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Venture Capital and Private Equity Association of Bangladesh (VCPEAB) on Sunday sought incentives and policy support for startups in the budget for fiscal 2020-21.
The association raised the issue in a virtual roundtable session named “Budget Discussion on GDP Contribution by Startups” in partnership with Capital Market Journalists Forum(CMJF).
In the event, VCPEAB Chairman Shameem Ahsan chaired the session and presented his keynote presentation.
“Our businesses and economy both are facing an unprecedented challenge in light of COVID-19. Our startups, backed by venture capital, have been contributing to the economy. Venture capital has been instrumental for economic development for both developed and developing countries including France, Singapore, Japan, and Malaysia, where the VCs are getting adequate financial and policy support from their Government, helping startup companies survive," said Shameem Ahsan, Chairman of VCPEAB and General Partner of Pegasus Tech Ventures.
"Bangladeshi startups also need similar policy and financing supports through tax exemption, grants, soft loans and equity investments to contribute to country’s GDP. Saving these businesses can save vacancies created for more than seven hundred thousand people working in the startups. We invite you to participate in a journey that will create five unicorns in Bangladesh by 2025 and also create employment for more than six million people through the venture capital and startup ecosystem.”
M A Mannan MP, Minister, Ministry of Planning was the chief guest and said, “Our situation in light of COVID-19 has forced us to shift towards technology, thus creating opportunities for young entrepreneurs. The government is open to support these startups through possible measures. We will work on policy level to sustain and make it easy for the entrepreneurs to do business.”
Zunaid Ahmed Palak MP, State Minister, ICT division, while addressing as special guest said, “Government has given focus to innovation and startups for a long time, because that is a path we have to take to realize the dream of creating our “Shonar Bangla”. Startup Bangladesh have been supporting the startup ecosystem of our country through its accelerator programs and startup funds. We will continue to give both policies and financial support to these startups to flourish and succeed through specialized taskforce in cooperation of government and private sector.”
Prof. Dr. Shibli Rubayat Ul Islam, Chairman of Bangladesh Securities and Exchange Commission (BSEC), as another special guest said, “BSEC has passed the Alternative Investment Rules in 2015. Under this rule, various venture capital and private equity companies have been established in Bangladesh. In addition to these, many foreign venture capital companies are working in Bangladesh. The Venture Capital Guideline has been formulated for them. Globally the stock market provides exit opportunity for startup and their related venture capital investors through IPO. We will certainly look into the opportunity to create a supportive system to ease the IPO process for these startups.”
Special Guest Sheikh Fazle Fahim, President of FBCCI said, “We have been working with government to facilitate the stimulus packages introduced by government. Rather than thinking about one specific sector or product, we should concentrate on the domestic industry around country for all the sectors. Attention should be given to sectors that are in the value chain of our economy. We see good value created in our startup companies, and we need policies to back these startups. From FBCCI, we welcome the growth of these newer companies and enterprises through collaboration and linkage with established businesses; in turn we can generate higher value in our economy.”
Shawkat Hossain, Secretary General Secretary of VPEAB said, “Government or Bangladesh Bank may create a fund which will invest in the registered Alterative Investment Fund management company’s Fund. Alternative Investment funds will be very meaningful and succeed when matching investments will be made by private and Alternative Investment fund. Alternative Fund Management companies may be exempted from income tax for a period of 10 years. VCPE firms to earn from their core business need minimum 10 years. Before that, earnings will be small and will be required to keep the company going only. Tax on this small income, if any, will be very ruinous to AIFM industry. Fund Manager of Alternative Investment are at nascent stage. AIFM deals with much riskier portfolio (venture capital). To attract the HNI individual for investing in Alternative Investment Fund and promote the AIFM industry, Investment by high net worth individuals (HNI) investors in Alternative Investment Fund recognized by BSEC may be given tax exemption like investment in insurance.”
Wali-Ul-Maroof Matin, Director of VCPEAB and Managing Director of Maslin Capital said, “The country's venture capital institutions have not yet gone beyond their primary stage. This sector is developing in the light of national policy. So logically we can expect the government will support this industry which has created so many employments. It will face challenges in the long run, especially if proper assistance is not provided at this critical juncture. If we cannot provide incentives on the pretext of corona or anything else, this billion-dollar industry will shrink, unemployment will rise, and pressure on the economy will increase. So it is high time for us to take action.”
Syed Mojibul Huq, Project Director (Additional Secretary), iDEA, ICT Division; Rubana Huq, President, (BGMEA); Syed Almas Kabir, President, BASIS; Tina F. Jabeen, Investment Advisor, Startup Bangladesh, ICT Division; Ferdous Ahmed, Chairman, FNS Media Ltd.; Mr. Munir Hassan, Head of Youth Program, Prothom Alo, Founder General Secretary, BDOSN; Zia U Ahmed, Vice Chairman, VCPEAB; Shawkat Hossain, General Secretary, VCPEAB; Wali-Ul-Maroof Matin, Founder & Managing Director, Maslin Capital Ltd.; Arastoo Khan, Advisor, BUILD; Tanveer Ali, Partner, Inflection Ventures Ltd.; Hussain M Elius, CEO, Pathao; Samad Miraly, Co-Founder, Startup Dhaka; Minhaz Anwar; Founding Director, Bangladesh Angels, were present among others.
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