Shipping Finance & Ship Leasing in Bangladesh
Shipping finance and ship leasing advice for Bangladeshi owners, foreign lenders and lessors: vessel acquisition loans, registered ship mortgages, finance and operating leases, sale-and-leaseback, refinancing, foreign exchange approvals and the tax points that shape every vessel deal, from term sheet to closing.
- Structure and term sheet
- Diligence and approvals
- Documents and registration
- Closing and lifecycle
Shipping finance for Bangladesh-connected vessels
Shipping finance in Bangladesh sits where banking, foreign exchange, maritime registration and tax law meet. A Bangladeshi owner buying a second-hand bulk carrier, a coastal tanker operator refinancing its fleet or a foreign lessor placing a vessel with a local charterer will each face questions that do not arise in ordinary corporate lending. We advise owners, banks, leasing companies and overseas financiers on structuring, documenting and closing vessel transactions, working within our wider corporate and finance practice in Bangladesh and alongside maritime colleagues where a deal touches registration, arrest risk or enforcement. Each mandate starts with the vessel itself.
The first question in most shipping finance matters is who will own the vessel and under which flag. A ship registered in Bangladesh is subject to the Bangladesh merchant shipping legislation and the registry kept under the Department of Shipping, and a mortgage over it should be recorded on that register to protect priority. A vessel owned through an overseas special purpose company and flagged elsewhere raises different questions, including recognition of foreign mortgages, the position of local charterers and the rules protecting Bangladesh flag vessels in cargo reservation. The choice drives cost, security and exit.
Foreign currency is the second recurring theme in shipping finance. Most vessel purchases are priced in US dollars, and a Bangladeshi borrower taking a loan or lease from an offshore bank, export credit agency or leasing house will usually need approval or reporting under the foreign exchange regime administered by Bangladesh Bank. Since 23 August 2026, the scrutiny of foreign borrowing formerly handled through BIDA sits with Invest Bangladesh. We map these approvals at term sheet stage so that drawdown, hedging and repayment can run without later surprises for the lender, the lessor or the owner.
Tax and duty treatment can change the economics of a shipping finance or ship leasing structure considerably. The Finance Act 2026 reduced withholding on interest paid to non-residents from 20% to 10%, which affects loan pricing and gross-up clauses. Lease rentals, commitment fees and guarantee fees may be treated differently from interest, and customs duty and VAT can apply when a vessel is imported into Bangladesh. Our tax colleagues review the structure so that the cash flows in the financial model reflect the law that will actually be applied. Duty planning matters most for imported tonnage.
We also look ahead to the moment when something goes wrong. Shipping finance documents should anticipate default, total loss, requisition, sanctions events and charterer insolvency, and should give the financier a practical path to enforce in Bangladesh or abroad. The High Court Division, sitting as the Admiralty Court under the Admiralty Court Act 2000, hears mortgage and arrest claims, and our dispute resolution team advises on arrest and recovery. Drafting with that court in mind at the outset makes later recovery faster, cheaper and less open to challenge by the borrower. That planning costs little at signing.
Core workstreams
Four clear stages
- 01Structure and term sheet
- 02Diligence and approvals
- 03Documents and registration
- 04Closing and lifecycle
Talk to a partner
Consultations in Dhaka or by video. Scope, team and fees are agreed in writing first.
Book →Where we support vessel transactions
Vessel acquisition and term loans
- Structure and term sheet
- Diligence and approvals
- Documents and registration
- Closing and lifecycle
Registered ship mortgages and security
- Structure and term sheet
- Diligence and approvals
- Documents and registration
- Closing and lifecycle
Finance and operating leases
- Structure and term sheet
- Diligence and approvals
- Documents and registration
- Closing and lifecycle
Sale-and-leaseback and refinancing
- Structure and term sheet
- Diligence and approvals
- Documents and registration
- Closing and lifecycle
Newbuilding and shipyard finance
- Structure and term sheet
- Diligence and approvals
- Documents and registration
- Closing and lifecycle
Restructuring and enforcement planning
- Structure and term sheet
- Diligence and approvals
- Documents and registration
- Closing and lifecycle
Vessel acquisition and term loans
We act for Bangladeshi and foreign banks and for owners on secured shipping finance term loans for new or second-hand vessels. Our work covers facility agreements, conditions precedent, security packages, earnings and insurance assignments, account charges and the borrower's corporate approvals, together with foreign exchange approvals and reporting where funds are raised offshore and repaid in foreign currency. We also advise on hedging and the release mechanics for each tranche.
Registered ship mortgages and security
We prepare and register mortgages over Bangladesh flag vessels, coordinate with the registrar on priority searches and discharges, and advise on deeds of covenant, guarantees, share pledges over owning companies and assignments of charter hire. Where the vessel is flagged abroad, we work with qualified counsel in that registry so the shipping finance security package holds together across both jurisdictions. We keep registry certificates and filings in order after closing.
Finance and operating leases
We advise lessors and lessees on bareboat charter structures, hire purchase, finance leases and operating leases for vessels used in Bangladesh waters or on international trades. This includes title retention, purchase options, quiet enjoyment, return conditions, the role of local leasing companies licensed under the financial institutions framework and the tax treatment of lease rentals paid to overseas lessors. We also check approvals needed before rentals are remitted.
Sale-and-leaseback and refinancing
Owners increasingly release equity from existing tonnage through sale-and-leaseback with Asian lessors, or refinance local bank debt with offshore shipping finance facilities. We review the existing security, manage releases and new registrations so there is no gap in cover, and advise on approvals, prepayment fees, stamp duty and the corporate steps needed to transfer title cleanly at each stage. With several lenders, we coordinate the release and re-registration sequence.
Newbuilding and shipyard finance
For vessels built in Bangladeshi or foreign yards, we advise on pre-delivery finance, refund guarantees, assignment of shipbuilding contracts and delivery mechanics. We also support yards seeking working capital or export finance against construction contracts, and coordinate with insurers and export credit agencies on the conditions their cover requires before shipping finance funds are released for each instalment. Delivery protocols are drafted so title, payment and registration happen together.
Restructuring and enforcement planning
Where an owner is under financial pressure, we advise lenders and owners on standstills, rescheduling, partial fleet sales and consensual delivery of vessels. When enforcement of shipping finance security is needed, we work with our admiralty litigators on arrest, sale and priority, and with foreign counsel where the vessel or its earnings are located outside Bangladesh, so recovery is coordinated. We keep commercial options open for as long as possible.
Partner-led, on every matter.
Corporate & Finance matters at TRW are led by partners, supported by associates, with one responsible lawyer from first advice to final outcome.
Meet the firm →01Can a foreign bank take a mortgage over a Bangladesh flag vessel in a shipping finance deal?
Yes. A foreign lender can take security over a ship registered in Bangladesh, and the mortgage should be registered with the registrar of Bangladeshi ships so that its priority is recorded. In practice the lender will also want a deed of covenant, an assignment of insurances and earnings, and guarantees from the owner's group. Because the loan is likely to be in foreign currency, the borrower's foreign exchange approvals and reporting must be in order, and enforcement would normally run through the Admiralty Court. We review the registry position and approvals before the loan is signed and drawn.
02Do we need Bangladesh Bank or Invest Bangladesh approval for offshore shipping finance?
Usually some approval or reporting is needed when a Bangladeshi resident borrows or leases from abroad in foreign currency. The route depends on the borrower's status, the tenor, the pricing and whether the borrower is an industrial enterprise, an exporter or another type of entity. Since August 2026, the foreign loan scrutiny previously associated with BIDA sits with Invest Bangladesh, while Bangladesh Bank remains responsible for the foreign exchange regime. We identify the route at term sheet stage, because approval timing often drives a shipping finance closing timetable more than the documents do. Delays usually come from missing papers.
03How is withholding tax applied to interest in shipping finance from overseas lenders?
Interest paid by a Bangladeshi borrower to a non-resident lender is subject to withholding tax at source. Under the Finance Act 2026, the rate on interest paid to non-residents fell from 20% to 10%, which affects pricing and the cost of gross-up clauses in shipping finance documents. A double tax treaty between Bangladesh and the lender's country may reduce the rate further if its conditions are met and the paperwork supports treaty access. Fees and lease rentals may be treated differently from interest, so we review each payment stream with tax advisers before the margin is fixed.
04Is a bareboat charter treated as a lease or a loan in Bangladesh?
It depends on the commercial terms and the purpose for which the question is asked. A bareboat charter with a purchase obligation at the end may be treated for accounting and tax purposes much like a financing, while a pure operating charter with return of the vessel is closer to a rental. The characterisation matters for withholding tax, foreign exchange approvals, the lessor's rights on the lessee's insolvency and whether a local licence is needed. We review the draft charter against each of these tests so the parties know in advance how it is likely to be viewed in Bangladesh.
05What happens to our shipping finance security if the vessel is arrested by another creditor?
If a third party arrests the vessel in Bangladesh, the Admiralty Court will decide the claims against it and, if the vessel is sold, the order in which creditors are paid. A registered mortgage generally ranks behind certain maritime liens, such as crew wages and salvage, but ahead of many unsecured claims. A mortgagee should therefore act quickly to file its own claim and protect its position. We advise lenders on intervention, release security and the evidence the court will expect, working closely with our admiralty litigation team throughout the proceedings and any sale.
06Can a Bangladeshi leasing company provide shipping finance for a vessel?
Leasing companies licensed under the financial institutions framework supervised by Bangladesh Bank can finance assets, including vessels, within their licence terms and the prudential limits that apply to them. In practice, large ocean-going vessels are often financed by banks or offshore lessors because of single-borrower limits and the need for foreign currency. Smaller coastal vessels, lighters and river craft are more commonly financed locally. We check the lender's licence, internal approvals and exposure limits as part of due diligence, so that the transaction cannot later be challenged on capacity grounds. Local syndicates can sometimes share larger exposures.
07What due diligence is needed before we close a ship leasing or loan transaction?
A lender or lessor should verify the owner's title and corporate authority, search the ship register for existing mortgages, confirm classification and insurance, review charters and management agreements, and check for sanctions exposure in the vessel's ownership, trading history and counterparties. Local corporate records, tax status and litigation searches are also relevant, together with any pending Admiralty Court claims. We prepare a focused diligence report that ties each finding to a condition precedent, covenant or price adjustment, so the documents deal with the risk rather than merely recording it. Findings are shared early with the credit team.
08How long does a Bangladesh shipping finance transaction usually take?
Timing depends mostly on approvals, the condition of the vessel's records and how many jurisdictions are involved. A straightforward local bank loan for a Bangladesh flag vessel with clean title can move quickly once credit approval is given. A cross-border shipping finance loan or lease needing foreign exchange approval, registration in two registries and coordination with foreign counsel takes longer. We give an indicative timetable after an initial review of the term sheet, the vessel's papers and the parties' approvals, and update it as the work progresses, rather than offering fixed periods in advance.
From first call to resolution.
- 01
Structure and term sheet
We review the proposed ownership, flag, financing route and cash flows, identify the approvals and tax points that affect the shipping finance structure, and comment on the term sheet before credit sign-off. We flag any approval risk early.
- 02
Diligence and approvals
We run title, registry, corporate and sanctions checks on the vessel and the parties, then prepare, file and track the foreign exchange, corporate and regulatory approvals that the chosen structure requires before drawdown. Gaps in title or approvals are reported to you promptly, and we chase pending items with the registry and authorities.
- 03
Documents and registration
We draft or review the facility or lease, the mortgage and related security, coordinate foreign counsel, and arrange registration and filings so that the shipping finance security is perfected on the closing date. We track original documents and signature pages carefully and confirm that every filing and condition is complete at closing.
- 04
Closing and lifecycle
We manage the closing checklist and funds flow, then remain available for amendments, waivers, refinancing, releases and, where needed, enforcement and recovery over the full life of the facility or lease. We also monitor covenant and renewal deadlines.
“Demonstrates an extraordinary command over both domestic litigation and international arbitration.”
The Legal 500 Asia Pacific, Bangladesh: Dispute resolution, client feedback
Related reading.
Registered Ship Mortgages and Maritime Lien Terminology in Bangladesh

Foreign Loan Approval in Bangladesh 2026: Invest Bangladesh, Bangladesh Bank and the Scrutiny Committee

Admiralty Court Act Bangladesh 2026: Jurisdiction, Ship Arrest and Procedure

Withholding Tax (TDS) in Bangladesh 2026: Rates and Obligations
All insights →
What does shipping finance cover in Bangladesh?
Who uses shipping finance lawyers in Bangladesh?
Is ship leasing common for Bangladeshi shipowners?
Can a shipping finance loan be governed by English law?
Does a registered mortgage protect a lender against all other claims?
What sanctions checks apply to shipping finance?
Can TRW coordinate counsel in the vessel's flag state?
How do we start a shipping finance matter with TRW?
Plan your vessel financing with clear Bangladesh advice
Speak with the partners about Shipping finance in Bangladesh or across borders.
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