A land blessed with the beauty of lush, lime green paddy fields and the hidden trinkets of natural wonder, Bangladesh now lingers on the edge of great industrious promises; Special Economic Zones.
What Is A Special Economic Zone?
A Special Economic Zone (SEZ) is an industrial establishment where business and trade laws are different from that of rest of the country. These economic zones are created to attract foreign direct investment (FDIs). SEZs are vital when it comes to the economic development of any country. In 2010, under the Bangladesh Economic Zones Act, a centralized economic zones authority of Bangladesh was created that is responsible for establishing and managing SEZs, known as Bangladesh Economic Zone Authority (BEZA).
BEZA has already allotted a substantial amount of land under a G2G (government-to-government) arrangement. The establishment has already leased a total of 76 land units of economic zones out of 100 and has plans for extension over the next 14 years. Reports suggest that foreign investors’ interest has been on the rise, which indicates the emerging importance of Bangladesh’s strategic and geographical location.
Four SEZs have already been selected by BEZA exclusively for Japanese, Chinese and Indian investors. The zones have been built in the arrangement where the Bangladesh government will have 30% equity share while 70% will be retained by foreign investors. This proves to be a great opportunity for developers of Bangladesh to build upon such prospective establishments and magnify the industrial real estate sector of the country.
Reasons Why Economic Zones Can Benefit Real Estate of Bangladesh
- Economic Zones are established for trade and are teeming with foreign investment. Around such economic zones, various industries will continue to grow. Hence, over time, infrastructure will also develop. When foreign companies from Korea, Japan or Europe are attracted to come and invest, real estate, particularly housing facilities, will need to be developed around such zones.
- Establishment of economic zones around Bangladesh will also benefit the people working in such areas. People employed in such zones will require housing. Economic zones operate on different economic laws and are a hub of high investment, meaning people employed in such zones could possibly have high remuneration. This provides them with outlets to invest gradually in the property market of Bangladesh, providing developers with more incentives to expand housing around economic zones.
- Remittance coming from counties like the UK and Saudi Arabia gives buyers the chance to invest in the local property market of Bangladesh. Specialized economic zones under BEZA will attract a lot of foreign direct investment (FDI) and with nurtured policies, infrastructure and development is expected to grow in respective regions. In light of such infrastructure developments, road connectivity will open up real estate across economic zonal regions. Over time, those specific regions will become a lucrative property market, giving working individuals abroad the option to invest in a new property market outside of Dhaka.
Only time will tell how Bangladesh will mold its internal and external policies to strengthen the foundation of economic zone activity. With that said, big dreams require big steps, and Bangladesh is on the right path in creating fields of gold for a rich, rewarding economy. For the prospects that lay ahead, click here to find out what Commercially Important Person (CIP) Engr. Tanveerul Haque Probal thinks about our real estate and the economy.