Venture Capital and Private Equity Association of Bangladesh (VCPEAB)
Budget response of VCPAB of the year 2017-18 fiscal year
Sunday, 11 June, 2017
On Wednesday, June 11, at the Krishi Pidhi Institute, Venture Capital and Private Equity Association of Bangladesh (VCPEAB) organized a press conference. Annual budget for the financial year 2017-18 fiscal year proposed by Honorable Finance Minister Mr. Abul Maal Abdul Muhith on 01 June 2017, the ninth budget of the current elected democratic government. VCPEAB congratulates the proposed budget for the implementation of the election manifesto of the elected democratic government, the changing of demand for the country’s economy, the industrial development and establishment of a golden Bengal in the face of the recession of the selected democratic government. Specifically, VCPEAB specially thanked the government’s special emphasis on alternative investment system to expand and mobilize alternative investment. With the announcement of alternative investment in the budget, they expressed hope that the country’s industrialization would be deteriorated by strengthening the new sector. VCPAB thinks the progress of the government and progressive attitude of the government will lead to further development and development.
In the speech, we thanks and congratulate the government and in particular the Honorable Finance Minister for making the tax free from the Alternative Investment Fund (in line with the RHH). Alternative Investment Fund Bangladesh Securities and Exchange Commission (BSEC) Regulated fund that is being formed in the form of trust These will fund the small and medium enterprises entrepreneurs. The alternative investment fund will fund three types of projects, such as venture capital, i.e. less than two year old entrepreneurs, private equity, entrepreneurs of more than two years of age, and finally the impact fund, which will increase the socio-economic impact of socio-economic development rather than economic profit. Being tax-free, these funds or funds will get more effective and more profitable. This tax relief will be a great stimulus among alternative investment fund management and investors.
VCPEAB also provides tax relief on the National Board of Revenue for taxation on alternate investment funds and at the same time the income of these funding companies, which are in companies, is also required for tax relief. Because of this taxation, the country and the foreign investment in the information technology sector will increase.
Chairman of Association and Mr. Shameem Ahsan, General Partner of Fenox Venture Capital, spoke on the occasion. He said, “There is a lot of good news for the IT sector in this year’s national budget.
It includes the reduction of VAT on software, allocation of 3,974 crores in ICT Division, reducing VAT on laptops and mobile phones for the production of laptops, and thanking the Prime Minister, Finance Minister and ICT Minister for allocation of Taka 11,000 crores in the Ministry of Information Technology. In spite of tax exemption in almost all sub-sectors in the Information Technology sector, the taxation of 35 percent taxation in the business of ecommerce does not cancel the budget, it will be a hindrance to the sector’s progress.
He said venture capital financing is very risky. Because of this a new financial sector, there are many doubts among investors in this sector. Therefore, corporate tax exemptions were called for the celebration of this art. He also said it takes at least 7-8 years to get the money back from the venture capital’s venture. They are very difficult to survive at this time. So they should be given tax waiver for at least 10 years. We believe that this tax holiday is a great help from the government to build digital Bangladesh for national development. In this context, we are making more promises from VCPEAB to take part in the development of the country.
Secretary General Shawkat Hossain said, “Start up banks or financial institutions and get financial assistance from anywhere.” World-wide venture capital companies provide their money. So in the interest of the development of start-up or innovative products in Bangladesh, venture capital needs to be developed. Speakers said it takes at least 7-8 years to get back the money transferred from venture capital. They are very difficult to survive at this time. So they should be given tax waiver for at least 10 years.
The other members of the Board of Directors including Mr. Shawkat Hossain, Managing Director of BD Venture limited and VCPEAB General Secretary, Mr. Shahidul Islam, Chief Executive Officer of VIPB and treasurer of VCPEAB and Mr. Wali-ul-Maruf Matin, co-founder and Managing Director of Maslin Capital were present.
Venture Capital is investing in various innovative enterprises including IT and ITES. Venture capital in various countries, including USA, Europe and India, helped fund the start-up company by getting started. You know that Bangladesh Securities and Exchange Commission 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, many foreign venture capital companies are working in Bangladesh. These venture capital and private equity companies together with the establishment of ‘Venture Capital and Private Equity Association of Bangladesh’ (VCPEAB) in 2016.
VCPEAB members are:
1. BD Venture Limited
2. Bangladesh Venture Capital Limited
3. Fenox Venture Capital
4. Lanka Bangla Asset Management Company Limited
5. Athena Venture and Equity Limited
6. Maslin Capital Limited