At a glance: commercial context

Bangladesh remains one of South Asia’s fastest-growing markets, with sustained manufacturing and services expansion and a large domestic market. For international investors the country’s advantages include a sizeable labour force, improving infrastructure in key corridors, and policy measures aimed at attracting foreign direct investment. At the same time, investors should expect an evolving regulatory environment, sector-specific licensing regimes and practical challenges common to emerging markets, such as land availability, supply-chain resilience and regulatory coordination between national and local authorities.

Legal and regulatory framework — what to expect

Foreign investment is governed by a mix of general company law, sectoral statutes and administrative licences. Key considerations include:

• Entity choice and ownership restrictions — options typically include locally incorporated companies, branch offices and project-specific special purpose vehicles. Some sectors have caps or approval requirements for foreign participation.
• Permits and licences — many regulated activities (telecoms, energy, financial services, pharmaceuticals, food and manufacturing in certain zones) require prior approvals and compliance with technical standards.
• Tax and incentives — tax treatment, transfer pricing rules and available incentives (for export-oriented activities or investment zones) should be mapped early in the transaction timeline.
• Employment and labour — local labour law governs contracts, termination, social contributions and dispute resolution; expectations on work permits for expatriates also differ by role and sector.
• Land, property and leases — due diligence on title, permissible uses and relevant development approvals is essential; long-term leasehold structures are commonly used where freehold ownership is restricted.

Market entry and risk management

Market-entry strategies that international investors commonly use include greenfield investment in export processing or economic zones, acquisitions of local entities, joint ventures with established domestic partners, and contractual arrangements such as toll-manufacturing or distribution agreements. Risk management tools should include comprehensive legal, financial and compliance due diligence, clear governance and exit provisions, and contingency planning for political, currency and operational risks. Arbitration and international dispute resolution clauses are frequently used, but investors should also be familiar with local court procedures and enforcement realities.

Practical checklist for investors

• Conduct multi-disciplinary due diligence covering corporate title, licences, tax, employment, property and environmental matters.
• Confirm permissible foreign ownership and any sector-specific approval processes.
• Structure the investment vehicle for tax efficiency, repatriation of profits and governance control.
• Negotiate robust contractual protections: warranties, indemnities, minority protection and exit mechanisms.
• Plan for compliance: anti-corruption, AML, export controls and data protection applicable to operations.
• Engage local advisers early for regulatory filings, permitting and interactions with administrative agencies.

Jurisdiction and sources

Relevant official sources and regulators to consult include:

• Government of the People’s Republic of Bangladesh (official government portals)
• Bangladesh Investment Development Authority (BIDA)
• Bangladesh Bank (central bank)
• National Board of Revenue (tax authority)
• Registrar of Joint Stock Companies and Firms (RJSC)
• Bangladesh Export Processing Zones Authority (BEPZA)

For enquiries from the UK or to discuss cross-border structuring and regulatory risk from our regional perspective, our London office is located at Holborn Gate, 330 High Holborn, London, WC1V 7QH, England. We recommend engaging local counsel in Bangladesh for transactional and compliance work.

General information only; not legal advice and not a substitute for advice on a particular matter.