Bangladesh Investment Opportunities for Foreigners 2026: Sectors, FDI Data, Engineering Consultancy Setup and Project Mobilisation

Bangladesh investment opportunities for foreigners: the 2026 picture

Bangladesh investment opportunities for foreigners in 2026 sit in a market that recovered strongly in 2025 and then slowed sharply in the first half of 2026. Net foreign direct investment rose by almost 40 per cent last year, power and food processing attracted the largest sums, and a new apex investment statute took effect in August. At the same time, fresh equity has thinned, energy supply remains a constraint and investors are watching how the elected government implements its reforms. The opportunity is real, but it rewards investors who choose the right sector, the right vehicle and the right sequence.

This guide serves two readers: the investor deciding where to put capital, and the foreign engineering, project management or contracting firm that wants to sell services or build projects here. It covers priority sectors and their legal hooks, the latest FDI data, how an engineering consultancy sets up, how government consultancy work is won and taxed, and how a contractor mobilises. Entry procedure, approvals, incentives, registration and visas are covered in companion TRW guides, which we link rather than repeat.

Summary: Net FDI into Bangladesh reached USD 1.77 billion in 2025, led by power and food processing and by investors from the Netherlands, China, Singapore, South Korea and the United Kingdom, but fell 28 per cent in the first half of 2026. The strongest Bangladesh investment opportunities for foreigners are in power and renewables, export diversification away from cotton garments, pharmaceuticals and medical devices, electronics and semiconductors, light engineering, agro-processing, logistics and healthcare. Foreign engineering and project firms enter through a branch, project office, joint venture or subsidiary, and must register with the investment authority before working on government projects.

Key point: The legal hook for most opportunities is now the Invest Bangladesh Act 2026, in force since 20 August 2026. It lets the Government grant special customs facilities and sector incentives by gazette notification, so an incentive exists for a project only when a notification or tax instrument covers it. For service firms, a separate rule matters just as much: foreign companies working on government projects, alone, in a joint venture or as subcontractors, need investment authority registration and a Bangladesh Bank filing before they can be paid.

At a glance

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Table of Contents

What the 2025 and 2026 FDI data tell foreign investors

Any assessment of Bangladesh investment opportunities for foreigners should start with what other foreign investors have actually done. According to Bangladesh Bank data published by Invest Bangladesh on 14 May 2026, net FDI rose from USD 1,270.39 million in 2024 to USD 1,770.42 million in 2025, an increase of 39.36 per cent.[2] Reinvested earnings quadrupled to USD 434.10 million, intra-company loans rose to USD 781.68 million, and fresh equity capital was almost flat at USD 554.64 million.[2] Existing investors were expanding; relatively few new ones were arriving.

Where the money came from and went

Bangladesh Bank's survey, reported in June 2026, put the Netherlands first among source countries with USD 544.61 million, followed by China with USD 321.15 million, Singapore with USD 192.43 million, South Korea with USD 171.70 million and the United Kingdom with USD 169.41 million. Hong Kong, India, Sri Lanka, Malaysia and the UAE completed the top ten.[5] Power was the largest recipient sector, at USD 448.18 million, and the Netherlands alone put USD 405.46 million into food products. China's investment was concentrated in power, at around USD 215 million.[5] The top ten sectors absorbed 99.12 per cent of net inflows, so FDI remains concentrated in a narrow set of industries.[5]

The first half of 2026

The momentum did not hold. Net FDI in January to June 2026 fell 28.06 per cent year on year to USD 794.25 million. Net equity dropped to USD 155.68 million and inter-company loans collapsed to USD 34.74 million, while reinvested earnings rose to USD 603.83 million.[4] Investors cited energy supply, policy implementation and tax audits; Invest Bangladesh reported a USD 1.3 billion project pipeline.[4] For a new entrant, Bangladesh investment opportunities for foreigners now come with less competition for sites and partners, but approvals, energy and tax exposure must be priced in from day one.

The legal hooks behind Bangladesh investment opportunities for foreigners

Every sector rests on the same legal stack: the guarantees of the Foreign Private Investment (Promotion and Protection) Act 1980, the Invest Bangladesh Act 2026, Bangladesh Bank's foreign exchange rules and sector licensing. The statutes and treaties are analysed in our guide to foreign investment law in Bangladesh; this section covers only the parts that turn a sector into an investable opportunity.

The Invest Bangladesh Act 2026

The Invest Bangladesh Act 2026, Act No. 104 of 2026, took effect on 20 August 2026. It merged the Bangladesh Investment Development Authority, the Bangladesh Economic Zones Authority and the Public-Private Partnership Authority into the Invest Bangladesh Authority and repealed their statutes and the One Stop Service Act 2018.[1] Section 6 empowers the Authority to approve incentives for domestic and foreign capital, approve domestic-foreign joint ventures, recommend visas and grant work permits. Chapters 4 and 5 provide for industrial areas, Chapter 7 for registration of private industrial projects and Chapter 8 for PPP.[1] Our note on the Invest Bangladesh Act 2026 industrial-area framework analyses the statute in detail.

Incentives exist only when notified

Two provisions decide whether a sector opportunity carries fiscal support. Section 21 lets the Government, by gazette notification and for a fixed period, grant special customs facilities to projects inside an industrial area and to registered projects outside one. Section 22 allows sector-based financial and non-financial incentives by gazette.[1] Neither section grants anything by itself. The FY2026-27 budget named electronics, semiconductors, electric vehicles, batteries, solar energy, shipbuilding and pharmaceuticals as sectors to receive duty and tax concessions, and proposed accelerated depreciation for manufacturing outside Dhaka and Chattogram.[6] Model an incentive only once the instrument is identified; the detail is in our guide to tax incentives for foreign investors in Bangladesh.

Reserved sectors, controlled sectors and caps

Bangladesh is open by default. One hundred per cent foreign ownership is permitted in most sectors, but four are reserved and closed to private investment: arms and military equipment, nuclear power, security printing and minting, and forestry and mechanised extraction in reserved forests.[9] A further 22 controlled sectors, including power, oil and gas, large-scale infrastructure, telecoms, aviation, seaports and chemicals, need a no-objection certificate from the relevant ministry before registration. Local ownership is required for activities such as shipping agencies, couriers, buying houses and advertising agencies.[9] Several of the priority sectors below therefore start with a ministry NOC, not a company filing.

Bangladesh investment opportunities for foreigners by sector

The priority sectors below combine proven foreign interest, policy support and a workable legal route. Each carries a regulatory question to answer before committing capital.

Power and renewable energy

Power is already the largest FDI sector, and renewable energy is where new capacity is being procured. The Renewable Energy Policy 2025 targets 20 per cent of electricity demand from renewables by 2030 and 30 per cent by 2040, and a companion 2025 policy allows private investors to sell power through the utilities' networks or directly to large and bulk consumers.[7] In June 2026 the Power Minister told parliament that renewable capacity stood at 1,781.09 MW, with 1,172 MW under construction and 665 MW being tendered for connection by 2029.[7] Power generation is a controlled sector, so the NOC, tariff and offtake documents drive bankability. See our guide to renewable energy law in Bangladesh.

Garment diversification and technical textiles

The garment industry is the export engine, but it is heavily weighted to cotton while global demand shifts to synthetic and blended fibres. The gap is in man-made fibre, synthetic fabrics, technical textiles and higher-value activewear. Such projects usually locate in BEPZA zones or industrial areas, and the legal work is zone allotment, environmental clearance for dyeing and processing, and buyer contracts.

Pharmaceuticals, API and medical devices

Bangladesh's pharmaceutical industry is one of the country's most established manufacturing sectors. The opportunity for foreign investors lies in active pharmaceutical ingredients, biologics, contract manufacturing and medical devices, where import dependence remains high. Pharmaceuticals were named among the sectors for duty and tax concessions in the FY2026-27 budget.[6] The legal questions are drug registration, patent and data protection as LDC-era flexibilities are reviewed, and licensing terms that allow royalty remittance.

ICT, electronics and semiconductors

Electronics assembly, semiconductor design, testing and packaging, and IT-enabled services are an explicit government priority, with electronics and semiconductors named for budget concessions.[6] Hi-tech parks remain under their own authority and were not merged into Invest Bangladesh.[1] Telecoms is a controlled sector with tiered foreign-ownership caps, covered in our guide to foreign investment law. For design businesses, the key issues are IP assignment, employee inventions and fee remittance.

Light engineering

Light engineering, from machine parts and moulds to bicycles and agricultural machinery, is a large, fragmented industry with exports well below potential. Foreign investors bring tooling, quality systems and buyers, usually through a joint venture with a local manufacturer that documents technology, quality and export rights; our guide to joint ventures in Bangladesh covers the shareholder terms.

Agro-processing and food

Food processing produced the largest single country-sector FDI flow of 2025, through Dutch investment of USD 405.46 million in food products.[5] Dairy, edible oil, poultry and feed, frozen foods, fruit processing and cold chain are all open to full foreign ownership. The regulatory work is food safety and standards licensing, import permits for inputs and, for land-based projects, the land and lease structure.

Logistics, ports and inland container depots

Ports and logistics opened decisively to foreign operators in 2025 and 2026. In November 2025 the Chittagong Port Authority signed a 30-year PPP concession, extendable on performance, with APM Terminals to design, finance, build and operate the Laldia container terminal.[8] The FY2026-27 budget proposed removing the 49 per cent cap on foreign ownership of private off-docks and inland container depots and announced frameworks for air cargo stations and private port operators.[6] Seaports are a controlled sector and port concessions are PPP projects, so our guide to PPP projects in Bangladesh is the starting point.

Healthcare

Hospitals, diagnostics and specialist clinics are open to full foreign ownership, and spending on treatment abroad points to unmet demand at the top of the market. Hospitals keep advance tax exemptions on imported capital machinery.[6] The legal path runs through facility licensing, registration of foreign clinicians and building approvals.

How a foreign engineering consultancy Bangladesh entry is structured

Engineering, project management and supervision services are among the most practical Bangladesh investment opportunities for foreigners, because the infrastructure, power and industrial pipeline needs design and owner's engineer capacity. An engineering consultancy Bangladesh clients engage can be structured in five ways, and the choice decides what it can earn and how it is taxed.

Liaison office

A liaison office may coordinate with the parent and local agents and collect and disseminate business information, but it may not earn local income, and its costs are borne entirely by the parent.[3] It suits business development, not paid engineering work. Approval runs through the inter-ministerial committee at the investment authority, which meets twice a month.[9]

Branch office

A branch can carry on approved commercial activities and earn local income in the approved fields, but any expansion beyond them needs an amendment, and outward remittances need prior approval.[3] Permission is usually granted for three years and must be renewed at least two months before expiry; at least USD 50,000 must be brought in as inward remittance within two months of the approval letter.[3] A branch operates through one nominated authorised dealer bank for all inward and outward remittances.[10]

Project office

A project office, introduced by the investment authority's 2023 guidelines, is designed for implementing a government, development partner or private development project, or part of one. It requires a recommendation from the implementing agency and a copy of the relevant contract.[3] For a single defined mandate it is often the cleanest vehicle, closing when the project ends.

Subsidiary or joint venture company

A private limited company under the Companies Act 1994 suits a firm building a permanent practice that bids repeatedly; a joint venture company with a local firm adds local credentials and staff. Incorporation is covered in our guide to foreign company registration in Bangladesh.

Unincorporated JV or consortium for a single tender

Many foreign firms bid with a local partner as an unincorporated joint venture, consortium or association. Bangladesh Bank's FEID Circular No. 02 of 20 November 2024 regulates these arrangements: the JVCA needs permission from the investment authority or other competent authority, a valid contract among the partners, TIN, BIN and VAT registration, regular tax returns and an account with a nominated authorised dealer into which all work-order payments are credited.[10] It must keep separate audited accounts under Bangladesh financial reporting standards, and profit remittances to foreign partners need Bangladesh Bank approval.[10]

Engineering practice rules: professional membership and the Building Code

Bangladesh does not run a separate statutory licence for foreign engineering firms. The control sits at the level of individual engineers and signed drawings. The national building code's permit chapter requires every drawing submitted for approval to be prepared and signed by the technical personnel the code specifies, with the signature treated as certifying compliance with the code and accompanied by the engineer's professional society membership number.[14] It provides that to qualify as an architect, engineer or supervisor of building works one should be a member of the respective professional body in the country, with permission to perform design work granted by that institute.[14] For engineers, that body is the Institution of Engineers, Bangladesh.

In practice, a foreign engineering consultancy Bangladesh building authorities deal with needs locally enrolled engineers to sign drawings for approval, even where the design is produced abroad. The code scales the qualification by height and floor area, reserving the largest buildings for members or fellows with eight years' experience.[14] The signing engineer carries personal responsibility, so the client contract should allocate design liability between the foreign firm, the local entity and the signatory.

Tender eligibility for foreign firms

National works tenders are open to firms from all countries unless the data sheet excludes some, and tenderers must be enrolled in the relevant professional or trade organisations of their own country; foreign tenderers, partners and subcontractors each declare eligibility in writing.[12]

Winning government consultancy work

Most public consultancy assignments in Bangladesh, whether owner's engineer, design and supervision, feasibility or project management, are procured through quality- and cost-based selection, in which technical proposals are scored first and the financial proposal is opened only for firms that pass. The process runs through the e-GP system for nationally funded work, under the Public Procurement Act 2006 and the Public Procurement Rules 2025. The 2025 and 2026 reforms are summarised in our note on public procurement amendments in 2026.

Registration before tendering

The most important rule for foreign service firms is not in the procurement law. Following Bangladesh Bank's November 2024 JVCA guidelines, government agencies began requiring investment authority registration before foreign firms take part in tenders, and on 12 March 2025 the Roads and Highways Department issued a circular telling foreign bidders to follow the Bangladesh Bank policy.[11] The requirement covers foreign companies working alone, in joint ventures with local firms or as subcontractors.[11] Officials cited untaxed income and firms leaving before completing work.[11]

Development partner-funded assignments

Where a World Bank, ADB, JICA or AIIB loan finances the project, the lender's procurement rules usually apply, but registration and Bangladesh Bank reporting still govern the foreign firm's presence and payments.[10] [11] Our guide to infrastructure projects in Bangladesh maps the financing routes.

JV shares and the lead partner

In national works JVs, the lead partner's business share must be the highest and each other partner must hold at least 25 per cent.[12] Check the equivalent conditions in each request for proposals before signing a teaming agreement.

Tax and VAT on engineering and consultancy services

Settle tax design before choosing the vehicle: a branch, project office or JVCA creates a taxable presence, while services delivered from abroad are taxed mainly by withholding.

Withholding on payments to non-residents

Payments to non-residents for technical services, technical know-how or technical assistance are now subject to withholding at 10 per cent for payees other than individuals, instead of the former flat 20 per cent, and withholding on non-residents without a permanent establishment is treated as final.[13] Treaty relief may reduce the rate. A branch or project office is taxed on local profits, and its expatriates must file returns and obtain tax clearance when their work permits are cancelled.[3] Rates for resident consultants and contractors are set out in our guide to withholding tax in Bangladesh.

VAT on services and imported services

The standard VAT rate is 15 per cent. For services imported from abroad, the bank remitting payment collects VAT at 15 per cent from an unregistered recipient; a VAT-registered recipient deposits the VAT itself and gives the bank the treasury receipt.[13] On projects, first-level subcontractors, agents and service providers are not subject to VAT deduction at source if evidence shows that VAT on the whole project is secured against the main contractor; the rule does not cover goods purchased for the project.[13] VAT withholding mechanics are covered in our guide to VAT deduction at source.

Project mobilisation Bangladesh contractors must plan for

Project mobilisation Bangladesh employers expect is a sequence of registrations, guarantees, permits and clearances, several of which are conditions precedent to the start date and first payment. The steps reflect the national works documents and foreign exchange rules; lender-funded contracts follow the same logic.

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Registrations and the bank account

Before mobilising, the foreign contractor or JVCA needs investment authority permission, a report to Bangladesh Bank's FEID through its authorised dealer within 30 days of that permission, TIN, BIN and VAT registration, and an account with one nominated authorised dealer.[10] For foreign-funded projects, foreign currency accounts can be opened without prior Bangladesh Bank permission and must be closed once project transactions end.[10] Inward remittances through a partner's existing branch office are not permitted.[10]

Work permits and visas for expatriate staff

Expatriates apply for a work permit within 15 days of arrival. Industrial projects may employ one foreign national for every ten local employees at the initial stage and one for every 20 in operation, while commercial offices such as branches and liaison offices are limited to one for every five.[9] Permits normally run for one year, extendable to five years in total, subject to security clearance.[9] Under the JVCA circular, the bank must verify each foreign national's work permit before paying salary, and salaries must be disclosed in the audited accounts.[10] The FY2026-27 budget set a target of seven days for foreign expert work permits.[6] Visa categories are covered in our guide to Bangladesh work visa requirements.

Customs for construction equipment

Contractors rarely want to pay full duty on cranes, piling rigs and other plant that will leave after the project. The Customs Act 2023 provides a temporary importation procedure, under which goods stay under customs control until re-exported, normally against security, and exemptions may be granted by notification or special order. Plan the equipment list, security and re-export timetable before shipment; our guide to customs law in Bangladesh explains the procedures.

Bank guarantees and the advance payment

Under the national works tender document above BDT 5 crore, the performance security is 5 per cent of the contract price, payable on first demand, issued by a Bangladeshi scheduled bank and valid until 28 days after intended completion.[12] Any mobilisation advance is paid against an unconditional scheduled bank guarantee equal to the advance, reduced as it is amortised, and may be spent only on equipment, plant, materials and mobilisation.[12] A foreign contractor therefore needs a local bank to issue against its own bank's counter-guarantee, arranged before signature. See our guides to bank guarantees in Bangladesh and to whether a performance guarantee can be stopped.

Commencement, site possession and the ECC

Under the national works conditions, the works start only once the contract is signed after approvals, possession of the site is given and the advance payment is received against the guarantee.[12] If the employer fails to give possession of part of the site by the contract date, the delay is a compensation event, and further delay can become a fundamental breach.[12] Record the handover date and every access restriction. Environmental clearance is usually the employer's responsibility, but camps, batching plants and quarries may need their own; our guide to environmental impact assessment in Bangladesh covers the process.

Local subcontracting

Subcontracting the whole of the works is not permitted, and subcontracting is capped at 30 per cent of the works by value.[12] Subcontractors not named in the contract need prior written consent from the head of the procuring entity, unauthorised subcontracting is a fundamental breach of contract, and the contractor remains responsible for its subcontractors' acts and defaults.[12] Flow down payment, quality, safety and VAT terms, and lodge each subcontract with the project manager.

Mistakes foreign investors and contractors should avoid

The same avoidable errors recur.

• Assuming an incentive. Sections 21 and 22 of the Invest Bangladesh Act create powers, not benefits; only a gazette notification or tax instrument confers one.[1]
• Registering in a controlled sector without the NOC. Power, ports, telecoms and large infrastructure need the ministry no-objection certificate before registration.[9]
• Bidding before registering. Agencies now require investment authority registration for foreign firms on government projects, including subcontractors.[11]
• Paying expatriates without permits. Banks must verify work permits before paying foreign staff on JVCA projects.[10]
• Over-subcontracting. Exceeding the 30 per cent cap or subcontracting without consent is a fundamental breach.[12]

Outlook: what to watch in late 2026 and 2027

Four developments will shape Bangladesh investment opportunities for foreigners over the next twelve months. First, whether the fall in new equity reverses as reforms bed in.[4] Second, the gazette notifications under the Invest Bangladesh Act 2026 that will turn incentive powers into benefits.[1] Third, the 665 MW renewable tender programme.[7] Fourth, free trade zones, starting at Anwara in Chattogram, and full foreign ownership of inland container depots.[6]

For an engineering or contracting firm, the choice is between a project office or JVCA and a permanent subsidiary that builds local credentials; for an investor, between expanding alongside an existing operator and a greenfield entry. Either way, the sequence of registration, NOC, bank account, permits and guarantees decides how quickly Bangladesh investment opportunities for foreigners become revenue. Our step-by-step guides to how to invest in Bangladesh and to investment approvals through Invest Bangladesh and BEPZA take the next step.

Disputes on payment, delay and guarantees are covered in our analysis of unpaid infrastructure project claims. Explore our branch and foreign company establishment practice, our corporate and commercial advisory practice and our construction claims and project disputes practice, or contact TRW.

Frequently asked questions

What are the best Bangladesh investment opportunities for foreigners in 2026?

The strongest sectors are power and renewables, garment diversification into man-made fibres and technical textiles, pharmaceuticals and medical devices, electronics and semiconductors, light engineering, agro-processing, logistics and ports, and healthcare. Power and food products attracted the largest FDI in 2025.[5] [7]

How much FDI did Bangladesh receive in 2025?

Net FDI was USD 1,770.42 million in 2025, up 39.36 per cent from USD 1,270.39 million in 2024, according to Bangladesh Bank data published by Invest Bangladesh.[2] It then fell 28.06 per cent to USD 794.25 million in the first half of 2026.[4]

Which countries invest most in Bangladesh?

In 2025 the Netherlands led with USD 544.61 million, followed by China, Singapore, South Korea and the United Kingdom.[5]

Can a foreigner own 100 per cent of a Bangladesh business?

Yes, in most sectors. Four sectors are reserved, 22 controlled sectors need a ministry no-objection certificate, and some activities require local ownership.[9] See our guide to foreign investment law in Bangladesh.

Does the Invest Bangladesh Act 2026 give automatic tax incentives?

No. Sections 21 and 22 allow the Government to grant customs facilities and sector incentives by gazette notification, so a benefit exists only once an instrument covers the project.[1]

How does a foreign engineering consultancy set up in Bangladesh?

Through a liaison office for business development only, a branch or project office for paid work, a subsidiary or joint venture company for a permanent practice, or an unincorporated JV or consortium registered under Bangladesh Bank's JVCA guidelines for a single project.[3] [10]

Do foreign engineers need IEB membership to sign drawings?

The national building code requires drawings submitted for approval to be signed by technical personnel who are members of the relevant professional body in Bangladesh and who give their membership number. In practice, a locally enrolled engineer signs design drawings for approval.[14]

Do foreign firms need registration to work on government projects?

Yes. Agencies require investment authority registration before foreign firms take part in tenders, whether alone, in a joint venture or as subcontractors, and the firm must report to Bangladesh Bank within 30 days of the permission.[11] [10]

What guarantees does a contractor provide on a public works contract?

Under the national works document above BDT 5 crore, a performance security of 5 per cent of the contract price and, if an advance is paid, an unconditional bank guarantee equal to the advance, each issued by a scheduled bank of Bangladesh.[12]

How much of a public works contract can be subcontracted?

Up to 30 per cent of the works by value. Subcontracting the whole works is prohibited, unnamed subcontractors need the procuring entity's written consent, and unauthorised subcontracting is a fundamental breach.[12]