Bangladesh aspires to become a developed country under the ‘Vision 2041’, however, materialization of this development vision requires a huge amount of funds. Regrettably, the country’s dependency on foreign aid is still more than 35%. Internal borrowing is also increasing considerably, and Foreign Direct Investment (FDI) can make a significant contribution to the financial basket. The government has set a target to increase the contribution of FDI to 3% of the GDP in the 8th Five Year Plan (FYP) which was 1% in 7th FYP. Japan has continued its support towards Bangladesh since independence. The country’s tendency is to shift FDI to a country after improving the infrastructure through Official Development Assistance (ODA). The same trend can also be seen in Bangladesh. Bangladesh has become the number one recipient of Japanese ODA in 2020. To successfully accomplish development goals, countries with limited resources like Bangladesh can be hugely benefitted by the Japanese FDI. The ASEAN nation Thailand, with more than 6000 Japanese companies, is one of the economies that has been significantly benefitted by the Japanese FDI. This qualitative research investigates the case of Thailand based on key stakeholders’ interviews and analysis of documents. The major findings of this paper bring forth challenges Bangladesh is facing to attract Japanese FDI which include national image crisis, lack of infrastructure, skilled human resources, local procurement of raw materials, frequent change in law and policies, uncongenial regulations regarding VAT, tax and customs and port clearance.