. For instance, in Germany, foreign investors can get a mortgage in any German bank at 1.5-2% interest per annum, which will cover up to 70% of the total property cost. That is why a unified structure within the sector is indispensable to overcome such real estate problems.
Citizenship by investment schemes
Schemes such as this can be really very popular and effective if the goal is to attract foreign real estate investors in Bangladesh. The process is not new and has a proven ability to attract foreign real estate investors. And many countries are actively practicing this. Malta and Cyprus, for instance, have been giving permanent residence permits to foreign investors in exchange for investment.
That said, one must own a local real estate in these countries. If anyone wants to get a permanent residence permit in Cyprus, one has to purchase a property with a value of over 500,000 euros or above 2 million euros (in this case there is no need to invest in other assets). In Malta, the amount is above 350,000 euros or one has to rent a property and pay more than 16,000 euros over five years. However, in Greece, the amount is even lower. One will have to spend above 250,000 euros on a real estate purchase to get a residence permit there making it the most inexpensive way to get a residence permit in the EU.
This kind of exchange program is really effective and the government may think about introducing such schemes to attract foreign real estate investors in Bangladesh as well.
More investment opportunities
Creating more efficient investment opportunities is another great way to attract foreign real estate investors. Other than purchasing a property, there are plenty of ways to invest in real estate. Investing in real estate ETFs (Exchange-Traded Fund) or REITs (Real Estate Investment Trust) companies can be some excellent ways to invest in this sector. Investing in real estate through real estate mutual funds and crowdfunding is also great. But online real estate investment platforms can make investing in real estate really simple and foreign investors can take full advantage of them. More investing opportunities mean more options and investors love that.
Other than these, special economic zones can play a vital role in creating more investment opportunities. Their main objective is to capture the interest of foreign investors. And as most of the investments are real-estate projects, SEZs can become a major real-estate investment arena in Bangladesh.
What is your take on this issue? Are there any other ways worth mentioning here to attract foreign real estate investors to invest in the real estate sector of Bangladesh? Let us know in the comments section below.
2 Comments
Hi
My parents were born in Bangladesh however reside in the UK as British citizens. They own property in Bangladesh and at some point will be inherited by us siblings.
As we were born in the UK and hold British passports do we still have property rights in Bangladesh? And what becomes of our children?
I’m keen to invest in Bangladesh but not sure if I legally can.
Your input would be most appreciated.
Many thanks
Good day, sir.
We have consulted with our in-house legal team to answer your questions:
1. To claim the properties, since your parents are dual citizens, you also need to apply for citizenship and get a Bangladeshi NID/Passport. Otherwise you won’t be entitled to the properties. The process is easy, you just need to talk to the Bangladeshi embassy with documents of your parents holding Bangladeshi citizenship.
2. Yes, it is possible to invest as a British citizen, but you need to take permission from the foreign ministry and show your purposes of investment. In that case, there will be different schemes if taxation for FDIs.
I hope you found the answers helpfull. For any further queries, feel free to contact us.
Thank you