The establishment of new industries and factories has ceased, employment generation has stagnated, and entrepreneurs are under mounting strain from elevated bank interest rates. Meanwhile, the overall law and order situation continues to deteriorate.
As a result, confidence among investors remains low. At a time when domestic investment is in the doldrums, Bangladeshi investment abroad is showing a sharp rise. Overseas investment by Bangladeshis has increased by more than 12 per cent. Even in the first three months of the current financial year, the growth in net investment has exceeded 829 per cent.
According to Bangladesh Bank data, a large portion of this capital is flowing to a neighbouring country. Economists and sector insiders say that due to political uncertainty at home and a prolonged dollar shortage, entrepreneurs are seeking safer havens abroad amid a lack of confidence. Others believe that money previously siphoned out of the country is now being channelled into overseas investments in an attempt to gain legitimacy. However, some analysts argue that if profits from legally made overseas investments are repatriated, it could ultimately benefit the country.
The President of the American Chamber of Commerce in Bangladesh (AmCham), Syed Ershad Ahmed, said on Monday: “Businesspeople will do business. They cannot do anything else. If they do not find a favourable environment and opportunities at home, they will look for profit elsewhere and invest abroad. Overseas investment creates employment, but if dividends are not brought back, it is a warning sign for the economy.”
Commenting on the domestic investment climate, the AmCham president said: “Businesspeople are observing the situation—what happens, whether political stability returns. Political stability is the most important factor for investment. I know that investments by several companies are on hold. They are not getting access to affordable funds.”
Many of those who have invested abroad through legal channels are involved in export-oriented businesses, including the ready-made garment sector. Former BGMEA director and Additional Managing Director of Denim Expert Limited, Md Mohiuddin Rubel, believes that ongoing instability in the garment sector across various countries has prompted capable investors to move abroad. He said: “Those with large investments in this sector are now thinking that instead of facing complete risk at home, they should place their operations where costs are lower and certainty is higher, so that if problems arise domestically, they can still meet buyers’ demands in other ways. The problems affecting domestic investment should be addressed on a priority basis.”
Where and how much is being invested
An analysis of the latest Bangladesh Bank statistics shows that by the end of September 2025, total overseas investment by Bangladeshis stood at US$362.1 million. At the end of December 2024, the figure was US$322.2 million—an increase of US$39.9 million in just nine months.
Historical data show that until the 2016–17 financial year, Bangladeshi overseas investment amounted to only US$40–50 million. From 2021 onwards, the picture began to change rapidly. In 2022, it crossed US$200 million, and in 2024 it surpassed the US$300 million mark. In terms of net investment, Bangladeshis invested US$15.8 million abroad in the first three months (July–September) of the current 2025–26 financial year, compared with just US$1.7 million during the same period last year.
India accounts for the largest share of these overseas investments, with Bangladeshi investment there amounting to US$105.3 million. The United Kingdom ranks second with US$102.1 million. Other destinations include Hong Kong (US$79.8 million), the United Arab Emirates (US$61.3 million) and Malaysia (US$12 million). Significant amounts have also gone to countries such as Kenya, Singapore, Ireland and Ethiopia.
It is learnt that each month, banks report details of their domestic and foreign transactions, deposits and investments to Bangladesh Bank, which maintains comprehensive records based on these submissions. These records show that Bangladeshi investment in India has continued to rise even without new investment approvals.
A central bank official said that investments made through branches of Sonali Bank and AB Bank in India are recorded as foreign investments, although the banks have not made any new investments from Bangladesh during this period. In addition, Summit and PRAN Group have two small investments in India, but neither has invested there since 5 August. Transfers between multiple overseas accounts can also inflate foreign investment figures. Moreover, money siphoned off to various countries over the past 15 years by individuals linked to the Awami League is now reportedly being moved to India.
According to the latest Bangladesh Bank data, as of 1 July 2025 the central bank approved the formation of five companies by three Bangladeshi firms abroad with a total investment of US$2.1 million. Among them, Square Pharmaceuticals will open a company in the UAE named Square Pharmaceuticals UAE Limited, investing US$1 million from its ERQ account. Karim Textile will invest US$500,000 in the UAE to establish Karim Resources UAE. Software firm Brain Station-23 Limited has received approval to set up three companies abroad, investing US$200,000 in each— in Malaysia, the UAE and the Netherlands.
What lies behind the sectoral figures
Most of this investment has not gone into establishing industries. Of the total, US$314.1 million has been invested in financial institutions. The mining sector received US$54.1 million, while manufacturing industries attracted just US$4.8 million.
Business leaders’ lament: Doing business at home is difficult
A former vice-president of BGMEA said: “We want to invest in the country. But there is no assurance of energy supply. Bank interest rates have now reached 15–16 per cent. On top of that, there is labour unrest and political volatility. In contrast, countries like Ethiopia or Vietnam are inviting us to set up factories. Some large groups are opening subsidiaries abroad to reduce risk, as the cost of doing business and uncertainty are both lower there.”
Economists warn that while private sector credit growth at home remains below 6 per cent, the rise in overseas investment is a ‘red flag’ for the economy. It indicates a lack of confidence among domestic entrepreneurs. If this money has gone abroad without central bank approval through legal channels, it amounts to nothing less than money laundering.
Employment at risk
Private sector credit growth, which once stood at 15–16 per cent, has now fallen to 6.58 per cent. Due to stagnant investment, new employment opportunities are not being created. Analysts say that when capital leaves the country, it takes not only money but also talent and potential with it. If investment continues to flow into competitor countries such as India, Bangladesh’s export markets and domestic industries could face an existential threat in the long run. Failure to curb capital flight now could bring the economy to a standstill.
However, some experts offer a different view. They argue that following the recent change in government, many politically influential individuals have left the country, and money previously laundered abroad is now being presented as foreign investment.
More overseas investments
Several leading Bangladeshi companies are steadily expanding their overseas footprint. Pharmaceutical firms Square, Beximco and Incepta have investments in countries including Kenya, Saudi Arabia and the United States. Steelmaker BSRM, shipbuilding group Akij, and energy companies Summit and Mobil Jamuna also have operations abroad. In addition, DBL, PRAN, AIM Global, Takeout and others have received approval to invest in countries such as Estonia, India and Sri Lanka.
Bangladesh Bank Executive Director and spokesperson Arif Hossain Khan said: “No major overseas investments have been formally approved by the central bank recently. We are examining how this spike in the statistics occurred. In particular, we will verify the sources of the large investments seen in financial companies. Strict action will be taken if money is found to have been sent abroad illegally.”
Dr Iftekharuzzaman, Executive Director of Transparency International Bangladesh (TIB), said that any overseas investment without specific approval from Bangladesh Bank constitutes money laundering. Following the change in government, many politically influential individuals are shifting funds abroad and presenting them as investments. Identifying them and bringing them under the law is essential.
Call for stronger monitoring to bring investment back home
Masrur Riaz, Chairman and CEO of private research organisation Policy Exchange Bangladesh, said that due to political uncertainty, deteriorating law and order, gas and power shortages, and high borrowing costs, domestic investment has declined and businesspeople are adopting a ‘wait and see’ approach. Those investing abroad, he said, may already have had a presence in those markets and are now expanding to meet demand and consolidate their businesses further overseas.
Bd-pratidin English/ ANI
