by Shuvonkar Karmokar in Prothom Alo, Sept 27, 2023
The number of Bangladeshis-owned companies registered in the United Arab Emirates (UAE) is on the rise, according to the statistics of one of its emirates.
Besides, the number of memberships at the Dubai Chamber of Commerce held by Bangladeshi businesses rose by 47 per cent (1,044 companies) to a total of 10,975 companies in January-June this year.
Established in 1965, the Dubai Chamber of Commerce released the data on its members on its website this month.
Data shows more than 350,000 member companies exported and re-exported goods of USD 27.29 billion or 137 billion UAE dirhams in the first half of this year.
Nobody from Bangladesh, however, runs businesses in the UAE with permission to invest in the Gulf country. According to the Bangladesh Bank, 17 companies have received government clearance so far to open foreign offices or factories on a small scale, and Singapore, Kenya, Malaysia, India, Sri Lanka, Saudi Arabia, the United Kingdom, the United States and Hong Kong are the most favourite destination for Bangladeshi entrepreneurs investing in foreign lands.
Bangladeshis themselves or in other names are investing in various sectors including villas, apartments, restaurants and star hotels across the various UEA emirates including Dubai, Sharjah, Abu Dhabi and Ajman. Many of them, however, hid their identity and used the citizenship of various countries including Albania and Cyprus.
Regarding this, Transparency International Bangladesh (TIB) executive director Iftekharuzzaman told Prothom Alo on 26 September the wealth and businesses of Bangladeshis have been apparently built on the laundered money, and the data of Dubai Chambers on the membership of the 11,000 Bangladeshi-owned companies tells that money laundering increased to this gulf country.
However, many also went legally to UEA as workers and then invested there, he said adding that is why it is necessary to scrutinise the entire list of the Dubai Chamber to find out who invests legally and illegally.
The TIB executive director noted if the government becomes interested, they can easily collect this list by talking to the UAE government.
Iftekharuzzaman said most of the money is laundered through mis-invoicing in the guise of import and export, as well as through hundi, and it rises because of political instability during the election. On top of that, money laundering is being encouraged because laws are not enforced.
According to several Bangladeshis living in the UAE, other than holding a service, a license is required to open a business in the UAE with a membership fee, and there are options to obtain licenses for more than 2,000 businesses including consultancy, trading, apartments and land businesses. Educated people coming to the UEA from Bangladesh are getting involved in business in the Gulf country. In contrast, influential people are involved in business through money laundering, which is why more Bangladeshi companies get membership in the Dubai Chamber.
Who are the members of the Dubai Chamber?
According to the Dubai Chamber, a total of 30,146 companies received their membership in the first half of this year, and 22 per cent of those companies are Indian. The membership at the Dubai Chamber held by Indian businesses rose by 37 per cent (6,717 companies) to 90,118 companies in January-June this year.
Indian businesses were followed by the Emiratis (4,445 companies) and Pakistanis (3,395 companies). The membership held by Pakistani-owned companies rose by 59 per cent to 40,315 companies. As many as 2,154 Egyptian-owned companies received the membership in January-June raising the total number to 18,000 while 1,184 Syrian-owned companies obtained membership, taking the total number of Syrian-owned companies to 10,678.
However, UK and Chinese citizens fell behind Bangladeshis at the Dubai Chamber. As many as 963 British firms joined the Dubai Chamber in the first half of 2023, yet the total number of British firms did not cross 10,000 while 8,265 Chinese firms hold membership at the Dubai Chamber.
Mohammad Ali Rashed Lootah, president and chief executive officer of Dubai Chamber, said in a statement, “The diversity of nationalities represented among the new companies joining the chamber reflects the vibrancy of Dubai’s dynamic business environment, together with the emirate’s strong ability to consistently attract a broad range of foreign direct investment.”
According to the Dubai Chamber, trading and repair services accounted for 42.4 per cent of the new member companies registered in the first half of 2023, followed by the real estate, renting, and business service sector, which made up 30.8 per cent of new member companies while businesses in the construction industry accounted for 7.2 per cent.
How do Bangladeshis make wealth?
The UAE introduced a golden visa scheme to attract foreign rich people. A person who owns wealth worth USD 2 million can apply for this visa. Rules on buying houses were also relaxed for foreigners allowing 70 per cent of transactions in cash. Since then, foreigners including Bangladeshis have increasingly bought properties in Dubai.
It costs about 300,000-400,000 dirhams or approximately Tk 12 million to buy a three or four-room apartment in Dubai, which is cheaper than the properties in the upscale area of Dhaka. It has been learned that many Bangladeshis have built villas in Ajman emirate and Dubai’s Palm Jumeirah, Emirates Hill, Silicon Oasis and Business Bay areas; many even bought hundreds of acres of land.
The EU Tax Observatory analysed the data collected by the US-based Center for Advanced Defense Studies last January. According to the EU Tax Observatory, as of 2020, 459 Bangladeshi bought 972 properties worth USD 315 million in Dubai concealing their information.
Bangladeshis, mostly workers, account for 10 per cent of the total population in the UAE and they send their earnings home, but the hundi operation is involved in transferring the money.
Besides, a huge amount of money is allegedly laundered from Bangladesh to foreign countries annually. The Bangladesh Financial Intelligence Unit (BFIU) of the Bangladesh Bank is tasked with fighting money laundering, but the agency takes no steps against money laundering. The government took no significant step to stop money laundering either.
Centre for Policy Dialogue (CPD) distinguished fellow Mustafizur Rahman said there has been a rising trend among the Bangladeshis to make wealth and build businesses in the UAE in a sequel to the making Canada and Malaysia a second home. The government’s agencies concerned should investigate who has become the Dubai Chamber members and whether they took the money through hundi or borrowing from banks. If the money to the Middle-East country illegally, it is necessary to take legal action against the people concerned, because the economy of the country is being damaged because of them .https://en.prothomalo.com/business/local/wwyla142sh
