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One-person company

Ministry to reduce minimum paid-up capital to Tk 0.5m

Tipu Munshi tells BUILD

February 16, 2021 00:00:00

BUILD Chairperson Abul Kasem Khan paid a courtsy call on Commerce Minister Tipu Munshi at his office in the city on Monday

Commerce Minister Tipu Minshi has said his ministry will work to reduce the required minimum paid-up capital for one-person companies (OPCs) to Tk 0.5 million from Tk 2.5 million in the Companies Act (2nd Amendment) Bill, 2020.

This initiative is aimed at allowing more small businesses to register, thus enabling their formalization, he said during a meeting with Business Initiative Leading Development (BUILD) Chairperson Abul Kasem Khan at the ministry's office in the city on Monday, says a press statement.

Asif Ibrahim, Chairman of Chittagong Stock Exchange and former chairman of BUILD, and BUILD CEO Ferdaus Ara Begum were also present at the meeting.

The minister also emphasised the need for introducing trade licences for e-commerce businesses.

Mentioning that e-commerce should be automatically recognised as enterprises, he said this high-potential sector is not getting promoted as expected since they need trade licences.

Tipu Munshi also said his ministry was already working with the local government ministry to speed up the process to introduce trade licence for the industry so that e-commerce businesses could avail access to finance as well as other opportunities.

Stressing the importance of enabling business environment in Bangladesh, he stated that the commerce ministry is always ready to extend all forms of logistical support to make the private sector vibrant.

He also appreciated the role of the private sector in creating a platform like BUILD for evidence-based public-private dialogue between the government and trade and industry to create a business-friendly environment through policy reforms.

BUILD Chairperson Abul Kasem Khan said, "Our export is heavily concentrated on one sector. Other sectors like leather and leather goods, plastic and light engineering merit greater policy attention for diversifying the export basket."

He also said all the non-RMG sectors immediately need bonded warehouse facilities alongside other policy benefits.

Mr Khan informed that Vietnam established Global Distribution Centre managed by privately owned licensed operating firms, from where entrepreneurs are getting all raw materials for exports from a single source.

He said supply side management is the primary requirement for attracting FDI.

Large companies need confidence on supply side management before making the investment decision in a country, he added.

The BUILD chairperson thanked the minister for Free Trade Agreement (FTA) with Bhutan.

Terming this as a good beginning, he put emphasis on South-South Collaboration.

In this connection, he stressed the need for ensuring duty-free access to the Chinese market.

For export diversification, he called for greater focus on jute and bamboo.

He also mentioned the importance of logistic and infrastructure development and said that BUILD has formed a new committee in that respect.

Referring to engaging BUILD in export-related research, he urged inclusion of BUILD as a member of the National Export Committee headed by the Prime Minister. BUILD will soon send a letter to the commerce ministry in this regard.

The BUILD chairperson informed that BUILD is working on three export-sector roadmaps. Once the roadmaps are prepared, national level dialogues will be organised to disseminate the main points.

He sought support from the commerce ministry in this regard.

Asif Ibrahim, former chairman of BUILD, spoke about the situation of RMG sector and thanked the government for extending the provision for allowing utilization declaration (UD) through the BGMEA, which has helped businesses carry out export-oriented production efficiently without facing bureaucratic hassles.

With regard to raising coverage of small businesses as OPCs, he suggested allowing tax benefits and tax exemption for at least three years to encourage them to register under the Companies Act.

BUILD CEO Ferdaus Ara Begum said Bangladesh and Vietnam started export diversification journey almost at the same time in 1990. "However, Vietnam has made tremendous progress. If its RMG sector is adversely affected, only 14 per cent of its export would be impacted. Export of Vietnam stood at $263.45 billion in 2019, out of which RMG export was $39 billion. On the other hand, a different picture has emerged in Bangladesh where RMG singularly contributes about 85 percent to exports."

She also said BUILD would seek supports from the commerce ministry for policy advocacy for Medical and Personal Protective Equipment (MPPE) products and identify gaps in the list of standards developed by BSTI in terms of export potential.

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