Bangladesh IT and ITES Industry Insights and Investment

Bangladesh IT and ITES Industry Insights and Investment Opportunities

Bangladesh: Country Facts Civilization in the Bengal delta dates back more than 4, 300 years. However, it achieved independence in 1971 experiencing fierce bloodshed and sacrificing three million lives. Father of the Nation, Bangabandhu Sheikh Mujibur Rahman

Bangladesh: Country Facts Standard Time: GMT+6 hours Total Area: 1, 47, 570 sq. km Neighboring Countries: India, Myanmar Capital: Dhaka Total Population: 162. 9 million Median Age : 26. 7 years Life Expectancy: 73. 4 years Ethnic Groups: 98% Bangali, 2% Others Currency: Taka (BDT) Source: UNDP, World Bank, Bangladesh Bureau of Statistics, CIA

Bangladesh: Country Facts In 2018, Bangladesh fulfilled all three eligibility criteria for graduation from the UN’s Least Developed Countries (LDC) list for the first time and is on track for graduation in 2024. Total GDP (FY 2017 -18): GDP per Capita: GDP Growth: US$ 275 billion US$ 1, 754 Total ICT Exports: 7. 28% Human Development Index (HDI) Score: (Rank: 139 out of 188) Total Exports (FY 2017 -18): 0. 57 US$ 34. 85 US$ 800 million Total Imports: US$ 43. 49 billion Inflation Rate: 5. 39% Source: UNDP, World Bank, ICT Division, Bangladesh Bureau of Statistics, CIA Facts

Bangladesh: International Trade Agreements Sl # Name Status 1 Asia-Pacific Trade Agreement Signed and In Effect 2 South Asian Free Trade Area Signed and In Effect 3 Preferential Tariff Arrangement-Group of Eight Developing Countries Signed and In Effect 4 Trade Preferential System of the Organization of the Islamic Conference Signed but not yet In Effect 5 Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) Free Trade Area Negotiations launched 6 Sri Lanka-Bangladesh Free Trade Agreement Negotiations launched 7 Pakistan-Bangladesh Free Trade Agreement Negotiations launched Source: Asian Development Bank, Ministry of

Digital Government Digital Education Digital Economy Vision 2021 Digital Lifestyle IT/ITES Export-US$ 5 billion Middle Income Country Story of the glorious emergence of a Vision which has transformed the country. .

Knowledge Economy Vision 2041 Knowledge Worker Knowledge based Society Intelligent Govt. Developed Country Story of the glorious emergence of a Vision which has transformed the country. .

IT/ITES Industry: Local & Export Market Status

Tech Adoption Scenario 80. 83 million 147 million mobile phone users (BTRC, 2018) Internet subscribers (BTRC, 2018) 59 million Clients of Mobile Financial Services (Bangladesh Bank, 2018)

Local Market Scenario • The local market size for Software & ITES in 2017 was US$ 0. 9 - 1. 1 billion • Projected to grow at the CAGR of 34% till 2020 F Source: Everest Group, 2017

Export Market Scenario ICT Export (million USD) Poly. (ICT Export (million USD)) 800 • Export earnings on US$ 800 million in FY 201617 • Annual growth exhibited: 14. 29% 700 R 2 = 0. 9705 444. 8 349. 5 70. 81 101. 61 26. 98 26. 08 24. 09 32. 91 35. 36 45. 31 2005 -06 2006 -07 2007 -08 2008 -09 2009 -10 2010 -11 2011 -12 2012 -13 2013 -14 2014 -15 2015 -16 2016 -17 Source: Bangladesh Bank, ICT Division, & EPB

Major ICT Export Destinations (percentage of companies exporting) ud bi i. A ra ay M a sia s nd al Sa N et he rla ia an m G er In d y k ar D en m tra us A C an ad lia a UK US A 90 80 70 60 50 40 30 20 10 0

Bangladesh ranked 21 in AT Kearney Outsourcing Destination Rankings 2017

40+ ODC Export grew at a CAGR of 25% in the last 6 years Local Market size US$ 1. 10 billion (excluding the telecom sector) Software export is about US$ 800 million in 2016 -17 Current Industry Data The Industry is composed of over (Offshore Development 2000+ firms of which 1076 are BASIS members Centers) & Joint Ventures started working

Human Resource Capacity & Cost Structure

Human Resource Potential BCC, BHTPA, LICT, BASIS are working with Capacity Building IT professionals : 300, 000 direct & 700, 000 more freelancers 64% youth (Age between 18 – 35). English Education is built-in into the education system. Total graduate pool: 960, 000 annually (UGC & NU Data) among them 22, 000 are IT graduates

Human Resource Capacity and Cost Structure Source: Tholons Research & Estimates 2015, World Bank 2014, UNESCO

INVESTING in BANGLADESH 100% Tax Exemption for software and ITES companies till 2024 100% VAT exemptions on space rents for IT/ITES firms 50% Personal Income Tax exemption for expatriates/foreign technicians for up to 3 years 10% Cash Incentives on IT/ITES Export Earnings Facilities for full repatriation of invested capital and profit Fully subsidized training programs for technical and managerial skills ICT incubator programs, Hi-Tech Parks are in places Negligible Customs Duty Intellectual Property Protection

KEY COMPETENCIES OF THE SECTOR Favorable Government Policies Skilled and Semi-Skilled workforce Comparatively Lower Salary Range Low Startup Cost Strategically Convenient Location Considered as One of the Thrust Sectors of Bangladesh

Few of the International Recognitions far… AT Kearney GSLI 2017 21 st rank among Top 50 (Ranked first in financial category) Gartner Bangladesh among top 25 Outsourcing destinations Elance–Upwork JP Morgan 1 of the Frontier 5 – 3 rd most popular for outsourcing from the OECD countries Coface Goldman Sachs Next 11 after BRIC Enlisted among the next 10 emerging countries

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