Dutch, Chinese FDI tops in Bangladesh

Netherlands has become Bangladesh’s largest foreign investor in 2025 as foreign direct investment (FDI) or equity into Bangladesh from the country reached $544.61 million, or 30.76 percent of total inflows, according to a Bangladesh Bank recent report.

Netherlands invested the highest amount $405.46 million in the food products category and more than $72 million in the power sector.

Likewise, China, the second-largest investor in Bangladesh in 2025, directed most of its investment $215 million out of $321 million into the power sector.

The central bank said overall net inflows grew by $500.02 million, or 39.36 percent, in 2025, driven by a $330.31 million rise in net intra-company loans and a $159.71 million increase in net reinvested earnings.

Net FDI is the total amount of foreign capital entering a country minus any capital repatriation, loan repayments, or disinvestment by foreign investors during the same period.

The central bank’s Foreign Direct Investment and External Debt report showed that the top FDI contributing countries, including China, Singapore, South Korea and the United Kingdom, accounted for most of the total net FDI inflows, which rebounded to $1.77 billion in 2025 from $1.27 billion in 2024.

South Korea and the United Kingdom registered $171.70 million, or 9.69 percent, and $169.41 million, or 9.57 percent, respectively.

Meanwhile, World Investment Report (WIR) 2026 by UN Trade and Development (UNCTAD) showed Bangladesh’s FDI inflows increased significantly from US$1.23 billion in 2024 to US$1.78 billion in 2025, ending two consecutive years of decline .

However, during the first quarter(Q1) this Tear fresh foreign direct investment (FDI) or equity into Bangladesh plummeted by 70.34 per cent year-on-year to $78.26 million in the first quarter of 2026, driven by persistent structural weaknesses, macroeconomic risks, and election-related uncertainties.

Data released by the Bangladesh Bank on Thursday show that net equity inflows – which reflect actual new overseas capital – reached their lowest level in four quarters during the March period.

Total FDI inflows, which encompass equity, reinvested earnings, and intra-company loans, dropped to $447.31 million in the first quarter of 2026 from $796.57 million in the corresponding period of the previous year.

In contrast, reinvested earnings from existing foreign enterprises increased significantly to $342.92 million during the first three months of 2026, up from $191.22 million in the first quarter of 2025.

While retained profits expanded the total FDI stock to $21.30 billion by the end of March 2026 from $18.99 billion a year earlier, economists cautioned that true investment growth depends on fresh equity rather than accounting adjustments of retained earnings.