TRW & Co · UK–Bangladesh corridor
Foreign Ownership Rules in Bangladesh: Sectors and Approvals for UK Investors
The foreign ownership rules Bangladesh applies allow 100% foreign ownership in most sectors. The exceptions are four state-reserved sectors, controlled sectors such as banking, insurance, telecoms and energy that need prior approval, and a few service activities that must be locally owned. For UK investors, approvals, licences and foreign exchange documentation usually matter more than the ownership cap itself.
Key pointOwnership is tested again whenever money leaves Bangladesh: banks check the original encashment certificate, RJSC filings and approvals before releasing dividends, royalties or sale proceeds, so the paper trail matters as much as the percentage you own.
At a glance
Mostly fully open
BIDA states that 100% foreign ownership is permitted in the majority of sectors, so most UK investors need no local shareholder.
Four reserved sectors
Arms and military equipment, nuclear power, security printing and minting, and extraction in reserved forests are closed to private investment.
Controlled sectors need approval
Banking, insurance, energy, telecoms, aviation, ports and others need prior permission or licences from the relevant ministry or regulator.
Some activities locally owned
Freight forwarding, shipping and courier agents, buying houses, advertising agents and for-profit education require local ownership.
2026 institutional change
Bangladesh Bank's September 2026 circular cites the Invest Bangladesh Act, 2026 and the Invest Bangladesh Authority as an approving body.
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The short answer: how open is Bangladesh to foreign owners?
The foreign ownership rules Bangladesh applies are, by regional standards, liberal. A UK company can usually own 100% of a Bangladeshi company without a local partner. The exceptions fall into three groups: a short list of sectors reserved for the state, a longer list of "controlled" sectors where private and foreign investors need prior permission from the relevant ministry or regulator, and a handful of service businesses that must be locally owned.
In practice, the harder questions are not about the percentage you may own but about approvals, licences and money flows. Registration with the national investment authority, sector licences, work permits and Bangladesh Bank's foreign exchange rules decide how quickly you can operate and whether you can bring profits home.
This guide explains the framework as of October 2026, including the Invest Bangladesh Act, 2026, which Bangladesh Bank's latest circulars now cite, and sets out how UK investors should document ownership and approvals.
The legal framework
Four layers of law shape the foreign ownership rules Bangladesh investors encounter. Each has its own decision-maker, and a project can need sign-off at every level.
Investment protection legislation
The Foreign Private Investment (Promotion and Protection) Act, 1980 is the cornerstone. It promises foreign investors treatment no less favourable than comparable local investment, fair and equitable treatment, protection against expropriation without compensation, and the right to repatriate capital, profits and sale proceeds, subject to the exchange control framework.
Industrial policy: reserved and controlled sectors
Sector restrictions are set mainly by the National Industrial Policy, most recently issued in 2022, rather than by a single foreign investment statute. The policy identifies reserved sectors closed to private investment and controlled sectors that need a no-objection certificate or licence from the responsible ministry or regulator.
The investment authorities
The Bangladesh Investment Development Authority (BIDA) has been the main registration and facilitation body for projects outside special zones, alongside the Bangladesh Export Processing Zone Authority (BEPZA), the Bangladesh Economic Zones Authority (BEZA) and the Bangladesh Hi-Tech Park Authority. As of October 2026, Bangladesh Bank's consolidated circular of 30 September 2026 refers to the Invest Bangladesh Act, 2026 and to the Invest Bangladesh Authority as an approving body, alongside BEPZA and the Hi-Tech Park Authority. Investors should confirm which authority now handles their application before filing, as the institutional map is changing.
Company, exchange control and sector law
Companies are incorporated under the Companies Act, 1994 with the Registrar of Joint Stock Companies and Firms (RJSC). Cross-border payments are governed by the Foreign Exchange Regulation Act, 1947 and Bangladesh Bank's rules, administered through authorised dealer banks. Banking, insurance, telecoms, energy and aviation each have their own licensing statutes and regulators.
Foreign ownership rules Bangladesh: which sectors are open, controlled or restricted
The table summarises the position under the published policy. It is a starting point: sector licences can carry their own ownership, capital and local-participation conditions, so check the current rules for your specific activity.
| Category | Examples | Foreign ownership position | Who decides |
|---|---|---|---|
| Open sectors | Most manufacturing, garments, IT and software, consumer goods, many services | Up to 100% foreign ownership is permitted in the majority of sectors | Registration with the investment authority; RJSC incorporation |
| Controlled sectors | Banks and financial institutions, insurance, power, oil, gas and minerals, telecoms, satellite channels, aviation, sea shipping, ports, large infrastructure, explosives and certain chemicals | Private and foreign investment allowed with prior approval; licence conditions may limit ownership or impose local participation | Relevant ministry and sector regulator, such as Bangladesh Bank, the Insurance Development and Regulatory Authority or the telecoms regulator |
| Local ownership required | Freight and cargo forwarding agents, shipping agents, courier service agents, buying houses and indenting agents, advertising agents, for-profit educational institutions | BIDA states that local ownership is required in these limited cases | Licensing authority for the activity |
| Reserved sectors | Arms, ammunition and military equipment; nuclear power; security printing and minting; forestation and mechanised extraction in reserved forests | Closed to private investment, local or foreign | Government only |
Land
Foreign individuals generally cannot own land in Bangladesh. A company incorporated in Bangladesh, even one that is wholly foreign-owned, is a local entity and can hold land in its own name. Many investors take long leases of factory space in export processing or economic zones instead, which avoids title risk entirely.
Approvals and registrations: the process
Complying with the foreign ownership rules Bangladesh sets is mostly a matter of sequencing. For a typical UK investor setting up a wholly owned subsidiary in an open sector, the steps below apply. Controlled sectors add a licence or no-objection certificate, usually before significant capital is committed.
- Confirm the sector status. Check whether the activity is open, controlled, locally reserved or reserved for the state, and identify the regulator. Decide between a subsidiary, a branch or a liaison office; see our guide on a Bangladesh subsidiary or branch.
- Prepare and legalise UK documents. Board resolutions, certificates of incorporation and powers of attorney usually need notarisation and legalisation for use in Bangladesh. Our guide to legalising UK documents for Bangladesh explains the steps.
- Clear the name and draft the constitution. Apply to the RJSC for name clearance and prepare the memorandum and articles, including any shareholder protections the UK parent needs.
- Remit the share capital. Open a temporary account with an authorised dealer bank and remit the subscription money from abroad through banking channels. Keep the bank's encashment certificate: it is the evidence that the investment entered Bangladesh lawfully.
- Incorporate. File with the RJSC and obtain the certificate of incorporation.
- Register the project and obtain licences. Register with the investment authority where required, obtain tax and VAT registration and a trade licence, and secure any sector licence or no-objection certificate.
- Arrange work permits. Expatriate staff need work permits issued through the investment authority or the relevant zone authority, with employment contracts approved in the form Bangladesh Bank's remittance rules expect.
- Report and maintain. File annual returns and keep the share register, capital records and approvals current, because each later remittance or exit will be checked against them.
How UK investors should document ownership and approvals
The foreign ownership rules Bangladesh enforces are checked at the moment money moves, not just at incorporation. When you want to repatriate dividends, pay royalties or sell your shares, the authorised dealer bank will look for an unbroken paper trail: the encashment certificate for the original capital, the RJSC filings showing the shareholding, audited accounts, tax clearances and any sector approval.
Open a single "approvals file" on day one, with the encashment certificates, RJSC filings, investment authority registration, sector licences and board approvals for every capital injection. Most repatriation delays we see trace back to a missing document from years earlier, not to a refusal of permission.
At group level, the UK parent should record the structure in a shareholders' agreement or, for a wholly owned subsidiary, in intra-group agreements covering management services, intellectual property licences and loans. Royalty and technical fee payments generally need the agreement to be approved by the investment authority before Bangladesh Bank's rules allow remittance. Our guide to repatriating profits from Bangladesh sets out the current rules, and the UK–Bangladesh double tax treaty affects withholding on each payment.
For joint ventures, the shareholders' agreement can be governed by English law with disputes referred to arbitration seated in London, while the company's articles remain subject to Bangladeshi law. Our guides to English law in Bangladesh contracts and enforcing a London arbitration award in Bangladesh explain the trade-offs.
An illustrative scenario
This example is illustrative only and does not describe a real client. A UK logistics group wants to enter Bangladesh to serve its apparel customers. It plans a wholly owned company providing freight forwarding, warehousing and software-based supply chain services.
Advice reveals a split. Freight forwarding is one of the activities where local ownership is required, so the group cannot own that business outright. Warehousing and software services are open. The group incorporates a wholly owned subsidiary for warehousing and technology, and enters a commercial agency arrangement with a licensed Bangladeshi forwarder, governed by English law with London arbitration.
The subsidiary takes a lease in an economic zone rather than buying land, remits capital through an authorised dealer bank, registers its services agreement with the investment authority so that fees can be paid to the UK, and keeps a full approvals file. When it later pays its first dividend, the bank processes it in days.
Risks and common mistakes
Using nominee shareholders to get around restrictions
Where the foreign ownership rules Bangladesh applies require local ownership or a controlled-sector licence, some investors are tempted to hold shares through Bangladeshi nominees under side agreements. These arrangements are fragile. They may be unenforceable, they leave the real investor with no protection under the 1980 Act, and they can breach licence conditions and exchange control rules. They also create serious UK compliance exposure, including under anti-bribery and anti-fraud rules, if payments are needed to keep them in place. Use a properly documented joint venture or commercial agreement instead.
Bringing in capital outside banking channels
Capital that does not arrive through an authorised dealer bank with an encashment certificate may not be recognised as foreign investment. That can block later dividends, royalties and sale proceeds, because the bank cannot verify that the original capital was lawfully invested. Shares issued against loans or in-kind contributions need careful handling and, often, prior approval. Treat every injection of capital as a regulated transaction and keep the evidence.
Assuming an open sector means no licence
Full foreign ownership being permitted does not mean the business can start trading. Trade licences, environmental clearances, fire and factory licences, import registration and, in some cases, sector-specific permissions still apply. Activities that look like ordinary services, such as payment processing, telecoms-adjacent software or education, can fall within a regulated category. Map every licence before committing to premises or staff.
Ignoring UK obligations
UK groups investing in Bangladesh remain subject to UK law. Section 7 of the Bribery Act 2010 makes a commercial organisation liable for failing to prevent bribery by associated persons, including agents who obtain licences on its behalf. UK sanctions, modern slavery reporting and supply chain expectations also apply. Our guide to Bangladesh supply chain due diligence explains the overlap.
Changing ownership and exiting the investment
The foreign ownership rules Bangladesh imposes apply again whenever the shareholding changes. A transfer of shares between a foreign and a Bangladeshi holder, a new allotment to a foreign investor or a group reorganisation must be filed with the RJSC and must respect the company's articles and any sector licence conditions. In controlled sectors, the regulator's consent to a change of control is often required before completion.
Selling out is where weak documentation is most expensive. Sale proceeds are a capital-account remittance, and authorised dealer banks scrutinise them more closely than dividends. Expect to show the original encashment certificates, the valuation basis for the sale price, tax clearance on any gain and evidence that each earlier capital injection was properly approved. Where the paperwork is incomplete, Bangladesh Bank's involvement can add months.
Plan the exit route at the outset. A shareholders' agreement with drag-along and tag-along rights, a pre-agreed valuation mechanism and an English-law dispute clause gives a UK investor far more leverage than renegotiating with a local partner after relations sour. Under the foreign ownership rules Bangladesh maintains for locally reserved activities, an exit may also need a qualifying Bangladeshi buyer, which narrows the market.
The UK angle: treaties, finance and disputes
The United Kingdom and Bangladesh have a bilateral investment treaty, which gives qualifying UK investors protections under international law, such as fair treatment, protection against expropriation and the free transfer of funds, enforceable according to the treaty's own dispute resolution terms. Structuring the investment through a UK entity that qualifies under the treaty can therefore add a layer of protection beyond domestic law.
The UK and Bangladesh also have a long-standing double taxation convention, published on GOV.UK, which limits withholding tax on dividends, interest and royalties for UK residents who can prove their status. Financing from London, whether shareholder loans or bank facilities, must fit within Bangladesh Bank's rules on foreign borrowing, which often require prior approval.
For an overview of the market and its reform agenda, the US government's investment climate statement for Bangladesh notes that efforts to remove obstacles such as delayed foreign currency payments are under way but at an early stage.
Checklist for UK investors
- Classify your activity under the foreign ownership rules Bangladesh applies: open, controlled, locally reserved or state-reserved.
- Identify the sector regulator and any licence ownership conditions before signing leases or hiring.
- Confirm which investment authority handles registration under the 2026 reforms.
- Choose between a subsidiary, branch, liaison office or joint venture.
- Remit all capital through an authorised dealer bank and keep encashment certificates.
- Have royalty, service and loan agreements approved before relying on them for remittances.
- Check bilateral investment treaty and double tax treaty eligibility when choosing the holding entity.
- Build UK anti-bribery and supply chain controls into the local structure.
TRW & Co is headquartered in Dhaka with an SRA-authorised office in London, so we advise on both ends of UK investment into Bangladesh through our investing in Bangladesh practice. To discuss your project, contact us: email info@trw.co, call +880 1779 127165, or visit Holborn Gate, 330 High Holborn, London WC1V 7QH.
Frequently asked questions
01Can a UK company own 100% of a business in Bangladesh?
Yes, in most sectors. Bangladesh's investment authority states that 100% foreign ownership is permitted in the majority of sectors, and a locally incorporated company can be wholly owned by a foreign parent without a Bangladeshi shareholder. The exceptions are the reserved sectors closed to private investment, controlled sectors where a licence or approval is required and may carry ownership conditions, and certain service activities, such as freight forwarding and advertising agencies, where local ownership is required.
02Which sectors are restricted for foreign investors in Bangladesh?
Under the National Industrial Policy, four sectors are reserved for the state: arms and military equipment, nuclear power, security printing and minting, and forestation and mechanised extraction in reserved forests. Controlled sectors, open to private and foreign investment with prior approval, include banking, insurance, power, oil and gas, minerals, telecoms, satellite channels, aviation, shipping, seaports and some chemical industries. Certain agency and education businesses must be locally owned.
03Can foreigners own land in Bangladesh?
Foreign individuals generally cannot own land in Bangladesh. A company incorporated in Bangladesh, including one that is wholly foreign-owned, is treated as a local entity and can hold land in its own name. Many foreign investors lease plots or factory space in export processing zones or economic zones instead, which avoids land title risk and gives access to zone incentives. Due diligence on title is essential for any land purchase.
04Do I need approval to invest in Bangladesh?
For most open sectors, there is no prior approval of the foreign shareholding as such, but you must incorporate with the RJSC, bring capital in through an authorised dealer bank, and register with the investment authority where required. Controlled sectors need a licence or no-objection certificate from the relevant regulator. Branch and liaison offices, foreign loans, and royalty or technical fee agreements need specific approvals.
05Can profits be repatriated from Bangladesh to the UK?
Yes. The Foreign Private Investment (Promotion and Protection) Act, 1980 guarantees repatriation of profits and sale proceeds, subject to exchange control. Dividends are usually remitted through the company's authorised dealer bank on production of audited accounts, tax documents and evidence that the original capital was invested lawfully. Royalties and technical fees depend on approved agreements. Withholding tax applies, reduced for qualifying UK residents under the UK–Bangladesh double taxation convention.
06What is the Invest Bangladesh Authority?
Bangladesh Bank's consolidated foreign exchange circular of 30 September 2026 refers to the Invest Bangladesh Act, 2026 and to the Invest Bangladesh Authority as an approving body for matters such as expatriate employment contracts and royalty arrangements, alongside BEPZA and the Hi-Tech Park Authority. It is part of a reorganisation of Bangladesh's investment agencies. Investors should confirm which body handles their registration and approvals before filing applications.
Sources and official materials
- BIDA: Are there any explicit restrictions on foreign investment in Bangladesh? — 100% foreign ownership in most sectors and activities requiring local ownership
- Bangladesh Bank FEPD-1 Circular No. 40 (30 September 2026) — Outward remittance rules citing the Invest Bangladesh Act, 2026
- Bangladesh Bank — Central bank and foreign exchange regulator
- US International Trade Administration: Bangladesh investment climate — Overview of the investment climate and reform agenda
- GOV.UK: Bangladesh tax treaties — UK–Bangladesh double taxation convention
- Bribery Act 2010, section 7 — UK corporate offence of failing to prevent bribery
General information only, current as at 21 October 2026. It is not legal advice and does not create a solicitor–client relationship. It reflects the law of England and Wales unless stated otherwise; Scotland and Northern Ireland have separate legal systems, and the law changes frequently. Check current official sources and take advice on the facts of your matter.