Foreign-owned firms will not get new licence

The government has the barred companies with full foreign ownership from obtaining fresh licence for freight forwarding (FF) business in a bid to facilitate the local companies.
Only joint venture and local companies will be able to obtain new licence for freight forwarding business from the current fiscal year (FY), 2015-16, customs rules said.
However, the existing cent per cent foreign-owned companies involved in the business will not come under the new rules. They will be free to renew their respective licences to continue operations.
The Freight Forwarders (Licensing and Operating) Rules 2008 have been amended in the budget for the current FY.
With the amendments, fully-owned foreign companies are not getting new freight forwarding licence from July 1.
Besides, the portions of share in joint venture companies have also been re-fixed at 40 per cent and 60 per cent for foreign entrepreneurs and local entrepreneurs respectively for obtaining licence.
Until 2014-15, required portions of share for foreign and local entrepreneurs in a company were 49 per cent and 51 per cent respectively.
Other amendments made to the rules include increase in tenure of licence for renewal to four years from two years, an enlistment fee of Tk 10,000, and allowing investment of security deposit amounting to Tk 3,00,000 in savings certificates instead of bank guarantee.
A senior customs official said freight forwarding rules have been amended in line with the clearing and forwarding (C&F) and shipping business licence rules.
"Under the C&F and shipping rules, fully foreign-owned companies cannot invest in C&F and shipping businesses. The customs rules have been amended to frame similar rules for the businesses of same nature."
Local businesses claim that they have adequate capacity to handle the country's freight forwarding business, he said.
"Under the new amendments, a freight forwarder licensee needs to pay Tk 10,000 fee, if it wants to operate in other customs houses, not mentioned in the licence," he added.
Mahbubul Anam, president of Bangladesh Freight Forwarders Association (BFFA), hailed the amendments to the freight forwarding rules.
The changes were needed, as shipping and C&F rules have also been revised, said Mr Anam, also the managing director (MD) of Expo Freight Bangladesh.
The freight forwarding business is a low-asset based service-industry, through which the country cannot reap the benefit of Foreign Direct Investment (FDI), he also said.
"There is no requirement of logistics. Cargo movement is the main service of freight forwarding business," he opined.
Currently, less than 10 are fully foreign-owned freight forwarding companies out of its 900 members.
Bangladesh Indenting Agents Association (BIAA) president MS Siddiqui, however, termed the new move of restricting the fully-owned foreign companies in the business as 'suicidal', considering the government's efforts to attract FDI.
"Foreign companies usually invest in a country following successful operations of small trading companies. The amendments will give a wrong message to the foreign investors," he concluded.   
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