In most cases foreign currency borrowing by a Bangladeshi company requires Bangladesh Bank approval, or must fall within a route Bangladesh Bank has already permitted, such as certain short-term trade finance or borrowing by enterprises in export processing zones under their own arrangements. Approval conditions commonly address the all-in cost, tenor, purpose, repayment schedule and security. These rules have changed several times in recent years, so we check the current circulars for each offshore debt finance transaction and prepare the application together with the lender, so that the approval matches the final facility terms.

Under the Finance Act 2026, the general rate of withholding tax on interest paid to non-residents is 10 per cent, reduced from 20 per cent. A lower rate may be available under a double tax treaty between Bangladesh and the lender's country, subject to documentation such as a tax residence certificate. Most facility agreements require the borrower to gross up payments so the lender receives the full amount, shifting the tax cost to the borrower. We review the treaty position, the gross-up clause and any exemptions when pricing cross-border debt finance, as the difference can be significant.

A typical package includes a registered mortgage over land and buildings, hypothecation of plant, machinery, stock and book debts, a pledge of shares with blank transfer forms, assignment of key contracts, receivables and insurance proceeds, lien over deposits and guarantees from parent companies or directors. Some lenders also take an irrevocable general power of attorney to sell mortgaged property, which needs careful drafting and registration. The right mix depends on the borrower's assets and the lender's priorities. We advise on what each instrument achieves, its cost in stamp duty and registration fees, and how it is enforced.

A charge created by a company over its assets must be registered with the Registrar of Joint Stock Companies and Firms within the period set by the Companies Act 1994. If it is not, the charge is generally void against a liquidator and the company's other creditors, although the debt itself remains payable. Late registration may be possible only with a court order, which takes time and is not guaranteed. For that reason we build RJSC filings into the closing checklist for every secured debt finance transaction and obtain the registration certificates before treating the security as perfected.

Stamp duty in Bangladesh is charged under the Stamp Act 1899 as amended by successive finance laws, and the amount depends on the type of instrument and, for many security documents, the value secured. Mortgages, hypothecation deeds, guarantees and powers of attorney each have their own treatment, and registered mortgages also attract registration fees and related charges. Rates and caps have changed over time, so we confirm the current amounts for each document before signing. Under-stamped documents can face difficulties as evidence in court, so in debt finance we treat correct stamping as essential, not optional.

Yes. Offshore facility agreements are frequently governed by English or Singapore law, with disputes referred to arbitration or foreign courts. However, security over assets in Bangladesh, such as land, machinery and shares in a Bangladeshi company, is normally created under Bangladeshi law and must comply with local formalities to be effective. A foreign court judgment may face hurdles in Bangladesh, while a foreign arbitral award can be enforced under the Arbitration Act 2001. We advise on governing law and forum so that each part of the debt finance package can actually be enforced where the assets sit.

Key risks include defects in land title or existing encumbrances, incomplete registration of security, regulatory restrictions on foreign currency payments, and corporate authority problems, such as missing resolutions or directors acting beyond their powers. Enforcement can be slow, particularly through the courts, and rescheduling policies may affect a lender's leverage with a defaulting borrower. Concentration and single borrower limits may restrict local banks' participation. We address these practical risks through due diligence, careful conditions precedent and well-drafted security, and by structuring debt finance so that recovery options remain available if the borrower's position deteriorates.

Most facility agreements allow voluntary prepayment on notice, sometimes with a prepayment fee or break costs, and Bangladeshi banks commonly permit takeover of a loan by another bank subject to their own conditions and Bangladesh Bank rules. Refinancing requires the release of existing security and the creation of new security in favour of the incoming lender, ideally in one coordinated closing so the borrower is not left exposed. For offshore loans, prepayment also needs to fit within the foreign exchange approval. We plan refinancing as a single debt finance closing with agreed release and new security steps.