Yes, but the loan generally needs approval through Bangladesh's foreign borrowing route, which now involves Invest Bangladesh and Bangladesh Bank. The approval typically records the lender, amount, pricing, tenor, purpose and repayment schedule, and the borrower's authorised dealer bank will only process drawdowns and repayments that match it. Private sector borrowers in some regulated sectors face additional requirements. We assess eligibility early, prepare the application with the borrower, and draft the facility agreement so that its terms stay within the approval and can be amended later if needed. Funds should not be drawn until the approval is in hand.

In an onshore structure, the fund lends directly to the Bangladeshi operating company and takes security over its assets, which requires foreign borrowing approval but gives direct claims against the business and its collateral. In a holdco structure, the fund lends to an offshore holding company and takes security over its shares in the Bangladeshi company. That avoids some onshore approvals but leaves the lender structurally behind onshore creditors and dependent on dividends or other upstream payments. Many private credit deals combine the two. We explain the legal and practical consequences of each option for the specific borrower group.

Bangladesh Bank has historically set ceilings on the all-in cost of foreign currency borrowing by private sector companies, covering interest margin and certain fees, and these limits are applied through the approval process. The current limits and how they apply to particular instruments should be confirmed with the authorised dealer bank for each transaction, because they change. Equity kickers, warrants and default interest may also be scrutinised. We advise on how pricing, fees and returns can be structured within the applicable rules, and how changes in benchmark rates are dealt with in the loan documents.

A unitranche facility gives the borrower a single loan with one set of terms and a blended interest rate, while the lenders divide the economics among themselves under an agreement among lenders. First-out lenders are repaid ahead of last-out lenders in an enforcement, in return for lower pricing. For Bangladeshi borrowers, the structure can simplify negotiation and approval, because there is one facility and one approval application. The lenders' internal arrangements still need to fit with Bangladesh security and insolvency rules. We advise both borrowers and lenders on documenting unitranche deals in a way that works locally.

Interest paid by a Bangladeshi borrower to a non-resident lender is subject to withholding tax, which the Finance Act 2026 set at 10%, reduced from 20%. A lower rate may apply under a double tax treaty between Bangladesh and the lender's jurisdiction, provided the lender can show treaty eligibility and beneficial ownership. Fees and other payments may be treated differently. Loan agreements usually include gross-up and tax indemnity provisions, and the approval may address who bears tax. We advise on the expected tax cost, treaty documentation and drafting that reflects the commercial agreement in a private credit deal.

The Artha Rin Adalat Ain 2003 created specialised courts for recovery of loans by banks and financial institutions defined under Bangladesh law, and foreign funds generally fall outside that definition. A foreign private credit lender will usually rely on arbitration or court proceedings under the loan documents, followed by enforcement of an award or judgment and realisation of security in Bangladesh. Some structures use a local bank as security agent or participant, which can open local recovery routes. We advise on choosing the dispute resolution clause and the enforcement route at the documentation stage, not after default.

Bangladesh is a party to the New York Convention, and the Arbitration Act 2001 allows foreign arbitral awards to be enforced through the courts, subject to limited grounds for refusal. Many private credit agreements therefore choose arbitration seated in Singapore, London or another established centre. Enforcement still takes time and depends on locating assets, so security over Bangladesh assets, guarantees and cash controls remain important. We advise on clause drafting, interim relief from Bangladesh courts in support of foreign arbitration, enforcement proceedings and coordination with recovery against security. Private credit lenders should plan early.

Lenders should check corporate approvals, the borrower's constitutional documents, existing loans and charges registered with the RJSC, CIB status with Bangladesh Bank where available through the borrower, title to land and key assets, licences and permits, tax and VAT position, related party transactions, litigation and any defaulted loans within the group. Foreign exchange compliance on previous investments and borrowings matters too. We tailor a focused legal diligence scope for private credit transactions, and report findings in a form that supports credit approval and drives the conditions precedent. Gaps found early can become conditions precedent rather than post-closing problems.