Investment Protection in Bangladesh: the 1980 Act, Bilateral Investment Treaties and Tax Treaties, and What They Actually Protect

In this guide: The 1980 Act: what it guarantees and to whom · Bilateral investment treaties: the list and the content · Bringing a claim: ICSID, the New York Convention and the courts · Double taxation agreements: the list and how to use one · The gaps, and the NRB position in particular · What to do at entry so the protection exists later

The short answer

If you are a foreign national or company, you have the 1980 Act whatever your country, and a bilateral investment treaty if your country is one of the twenty-five; check with the tool below. The treaty is what gives you a forum outside Bangladesh, so if treaty protection matters, hold the investment through a company in a treaty country before the money arrives, make the investment in compliance with the registration, remittance and reporting rules (treaties protect only lawful investments), and keep the record of the approvals and the encashment certificates, because that record is the claim file. If you are a non-resident Bangladeshi, understand that the 1980 Act defines foreign investment as investment by a non-citizen, that the treaties generally exclude a state’s own nationals, and that your protection is therefore the Constitution, the ordinary courts and Bangladesh Bank’s repatriation rules; dual nationals have an argument under some treaties, but it is an argument. For tax, obtain the tax residence certificate from your home tax authority each year and have the Bangladeshi payer obtain the NBR certificate for the treaty rate before the first payment of the year; the domestic rate of 20% on dividends paid to a non-resident company (25% to a non-resident individual) and 20% on interest applies by default, and refunds of excess withholding are slow. Our repatriation guide covers the payment side; this guide covers the protection and the treaty mechanics.

The 1980 Act: what it guarantees and to whom

The Act has not been amended in substance since 1980 and has not been replaced, though reform has been discussed in 2026 without a bill. It is enforced in the Bangladeshi courts, by writ under the Constitution against executive action and by suit for compensation. Its practical weight is in s.8: Bangladesh Bank’s remittance rules are the administrative form of that guarantee, which is why a complete remittance file is the first and cheapest layer of protection an investor has.

Bilateral investment treaties: the list and the content

Bangladesh has signed 34 bilateral investment treaties of which 25 are in force (UNCTAD count; one practitioner source says 33 signed): with the United Kingdom (1980), Germany (1981), Belgium-Luxembourg (1981), France (1985), the United States (1986), Korea (1986), Romania (1987), Italy (1990), Malaysia (1994), the Netherlands (1994), China (1996), the Philippines (1997), Poland (1997), Indonesia (1998), Japan (1998), Austria (2000), Switzerland (2000), Uzbekistan (2000), Iran (2001), Thailand (2002, replacing a 1988 treaty), Singapore (2004), Denmark (2009), India (2009), the UAE (2011) and Türkiye (2012, replacing a 1987 treaty). Treaties with Pakistan, North Korea, Vietnam, Belarus, Cambodia, Bahrain and Kuwait were signed but are not in force. There is no treaty with Saudi Arabia, Qatar, Canada, Australia, Hong Kong or Spain. Bangladesh has no published model treaty, so the texts differ, but they share a core: admission under domestic law; fair and equitable treatment and full protection and security; national treatment and most-favoured-nation treatment with exceptions for customs unions and tax matters; expropriation only for a public purpose, without discrimination, against prompt, adequate and effective compensation; free transfer of investments and returns; compensation for war and civil-strife losses on a non-discriminatory basis; investor-state arbitration, usually at ICSID or under the UNCITRAL rules after a negotiation period; and state-to-state dispute settlement. The India treaty carries 2017 joint interpretative notes that confine fair and equitable treatment to the customary minimum standard. Two features decide most cases before any tribunal sits: the definition of investor (a company incorporated in the treaty state usually qualifies, but some treaties add a seat or substantial-business test, and dual nationals are treated variously) and the legality requirement (an investment made in breach of Bangladeshi law, for instance equity brought in outside the banking channel or a business run without the permits, may fall outside the treaty).

Bringing a claim: ICSID, the New York Convention and the courts

Bangladesh signed the ICSID Convention in 1979 and has been a party since 1980, so a treaty that provides for ICSID arbitration gives the investor a tribunal whose award is enforceable in every ICSID state as if it were a final judgment of its courts, without review on the merits. The best-known case is Saipem v Bangladesh (ICSID Case No. ARB/05/7, under the Italy treaty), in which the tribunal held that the Bangladeshi courts’ interference with and annulment of an ICC award amounted to an expropriation of the investor’s rights; Chevron and Niko were contract-based ICSID cases arising from petroleum agreements. Bangladesh is also a member of MIGA, which insures eligible investments against expropriation, transfer restriction, breach of contract and civil disturbance, and acceded to the New York Convention in 1992; the Arbitration Act 2001, modelled on the UNCITRAL Model Law, provides for recognition and enforcement of foreign arbitral awards in the District Judge’s court, subject to the Convention’s narrow grounds of refusal. A claim typically begins with a notice of dispute under the treaty and a negotiation or cooling-off period of three to six months, during which most investor-state matters in Bangladesh are in fact resolved by the ministry concerned; the record that persuades a ministry is the same one that would persuade a tribunal, namely the approvals, the encashment certificates, the Bangladesh Bank reports and the correspondence. A commercial dispute with a Bangladeshi counterparty, as opposed to a measure of the state, is a matter for the contract’s arbitration clause and the Arbitration Act, which our disputes practice handles.

Double taxation agreements: the list and how to use one

The NBR’s list of 27 April 2026 names 43 agreements: Bahrain, Belarus, Belgium, Bhutan, Canada, China, the Czech Republic, Denmark, France, Germany, Hong Kong, India, Indonesia, Iran, Italy, Japan, Saudi Arabia, Kuwait, Malaysia, the Maldives, Mauritius, Morocco, Myanmar, Nepal, the Netherlands, Norway, Oman, Pakistan, the Philippines, Poland, Qatar, Romania, Singapore, South Korea, Sri Lanka, Sweden, Switzerland, Thailand, Türkiye, the UAE, the United Kingdom, the United States and Vietnam. The list does not state in-force dates, and some of the newer entries may be signed but not yet effective; Hong Kong’s is confirmed in force from 20 December 2024. An agreement does three things for an investor. It caps withholding on dividends, interest, royalties and (in many of Bangladesh’s agreements) fees for technical services at the treaty rate, which is usually 10% or 15% against the domestic 20% for companies and 25% for individuals on dividends; it defines when a foreign company’s activities here amount to a permanent establishment and so become taxable on business profits; and it provides relief in the home country for Bangladeshi tax paid, by credit or exemption. To obtain the treaty rate: the non-resident obtains a tax residence certificate from its home tax authority for the year; the Bangladeshi payer applies to the NBR for a certificate authorising deduction at the treaty rate, under the Income Tax Act 2023 and the NBR’s procedure, before the payment; the payer then withholds at that rate and files the withholding return citing the certificate. Without the NBR certificate the payer must withhold at the domestic rate, and recovering the excess means a refund claim after the non-resident’s return, which in practice takes years. Where the recipient is the beneficial owner is tested; conduit structures are refused. Our NRB and expatriate tax guide and withholding tax table give the domestic rates the treaty is measured against.

The gaps, and the NRB position in particular

Citizenship. Section 2(1)(b) of the 1980 Act covers non-citizens and foreign companies. A Bangladeshi citizen living abroad who remits money to buy shares is treated by Bangladesh Bank as a non-resident investor for exchange-control purposes, with the same reporting and the same repatriation rights, but is not a “foreign private investor” under the Act and is, as a national of the host state, generally outside bilateral investment treaty protection. A dual national may qualify under a treaty that does not exclude dual nationals, but the question is litigated case by case and tribunals have looked at dominant and effective nationality. The practical advice to an NRB who wants treaty protection is to invest through a company incorporated in a treaty state, with real substance there, before the investment is made; our NRB investment guide covers the accounts and instruments. Legality. Treaties protect investments made in accordance with the host state’s law; equity that came in outside the banking channel, a factory run without environmental clearance, or shares held through a nominee to evade a sector cap, are exposed. Tax carve-outs. Most treaties exclude taxation from most-favoured-nation treatment and some from expropriation claims except in narrow cases, so a tax measure is fought under the tax treaty and the Income Tax Act, not the investment treaty. Sector licences. A licence condition accepted at entry is part of the approval terms s.5 of the Act protects, and also part of what the investor agreed to; later changes to the licensing regime are the common ground of dispute.

What to do at entry so the protection exists later

1. Choose the investing entity for treaty access, with substance in the treaty state, before the first remittance; restructuring after a dispute has arisen is treated as abuse of process.
2. Make the investment lawfully: through the banking channel with encashment certificates, with Invest Bangladesh registration and the sector NOC where required, and with the 14-day Bangladesh Bank reports filed.
3. Keep the approval terms: the registration letter, licence conditions, any incentive letters and the correspondence that preceded them. Section 5 of the Act and the treaties protect the terms as given.
4. Set the tax treaty up in year one: tax residence certificate, NBR treaty-rate certificate, and a withholding file the auditors can certify.
5. Put an arbitration clause in the commercial contracts with a seat and rules you can live with; treaty arbitration is for measures of the state, not for a defaulting customer.
6. Consider MIGA or private political-risk cover for larger projects, which also tends to bring a ministry to the table faster than a treaty notice.