Preparing to export
Consultation and bespoke research
Visit: https://www.great.gov.uk/uk/ for guidance on how to research overseas markets as well as a range of other important issues for exporters.
Researching the Bangladesh market
You need to research market entry requirements using both desk research and market visits.
You need to determine whether:
there is a market for your product or service
your pricing is competitive
to adapt your business model
The questions listed below should help you to focus your thoughts. Your answers to them will highlight areas for further research and also suggest a way forward that is right for your company. You may then want to use this as a basis for developing a formal Bangladesh strategy, although this may not be necessary or appropriate for all companies:
It is unlikely that you will have the answers to all these questions at the outset and these ‘knowledge gaps’ could form the basis for further research and investigation. Some of these questions will require quantitative research in your sector, while others involve more contextual and cultural considerations.
Talking to other people in your industry and regularly visiting Bangladesh will give you access to the most current advice, and such experience can often lead to new insights and form the basis for further research.
There is also some useful guidance on developing a marketing strategy, customer segmentation, competitor and SWOT analysis etc. at: https://www.great.gov.uk/uk/ – and the IOE&IT and British Chamber can help too.
There may be trade shows held in Bangladesh each year, which could be useful to test product viability in the market. The Department for International Trade (DIT) Tradeshow Access Programme at: https://www.gov.uk/guidance/tradeshow-access-programme provides funding in the form of grants for eligible businesses to attend overseas trade shows.
The funding helps your business gain:
experience in attending and getting the most from overseas trade shows
advice and support from trade experts
Visit the DIT events portal at: https://events.trade.gov.uk/ to find upcoming events and missions.
Find out more about marketing your goods and services for Bangladesh at: https://www.great.gov.uk/uk/.
Contact the DIT team in Bangladesh at: https://www.gov.uk/world/organisations/department-for-international-trade-bangladesh#contact-us for events and company launches at the British High Commission.
Visit: www.great.gov.uk/uk/ for guidance on how to research overseas markets as well as a range of other important issues for exporters.
Consult a local lawyer to avoid costly mistakes and ensure you start out in the way that is best suited to your sector of activity. See: https://www.gov.uk/government/publications/bangladesh-list-of-lawyers.
British companies can approach the Bangladesh market in several ways including:
set up an office
appoint an agent or distributor
You can set up a business in Bangladesh within 11 days.
Direct export to Bangladesh
UK companies can consider direct export to Bangladesh by contacting appropriate end users. You might consider this as a first step before appointing a partner in Bangladesh.
Setting up a corporate or non-corporate entity in Bangladesh
You can establish an office to sell products and equipment direct to the end user or consumer. Offices can also be set up on a registered joint venture basis with a Bangladeshi trading company.
See the Bangladesh Investment Development Authority (BIDA) for full procedures for establishing a business, at: http://www.boi.gov.bd/site/page/ad10fa6e-128d-41c2-aee4-255a0a3cee14/Step-by-Step-Procedure.
Consult legal professionals to avoid costly mistakes and ensure you start out in the way that is best suited to your sector of activity. See: https://www.gov.uk/government/publications/bangladesh-list-of-lawyers.
Local representation in Bangladesh
You should have a local representative either on a commission basis or as an agent or distributor, particularly if you intend to export directly. A local partner can deal with Bangladeshi bureaucracy and advise on the best type of advertising. An agent is allowed to participate in international tenders on behalf of their foreign principle. Dhaka-based agents should be able to cover all of Bangladesh.
Local agents may either have an Import Registration Certificate (IRC) or a Commercial Trade Registration Certificate (CTRC). The first category is suitable for small-scale vendors and the latter for medium/large scale companies. The 1972 Contract Act details the rights and liabilities of an agent and also of the principal.
If you use an agent, you will not need to register with the Board of Investment (BOI) as there is no need for a licence or import permit, and no permission is required for outward remittance of sales proceeds through the Central Bank of Bangladesh (BB). There is also no need for interaction with the National Board of Revenue (NBR) regarding customs duties, VAT or other fees.
If you do choose this route into the market check contracts carefully as agents can work for several companies. You should have exclusive distribution rights.
Most agency agreements have a clause permitting either party to give due notice of termination. It is prudent to include a contract clause which agrees to allow an independent arbitrator outside of Bangladesh to settle any disputes between parties.
The Bangladesh International Arbitration Centre (BIAC) was launched in 2011, visit: http://www.biac.org.bd/. This is Bangladesh’s first arbitration centre for the settlement of commercial disputes.
DIT’s trade specialists can help you identify local representatives for your products in Bangladesh. See: https://www.gov.uk/overseas-customers-export-opportunities.
If you want to establish a business relationship that goes beyond exporting, you will need to carry out further research. A thorough evaluation of your potential partner may be time consuming and expensive, but doing so will greatly reduce the risk of serious problems in the future.
Establishing a franchise in Bangladesh
Franchising is becoming increasingly popular in Bangladesh, with a sizeable percentage of young people ready to spend on food and beverages.
There are no regulations barring franchise operations and growing access to global supply chains has improved product quality and reliability.
Visit the international section of the British Franchise Association at: http://www.thebfa.org/international, for more information on franchising.
Online selling to Bangladesh
To sell online in Bangladesh you need to localise your website or use an online marketplace.
There are no laws in Bangladesh regulating or prohibiting direct marketing.
See DIT’s E-Exporting programme details at: https://www.gov.uk/guidance/e-exporting, which can help you export your products to Bangladesh.
Also check out online marketplaces in Bangladesh at: https://selling-online-overseas.export.great.gov.uk/, where DIT has negotiated listings at better-than-commercial rates.
You should conduct due diligence checks once you have chosen your method of entry into the market.
[Source – DIT/ gov.uk]
Getting finance to fulfil an export contract to Bangladesh
Globally, Bangladesh ranks 159th out of 190 economies in the World Bank’s “Doing Business – Ease of Getting Credit” report 2018. See: http://www.doingbusiness.org/rankings.
Schemes are available to UK companies selling products and services to Bangladesh to make it easier to fulfil an export contract and grow your business. Contact your bank or specialist financial organisations for assistance.
UK Export Finance (UKEF) has significant risk capacity to support exports to Bangladesh. See: https://www.gov.uk/guidance/country-cover-policy-and-indicators#bangladesh.
Contact one of UKEF’s Export Finance Advisers at: https://www.gov.uk/government/publications/find-an-export-finance-manager, for free and impartial advice on your finance options.
Getting paid in Bangladesh
You may wish to talk to a specialist about finance, including how to get paid in Bangladesh. This could be a bank, an accountant or you can contact the DIT team in Bangladesh at: https://www.gov.uk/world/organisations/department-for-international-trade-bangladesh#contact-us, to help you find a local financial adviser.
Your contract should always clearly state the terms for delivery and payment of goods and services. If there is any dispute you will need to go through the Bangladesh legal system for resolution, which can be extremely slow, bureaucratic and expensive.
You should use secure terms of payment in Bangladesh through a Letter of Credit (LC) or a Documentary Letter of Credit via your bank.
comments powered by Disqus