An agent of record engages and pays independent contractors on a client's behalf, while an employer of record employs staff on a client's behalf. With an agent of record, the people remain contractors: they invoice for services, manage their own tax affairs and do not receive employee benefits. With an employer of record, they become employees with salary, tax deduction at source, leave and statutory protection. TRW offers both, and part of good contractor management is helping you decide which route fits each role, budget and the way the work is actually organised.

Many foreign companies do, and in principle a Bangladeshi individual may provide services to an overseas client and receive payment through banking channels. The risks lie in the details: unclear contracts, missing intellectual property assignments, payments that the receiving bank cannot classify, and relationships that look like employment. A direct engagement can work for a small number of short projects. As numbers grow, structured contractor management through an agent of record, or employment through an employer of record, usually gives better protection and less administrative work for your finance and legal teams.

Fees from overseas clients should arrive through an authorised dealer bank, with an invoice, a contract or statement of work and, where requested, other documents showing the service provided. The bank records the inward remittance under Bangladesh Bank foreign exchange rules, and correct classification can affect how the contractor's income is treated for tax. Under our agent of record service, TRW receives funds from you and pays contractors locally with full documentation. Either way, clean payment records are a practical part of contractor management that protects both sides. Delays usually come from missing documents.

A Bangladeshi company paying a non-resident for services may need to deduct withholding tax at source, unless an exemption or tax treaty relief applies and the right documents are in place. VAT may also be payable on services imported into Bangladesh. The company's bank will ask for supporting documents before making an outward remittance under Bangladesh Bank rules, and some payments need specific approval. We review each engagement before payments begin, prepare the documents and include tax provisions in the contract, so contractor management stays compliant without delaying the work.

The contract must include a clear, present assignment of copyright and other intellectual property rights in work product, rather than a vague promise to assign later. It should cover code, designs, documentation, inventions and improvements, address any pre-existing materials and open source components, and include confidentiality duties that survive termination. Where permitted, moral rights should be waived or limited. Our contractor management agreements also require contractors to sign confirmatory documents if needed, which helps with registrations and investor due diligence in Bangladesh and abroad. We also check existing contracts for gaps and fix them.

Warning signs include fixed working hours set by the client, close supervision, inclusion in the client's organisation chart, exclusive work for one client over a long period, use of company email titles and equipment, and payment of a fixed monthly amount regardless of output. No single factor decides the question, and courts look at the reality of the relationship rather than the label in the contract. Regular contractor management reviews help you spot these signs early and make changes before a claim, inspection or tax audit raises the issue. Written reviews also show good faith.

Reclassification can expose the client or the local entity to claims for statutory benefits such as leave, festival bonuses and termination payments, to tax consequences for unwithheld salary tax, and in some cases to permanent establishment arguments for a foreign company. The cost depends on how long the relationship lasted and what was paid. We assess the exposure, recommend remediation and, where appropriate, convert the person to employment through our employer of record service. Proactive contractor management is far cheaper than defending a claim after the relationship has broken down. Early advice also limits the risk of back taxes.

Yes. Bangladeshi companies increasingly engage designers, developers, consultants and sales agents in other countries. We prepare contracts that work under the contractor's local law as well as Bangladesh law, advise on withholding tax, VAT and outward remittance requirements, and coordinate with our offices in London, Dubai, Singapore, Mumbai and Bengaluru on local rules. Where a foreign contractor is effectively a full-time team member, we explain the employment and permanent establishment risks in that country and the options for structuring the relationship more safely. Our contractor management team then keeps the arrangement under regular review.