An SPA (sale and purchase agreement) is the principal contract that records the parties’ commercial deal and allocates legal and financial risk. For cross‑border transactions involving assets or shares in Bangladesh, the SPA must be drafted to address local regulatory, tax and title issues while preserving internationally accepted deal mechanics such as representations and warranties, indemnities and completion mechanics.

Key components of an SPA

Core provisions that require careful drafting in any SPA include:

• Purchase price and payment mechanics (including escrow arrangements and release mechanics).
• Conditions precedent and pre‑closing covenants (regulatory approvals, third‑party consents, tax clearances).
• Reps and warranties and disclosure schedules to allocate due diligence risk.
• Indemnities, caps, baskets, and survival periods for post‑closing claims.
• Completion mechanics: simultaneous vs staggered closings, completion accounts and price adjustments, earn‑outs.
• Post‑closing obligations: transitional services, employment transfers, non‑competes and confidentiality.
• Dispute resolution, governing law and mechanisms for enforcement of remedies.

Specific considerations for transactions involving Bangladesh

Transactions touching Bangladesh raise a number of recurring issues that should be addressed at the contracting stage:

• Regulatory approvals: foreign investment approvals, sectoral licences and any central bank notifications can be conditions precedent to closing.
• Title and land: due diligence on land records and registration is often critical for asset deals because of local registration regimes and potential encumbrances.
• Tax and withholding: potential withholding obligations, capital gains and indirect tax exposures should be mapped and allocation agreed in the SPA.
• Currency and repatriation: controls or central bank requirements affecting repatriation of proceeds or dividends should be contemplated in payment clauses.
• Enforcement and dispute resolution: consider arbitral clauses with an internationally recognised seat and clear enforcement strategy for awards or judgments.
• Local counterparties and approvals: the SPA should anticipate required consents from minority shareholders, lenders and third parties under existing contracts.

Negotiation and closing mechanics

Parties commonly follow a staged process: term sheet, due diligence, draft SPA and schedules, negotiation of risk allocation, and a completion timetable. Practical drafting tips include clear definitions of materiality, a precise set of completion deliverables, objective procedures for price adjustment disputes and an escrow regime that balances protection with commercial exit mechanics.

Practical checklist

1. Confirm governing law and enforcement route (arbitration seat and rules).
2. Identify all required regulatory approvals and timeframes.
3. Complete focused due diligence on title, tax, employment and regulatory risk areas.
4. Agree caps, baskets and survival periods for indemnities.
5. Set clear completion deliverables and post‑closing covenant timetable.
6. Establish escrow, warranty insurance or other risk mitigation if needed.
7. Plan for integration and post‑closing cooperation obligations.

Jurisdiction and sources

When negotiating SPAs involving Bangladesh, consult primary official sources and local regulators, including:

• Bangladesh Bank (central bank circulars and foreign exchange requirements)
• National Board of Revenue (tax rules and clearance procedures)
• Registrar of Joint Stock Companies and Firms / relevant company registry
• Bangladesh Investment Development Authority and applicable sectoral regulators
• Primary legislation and regulations, including the Companies Act and applicable tax and property laws

For international counterparties, engage local counsel in Bangladesh early to confirm documentary requirements and timing. TRW & Co, London (Holborn Gate, 330 High Holborn, London, WC1V 7QH, England) can assist with cross‑border structuring and coordination with local advisers.

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