Bangladesh Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into Bangladesh generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

What Types of Work Visas and Permits for Bangladesh are there?

Many different types of visas allow people to travel to Bangladesh. The diplomatic missions abroad decide on the visa’s type or category and for how long applicants can stay, after they receive the application. Sometimes this is determined by bilateral agreements. The process can be started online, plus an interview is also booked online, and documents are submitted to a Bangladeshi embassy or consulate.

Stays of longer than 60 days must be registered with the Ministry of Immigration and Passport Office.

Main Visas

  • Business Visa (B) for individuals wishing to conduct commercial, investment or trade activities, requires a letter from the company sending the businessperson and an invitation letter from the hosting company. The visa is valid for up to one year, single or multi-entry, but each visit is restricted to 60 days
  • Investor Visa (PI) for individuals who invest in or are in an entity’s management i.e., a joint venture or wholly-owned foreign company. This visa is a single, double or multi entry to a maximum of one year, with extensions available up to five years. Duration of trips as required
  • Tourist Visa (T) for tourism, to visit friends or family, to attend a workshop or conference or for religious purposes. This is for one-time usage for 90 days. An extension can be applied for at the Immigration department inside Bangladesh
  • Visa On Arrival – VOA (short-term visa) for a maximum of 30 days for business, tourism, government work or investment. However, this visa is limited to certain countries, including the UK and other European countries, US and Canada, Australia and New Zealand, Japan and Singapore, Malaysia, Russia, China, S. Korea, Brunei, Egypt, and Turkey, plus Qatar, Bahrain, Kuwait, and Oman or if there is no diplomatic mission available in country of residence. Foreigners requesting a VOA must present all relevant documentation at immigration. They should have funds to support their trip e.g., minimum US$500 plus visa fee in cash – US$50. They must have proof of return ticket and accommodation for their stay
  • Transit Visa (short term visa) for passing through the country – allows three days for connecting flights
  • NVR Visa or No Visa Required applies to those who have Bangladeshi origins, plus spouse and dependents, and is stamped in the passport allowing a number of trips of unlimited duration. Other rules may apply, and immigration has right of veto. This stamp is available through diplomatic missions abroad or by post
  • Visa Exemption Sticker is available to 24 groups of VIPs of SAARC countries which are, besides Bangladesh: Sri Lanka, Afghanistan, Pakistan, Maldives, Bhutan, Nepal and India

Other visas available for: diplomats and government officials, non-governmental staff, research personnel, students, interns, journalists. There are also dependents’ visas. For a more comprehensive list of visa categories:

Main Work Visas

As with all countries, Bangladesh has procedures regarding work authorization and staying in the country legally. Those eligible for visas are:

  • Employees, advisors or experts employed in government or its organisations and projects or similar governmental bodies
  • Foreign nationals employed in governmental organisations, commercial or industrial sectors or similar businesses
  • Foreigners employed in semi- or government departments as contractors who provide services and skills within a set period of time
  • For voluntary work without pay when working with a Non-governmental Organisation (NGO)

Three authorities are involved with applications, depending on the commercial/business sector:

  • For employees in the private sector entities, branches, and liaison offices and outside of the Export Processing Zone (EPZ) – The Bangladesh Investment Development Authority (BIDA)
  • For the employing foreign nationals inside the EPZ – Bangladesh Export Processing Zones Authority (BEPZA)
  • Non-Governmental Organisation foreign national staff – NGO Affairs Bureau

Applying for the Work Visa and Work Permit for Bangladesh

Considerable eligibility conditions are attached to Work Authorisation and the steps for applying for the Work Visa and Work Permit can be seen above. The authorities involved can be either:

  • The Bangladesh Investment Development Authority (BIDA) for employees in the private sector, branches, and liaison offices and outside the Export Processing Zone (EPZ)
  • Bangladesh Export Processing Zones Authority (BEPZA) for employing foreign nationals inside the EPZ

These two authorities have One Stop Service (OSS) portals. They provide services internally and for other government departments as well as for private agencies and investors, including for work visa recommendations and work permits. BIDA offers around 58 online services.

Paperwork required for employees:

  • E Visa Recommendation
  • E Visa via the Bangladeshi embassy or consulate (three-month validity)
  • Work Permit
  • Extension of E Visa
  • Security Clearance

Documents required for the E Visa recommendation

  • A letter of application on company paper
  • Letter of permission to operate as an entity e.g., branch office/representative office or company documentation e.g., Incorporation Certificate, Articles of Association and Trade Licence, which for local registered company should also be signed by shareholders showing legality in Bangladesh
  • Copy of Board of Directors’ resolution to employ the foreigner, which has to include all details e.g., name, date of birth, nationality, and passport details
  • Passport copy of employee with six months validity and blank pages for Visa showing any previous entry and exit stamps
  • Recent colour photos along passport guidelines
  • Employment contract, service contract, transfer letter or appointment letter for the employee
  • Foreign worker’s educational certificates, qualifications, and proof of professional experience
  • Proof the job vacancy has been advertised, as necessary, to check for local qualified applicants
  • Details of the company business activities
  • Details of company workforce, including how many locals versus foreigners; positions, salaries, start of employment, benefits, and bonuses
  • Proof that US$50,000 (€45,740) has been deposited as capital into the bank account, which is required when hiring foreigners under certain circumstances
  • Proof of latest tax clearance certificate for employer/company
  • Company letter giving permission to submit application for hiring employee

When this is approved, the worker can go to the local embassy in his home country to apply for the E Visa to be stamped in the passport. Applicants can download the application form as well as booking a visa appointment online to present documentation.

Overview of Taxes in Bangladesh

Bangladesh operates a progressive taxation regime on personal income, with rates set each fiscal year by the updated Finance Act.

Figures are given in Bangladeshi taka (BDT) with euro and US dollar equivalents.

Personal Income Tax (PIT): There is a tax-free allowance of BDT 300,000 (€2,550, US$2,830), with five further bands up to a maximum of 25% on taxable income over BDT 1,600,000 (€13,600, US$15,100)

Corporate Income Tax (CIT): 5% on private companies; 20%/22% on publicly-listed companies

Branch Tax Rate: 5% plus 20% on remitted profits

Capital Gains Tax (CGT): The rate applied to individuals is 15% or the lesser of the relevant personal tax rates. 15% applies to corporate CGT

Alternative Minimum Tax: 6% on companies with gross receipts exceeding BDT 5 million (€42,500, US$47,190). Higher rates can apply for manufacturers of tobacco products and mobile phones

Value Added Tax (VAT): The standard rate is 15% with reduced rates of 5%, 7.5% and 10%, plus zero-rated categories

Withholding Tax: Resident companies and individuals are liable for rates at 10%, 12% and 20% on royalties, dividends and fees for technical services. Non-residents companies are taxed at 20% on dividends, interest, royalties and fees for technical services as are individuals, with the exception of 30% applying to dividends

Personal Income Tax in Bangladesh

Figures are given in Bangladeshi taka (BDT) with euro and US dollar equivalents.

Personal income tax for residents

Income | Tax on Excess
Up to BDT 300,000 (€2,550, US$2,830) | 0%
BDT 300,001 to BDT 400,000 (€3,400, US$3,775) | 5%
BDT 400,001 to BDT 700,000 (€5,950, US$6,606) | 10%
BDT 700,001 to BDT 1,100,000 (€9,350, US$10,382) | 15%
BDT 1,100,001 to BDT 1,600,000 (€13,600, US$15,100) | 20%
Above BDT 1,600,000 | 25%

Individual Tax Rules in Bangladesh

  • The tax year is generally July 1 until June 30
  • Joint returns are not allowed for spouses
  • Individuals whose entire income is not remitted through payroll must file a return and payment by November 30 following the tax year
  • Taxpayers filing for the first time have until June 30 of the following year
  • Residents earning more than BDT four million (€34,000, US$37,750) who own a car, house or apartment in a city corporation area must submit a statement of ‘assets, liabilities and lifestyle’. Non-residents can voluntarily file the statement, covering only their assets in Bangladesh
  • Residents and non-residents earning more than BDT 400,000 (€3,400, US$3,775) must submit a statement on their ‘lifestyle expenses’
  • Employers must provide information relating to an employee’s tax return by April 15 each year
  • Penalties and fines apply to late returns, late payments, failing to keep records or provide the authorities with required documents

Employers’ and Employees’ Social Security and Statutory Contributions in Bangladesh

There are no mandatory social insurance contributions in Bangladesh. Under the Labour Act, employers must pay 5% of their net profits into a Workers’ Profit Participation Fund, within nine months of the end of the fiscal year. This applies to companies with paid up capital of BDT 10 million (€85,000, US$94,383) or permanent assets of BDT 20 million (€170,000, US$189,000).

Setting up a subsidiary is essential for international companies when expanding their operations into the People’s Republic of Bangladesh if they intend hiring staff and operating payroll for the new entity.

Bangladesh is opening its doors to increased Foreign Direct Investment (FDI) to upgrade infrastructure and diversify the economy away from dependence on its ready-made garments industry, which accounts for 80% of exports. This sector has pushed Bangladesh into second place among South Asian economies with Gross Domestic Product of 460 billion US dollars, 32nd globally, but is vulnerable to world demand.

Economic free zones, tax incentives and government support for start-ups are also in the mix to broaden Bangladesh’s economic appeal for foreign investors. The Matarbari deep-water port on the Bay of Bengal is due to become fully operational in 2026 and will boost access into the Indian Ocean to East Africa, and south and east into the South China Sea, the Pacific and Australasia.

Companies attracted by this potential to invest in Bangladesh can opt to do so through a subsidiary, and typically look at establishing a limited liability company (LLC). It will operate under the Companies Act and incorporate through the Registrar for Joint Stock Companies and Firms (RJSC).

Incoming companies can make a better choice. The more practical, faster and simpler route into the Bangladesh economy avoids the complications of opening a subsidiary. Bradford Jacobs has the expertise to remove any potential obstacles. Our Professional Employer Organisation (PEO) teams and Employer of Record (EOR) consultants will be alongside you every step of the way – from recruiting staff to managing every legal aspect of compliance. Instead of waiting weeks or months, you and your staff can be up-and-running in days … and your employees always remain under your daily operational control.

How to set up a Bangladesh Subsidiary

Incorporation and registration procedures to set up a limited liability company, for example, in Bangladesh include the following:

  • Obtain Name Clearance Certificate after registering unique company name with the RJSC
  • Draft Articles of Association (AOA) and Memorandum of Association (MOA)
  • Register a minimum of two shareholders and two directors and complete Form XII with details of directors, managers and managing agents
  • Apply for company registration through the RJSC online portal and receive certified copies of MOA, AOA and Forms VI, IX, X and XII from the RJSC
  • Register with the National Revenue Board for income tax, corporate tax and VAT
  • There is no minimum share capital for an LLC unless they intend hiring foreign employees, which requires a remittance of €45,345 (US$50,000)
  • Apply for trade, export, import licences as necessary

Required documentation for an LLC includes:

  • Passports or photographic IDs of all directors and shareholders
  • Certified copies of the MOA, AOA and Incorporation Certificate of the parent company
  • Resolution from parent company’s board, nominating particular individual with authority to sign documents on behalf of the subsidiary

What are the Benefits of setting up a Subsidiary in Bangladesh?

The subsidiary operates in Bangladesh as a separate and independent legal entity from the parent company, which is generally protected from the responsibility for the subsidiary’s debts or liabilities, including legal issues. The subsidiary can acquire assets, generate profits and incur debts, enter into contracts and hire and fire staff. Shareholders, partners and members are normally liable only to the extent of their contribution to the subsidiary’s capital.

These exemptions do not apply if the parent company elects to open a branch or agency. Branches are permitted only to operate in commercial service sectors and need prior permission from the Bangladesh Investment Development Authority (BIDA) and a deposit of €45,345 (US$50,000).

Opening a subsidiary in Bangladesh provides the parent company with the opportunity to explore new markets outside its regular economic orbit. The subsidiary opens the potential to enter into agreements with other registered companies in Bangladesh and throughout South Asia. Also, the permanency of a subsidiary has greater credibility with clients and suppliers, compared with branches which are limited in their area of operations.

However, taking the step of setting up a subsidiary is still a long journey compared with taking the most efficient and financially sensible route to starting operations in Bangladesh.

Here is the best solution … let Bradford Jacobs locate top-rated talent for your company in Bangladesh through our in-country Professional Employer Organisation (PEO) specialists. Employees can be working at their desks and screens in days … not weeks, or even longer. We remove all concerns regarding employment laws and compliance. Our Employer of Record (EOR) teams handle the hassle … while you have day-to-day operational control over your workforce.

Subsidiary Regulations in Bangladesh

Procedures applying to a limited liability company include:

Registration and Documentation:

  • Verifying unique company name with the Registrar of Joint Stock Companies and Firms (RJSC) and obtaining the Name Clearance Certificate
  • Applying for company registration from the RJSC online portal
  • Drafting Articles and Memorandum of Association for the RJSC, obtain certified copies of these and complete Forms VI, IX, X and XII
  • Provide certified copies of the MOA, AOA and Incorporation Certificate of the parent company, and resolution from parent company’s board nominating particular individual with authority to sign documents on behalf of the subsidiary

Accounts and Taxation:

  • Register with the National Revenue Board (NBR) with the entity’s 12-digit e-TIN
  • There is no minimum share capital for an LLC unless they intend hiring foreign employees, which require a remittance of €45,345 (US$50,000)
  • Export-oriented companies can hold foreign currency accounts; others must have accounts in Bangladeshi taka
  • Corporate Tax paid at 27.5%
  • Alternative Minimum Tax applies at 6% on companies with gross receipts exceeding BDT 5 million (€42,500, US$47,190)
  • The company must file annual returns to the RJSC; monthly returns for Withholding Tax and Value Added Tax; monthly or six-monthly returns for payroll taxes
  • Mandatory annual audits apply

Management:

  • Register a minimum of two shareholders and two directors and complete Form XII with details of directors, managers and managing agents
  • Provide passports or photographic IDs of all directors and shareholders

International companies planning expansion into the People’s Republic of Bangladesh will find a country that made significant strides in the world economy in the 50 years after it became independent from Pakistan in 1971. By 2022, Bangladesh was the second strongest economy in South Asia behind India, the nation that squeezes it on three sides. Bangladesh also has a short border with Myanmar, while its Bay of Bengal coastline has historically been key to the region’s international trade and cultural variety.

The Padma River, the main channel of the iconic Ganges, flows through the delta into the Bay of Bengal. Despite being a young nation politically, Bangladeshi’s culture and heritage has become entwined with those of India, Pakistan and other South Asian influences over hundreds of years. Throughout the centuries, the coastal access to trade routes also attracted wider influences and by the 13th century Arabs, Persians, Turks and other Mediterranean races could be found in what is now Bangladesh.

The traditional dependence on agriculture was based on indigenous crops such as jute, tea and cotton, plus hides and skins, and these are still significant components of Bangladesh’s exports. What began as a cottage industry of producing yarns and textile fabrics, has seen Bangladesh grow into one the world’s largest producers of ready-made garments and it is generally considered second only to China.

By 2022, ready-made-garments, textiles, other apparel and shoes accounted for 80% of Bangladesh’s exports, contributing to 460 billion US dollars to Gross Domestic Product, which placed Bangladesh 32nd globally.

Starting your business in Bangladesh

Foreign companies intending to start business operations in Bangladesh by hiring staff and running their payroll system, must first open a subsidiary in the country. All companies in Bangladesh must be registered under the Companies Act of 1994. The options include: private and public limited companies; sole proprietorships; companies limited by guarantees and those with unlimited liabilities; branch or representative offices. The usual choice is a private limited liability company (LLC).

As an example, stages for a foreign entity registering a limited liability company include the following:

  • Register unique company name with the Registrar of Joint Stock Companies and Firms (RJSC) and receive the Name Clearance Certificate
  • Draft Memorandum of Association (MOA) and Articles of Association (AOA)
  • Complete Form XII with details of directors, managers and managing agents
  • Register a minimum of two shareholders
  • Open temporary bank account in Bangladesh for any share capital, if required, and obtain encashment certificate which must be verified by the RJSC. The account has to be in Bangladeshi taka (BDT). Export-oriented companies can open foreign exchange accounts
  • Apply for company registration through the RJSC online portal
  • Receive certified copies of MOA, AOA and Forms VI, IX, X and XII from the RJSC
  • Register with the National Revenue Board for income tax, corporate tax and VAT
  • Apply for trade, export, import licences as necessary
  • There is no minimum share capital for an LLC unless they intend hiring foreign employees, which require a remittance of €45,345 (US$50,000)
  • However, a branch office or representative office must register with the Bangladesh Investment Development Authority (BIDA) with an investment of €45,345 (US$50,000)

Required documentation for an LLC includes:

  • Passports or photographic IDs of all directors and shareholders
  • Certified copies of the MOA, AOA and Incorporation Certificate of the parent company
  • Resolution from parent company’s board nominating particular individual with authority to sign documents on behalf of the subsidiary

This incorporation process underlines the importance of taking the best possible advice. By making the right choice now, you can steer a course around these obstacles by working alongside Bradford Jacobs. Our Professional Employer Organisation (PEO) specialists and Employer of Record (EOR) experts will recruit the staff and undertake every step of compliance to have them up-and-running in the shortest possible time. Instead of waiting weeks to complete the process for opening a subsidiary, you can be operational in days.

Expanding your business into Bangladesh

The People’s Republic of Bangladesh has developed into South Asia’s second strongest economy since gaining independence from Pakistan in 1971. The driving force of the economy is its ready-made garments sector, accounting for 80% of exports. The Bangladesh government is steering the economy towards a diversified portfolio and away from dependence on textiles, by encouraging foreign investment.

A variety of economic free zones and tax incentives are targeting investment into agricultural and textile machinery, pharmaceuticals, the developing digital economy, biotechnology, petrochemicals, the automotive sector and tyre manufacturing among other areas. This potential is backed by incentives including reduced rates of corporate taxes between five and 10 years, plus duty-free import of capital equipment. Foreign companies are allowed 100% ownership of subsidiaries and full repatriation of profits.

The government moved to accelerate diversification by opening economic free zones, with a target of establishing 100 by 2030.

Expanding in Bangladesh offers these opportunities and incentives. However, for companies aiming to establish their own entity in the country, expansion comes with issues of incorporation, recruitment and contracts, company and employment legislation and much more. By working with Bradford Jacobs as your Professional Employer Organisation (PEO) and Employer of Record (EOR), we deal with everything on that list. We can ensure that the only item on your list is … ‘global expansion’.

Advantages and Challenges when entering the Bangladeshi Market

Some Advantages:

  • Cost-effective labour market to support labour-intensive industries and manufacturing
  • Predominantly young workforce
  • Consumer spending helped by funds remitted by Bangladeshis working in the Gulf States
  • Bay of Bengal coastline provides trading access to Indian Ocean, South China Sea and further east into the Pacific and Australia
  • Deep water port of Matarbari, due to be completed in 2026, will improve import-export access
  • An improving e-commerce and government-supported Start-up sector

Some Challenges:

  • Poorly-regulated banking system; perception of corruption and lack of transparency in regulatory procedures
  • Economy dominated by ready-made garment sector, which is vulnerable to world demand
  • Consumer market generally suffers from low per capita income
  • Sub-standard logistics and infrastructure
  • Mainly low-lying country susceptible to natural disasters and climate change
  • Damaging gap between educational standards and requirements of industry and employers

Employment contracts must be in writing, or the employee must receive at least the mandatory letter of appointment detailing the terms of employment. Under the Labour Act, executives and managerial staff are generally not covered by the contractual requirement of the Act, although the labour courts decided that if they do not have ‘hiring or firing’ rights they are considered to be workers. The contracts cannot undercut the minimum statutory benefits, entitlements and compensation laws of the Act. Workers are classified under the Act as apprentice, substitute, casual, temporary, probationer, permanent or seasonal workers.

Different types of Employment Contracts in Bangladesh

Open-ended, permanent employment contracts:  These must specify both the start and end date, as indefinite contracts are not permitted under the Act.

Fixed-term or temporary employment contracts: These are allowed and the Act does not limit their term.

Probation periods:  The usual for office or clerical work is six months. Three months applies to other areas with the option of an extra three months. If the probationer continues to work after the trial period they are considered permanent employees.

Collective Bargaining Agreements (CBAs): Section 2 (52) of the Labour Act establishes the right of workers to collective bargaining with the management of the establishment where they work. If the establishment already has a trade union presence, they are the negotiators for CBAs, which remain in force for two years.

Laws that regulate the labour relationship in Bangladesh

  • The Labour Act (2006)
  • The Labour Rules (2015)
  • The Bangladesh Constitution
  • The Minimum Wages Act

General requirements for Contracts

The Labour Act does not permit indefinite contracts, which must therefore specify both a start and end date. The type of contract, temporary or permanent, must be stated clearly. If a written contract is not supplied, the employer must issue a mandatory letter of appointment, in Bengali. Contracts apply to foreign and local workers but generally exclude managerial and executive staff. The contract should cover all the categories of benefits and entitlements as stipulated under the Act.

Employee benefits and entitlements in Bangladesh are regulated by the Labour Act (2006) and the Labour Rules (2015), some of which were updated in 2018, as applying to foreign and local employees in the formal economy. Contracts or Collective Bargaining Agreements cannot offer less than statutory minimums under the Act.

What are the Compensation Laws?

National Minimum Wage (NMW): The minimum monthly wage for 2023 can vary between sectors, regions and metropolitan areas. In the garment sector, for example, it is BDT 8,000 (€69, US$76). The minimum for sectors not covered by industry-specific agreements is BDT 1,500 (€13, US$14). The minimums are set every five years by the National Minimum Wage Board.

Working Hours and Breaks: The normal working day is eight hours and after working six hours the employee has a one-hour break or two 30-minute breaks, or a 30-minute break after a five-hour shift. The working week should not exceed 48 hours. Night shift workers must have a 24-hour break between shifts. Different limits apply depending on the sector and any Collective Bargaining Agreements.

Overtime: Overtime can take the maximum hours worked in a day up to 10 and the maximum hours worked in a week up to 60. Section 108 of the Labour Act sets overtime pay at twice the normal hourly rate.

Sick Leave and Benefits: The usual statutory limit is 14 days paid sick leave per year; unused leave cannot be carried forward to the following year. Employees must produce a medical certificate justifying the time off work. Employees are also allowed a maximum of 10 paid ‘casual leave’ days annually to deal with personal issues.

Paid Vacations: Paid leave is a grey area often left to employers’ discretion, but should be for a minimum of 10 days per year, under the Act. Other allowances can apply to particular sectors. For example, transport service workers and those in commercial establishments and factories receive one day’s paid leave for every 18 days worked.

Public Holidays: Official public holidays, especially those involving festivals, are integral to Bangladesh’s heritage and culture. They can amount to 17 days of paid days off to celebrate. Those who have to work on public holidays to keep businesses running receive two paid days off as compensation, plus a substitute day off without pay. Dates for the annual Islamic holidays of Eid-al-Fitr and Eid-al-Adha vary according to the Muslim calendar.

Probation Periods: Usually for six months for clerical, office or admin roles. Three months typically applies to other sectors with the option for an extra three months. If employment continues beyond the trial period, the probationer becomes a permanent employee.

Notice Periods: These vary between sectors and the type of role. Permanent employees may be required to serve a notice period of 60 days and receive 120 days’ notice from their employer, while mutual 30 days’ notice may apply for temporary/fixed-term workers.

Termination, Severance and Redundancies: Immediate dismissal without notice is permitted only for a criminal conviction. Where dismissal is for other disciplinary reasons as specified in the Labour Act, if the employee fails to justify their behaviour within seven days the employer convenes a hearing to decide on their dismissal. If the decision is to dismiss, the employee has a further 15 days to serve a notice of grievance to senior management. The dispute can ultimately be resolved by labour tribunals. If dismissal is confirmed, for any other reason than criminal conviction, the employee receives 15 days’ severance pay for each completed year. For voluntary termination, permanent employees receive 30 days’ pay for each year of service up to 10 years. Where employers make mass redundancies for reasons justified by the Act, employers can stop paying those who have been employed for less than one year. Those with more than one year’s service receive half their total monthly salary plus the cash equivalent of other benefits for 45 days. The payment reduces to a quarter of salary after 45 days, at which time the employer can make them redundant. Individual redundancies must be justified by the Chief Inspector of Factories and Establishments. Employees working for between one and 10 years receive 30 days’ pay for each year of service; those with more than 10 years, 45 days’ pay for each year.

Maternity / Paternity Leave and Benefit: Pregnant employees are entitled to eight weeks leave before the due date and eight weeks after. Four weeks’ leave applies in the case of miscarriage. Under Section 48 of the Act, benefit is based on earnings over the three months preceding notice of pregnancy. Proposed amendments under Labour Rules updates will reduce the assessment period to one month. There is no statutory provision for paternity or parental leave.

13th Month Bonus: There is no statutory requirement for a 13th month bonus.

Pensions: The Bangladesh parliament passed the Universal Pension Management Bill in January 2022 to bring the country’s elderly under a social security pension system. Only public sector employees, a small proportion of the working population, are covered by state schemes. Those aged between 18 and 50 can join the scheme and must pay a fixed premium for at least 10 years.

Healthcare and Insurance: Healthcare in Bangladesh suffers from being highly-decentralised, with input from private companies, NGOs, international welfare organisations and the government’s Ministry of Health and Family Welfare. Insufficient numbers of doctors, specialists and lack of up-to-date equipment leave Bangladesh’s healthcare system inferior to most other Asian countries. The system is short of a third of registered healthcare workers, and most qualified physicians and support staff are concentrated in metropolitan areas. These barriers to adequate universal healthcare lead most foreign employees to take out insurance for private healthcare, covering hospitals, clinics, GPs and diagnostic centres.

Foreign companies expanding their international operations into a new country, typically need to recruit staff there … and recruitment in the People’s Republic of Bangladesh needs expert guidance. Incoming companies need to be up-and-running in the shortest possible time, but local regulations and red tape can cause a frustrating delay to a smooth hiring process.

In Bangladesh companies must comply with every aspect of the Labour Act … and this includes drawing up contracts with new recruits. Under the Act, individuals engaged in any sort of work are considered to be ‘employees’ and are covered by the Act. A written contract is required and it must specifically refer to all statutory entitlements, privileges and compensation that are covered by the legislation.

This adds to a recruitment ‘to do’ list that is already long and often complex. Locating new talent will be the No. 1 requirement and it is certain to raise major issues. A gap between educational qualifications, vocational training and the needs of employers and industry adds to the recruitment issues in the country. Once staff are recruited and onboarded, employers must comply with the strictly-applied legislation of the Act, which spells out their responsibilities and obligations to employees, in addition to the legal rights of their staff.

These demands add up to a considerable workload. There is a better option … a direct, fast and cost-effective alternative that will have your new staff operational in just a few days, without needing to unravel the red tape surrounding recruitment.

Bradford Jacobs has the experience and contacts you need to provide the simplest route for your journey into the Bangladeshi economy. Our Professional Employer Organisation (PEO) networks have global reach to find the right staff. Then, through our Employer of Record (EOR) platforms we have your new employees at their desks and screens in the shortest possible time. This guide highlights the essentials of recruitment and onboarding in Bangladesh. You can trust Bradford Jacobs to put the brightest talent in position for your company – right now!

Recruiting in Bangladesh

Bangladesh’s population of around 170 million is estimated to contain a workforce of around 72.5 million. The potential employment market is obviously large, but complicated by Bangladesh’s informal economy. The International Labour Organisation (ILO) estimates close to 90% of the labour pool operate outside employment and tax legislation.

Employers hoping to sidestep these issues by importing non-Bangladeshi staff from abroad or from their home country, will need to have their company or subsidiary established in Bangladesh before they can offer the foreigner a job. A work permit is mandatory for every foreign national wanting to work in Bangladesh, obtained from one of three agencies – the Bangladesh Investment Development Authority (BIDA); the Bangladesh Export Processing Zones Authority (BEPZA) or the NGO Affairs Bureau.

Additionally, foreigners can be recruited only into authorised sectors and establishments, with quotas applying – no more than 5% of the total workforce in industry and 20% in the commercial sector. Further, where foreigners are employed in a 100% foreign-owned entity, a minimum deposit of €45,345 (US$50,000) is paid to the Registrar of Joint Stock Companies. This requirement also applies to branch or representative offices, in which case the amount is paid to BIDA.

These are the issues confronting employers even when they use local recruitment agencies registered with the Bangladesh Association of International Recruitment Agencies (BAIRA).

Complicated? Yes! This highlights where the global experience and local know-how of Bradford Jacobs is essential. Our Professional Employer Organisation (PEO) platforms will bridge the gap between the skills you need and finding the best-qualified talent for your company.

Employees’ pre-hire checks in Bangladesh

General:  The Labour Act allows employers to carry out pre-hire checks on prospective employees and also permits them to be undertaken by third parties on behalf of the employer. Potentially sensitive information cannot be gathered without the individual’s permission.

Guidelines include:

Discrimination:  Employers cannot contravene an individual’s rights under the Anti-Discrimination Law (2022) in employment or generally, over such as religious beliefs, gender or race.

Criminal Checks: These are conducted through the relevant local police, who can issue a police clearance certificate.

Reference and Educational Checks:  Employers should ask the applicant’s permission.

Basic requirements when recruiting in Bangladesh

Employment legislation in Bangladesh is based on the Labour Act, which also applies to one of the basic requirements of recruiting – drawing up contracts. The Labour Act does not permit indefinite contracts, which must therefore specify both a start and end date. The type of contract, temporary or permanent, must be stated as the title for the agreement. If a written contract is not supplied, the employer must issue a mandatory letter of appointment; both should be in Bengali. Contracts apply to foreign and local workers but generally exclude managerial and executive staff.

Written contracts must include the following:

  • The names and addresses of both parties signing the contract
  • All minimum rights, compensation and benefits the employee is entitled to under the Labour Act
  • Place of work and responsibilities
  • Remuneration and payment schedule
  • Process for termination and severance pay
  • Dispute resolution procedure

The Basics of Bangladeshi Culture

Bangladesh is an ethnically homogenous society with 98% of the population Bengalis. Islam is the official religion, but with a generally tolerant attitude to non-Muslims. Bangladesh is a hierarchical society, in line with most Asian nations, where deference is shown to age, experience and education. The culture is rich in festivals which show Hindu and Buddhism influences, as well as Muslim, and encompass entire communities.

In addition to festivals, this montage of cultures is reflected in Bengali literature, which reaches back 1,000 years, music, arts and folk drama. Dance also shows influences from the Mediterranean cultures that infiltrated the region from the 16th century.

Traditional dress remains a feature of cultural life, including ornamental and embroidered fabrics, along with quilted patchwork embroideries still produced by women in rural areas.

Bangladeshi Work Culture

Hierarchy:  Hierarchical attitudes in society generally are reflected in the business environment, with respect shown to the most senior and experienced member of the team.

Punctuality:  Being punctual gives the right impression … be prepared to wait for the other team to arrive.

Introductions/Greetings: Handshakes are the normal greetings, with men waiting for a woman to extend their hand first, otherwise just nodding in acknowledgement. Behave formally, as an over-casual approach can be interpreted as lack of respect. Businessmen are addressed as ‘Bahadur’ (‘sir’) and women as ‘Begum’ (‘madam’) with or without the family name. Wait for using first names to be suggested by the other team.

Language:  Many Bangladeshi business people use English in meetings, but if they lapse into the native Bangla this is not being discourteous or intended to exclude the other party.

Out of the Office: If invited to a meal be prepared for the other team to eat with their hands from shared dishes. If following suit, use only the right hand, although it is acceptable to ask for utensils.

Gift Giving: Not commonly given and never at a first meeting. Any gifts should be modest and thoughtful, and always offered with the right hand.

Business Cards:  Exchanged without fuss, and always offered and received with the right hand. Be sure to include educational qualifications, as these are important to Bangladeshis.

Dress Code: Smart, formal and, for women, dress discreetly to observe Muslim norms.

Negotiations and Meetings:  Small talk is likely to dominate the early stages of the process, even taking up all of the first meeting. Rushing into business talk will be considered rude. When negotiations begin, Bangladeshis will defer to the most senior member of their team – the decision maker – who will set the tone and pace of the meeting. Agendas are often just guidelines … do not expect to methodically work through a list. Concluding negotiations may take time and decisions come from the top down.

Avoid: Offering forceful opinions or being too direct, as Bangladeshis prefer undemonstrative and indirect communication.

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