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Enforcing One Stop Service Rule 2020 to attract foreign investment

The Covid-19 pandemic 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 and 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 jurisdiction, is also trying to turn the fury of this pandemic into blessings by attracting foreign investors.

On 10 May 2020, amid the coronavirus outbreak, the Government of Bangladesh has introduced the One Stop Service (Bangladesh Investment Development Authority) Rule, 2020. The 2020 Rule was enacted by dint of the One Stop Service Act (OSSA), 2018 which aims 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 is yet to frame the time schedule and hence, it is non-effective. Thus, the demand for expeditious and presumable file processing period in relation to foreign investment formalities has been a pressing issue for the Government for a quite a long time.

It is commonly said by the foreign investors that they have to face three Government agencies in Bangladesh i.e. Bangladesh Bank, Commerce Ministry and NBR. Foreign investors often face 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 the system. The 2020 Rule, nevertheless, is hoped to be a catalyst to regain foreign investors’ trust in the system.

The 2018 Act requires the Government to establish as many ‘One Point Service Centres’ all over the country as they are necessary to provide smooth and professional services to the investors while setting up their businesses 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 necessity, there will be Divisional and/or Local One Stop Service Authorities too.

According to the 2018 Act, investors are no longer required to file separate applications to separate authorities for obtaining separate licences. A single duly filed application to any focal point (the person authorised to deal with such application) with all necessary documents is sufficient to obtain all the licences, permissions, approvals and incentives. In case, any other existing law requires the investor to file separate application for any permission or licence that falls within the scope of this Act, that law should be deemed to be ineffective to its extent of conflict with the 2018 Act.

The 2020 Rule has supplemented the 2018 Act by stipulating specific time frame for issuing Trade Licence i.e. within one 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 one day; Approval of Articles of Association (AOA) or Memorandum of Association (MOA) within three days; Share Transfer or amendment of AOA/MOA or Change of Directors within seven days.

The Rule has also emphasised on BIDA’s services. Industry Registration or Visa recommendation or Import Permit recommendation or Licence for Importing Capital Machineries or any amendment to registration certificates is made compulsory to be issued within one 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 seven 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 three days respectively. Time frame has also been fixed for issuing Import-Export Licences, Land Acquisition & Land Registration, Environment & Factory related licences, National Board of Revenue (NBR) governed formalities, BGMEA utilisation 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.

It is mentionable that the 2018 Act along with the 2020 Rule 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 unusual in Bangladesh that the Government officials are being held liable for their failure to provide services within particular time frame, and hence in this context, the 2020 Rule is considered as an instrument of new hope for Bangladesh to attract foreign investments.

The writer is an Advocate, Supreme Court of Bangladesh.

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