The government on Tuesday (June 23) withdrew a major restriction on foreign entities to invest in the country's e-commerce sector. This withdrawal enables foreign investors to set up e-commerce businesses in Bangladesh without having to have joint venture with a local company.

WTO (World Trade Organization) cell of commerce ministry on Tuesday issued ‘National Digital Commerce Policy-2020’ amending the previous policy of 2018. This policy has been amended mainly to attract foreign investment in this sector.

The government hopes that e-commerce will expand along with the increase in foreign investment. However, the government will be able to impose new restrictions if domestic entrepreneurs suffer losses due to foreign investors.

According to ‘National Digital Commerce (Amended) Policy-2018’, foreign digital commerce companies were not allowed to conduct business alone without joint ventures with any domestic player.

But from now on, with the amendment in place, foreign investors will be able to do business in this sector with 100% ownership.

WTO Cell Director General (Joint-Secretary) Mohammad Hafizur Rahman said, "Until now, foreign investors could not invest in e-commerce sector alone. They had to invest jointly with local entrepreneurs. A foreign investor had a 49 percent stake and a local company would own the remaining 51 percent. This restriction has been lifted. From now on, foreigners will be able to invest 100% in this sector."

However, Rahman said that foreign investors have to abide by the existing rules and regulations for investing in Bangladesh. These regulations include investment policies, industrial policies, some investment provisions, bidders have some investment policies, BEJA and BEPZA policies."

When asked if this new policy would hurt local entrepreneurs, Rahman said, “There is a challenge. If global e-commerce giants such as Alibaba or Amazon invest then local companies may get in trouble. In that case, the government will impose restrictions on them under the existing law.”

At present, worldwide investment in e-commerce sector is around $ 5 trillion. According to the Commerce Ministry, last year it was only Tk 800 crore in Bangladesh.