Shahwar Nizam is Managing Director of DFDL Bangladesh, where he is responsible for overseeing the strategic direction, operations, and development of the firm. In this interview with Asia Law Portal, he details prime concerns foreign investors should be concerned about when operating or seeking to operate in the Bangladesh market — and his leadership role as Managing Director of DFDL Bangladesh.
You are a Partner and Managing Director of DFDL Bangladesh. Tell us about the firm, your practice and your role as Managing Director.
DFDL Bangladesh is a full-service law firm that provides very high quality legal and tax advisory services to mostly international clients across various sectors and industries. We are part of DFDL, a leading regional legal and tax firm that specializes in developing Asia. DFDL has offices in 10 countries across Southeast and South Asia and has been present in the region for over 25 years.
At DFDL Bangladesh, we specialize in transactional works and have been involved in almost all the major power and infrastructure projects in the last ten years, all the major M&A and JV deals in the last six years. For projects and infrastructure, we regularly advise developers, sponsors, contractors as well as investors and lenders. We have advised mostly the international DFIs such as IFC, ADB, DEG, AIIB, PROPARCO, OEEB and commercial lenders including Standard Chartered Bank, HSBC, SMBC, Mizuho and others. We have also been advising Islamic lenders such as ICD, OFID and others. Around 6 years ago we started seeing M&A deals in Bangladesh and we were lucky to be involved in many of the major deals since then, including the US1.7 billion Japan Tobacco acquisition. We represented large sovereign wealth funds such as Nebras, Temasek and others, global PE funds like Softbank, Actis, KKR and Blackstone in their first-time deals in Bangladesh. Currently we are advising many Japanese companies on investments and JVs, large and small. We have also been advising on technology, data privacy and related matters and have advised AWS, Microsoft, Google and Meta. Very recently, we have added Taxation to our key services. We have developed a team of experienced and qualified Bangladeshi lawyers who can handle complex and challenging commercial transactions.
As the Managing Director of DFDL Bangladesh, I am responsible for overseeing the strategic direction, operations, and development of the firm. I have been at it for more than 20 years, I started by training as a barrister at Erskine Chambers, London and since then have worked in London, Bangladesh, Singapore and then back to Bangladesh. In Bangladesh I did litigation, I was in-house at Citibank setting up their legal and compliance function for US Patriot Act and Sarbanes Oxley compliance back in 2004/5 and then went back to private practice. In Singapore I worked on capital markets at a local firm and then did a few cross-border energy and M&A deals with Ashurst. I have advised clients from various sectors such as banking, energy, telecom, manufacturing, and retail. I returned to Bangladesh end of 2011 and set up the DFDL Bangladesh office with only two lawyers. Now we have a team of 42 and have become the preferred law firm by most international law firms, institutional clients, and multinational corporations. I developed the practice with a single-minded focus on delivering quality advice and services. I tried to replicate structures and practices that I learnt in London and Singapore. I spent a lot of effort and resources in training. It gives me great pride to watch them grow in their career, some of them starting as paralegals and now they are one of my trusted legal advisers.
What are some of the most important legal considerations businesses should be aware of when doing business in Bangladesh?
Some of the most important legal considerations businesses should be aware of when doing business in Bangladesh are:
Foreign investment regulations. Bangladesh has a liberal and open policy for foreign direct investment (FDI), and offers various incentives and protections for foreign investors, such as tax holidays, duty exemptions, repatriation of profits and dividends, and dispute resolution mechanisms. However, foreign investors must comply with certain requirements and restrictions, such as obtaining approval from the Bangladesh Investment Development Authority (BIDA), opening a temporary bank account, registering with the Registrar of Joint Stock Companies (RJSC), obtaining a trade license, and becoming a member of various business associations.
Bangladesh has a common law legal system based on the English legal system. The main sources of corporate and commercial laws are the Companies Act 1994, the Contract Act 1872, the Partnership Act 1932, the Sale of Goods Act 1930, the Negotiable Instruments Act 1881, the Arbitration Act 2001, and the Foreign Exchange Regulation Act 1947. These laws regulate various aspects of doing business in Bangladesh, such as company formation, management, governance, dissolution, contracts, partnerships, sales, bills of exchange, arbitration, and foreign exchange.
Bangladesh has a complex and evolving tax system that imposes various taxes on businesses operating in the country.
What is the current climate for foreign investment in Bangladesh?
The current climate for foreign investment in Bangladesh is mixed. On one hand, Bangladesh has a liberal and open policy for foreign direct investment (FDI), and offers various incentives and protections for foreign investors, such as tax holidays, duty exemptions, repatriation of profits and dividends, and dispute resolution mechanisms.
Bangladesh also has a large and growing domestic market, a low-cost and skilled labor force, a strategic location between South and Southeast Asia, and a stable political and economic environment.
On the other hand, Bangladesh faces some challenges and constraints that limit its FDI potential and attractiveness. These include inadequate infrastructure, bureaucratic red tape, corruption, weak governance, poor enforcement of contracts and intellectual property rights, security concerns, and environmental issues.
Now, Bangladesh is suffering from the rising dollar and commodity prices. Also, as we are very close to the election cycle, things are on a slowdown. However, I anticipate another ten-year high growth trajectory if all goes well in the elections.
You oversee the Law Firm Referral Program of DFDL. Tell us more about this.
The Law Firm Referral Program of DFDL is the firm’s long-running and most successful key client program. DFDL has always been recognized as a trusted local counsel to international firms that have no presence in countries where DFDL operates. The program was designed to make a focused effort to strengthen our relationships with international law firms based on trust, responsiveness, expertise and equal treatment. Our goal is to deliver quality client service and of course generate higher revenues for the Firm.
I work closely with our Marketing and BD team to systematically track all referrals and in coordinating various client meetings across the region.
You are frequently called upon to discuss energy and infrastructure at seminars. Tell us about some of the issues you have addressed at these events.
I get asked a lot about that one thing that surprises everyone, that is how successful the energy project regime in Bangladesh is. Power and energy projects have been implemented quite successfully with international sponsors as well as lenders. The PPA and IA have been very balanced and bankable. Recently I have been on sessions comparing Bangladesh PPAs with PPAs of other countries. Also, I get asked to speak on the difficulties with land in relation to developing power projects in Bangladesh. As a small country with a very big population, land is scarce, and the English common law background coupled with very messy archaic land record system makes it very difficult to provide clean bankability legal opinions.
How can clients and referral sources contact you?
I can be reached by email at Shahwar.nizam@dfdl.com and on LinkedIN.
