Employment Law for Expatriates in Bangladesh 2026: Work Permits, Contracts, Tax and Exit

Employment law for expatriates Bangladesh: the 2026 framework

Employment law for expatriates Bangladesh employers must follow is not one statute but five regimes that run in parallel: the Visa Policy 2026, a work permit from the competent authority, the Bangladesh Labour Act 2006 or the EPZ Labour Act 2019, the Income Tax Act 2023 and Bangladesh Bank's foreign exchange rules. In 2026 two of those regimes changed shape. The Ministry of Home Affairs published a new Visa Policy in August, and the Invest Bangladesh Act 2026 replaced BIDA and BEZA with a single authority that now issues most work permits.[1] [3]

This guide is written for employers, HR teams and senior foreign hires. It explains which rules apply to a foreign employee, how the work permit and visa interact with the employment contract, how expatriates are taxed, how salary and savings leave the country, and how to end an expatriate's employment cleanly. Visa categories, extension procedure and the general law on hiring and firing are covered in companion TRW guides, linked where they matter.

Summary: A foreign national may work in Bangladesh only on an employment-type visa backed by a work permit from Invest Bangladesh, BEPZA, BHTPA, the NGO Affairs Bureau or another competent authority, applied for within 15 working days of arrival. The Labour Act protects foreign "workers" exactly as it protects Bangladeshis, but most senior expatriates fall outside it as managers, so their contract does the work. Residents are taxed on slab rates and non-resident foreigners at a flat 30%. Up to 80% of net salary can be remitted during the year, and the balance after tax assessment.

Key point: The work permit is the hinge on which everything else turns. The visa is extended only for the permit's term plus 15 days, Bangladesh Bank lets banks remit salary only against benefits specified in the permit, and savings leave on departure only if the employment contract was approved by the authority. A permit that lapses, or a contract that was never approved, blocks the visa, the payroll remittance and the exit at once.

At a glance

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Table of Contents

The five regimes behind employment law for expatriates Bangladesh

Every expatriate engagement in Bangladesh sits on five separate legal foundations, each administered by a different body. Getting one right does not cure a defect in another, and the failures compound: a visa that cannot be extended stops the payroll, and an unapproved contract stops the final remittance. Employers that treat expatriate hiring as an immigration task alone usually discover the tax and foreign exchange problems at exit, when they are hardest to fix.

• Immigration: the Visa Policy 2026 sets the visa category, its duration and the conditions on employment, enforced by the Department of Immigration and Passports and the Special Branch.[3]
• Work authorisation: a work permit from Invest Bangladesh, BEPZA, the Bangladesh Hi-Tech Park Authority, the NGO Affairs Bureau or another competent authority.[1] [3]
• Employment protection: the Bangladesh Labour Act 2006 outside the export processing zones, and the Bangladesh EPZ Labour Act 2019 inside them.[9] [10]
• Contract: the Contract Act 1872, which governs everything the labour statutes do not, including most senior expatriate terms.[11]
• Tax and money: the Income Tax Act 2023 and Bangladesh Bank's consolidated circular on outward current account remittances.[12] [14]

The table below shows how the layers fit together. On a phone, scroll it sideways.

The rest of this guide takes each layer in turn, from the expatriate's arrival to departure. Our overview of Bangladesh immigration law covers the immigration statutes themselves, including registration, overstay and deportation.

Work permits after the Invest Bangladesh Act 2026

A visa permits entry; it does not permit work, and the work permit is the instrument on which the rest of employment law for expatriates Bangladesh depends. The Visa Policy 2026 requires the passport of every E1, E2, E3, J, P, PI and N1 visa holder arriving to take up work to be stamped with an instruction to apply for a work permit to BIDA, BEPZA, BEZA, BHTPA, the NGO Affairs Bureau, PPA or another competent authority within 15 working days of first entry.[3] The policy was drafted before the merger of three of those bodies, so the list now needs to be read in light of the 2026 Act.

Invest Bangladesh takes over from BIDA and BEZA

The Invest Bangladesh Act 2026 is Act No. 104 of 2026, dated 16 July 2026, and was brought into force on 20 August 2026 by SRO No. 307-Law/2026.[1] Section 66 repeals the Bangladesh Economic Zones Act 2010, the Public-Private Partnership Act 2015, the Bangladesh Investment Development Authority Act 2016 and the One Stop Service Act 2018, dissolves BEZA, the PPP Authority and BIDA, and treats anything done under the repealed laws as done under the new Act.[1] The new authority began operating on 23 August 2026 under the Prime Minister's Office.[2]

Section 6 lists the authority's functions. They include setting the terms and scope of engagement of foreign officers, experts, employees and consultants in industries, branch, liaison, representative and project offices, buying houses and similar businesses, recommending visas and granting work permits.[1] Section 28(4) also requires the authority, when it registers an industrial project, to fix the timelines for visas, work permits and security clearance against work permits.[1] Existing BIDA and BEZA permits continue in force by virtue of the saving clause, and BanglaBiz remains the digital platform for applications.[1] [2]

Which authority issues the permit

The authority depends on where the employer sits, not on the employee. Companies, branch, liaison and representative offices and economic zone enterprises now apply to Invest Bangladesh. Units in export processing zones apply to BEPZA, companies in hi-tech and software technology parks to BHTPA, and registered NGOs to the NGO Affairs Bureau, each named in the Visa Policy as a competent authority.[3] A group with entities in more than one location needs a permit from each relevant authority for each person who works for those entities.

Ratios, fees and duration

BIDA's published guidance, which Invest Bangladesh has inherited, applies staffing ratios between local and foreign workers: 10:1 for an industrial project at the initial stage, 20:1 once it is operational, and 5:1 for branch, liaison and representative offices and educational institutes.[5] The fee for a new permit is BDT 5,000 per person per year through the One Stop Service, with a stated service time of 16 working days, subject to inter-ministerial committee approval.[4] A permit is ordinarily granted for one year and extensions are normally allowed up to a maximum of five years.[6]

The application file tells the employer what the authority will later hold it to. It includes a board resolution on the foreign national's salary, allowances and benefits, the service contract and appointment letter, a statement of all local and foreign staff, the company's tax clearance, and a list of the local employees the expatriate will train. Branch, liaison, joint venture and wholly foreign-owned companies must also show inward remittance of at least USD 50,000 as initial establishment cost.[4] The step-by-step procedure is in our guide to Bangladesh work visa requirements.

Security clearance is a separate deadline

Since 1 October 2025, security clearance against a work permit must be applied for only through the One Stop Service portal. Clearance is deemed granted if no objection is raised within 21 working days of a complete application, and failure to apply within the period stated in the work permit renders the permit invalid.[7] In practice this is the most commonly missed step. The permit letter arrives, HR treats the matter as closed, and the clearance window passes unnoticed.

Employment visas under the Visa Policy 2026

Employment law for expatriates Bangladesh imposes starts with choosing the right visa category, because the category cannot be fixed later from inside the country. The Visa Policy 2026 provides three employment categories, each with its own dependent category, and the full list of 34 categories is explained in our guide to types of visas in Bangladesh.[3] For employers, the decisions that matter are these.

E2 for ordinary employment, E3 for technical assignments

E2 covers experts and skilled workers employed in government, autonomous and private bodies, garments, industrial and commercial organisations and branch, liaison and representative offices, and international consultants and contractors implementing EPC, G2G, turnkey, PPP and FDI contracts. E3 covers installation, commissioning, maintenance, supervision, inspection and project monitoring, and technical support, with a 90-day limit per stay. E1 is confined to direct officials of development partners and excludes contractors.[3]

Both E2 and E3 begin with a visa of up to six months. Each is then extended for the term of the work permit plus 15 days, or for 30 days while the permit, police report or security clearance is pending.[3] The first extension requires a TIN certificate, and every extension from the first onwards an income tax certificate.[3] Tax compliance is therefore built into the immigration cycle: an expatriate who has not filed cannot stay. The timing rules for extensions are covered in our note on Bangladesh visa extension.

Business visas and dependants do not permit work

The policy requires visa labels for B, FE1, FE2, FE3, T and many other categories to carry the condition "Employment in Bangladesh prohibited".[3] An engineer flown in on a business visa to commission a line, or a spouse on an FE2 visa who helps out in the office, is working unlawfully. A dependant who finds a job needs a principal employment visa and permit in their own right.

No change of category after arrival

A visa category cannot be changed after entering Bangladesh, except a visa on arrival, which may be converted into listed categories including E1, E2 and E3. Conversion attracts a USD 200 fee for those who take up employment, and conversion into E2 or E3 needs a recommendation letter to the Ministry of Home Affairs from the competent authority.[3] A person who arrived on a business or tourist visa must leave and apply afresh at a mission.

Does the Labour Act apply to expatriates?

Yes, on the same terms as to anyone else. The definition of "worker" in section 2(65) of the Bangladesh Labour Act 2006, as replaced in 2026, covers any person, including an apprentice, employed in an establishment or industry directly or through a contractor for wages in skilled, unskilled, manual, technical, business development or clerical work, whether the terms are express or implied.[9] Nationality plays no part. A foreign quality controller in a garment factory or a foreign chef in a hotel is a worker, with the same rights to an appointment letter, leave, notice, compensation and the Labour Court as a Bangladeshi colleague.

The managerial exclusion is where most expatriates sit

The only exclusion from the definition is a person within section 2(49)(b): someone given managerial, chief executive, administrative or supervisory responsibility for the establishment in writing.[9] Such a person is treated as part of the "employer" side. Country managers, finance directors, plant heads and most senior expatriates fall here, but only if the written appointment actually confers that authority. A job title is not enough. An expatriate "manager" who supervises no one and takes no decisions is likely to be a worker.

The practical consequence is significant. For an expatriate outside the definition, notice, severance and restrictive covenants depend on the contract and any company service rules. For an expatriate inside it, the Labour Act's minimums apply whatever the contract says, and a clause that gives less is unenforceable to that extent. Employment law for expatriates Bangladesh courts apply therefore turns, case by case, on what the appointment letter records.

Establishments the Act does not reach

Section 1(4) excludes certain establishments altogether, including government offices, and education, training or research institutions not run for profit.[9] Foreign teachers at a non-profit international school, for example, are generally governed by their contracts and the school's rules rather than the Act. A school run for profit is not excluded.

Export processing zones

Inside the zones, the Bangladesh EPZ Labour Act 2019 (Act No. 2 of 2019) governs employment in place of the general Act, and BEPZA administers it.[10] Zone employers should check the EPZ statute and BEPZA's instructions rather than assume the general Act's provisions, which differ in places, particularly on workers' associations and dispute procedures. Our guide to labour law in Bangladesh explains the general Act and the 2026 reforms in detail.

Drafting the expatriate employment contract

For a senior hire outside the Labour Act, the contract is the whole of the employment relationship that employment law for expatriates Bangladesh recognises, so it must be drafted for Bangladesh, not imported from head office. The contract also has a regulatory life. It is filed with the work permit application, and Bangladesh Bank's rules tie salary and savings remittances to the benefits stated in the permit and to a contract approved by Invest Bangladesh, BEPZA, BHTPA or another competent authority.[4] [14] Anything not in the approved contract is difficult to pay out of the country later.

Clauses that matter most

• Employer and place of work: name the Bangladeshi entity that holds the permit. A permit issued to one entity does not authorise work for an affiliate.
• Term: align the fixed term or review dates with the permit's annual cycle, and make continued employment conditional on the permit and visa being renewed.
• Remuneration: state every element, including housing, car, school fees, home leave and any foreign-currency component, because the bank will calculate remittable income from the benefits specified in the permit.[14]
• Tax: say who bears Bangladesh tax and whether salary is net or gross. A tax-equalised package must be grossed up correctly, or the employer will under-withhold.
• Termination: set notice periods and severance that at least match the statutory minimums if there is any doubt about the employee's status.
• Repatriation: deal with flights, shipping and the employee's cooperation with permit cancellation and tax clearance on exit.

Governing law and restraints

Parties often choose a foreign governing law. That choice cannot displace mandatory Bangladeshi law, and the Labour Act's protections for workers, the work permit conditions and the tax and exchange control rules apply regardless. Post-employment restraints need particular care. Section 27 of the Contract Act 1872 makes every agreement restraining anyone from exercising a lawful profession, trade or business void to that extent, with a narrow exception for the sale of goodwill.[11] Confidentiality obligations and restrictions that operate during employment are on safer ground than a non-compete after it. Our guide to employment contracts in Bangladesh covers drafting points that apply to all employees.

Income tax on expatriates

Within employment law for expatriates Bangladesh, tax is the regime employers most often get wrong, because it depends on days of presence rather than on the contract. The Income Tax Act 2023 taxes an individual according to residential status, which is fixed separately for each income year.[12] [13]

Residence: 183 days, or 90 days plus 365

Under section 2(45), an individual is resident for an income year if present in Bangladesh for 183 days or more in that year, or for 90 days or more in that year having been present for 365 days or more during the four preceding years.[12] The Bangladesh income year runs from July to June, so an expatriate who arrives in March may be non-resident in the first year and resident in the second. Diarise the dates of arrival and departure from the start.

What is taxed and at what rate

Section 26 taxes a resident on worldwide income, and a non-resident only on income that accrues or arises, or is received, in Bangladesh.[12] Section 27 deems employment income to accrue in Bangladesh, wherever paid, if it is earned in Bangladesh.[12] A salary paid by the foreign parent into an overseas account for work done in Dhaka is therefore taxable in Bangladesh.

A resident expatriate is taxed on the same slabs as a Bangladeshi: for 2026-27, nil up to the BDT 400,000 threshold, then 10%, 15%, 20% and 25% bands, and 30% on the remainder. A non-resident who is not a Bangladeshi citizen is taxed at the maximum rate of 30% with no threshold.[13] Housing, cars and other perquisites are taxed at their value; an employer-provided car, for example, is valued at BDT 15,000 to BDT 50,000 a month according to engine size.[13] Our guide to income tax rates in Bangladesh sets out the slabs and thresholds in full.

Withholding and payment by bank

Section 86 requires the employer to deduct tax at source from employment income at the average rate applicable to the employee's estimated total income.[12] The Act also disallows, as a business expense, any payment under the head income from employment made by a means other than bank transfer.[12] Cash allowances to expatriates therefore cost the employer its deduction as well as creating a withholding gap. Where part of the package is paid abroad, the Bangladeshi employer still needs to account for the tax on it.

Returns, TIN and the statement of assets

The expatriate needs a TIN for the first visa extension and an income tax certificate for each extension after that.[3] Section 167(4) requires a foreign individual assessee who files a return to include a statement of assets and liabilities situated in Bangladesh.[12] Expatriates from countries with which Bangladesh has a double tax agreement should check whether relief is available, and keep evidence of foreign tax paid; the Act's provisions on agreements and foreign tax credit apply.[12]

Remitting salary and savings abroad

Under employment law for expatriates Bangladesh, foreign exchange control is the regime that determines whether expatriate pay can actually reach the employee's home account. Bangladesh Bank's FEPD-1 Circular No. 40 of 30 September 2026 consolidates the rules on outward current account remittances and is valid for one year.[14]

The 80/20 rule

Authorised dealer banks may remit up to 80% of a foreign national's net income after tax at any time during the year, subject to funds in the relevant account, using the prescribed application. The remaining 20% is remittable at the end of the financial year once the income tax assessment is complete, supported by a certificate from the tax authority.[14] Banks may also remit net income from an employer's foreign currency account maintained for the purpose to the country where the employee's family lives.[14]

The employer prepares the certificate that supports the remittance, taking into account all monetary and non-monetary benefits specified in the work permit, in line with income tax rules.[14] This is the link that makes the permit and the contract matter for payroll. Benefits paid outside the permit's terms will not be counted.

Foreign currency accounts, bonuses and leave salary

Up to 80% of net monthly income may be credited in foreign currency to an expatriate's foreign currency account, from the employer's permissible foreign currency, ERQ or taka accounts; the credit is treated as an outward remittance under Form TM procedures.[14] A bonus or commission cannot be included in the monthly entitlement in anticipation. It counts only once actually paid, and is then spread over the next twelve months unless the foreign national opts to remit it in one go after tax.[14] Net salary for leave admissible under a government-approved service contract is remittable on the employer's application, with a declaration that the leave was earned in Bangladesh.[14]

Savings and retirement benefits on departure

A foreign national leaving permanently at the end of service may transfer genuine savings out of salary and benefits clearly stated in the employment contract approved by Invest Bangladesh, BEPZA, BHTPA or another competent authority, together with provident fund, pension and gratuity due under that contract.[14]

The application must be supported by, among other things, an employer's certificate of salary, provident fund, leave salary and bonus for each year, and a certified copy of the approved contract. Payments not covered by the original contract need a board resolution and approval from the department that approved the employment.[14] The bank remits only what it is satisfied are genuine savings from legitimate earnings in Bangladesh.[14] The wider exchange control regime is explained in our guide to foreign exchange regulations in Bangladesh.

Hiring an expatriate step by step

The order of steps matters, because each permission depends on the one before it. The sequence we follow for clients is set out below. It assumes the employer is already established and registered with the competent authority; a new entity should first complete investment approvals and registration.

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International mobility: secondments and transfers

Group mobility raises questions that a single hire does not. A secondee who remains on the foreign parent's payroll still needs a Bangladeshi employer of record for the permit, and the income is still taxable in Bangladesh if earned there.[12] Because the permit is tied to the employing entity, a transfer between two Bangladeshi group companies needs fresh authorisation for the receiving company, and the cancellation file for the old permit asks for the transfer order and board resolution.[8] Short visits by regional managers are permissible on a business visa only if they genuinely involve meetings and not work, and the line should be documented.

Employers should also watch the five-year horizon. Because extensions are normally capped at five years, long-term expatriate roles need a succession or localisation plan, and the authority expects to see local staff being trained.[4] [6]

Termination of expatriate staff

Ending an expatriate's employment is a two-track exercise under employment law for expatriates Bangladesh. The employment track follows the Labour Act or the contract; the regulatory track closes the permit, the visa, the tax file and the remittance. Employers that complete only the first leave the employee unable to leave the country cleanly, and themselves exposed. The general law is covered in our guides to termination of employees in Bangladesh and hiring and firing laws; what follows is specific to foreign staff.

The employment track

If the expatriate is a worker, section 26 allows the employer to end a permanent worker's employment, otherwise than for misconduct, on 120 days' written notice for a monthly-rated worker or 60 days for others, or pay in lieu, with compensation of 30 days' wages for each completed year of service or gratuity if higher.[9] A permanent worker may resign on 60 days' notice under section 27.[9] All wages due must be paid within thirty working days of the end of employment under section 123.[9] Dismissal for misconduct requires the statutory inquiry. For a manager outside the Act, the contract's notice and severance terms govern, and the employer should follow them precisely.

Cancelling the work permit

The permit must be cancelled when employment ends. Invest Bangladesh's cancellation service, inherited from BIDA, requires the first and last permits, the company's and the expatriate's up-to-date income tax clearance certificates, tax certificates for the previous three years where applicable, the resignation letter or transfer order, a board resolution and release letter, the passport page with the latest departure seal, the air ticket and an updated list of local staff the expatriate trained. It is free and the stated service time is three days.[8] The departure seal requirement means cancellation is often completed after the person has left, so collect signed documents and authorisations before the last working day.

Once the permit is cancelled, the basis for the employment visa falls away. An expatriate who stays on to look for another job needs a new permit from the new employer, or must regularise the visa. Overstay attracts penalties under the Visa Policy of Tk 1,000 a day for the first 15 days and Tk 2,000 a day thereafter, rising for longer overstays.[3]

Tax clearance and final assessment

Section 243 of the Income Tax Act 2023 provides that, subject to exceptions made by the Board, a person not domiciled in Bangladesh may not leave the country without a tax clearance certificate or, if intending to return, an exemption certificate.[12] Section 193 allows the Deputy Commissioner of Taxes to assess a person authorised to work in Bangladesh who is leaving with no intention of returning, for the period up to the probable date of departure, after a notice of at least seven days.[12] The final 20% of the year's salary and the savings transfer both depend on completing this step.[14]

A clean exit checklist

• Settle the employment terms in writing, including notice, final pay, bonus, gratuity and any settlement payment.
• Compute and withhold tax on the final payments, and arrange the expatriate's final return or departure assessment.
• Obtain the tax clearance certificate before the departure date.
• Apply to remit the final salary balance and savings, with the employer's certificate and the approved contract.
• Cancel the work permit, and keep the departure-sealed passport copy and air ticket on file.
• Update the register of foreign staff and inform the bank and, where relevant, the NGO Affairs Bureau or BEPZA.

Compliance risks under employment law for expatriates Bangladesh

Enforcement now falls on employers as well as on the foreign national. Under paragraph 18 of the general instructions in the Visa Policy 2026, if a foreign national who arrives for employment, investment, business or education conceals information or breaches a visa condition, the appointing or sponsoring organisation is fined Tk 1,00,000 per person for the first violation and Tk 2,00,000 for each similar later violation.[3] The organisations below are the ones an expatriate employer will deal with.

The most common failures are predictable: permits applied for after the 15-working-day window, security clearance never filed, extensions sought without a current income tax certificate, technicians on business visas, payroll paid partly in cash, and exits that leave the permit open. Each is avoidable with a single register of every foreign national's visa category, expiry dates, permit, clearance and tax status, reviewed monthly. TRW's global mobility and business immigration team runs these registers for employers, and our employment law compliance practice audits contracts and service rules against the labour statutes.

What to watch in 2026 and 2027

Three developments will shape employment law for expatriates Bangladesh businesses must plan around over the coming year. First, Invest Bangladesh is expected to issue guidelines under the 2026 Act, including the timelines for visas, work permits and security clearance that section 28 contemplates; any revision of the BIDA-era ratios and five-year cap would come through that route.[1] Second, the Visa Policy 2026 still names BIDA and BEZA, and employers should expect operational updates aligning it with the merged authority.[3] Third, Bangladesh Bank's Circular No. 40 expires after one year, so the remittance rules will be reissued by September 2027.[14]

Employers that sequence the visa, permit, clearance, tax registration and payroll correctly at the start rarely face difficulty at the end. TRW advises on expatriate hiring, contracts, tax and exits for multinationals, NGOs and zone enterprises. Speak to our global mobility team or contact TRW before the next foreign hire arrives.

Frequently asked questions

Can a foreigner work in Bangladesh on a business visa?

No. The B visa label carries the condition "Employment in Bangladesh prohibited". Work requires an employment-type visa such as E2 or E3 and a work permit from the competent authority.[3]

Who issues work permits now that BIDA has been replaced?

Invest Bangladesh, created by the Invest Bangladesh Act 2026 (Act No. 104 of 2026), issues permits for most companies and offices and for economic zone enterprises. BEPZA, BHTPA and the NGO Affairs Bureau continue for their own sectors.[1] [3]

How soon after arrival must the work permit be applied for?

Within 15 working days of first entry into Bangladesh, as stamped on the passport when the employment visa is issued.[3]

How long can an expatriate hold a work permit?

A permit is ordinarily granted for one year, and extensions are normally allowed up to a maximum of five years.[6]

Does the Bangladesh Labour Act protect foreign employees?

Yes, if they are "workers". On this point employment law for expatriates Bangladesh makes no distinction by nationality, but the definition excludes anyone given managerial, chief executive, administrative or supervisory responsibility in writing, which covers many senior expatriates.[9]

Is a non-compete clause enforceable against an expatriate?

A post-employment restraint is at serious risk. Section 27 of the Contract Act 1872 makes agreements in restraint of a lawful profession, trade or business void to that extent, subject to a narrow goodwill exception.[11]

When does an expatriate become tax resident?

When present for 183 days or more in the income year, or for 90 days or more in the year after 365 days or more in the previous four years.[12]

What rate of tax does a non-resident foreign employee pay?

A non-resident individual who is not a Bangladeshi citizen is taxed at the maximum rate of 30% on Bangladesh-source income, without the tax-free threshold.[13]

How much of their salary can expatriates send home?

Up to 80% of net income after tax during the year, and the remaining 20% at the end of the financial year after the income tax assessment.[14]

Does an expatriate need tax clearance to leave Bangladesh?

Under section 243 of the Income Tax Act 2023, a person not domiciled in Bangladesh needs a tax clearance certificate, or an exemption certificate if returning, subject to exceptions made by the Board. Work permit cancellation also requires the expatriate's tax clearance.[8] [12]