In a typical buyer credit structure, a commercial bank lends to the Bangladeshi buyer or borrower to pay an exporter for equipment or services, and an export credit agency in the exporter's country guarantees or insures most of the loan. The buyer usually pays a down payment and the remainder is repaid over several years. The borrower needs Bangladesh approvals for foreign borrowing, and the lenders expect security, legal opinions and conditions precedent to be satisfied. We advise on the Bangladesh-law aspects and help borrowers and lenders plan the approvals that export credit transactions require.

Generally, yes. Foreign currency borrowing by Bangladeshi private entities is regulated, and loans from foreign lenders, including ECA-backed facilities, usually require approval or registration under the foreign exchange framework administered by Bangladesh Bank, with Invest Bangladesh involved in certain foreign borrowing matters following the 2026 institutional changes. Public sector borrowers need government authorisations, and sovereign-guaranteed loans involve the Ministry of Finance. Terms such as interest cost, tenor and use of proceeds may be reviewed. We confirm the current route for each transaction and build realistic approval timing into the timetable. Lenders usually make approval a condition precedent to first drawdown.

Political risk insurance typically covers losses from expropriation or nationalisation, currency inconvertibility and transfer restrictions, war, terrorism and civil disturbance, and breach of contract or non-honouring of financial obligations by a government or state entity. The exact cover depends on the policy wording, definitions, exclusions, deductibles and waiting periods. Commercial risks such as ordinary business losses or currency depreciation are not usually covered. We review the Bangladesh-law aspects of covered events, help structure investments so that they qualify for cover and advise on what the insured must do to preserve its rights. Policy terms are negotiable to a degree.

Yes. Bangladesh is a member of the Multilateral Investment Guarantee Agency, part of the World Bank Group, which provides political risk insurance and credit enhancement for cross-border investments and loans. MIGA cover can support investment in sectors such as power, infrastructure, manufacturing and finance. Applicants must meet eligibility requirements, including environmental and social standards and host-country approval of the investment. MIGA cover can also sit alongside export credit and commercial bank financing. We advise investors and lenders on the Bangladesh-law aspects of MIGA-supported projects and coordinate with international counsel. Applications are generally expected before the investment is irrevocably committed.

Interest paid by a Bangladeshi borrower to a non-resident lender is generally subject to withholding tax unless an exemption or treaty relief applies. Under the Finance Act 2026, the rate on interest paid to non-residents is 10%, down from 20%, which reduces financing costs where borrowers bear the tax through gross-up clauses. ECA premiums, arrangement fees and commitment fees may be treated differently and need separate review. We work with tax advisers to analyse payment flows, treaty positions and documentation requirements before signing export credit facility agreements. Treaty relief usually depends on residence certificates obtained from the lender early.

Yes, subject to Bangladesh law requirements. Lenders commonly take mortgages over land and buildings, hypothecation of plant and machinery, charges over receivables and bank accounts, assignment of contracts and insurance, and share pledges. Charges created by companies generally need registration with the Registrar of Joint Stock Companies and Firms within the prescribed period, and stamp duty may apply. Security in favour of foreign lenders may raise additional approval and enforcement questions. We advise on security packages that are effective in Bangladesh and coordinate with security agents and international counsel. Ranking against existing charges should be checked in the registers.

First, review the contract, any guarantee or letter of credit, and the terms of any export credit insurance or political risk policy, because notification deadlines and mitigation duties may apply quickly. Payment delays by state-owned buyers may result from budget, foreign exchange or approval issues rather than a dispute on the merits, so engagement with the buyer, the line ministry and the Finance Division can sometimes resolve them. If not, the creditor may call on security, claim under insurance or start arbitration or court proceedings. We advise on strategy, evidence and preserving the insurer's recovery rights.

Many ECAs apply environmental and social due diligence to the projects they support, often based on the OECD Common Approaches and international performance standards, in addition to Bangladesh environmental clearance requirements. Higher-risk projects may require independent assessment, action plans, consultation and ongoing monitoring. Non-compliance can delay cover or disbursement and may constitute a default. ECAs also require anti-bribery declarations and sanctions compliance. We help sponsors and borrowers align Bangladesh approvals with these requirements and prepare documents that satisfy export credit agencies and lenders. Starting baseline studies and consultation before the lender's review begins avoids delay. Consultation records matter to reviewers.