FDI Opportunities in Bangladesh’s RMG Sector

The ready-made garment (RMG) sector is not only Bangladesh’s export lifeline — it’s also a beacon for global investment. With rising production costs in China and capacity constraints in Vietnam, global investors are turning their eyes toward foreign investment Bangladesh garments. The sector offers attractive returns, supported by government incentives, a skilled workforce, and fast-growing infrastructure.

Why Bangladesh is a Hotspot for FDI in Garments

Bangladesh is now the second-largest garment exporter globally, with a mature yet still evolving manufacturing base. From factory construction to backward linkage industries (textiles, accessories, logistics), foreign investors see opportunity in every link of the apparel supply chain.

In 2025, the country has witnessed a notable increase in foreign direct investment (FDI) pledges in EPZs (Export Processing Zones), particularly in Chattogram, Dhaka, and Mirsarai Economic Zone. Countries like China, South Korea, India, Germany, and Japan are actively investing in joint ventures and fully-owned RMG factories.

Supporting keywords: FDI RMG Bangladesh, garment investment policy, foreign apparel investors, Bangladesh EPZ growth, textile sector investment.

Incentives for Foreign Investors

1. 100% Foreign Ownership Allowed

Bangladesh allows 100% foreign equity in most sectors, including garments. There are no restrictions on profit repatriation, making it easier for international companies to operate and scale.

2. Tax Exemptions & Duty Benefits

Investors in EPZs enjoy tax holidays (5–10 years), duty-free import of capital machinery, and exemptions from VAT and customs on raw material imports.

3. One-Stop Investment Services

The Bangladesh Investment Development Authority (BIDA) and BEPZA provide digitalized approvals and streamlined permits, minimizing bureaucratic red tape.

4. Affordable Labor and Operational Costs

Bangladesh offers one of the lowest labor costs in the region, complemented by large-scale industrial parks and utility subsidies.

Key Investment Areas in the RMG Sector

• LEED-certified green factories
• Automation and smart manufacturing units
• Backward linkage (spinning, weaving, dyeing)
• Apparel design and product development hubs
• Logistics, packaging, and shipping services

Major Foreign Players in Bangladesh RMG

• Youngone Corporation (South Korea): One of the earliest and largest investors in Bangladesh EPZs.
• TAL Group (Hong Kong): Invested in high-end shirt manufacturing for export to North America.
• Ha-Meem Group (Joint Ventures): Expanding partnerships with European machinery providers to scale digital printing.

Challenges and Risks

• Political instability and policy inconsistency
• Delays in infrastructure development
• Logistics bottlenecks at Chattogram Port
• Energy supply interruptions during peak seasons

However, long-term prospects remain highly positive with new economic zones, deep-sea port plans, and rising ESG compliance.

FAQs

Is 100% foreign investment allowed in Bangladesh’s garment industry?

Yes, foreign investors can fully own garment ventures and repatriate profits without restrictions.

Which countries are investing in Bangladesh’s RMG sector?

China, South Korea, Germany, India, and Japan are leading FDI sources in apparel and textile ventures.

What are the main investment opportunities?

Green factories, digital manufacturing, textile backward linkage, logistics, and innovation centers.

Are there tax benefits for foreign investors?

Yes — tax holidays, VAT exemptions, and duty-free imports are available, especially in EPZs.

What are the key challenges foreign investors face?

Policy inconsistency, infrastructure delays, and logistics challenges — though efforts are ongoing to address these issues.