Speakers at a dialogue have identified policy uncertainty and unpredictability as the key impediment to attracting increased foreign direct investments in the country.
They said the lack of coordinated actions by regulatory agencies also hinder the flow of foreign investment.
They also underlined the need for promoting the success stories of FDI in Bangladesh to the prospective foreign investors.
The views came at a virtual dialogue on "Investment Policy and Regulatory Reforms" organised by the Youth Policy Forum.
Speaking at the programme, the forum's adviser Dr. Akhtar Mahmood said there are a plethora of rules and regulations and many agencies to implement those, but there is a lack of coordination among them.
"Only a handful of people get benefit from some policies," he said, adding the country's policy is not open for FDI.
He noted favourable conditions for foreign direct investment exist in Bangladesh, but these are not being presented in a positive way.
President of the Metropolitan Chamber of Commerce and Industry, Dhaka (MCCI) Nihad Kabir said Bangladesh has a proven track record of being the manufacturer on a global scale.
She said it seems there is a perception issue of Bangladesh as a young unindustrialised country, which it is not true.
"Many multinational brands are doing very good business here," she said.
"We can't present ourselves what we really are to attract foreign investment," she said.
She also said the country invites foreign investors, but later gets scared of them.
Ms Kabir said Bangladesh needs to target some benchmark investment and focus on some countries.
She said the statutory regulatory orders by National Board of Revenue have become a practice, which is destabilising investment.
Former senior secretary at the Internal Resources Division of ministry of finance Mosharraf Hossain Bhuiyan said many laws, rules and regulations need reforms in line with the changes across the world.
He said bureaucrats tend to make things complicated and avoid risks, and none shoulders the responsibility for making a decision.
He said government officials responsible for investment promotion need more authority to act proactively.
He said the continuity of officers, and the consistencies in policies are necessary for a sustained flow of FDI.
Mr Bhuiyan, who headed the NBR, said SROs by the tax authority half way through the year should be avoided to keep consistency.
He said Bangladesh is offering a lot to foreign investors, but the problem is in the regulatory and managerial process.
Lawmaker Ahasanul Islam said the country's FDI is $2.84 billion, which is pretty low.
He said, "We need to bring foreign portfolio investment before bringing foreign direct investment. FDIs will follow."
He said ports, power, large infrastructure projects, roads and bridges etc could bring FDI.
Mr Islam said there is regulatory gap in Bangladesh.
Giving example, he said, many peer markets used bonds facilities to attract FDI, but Bangladesh has failed due to right regulatory actions.
He said Bangladesh is not completely a free market economy.
"We need to open up more to bring more investments," he said.
YPF members Chowdhury Albab Kadir and Sanjana Hoque jointly presented a keynote at the dialogue.
They said frequent changes in tax rates exemplify policy unpredictability while uncertainty about the time and cost of obtaining a regulatory approval is a source of regulatory unpredictability.
"Inconsistencies in rules and regulations also create the space for discretionary interpretation by the regulatory officials, coupled with regulatory gaps which increase corruption," according to the presentation.
It said the ambiguous wording of policies on paper often allows too much room for discretionary behaviour by regulatory officials and discretionary enforcement by government officials is often the most serious source of unpredictability.
They also said regulatory agencies do not conduct impact assessment of the proposed regulations.
