Bangladesh faces significant challenges as one of the world's poorest countries. On top of this corruption is endemic, the rule of law is weak, and there is limited bureaucratic transparency. Together this has created a business environment that has left the country struggling to attract foreign investment. Bangladesh has been at or near the bottom of numerous accountability, transparency and corruption indices for several years. Encouragingly, the country's 2007-2008 military-backed government implemented a programme of widespread institutional reform and, in an unprecedented move, set out to tackle the country's high levels of corruption, resulting in the conviction of corrupt businessmen, political figures and high-ranking officials. Nevertheless, corruption continues to be widespread at all administrative levels. The vast majority of companies expect to pay bribes to public officials in order to do business, while just one in four companies perceive the judiciary to be fair, impartial and uncorrupted.

Positive developments in relation to corruption and investment:

• The latest amendment of the Criminal Procedure Code Ordinance in February 2007 separated the judiciary from the executive branch of the government, securing the legal framework for an independent judiciary.
• The Right to Information Act came into force in July 2009. The Act is designated to play an important role in ensuring transparency and accountability. 
• A new Whistleblower Protection Bill has been sent to the Parliament in March 2010. Once enacted, it is believed the Act will play an important role in ensuring good governance and curbing corruption.

Risks of corruption:

• Companies report that they are subjected to costly and unnecessary licence and permit requirements, while e-governance is not yet developed in Bangladesh. Face-to-face encounters with public officials are therefore inevitable and facilitate the solicitation of bribes.
• Reports of corruption in the awarding of public and private tenders are frequent. Collusion between political leaders and bureaucrats in public contracting occurs in order to favour particular bidders.
• In February 2011, the amendment to the Anti-Corruption Commission Act sent to the Parliament, and will potentially weaken the Anti-Corruption Commission (ACC) if adopted. One provision of the amendment requires the ACC to seek prior permission from the government before investigating state officials.