How a Foreigner Can Invest or Start a Business in Bangladesh: Every Entry Route Compared

In this guide: The six routes, side by side · What the law guarantees a foreign investor · Closed and controlled sectors · Money in, money out · Tax by route, in one paragraph each · Leaving: how each route ends

The short answer

If you intend to sell, invoice, hire and stay, form a private limited company, either wholly foreign-owned or as a joint venture; it is the only route with limited liability, full earning capacity and a clean exit by share sale, and dividends go out through your bank without Bangladesh Bank approval. If you only want to study the market, source goods or liaise with buyers, open a liaison office: cheap to permit, but it may not earn a taka and must be fed from abroad. If the parent will perform one contract or project here, a project office or a branch office keeps everything on the parent’s books, at the price of unlimited liability and a 20% tax on branch profits remitted on top of corporate tax. If you will manufacture for export, look first at an EPZ, economic zone or hi-tech park, where land, utilities and bonded status come with a single authority. Use the sort below, then read the section on your route; the company registration guide and the office guide carry the step-by-step detail.

The six routes, side by side

Two things decide most cases. First, will the entity earn money in Bangladesh? A liaison office cannot; a project office can only under its contract; everything else can. Second, who carries the risk? A company limits it to the paid-up shares; an office of a foreign parent puts the parent’s whole balance sheet behind every contract, tax assessment and employment claim here. A third question, tax, is covered in its own section below.

What the law guarantees a foreign investor

The Foreign Private Investment (Promotion and Protection) Act 1980 is still the statute. Section 4 promises fair and equitable treatment and full protection and security; section 5 says the terms of an approval cannot be changed to the investor’s disadvantage and treatment will be no less favourable than for domestic investment; section 7 allows expropriation only for a public purpose against adequate compensation, paid promptly and freely transferable, at market value immediately before the measure; section 8 guarantees repatriation of capital, returns and liquidation proceeds, subject to the Government’s power to intervene in exceptional financial or economic difficulty. Note the definition in s.2(1)(b): foreign private investment is investment of foreign capital by a person who is not a citizen of Bangladesh, and s.2(1)(a) ties foreign capital to an industrial undertaking. A Bangladeshi citizen living abroad invests under the foreign-exchange rules as a non-resident, but is outside the 1980 Act and outside most treaty protection; our NRB investment guide deals with that position.

On top of the Act sit 25 bilateral investment treaties in force (among them the United Kingdom, Germany, France, Italy, the Netherlands, Switzerland, the United States, Japan, Korea, China, Singapore, Malaysia, India, the UAE and Türkiye), which add investor-state arbitration, usually at ICSID, and 43 double-tax agreements on the NBR list, the newest with Hong Kong in force from 20 December 2024. Bangladesh is a member of ICSID and MIGA and acceded to the New York Convention in 1992, so an arbitral award obtained abroad can be enforced here under the Arbitration Act 2001. What the treaties actually protect, and where they do not, is the subject of our investment protection guide.

Closed and controlled sectors

Four sectors are reserved for the public sector and closed to private investment, foreign or local: arms, ammunition and defence equipment; nuclear power; security printing and minting; and forestation and mechanised extraction within reserved forests. A longer list of controlled sectors is open but needs a no-objection certificate from the line ministry before registration; the list in the National Industrial Policy 2022 includes banking and finance, insurance, power generation and distribution, telecommunications, aviation, sea ports, deep-sea fishing, exploration of natural resources, large-scale infrastructure, chemicals and explosives, and several more. Invest Bangladesh asks for the NOC at the registration stage, and a company will not get its sector licence without one. Separately, sector laws cap foreign equity in a few industries (telecom licences, insurance, certain media and shipping agency work, for example), and those caps bind whatever the investment policy says. Everything else, from garments and software to hotels, logistics and retail, is open to 100% foreign ownership. Check the sector before the structure; we do this as the first item of every entry engagement.

Money in, money out

The entry money comes through the banking channel. A bank with an authorised-dealer licence may open a temporary non-resident taka account in the name of a proposed company without Bangladesh Bank approval, so share capital can be remitted before incorporation; the bank issues an encashment certificate carrying a reporting ID, and the RJSC checks it with the bank. Share money must be converted into shares, with the return of allotment filed, within 360 days, or it stops counting as equity for later loan ratios. A liaison or branch office must bring in at least US$50,000 within two months of its permission and notify Bangladesh Bank under s.18B of the Foreign Exchange Regulation Act within 30 days. Those rules, and the reporting that follows, are set out in our share money guide.

Going out, a company’s dividends are remitted by its nominated bank on the audited accounts, a board resolution and tax certificates, with no prior Bangladesh Bank approval; a branch remits profit the same way with post-facto checking within a month; a joint venture consortium (a JVCA, not a company) still needs prior approval. Sale proceeds of shares in an unlisted company are repatriable through the bank, since the March 2026 master circular, where the price is at or below net asset value, or the deal is up to Tk 1 crore, or up to Tk 100 crore at an independent valuation; liquidation proceeds always need Bangladesh Bank permission. Parent-company and shareholder loans to a fully foreign-owned industrial enterprise have general permission since July 2026, interest-free or at an all-in cost of up to 3%. Our repatriation guide and foreign loan guide give the documents and limits.

Tax by route, in one paragraph each

A company pays corporate tax at the non-listed rate, 27.5% for the 2026-27 assessment year (25% where all receipts and payments above the thresholds go through banks), and withholds tax on dividends to the foreign shareholder, 20% for a non-resident company and 25% for a non-resident individual, or the treaty rate on a tax residence certificate. A branch pays the same corporate rate on its Bangladesh profit and then a branch profit tax of 20% on the amount remitted to the head office; the bank will not remit until it is paid. A liaison office has no income to tax but files returns, deducts tax at source on salaries and rent, and must hold a tax clearance to close. A zone enterprise gets the zone’s tax holiday and duty-free import of machinery and inputs on the zone’s terms, and the Hi-Tech Park incentives run on their own schedule. Every route registers for a TIN, and any entity making taxable supplies above the VAT threshold registers for a BIN. Our tax guides, starting with company tax rates and returns, take each of these further.

Leaving: how each route ends

A company is sold by share transfer (the buyer takes over the registration, licences and staff) or wound up voluntarily through a liquidator, with the final distribution to the foreign shareholder remitted on Bangladesh Bank permission. A liaison, branch or project office closes by a newspaper notice at least three months ahead, an application to Invest Bangladesh with the audit report, tax clearance, landlord NOC and proof that every expatriate work permit has been cancelled, then a report to Bangladesh Bank and permission to remit the residual balance on three years’ audited accounts. Neither is quick: budget three to six months for an office and longer for a liquidation. The cheapest exit is the one designed at entry: a company whose shares can be sold, a branch whose permission covers only what it does, a liaison office that was never allowed to drift into trading.