BAFFA urges NBR to bar fully foreign-owned firms from freight forwarding

The Bangladesh Freight Forwarders Association (BAFFA) has urged the National Board of Revenue (NBR) not to issue freight forwarding licences to fully foreign-owned companies, arguing that local participation is needed to protect domestic entrepreneurs and retain economic benefits in Bangladesh.

The demand was among five policy proposals submitted by the industry body ahead of a meeting with the NBR on freight forwarding licensing rules on September 20.

BAFFA former president Kabir Ahmed said the association supports foreign direct investment that brings capital, technology, employment and knowledge transfer, but wants restrictions on 100% foreign ownership in the freight forwarding sector. “We are not seeking to stop foreign investment. We want to ensure Bangladesh’s net economic benefit,” BAFFA said in its position statement.

The association said freight forwarding is primarily a service industry driven by expertise, skilled manpower and international networks rather than capital, adding that local entrepreneurs have built substantial capacity in the sector over decades. It called for a comprehensive economic and regulatory impact assessment before any major policy change, taking into account foreign exchange inflows and outflows, profit repatriation, employment, competition, market concentration and the sustainability of domestic small and medium enterprises.

BAFFA’s other proposals include scrapping the 1% tax deducted at source on gross billing, denominating domestic air freight rates in taka instead of US dollars, and introducing a 5% incentive on freight forwarding service income repatriated through legal banking channels.

However, officials at the Investment Bangladesh Authority (IBA), formerly the Bangladesh Investment Development Authority (Bida), disagreed with BAFFA’s position on fully foreign-owned companies. A senior IBA official said allowing fully foreign-owned companies to operate in freight forwarding would improve efficiency, transparency and competition in the sector. “Agent businesses in Bangladesh, including freight forwarding, are still largely operated manually, which is the case in very few countries around the world,” the official said, adding that allowing foreign companies to enter the sector would be a major step towards improving Bangladesh’s agent businesses.