Hiring Abroad from Bangladesh: Offices, Subsidiaries, EOR, Contractors and Bangladesh Bank Rules in 2026

Hiring abroad from Bangladesh: the 2026 framework

Hiring abroad from Bangladesh is now a routine growth step for software houses, exporters, garment groups and service firms that need people close to their customers in Dubai, London, Singapore or Mumbai. The legal work is not routine. Every taka that leaves Bangladesh to pay a salary, a contractor's invoice or an employer of record's fee is a payment to a non-resident, and the Foreign Exchange Regulation Act 1947 allows it only where Bangladesh Bank has opened a route. At the same time, the destination country decides who may work there, on what permit and with what payroll and social security obligations.

This guide covers the four structures used for hiring abroad from Bangladesh (an office or branch, a subsidiary, an employer of record and independent contractors), the central bank rules for each, the tax treatment of overseas salaries and fees, assignments of Bangladeshi staff, employee data transfers, and how the UAE, the UK, Singapore and India compare. It closes with how TRW's offices in London, Dubai, Singapore, Mumbai and Bengaluru support these projects.

Summary: A Bangladeshi company may open an office abroad without prior Bangladesh Bank approval, report it within one month and remit up to USD 30,000 a year for its current expenses. Funding a subsidiary needs a capital account route: the USD 10,000 start-up permission of 2025, the exporter route under the 2022 overseas equity rules, or specific approval. Fees to foreign consultants, contractors and service providers need a current account head, and some, including overseas agents, need prior approval. The destination country then controls permits, payroll and social contributions.

Key point: The office-abroad allowance in FEPD-1 Circular No. 40 of 30 September 2026 cannot be used to send equity to a subsidiary, and any surplus earned by the office must be repatriated promptly. Choosing the overseas structure first and the payment route second is the most common and most expensive mistake in hiring abroad from Bangladesh.

At a glance

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Table of Contents

Why hiring abroad from Bangladesh is a two-country legal project

Every overseas hire sits under two legal systems at once. The destination country's employment, immigration, tax and data laws govern the person on the ground: whether they can work, who must hold the permit, which payroll must run and which contributions are due. Bangladesh law governs the Bangladeshi company: whether it may hold an office or shares abroad, how it may send money to pay people, how those costs are treated for tax, and what it must report afterwards.

The two systems do not talk to each other. A UK branch can be properly registered yet funded in breach of Bangladesh's foreign exchange rules, and a Singapore contractor can be paid under a clean contract while the Bangladeshi payer fails to withhold tax. Any plan for hiring abroad from Bangladesh needs both halves mapped before the first offer letter.

The Foreign Exchange Regulation Act starting point

Bangladesh Bank issues its foreign exchange instructions under the Foreign Exchange Regulation Act 1947. For current payments, the governing text in late 2026 is FEPD-1 Circular No. 40 of 30 September 2026, a consolidated circular on outward remittances other than imports and transport, issued under section 20(3) of the Act and valid for one year.[1] Equity investment abroad is a capital account transaction and follows separate rules, discussed below.[2] [3]

The circular is permissive in one important respect. Its limits are described as indicative, and bona fide requests above them, or for current transactions the circular does not mention, will be accommodated by Bangladesh Bank once the genuineness of the expense is established.[1] The constraint is evidence, not a closed list. Our guide to outward remittance rules in Bangladesh covers the wider circular.

Structures for an overseas team: office, subsidiary, EOR or contractors

Bangladeshi companies use four structures, often in sequence: a contractor first, then an employer of record, then an office or subsidiary once the market proves itself. Each has its own foreign exchange route and destination-country footprint.

An office or branch abroad

An overseas office or branch is part of the Bangladeshi company itself: contracts and liabilities belong to the parent, which employs the office's staff under destination-country law. It suits a sales or liaison presence with modest costs, and usually creates a local tax presence from the day it opens.

An overseas subsidiary

A locally incorporated company employs staff in its own name, holds the local permits and sponsors visas. It gives the cleanest separation of liability and the most credibility with customers and banks, but it is an equity investment, where Bangladesh's rules are strictest. Our note on setting up a Singapore company from Bangladesh walks through one destination in detail.

An employer of record in the destination

An employer of record is a local business that employs the worker in the destination country on the Bangladeshi company's behalf, runs local payroll and holds any work permit, while the Bangladeshi company directs the day-to-day work. It is the fastest route into a new market without an entity. The Bangladeshi company pays the provider a fee that bundles salary, statutory costs and a margin, and that fee is a cross-border service payment that must fit a Bangladesh Bank head.

Independent contractors

Contractors are the lightest option and the riskiest if the relationship looks like employment. A misclassified contractor can create employer liabilities and a taxable presence for the Bangladeshi company in the destination, and contractors acting as sales agents raise a specific foreign exchange issue, explained below.

Bangladesh Bank rules for hiring abroad from Bangladesh

The route depends on what the money pays for. An office's salaries, a subsidiary's equity, an employer of record's invoice and a contractor's fee each fall under a different instruction, and a payment approved under one cannot be reclassified under another.

Opening and funding an office abroad

Circular No. 40 states that residents in Bangladesh do not need prior Bangladesh Bank approval to open offices abroad. They must report the office to the central bank within one month of opening, in the format of Appendix-10, submit periodic statements of the office's accounts to the Foreign Exchange Investment Department through their bank, and promptly repatriate any net surplus of earnings over routine current expenses.[1] Banks and finance companies are excluded from this general permission.[1]

A commercial or industrial concern may remit up to USD 30,000 or equivalent a year to meet the office's current expenses, and only in the office's name. The authorised dealer bank will examine the foreign authority's approval for opening the office and the premises lease, assess actual need from the office's audited accounts and estimates, and check the renewed lease before later remittances.[1] Local salaries, rent and running costs of a small overseas team are normally met from this allowance. Larger budgets need central bank approval on evidence.

The authorisation cannot be used to remit equity to establish subsidiaries abroad.[1] A company funded as if it were an office is the classic breach.

Funding a subsidiary: the start-up permission

FEID Circular No. 02 of 27 March 2025 grants general permission, under section 5(1)(e) of the Act, to establish legal entities abroad with up to USD 10,000 or equivalent as investment supporting a start-up business in Bangladesh. The applicant enterprise must have operated in Bangladesh for less than ten years, funds must come from internal sources rather than bank borrowing, and only one entity abroad may be set up under the permission.[2]

The bank must be satisfied about the innovativeness, commercial viability and scalability of the business model, and reports the remittance to the central bank within one month of the foreign entity's incorporation and no later than six months after the remittance. The investor files annual reports and the overseas entity's audited accounts within three months of its year end, and any change in ownership must be notified.[2] The same circular opens a case-by-case route for share-swap acquisitions abroad.[2]

Funding a subsidiary: the exporter route

Established exporters can use the Capital Account Transaction (Overseas Equity Investment) Rules 2022. As reported on their issue, investment is capped by reference to 20 per cent of average annual export earnings over the previous five years or 25 per cent of net assets in the latest audited accounts, and is funded from Exporters' Retention Quota balances. Applicants need five years of sound audited accounts, a credit rating of at least 2.0 and a clean loan record, and proposals go to a committee chaired by the Bangladesh Bank governor, with prior government permission.[3]

Countries that let Bangladeshis work and repatriate income, or that have a tax treaty or investment treaty with Bangladesh, receive priority; sanctioned, FATF non-compliant and non-diplomatic destinations are barred. Funds must go directly to the subsidiary's bank account, and misuse is treated as money laundering.[3] The UAE, UK, Singapore and India all have tax treaties with Bangladesh.[6] TRW's outbound investment and overseas equity permission team prepares these applications.

Paying contractors, consultants and agents abroad

Industrial enterprises producing for the local market and service sector businesses may remit through their nominated bank, without prior approval, up to 1 per cent of annual sales declared in the previous year's tax return or USD 100,000, whichever is higher, for training and consultancy under a contract with the foreign trainer or consultant. The facility is not available to banks and other financial institutions, it is mutually exclusive with other permissions, and the bank must confirm that source tax and VAT have been dealt with.[1]

IT and software firms recommended by BASIS have a separate annual allowance of USD 40,000 for registration, hosting, server and similar fees and other bona fide current needs, including digital marketing.[1] Royalty, technical know-how, technical assistance and franchise fees follow their own track under section 27 of the Invest Bangladesh Act 2026 and the Invest Bangladesh Authority's guidelines.[1]

One rule catches many sales-led expansions. Persons or firms in Bangladesh need prior central bank permission to employ the services of agents abroad, whether on a regular or intermittent basis, applying with details of past business, existing arrangements and the proposed terms.[1] A commission-only sales representative in Dubai or London is usually an agent, whatever the contract calls them.

Paying an employer of record or a group company

There is no head in Circular No. 40 written for employer of record fees. A modest arrangement can sometimes be supported as a service payment within an existing facility, but a recurring, salary-driven invoice will usually need central bank approval through the authorised dealer, relying on the circular's commitment to accommodate bona fide current payments not specifically listed.[1] Support it with the contract, invoices, salary breakdown and tax and VAT treatment.

An overseas subsidiary billing its parent for services is also a related party for transfer pricing in Bangladesh.

Form TM, the nominated bank and approval validity

Non-import payments are applied for on Form TM, even where the central bank has approved them, and approvals are valid for no more than 45 days unless stated otherwise or revalidated.[1] Keep one nominated bank where the circular requires it, and keep the file of contracts, invoices, approvals and tax certificates.

Tax treatment of overseas salaries and fees

The Income Tax Act 2023, in the authentic English text published by the National Board of Revenue under SRO No. 404-Law/2025, decides whether the cost of an overseas team is deductible, whether tax must be withheld and how the employees themselves are taxed.[4]

Deducting overseas salaries and fees

Section 49 allows business expenses as general deductions, and section 54(2) requires the expenditure to be for earning business income, revenue in nature and reasonable in the circumstances.[4] Overseas salaries, an employer of record's fee and a contractor's invoice all qualify if the contract, invoices and remittance record line up. Overseas business travel is capped by section 55(g) at 0.5 per cent of disclosed turnover, unless evidence and commercial reasonableness support a higher amount.[4]

Section 55(a) historically barred any deduction for a payment on which the Part 7 withholding rules were not complied with.[4] The Finance Act 2026 changed the consequence: a default in withholding or deposit now triggers additional tax of 150 per cent of the default, with no disallowance of the related expense.[5] The cost of getting withholding wrong is therefore still severe; it has simply moved.

Withholding when paying non-residents

Section 119 requires any person paying a non-resident income that is taxable in Bangladesh to deduct tax at the specified rate, not exceeding 30 per cent. The National Board of Revenue may, on application, certify within 30 days that a treaty or other reason justifies nil or reduced deduction.[4] Where a contract promises the foreign party a net amount, section 141 requires tax on the grossed-up figure.[4]

Whether a foreign contractor's fee is taxable in Bangladesh at all turns on section 27(f). Fees for technical services paid by a resident are deemed to arise in Bangladesh, except where the services are used in a business carried on outside Bangladesh or for earning income from a source outside Bangladesh.[4] A developer in Bengaluru building the Dhaka company's core platform and a sales consultant in Dubai serving Gulf customers may therefore be treated differently. Our guide to withholding tax in Bangladesh sets out the current rates.

How Bangladeshi employees working abroad are taxed

An individual is resident in Bangladesh for an income year if present for 183 days or more, or for 90 days or more having spent 365 days or more in Bangladesh during the four preceding years.[4] A resident is taxed on worldwide income, while a non-resident is taxed on Bangladesh-source income only.[4] Employment income is deemed to arise in Bangladesh if it is earned in Bangladesh, wherever it is paid.[4]

Two further rules matter for assignees. Part 1 of the Sixth Schedule exempts income earned abroad by a Bangladeshi citizen and brought into Bangladesh under the foreign remittance laws.[4] And an individual residing abroad on deputation or lien for employment has a tax day of the ninetieth day after returning to Bangladesh.[4] The employer's salary withholding duty under section 86 still applies to salary it pays that is taxable in Bangladesh.[4]

Relief from double taxation

Where income is taxed both abroad and in Bangladesh, section 247 gives credit under a tax treaty, and section 246 gives unilateral relief at the lower of the two average rates where there is no treaty.[4] Bangladesh's treaty list includes the UAE, the UK, Singapore and India.[6]

Where the overseas company is really managed

A company is resident in Bangladesh if it is a Bangladeshi company or if the control and management of its affairs is situated wholly in Bangladesh.[4] A Singapore or Dubai company whose every decision is taken in Dhaka risks Bangladesh tax on its worldwide profits, so give the overseas board real authority and minute where it is exercised.

Destination rules: UAE, UK, Singapore and India

Each priority destination ties the right to work to a local employer or sponsor, so the structure for hiring abroad from Bangladesh is partly dictated by who in the destination can hold the permit.

United Arab Emirates

Under Article 6 of Federal Decree Law No. 33 of 2021, the UAE Labour Law, it is illegal to work in the UAE without a valid work permit from the Ministry of Human Resources and Emiratisation (MoHRE), and employers may not recruit or employ a worker without one. MoHRE issues permits to establishments registered with it; the permit to recruit a worker from outside the UAE is valid for two years.[11]

Two permit types suit companies testing the market. A mission work permit lets an establishment bring a worker from abroad for a specific temporary job or time-bound project, and a temporary work permit lets an establishment assign a worker already in the UAE to another company for a limited period.[11] Either way a UAE-registered establishment holds the permit, so most Bangladeshi entrants start with a UAE entity or a local employer of record. Our UAE–Bangladesh legal desk covers the inbound side.

United Kingdom

The UK Expansion Worker visa allows a senior manager or specialist who already works for an overseas business to come to the UK to set up a branch of that business where it has not yet started trading in the UK. The worker needs a certificate of sponsorship and an eligible job at the required salary, and may stay for 12 months, extendable by 12 months to a maximum of two years.[10]

Once the UK business is trading, the Senior or Specialist Worker visa covers existing employees transferred to the employer's UK branch. The employer must be a Home Office-approved sponsor, the job must be eligible and the salary at least £52,500 a year; the visa lasts up to five years, within a maximum of five years in any six for those paid under £73,900.[9] Our guide to the UK Skilled Worker visa from Bangladesh covers direct hires.

Singapore

An Employment Pass candidate must earn at least the qualifying salary, currently S$5,600 a month for most sectors and S$6,200 in financial services, rising with age. For new applications from 1 January 2027 the floors rise to S$6,000 and S$6,600. Candidates must also pass the points-based COMPASS framework unless exempt, and employers must meet the Fair Consideration Framework advertising requirement.[12]

Overseas intra-corporate transferees, candidates earning a fixed monthly salary of at least S$22,500 and roles of one month or less are exempt from COMPASS.[12] That exemption makes Singapore workable for transferring an experienced Bangladeshi manager to a new Singapore subsidiary. Our Singapore–Bangladesh legal desk handles the Bangladesh side.

India

India's Employment Visa requires the foreign national to be engaged or appointed by a company, organisation, industry or undertaking in India and, with limited exceptions, to draw a salary above US$25,000 a year. The visa follows the contract, up to a maximum of five years.[13] A Bangladeshi company sending staff to Mumbai or Bengaluru therefore needs an Indian employing entity or host.

India also brings foreign employees into its provident fund. A non-Indian passport holder working for an establishment covered by the Employees' Provident Funds Act 1952 is an international worker and must join the fund from the date of joining, unless excluded as a national of a social security agreement country holding a certificate of coverage.[14] Bangladesh was not among the agreement countries listed in the EPFO's 2022 brochure.[14] See our India–Bangladesh legal desk.

The table compares the four destinations for a first hire. On a phone, scroll it sideways.

Sending Bangladeshi employees abroad on assignment

Many companies hiring abroad from Bangladesh staff the new office with trusted people from Dhaka. An assignment keeps the Bangladeshi employment alive while the employee works abroad, and raises five questions to answer in writing before travel.

The contract and the assignment letter

The home employment contract continues, so the assignment letter must state the destination, duration, host entity, reporting line, salary split, allowances, housing, tax equalisation if offered, leave, and what happens on return or early termination. Benefits earned in Bangladesh, such as provident fund membership and gratuity, should be expressly preserved or frozen. Our guides to employment contracts in Bangladesh and provident fund and gratuity explain the home-country terms that need protecting.

Work authorisation in the destination

The employee needs work authorisation, not a business visa: a MoHRE permit held by a UAE establishment, a sponsored UK visa, a Singapore Employment Pass or an Indian Employment Visa tied to an Indian engager.[9] [11] [12] [13]

Emigration clearance in Bangladesh

The Overseas Employment and Migrants Act 2013 provides for registration of migrant workers in section 19 and emigration clearance in section 20, while section 5 disapplies the Act for the departure of certain persons.[7] Whether an intra-group assignee needs BMET clearance turns on the category they fall into, so confirm it before the travel date rather than at the airport. Our guide to migrant worker rights in Bangladesh explains the clearance process.

Social security and benefits

Social contributions follow the destination's rules. India is the clearest example: a Bangladeshi international worker in an EPF-covered establishment must join the fund.[14] Budget for host contributions and decide whether home benefits continue in parallel.

Paying the assignee

Split payroll is common: part paid in taka in Bangladesh, part paid locally by the host. The local portion must be funded through a permitted route, typically the office allowance or the host's own revenue.[1] Check the employee's Bangladesh residence position each year, because it decides whether the foreign salary is reportable at home and whether the Sixth Schedule exemption is needed.[4]

Employee data when teams sit in two countries

An overseas team shares HR files, payroll data, performance records and customer data with Dhaka. Bangladesh's Personal Data Protection Act 2026, Act No. 63 of 2026, was passed in April 2026 after the 2025 ordinance and its 2026 amendment. It applies to processing outside Bangladesh connected with offering goods or services to, or monitoring, people in Bangladesh, and it requires notification of transfers abroad involving large volumes of sensitive personally identifiable data, such as national ID and passport numbers.[8]

The destination's own data law governs data flowing back to Bangladesh. Put an intra-group data transfer agreement in place and map what moves in each direction. TRW's cross-border data transfer practice and our guide to Bangladesh data protection law cover the detail.

How TRW supports hiring abroad from Bangladesh

TRW is headquartered in Dhaka and has offices in London, Dubai, Singapore, Mumbai and Bengaluru. For hiring abroad from Bangladesh, that network lets one team handle the Bangladesh side, where most projects stall, while coordinating the destination side with the nearest office.

Our work covers structure, Bangladesh Bank reporting and approvals, overseas equity filings, contractor and employer of record agreements, assignment letters, withholding and treaty certificates, and data transfer paperwork. Our employment and labour practice and global mobility and business immigration team work together on each project.

Step by step: setting up a team overseas

The sequence below is the order that avoids blocked remittances and permit delays when hiring abroad from Bangladesh.

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Common mistakes to avoid

• Using the office allowance as equity. The USD 30,000 office authorisation cannot fund a subsidiary's share capital.[1]
• Forgetting the one-month report. An office abroad must be reported to Bangladesh Bank within one month of opening, with periodic accounts afterwards.[1]
• Treating agents as contractors. Overseas agents need prior Bangladesh Bank permission, regular or intermittent.[1]
• Paying net without grossing up. A tax-free fee promise requires withholding on the grossed-up amount.[4]
• Running the subsidiary from Dhaka. Control and management wholly in Bangladesh makes the company a Bangladesh tax resident.[4]
• Paying overseas costs by card or through relatives. Payments outside a permitted route remain breaches of the foreign exchange rules, however small.

What to watch in 2026 and 2027

Three dates matter. Circular No. 40 lapses one year after 30 September 2026, and each annual reissue has adjusted limits, so recurring payments should be checked against its successor.[1] Singapore's higher Employment Pass salaries apply to new applications from 1 January 2027.[12] And the regulations under the Personal Data Protection Act 2026 will shape how HR data may move to and from Bangladesh.[8]

Hiring abroad from Bangladesh rewards planning: decide the structure, secure the payment route, then hire. To discuss your expansion, contact our Dhaka lawyers or book a consultation.

Frequently asked questions

Does a Bangladeshi company need Bangladesh Bank approval to open an office abroad?

No prior approval is needed, except for banks and finance companies. The office must be reported to Bangladesh Bank within one month, periodic accounts filed through the bank, and any net surplus repatriated promptly.[1]

How much can be sent each year to run an overseas office?

A commercial or industrial concern may remit up to USD 30,000 or equivalent a year for the office's current expenses, in the office's name, against the foreign approval and the lease. Larger amounts need Bangladesh Bank approval.[1]

Can a Bangladeshi start-up set up a company abroad?

Yes. Under FEID Circular No. 02 of 2025 an enterprise operating for less than ten years may remit up to USD 10,000 from internal funds to establish one legal entity abroad, with reporting to Bangladesh Bank.[2]

Can larger exporters invest in an overseas subsidiary?

Yes, under the Overseas Equity Investment Rules 2022, from retention quota balances, within limits linked to export earnings and net assets, and with approval from a committee chaired by the Bangladesh Bank governor.[3]

Can we pay a foreign consultant without Bangladesh Bank approval?

Often, yes. Eligible businesses may remit up to 1 per cent of prior-year declared sales or USD 100,000, whichever is higher, for training and consultancy, after source tax and VAT are dealt with.[1]

Do we need approval to appoint a sales agent abroad?

Yes. Persons or firms in Bangladesh need prior Bangladesh Bank permission to employ agents abroad, whether regularly or intermittently.[1]

Must tax be withheld on fees paid to a foreign contractor?

If the fee is taxable in Bangladesh, yes, under section 119 at up to 30 per cent. Technical fees for services used in a business carried on outside Bangladesh are generally not deemed Bangladesh-source.[4]

Are salaries of overseas staff tax-deductible in Bangladesh?

Yes, if incurred for the business, revenue in nature and reasonable. Since the Finance Act 2026, a withholding default triggers 150 per cent additional tax rather than disallowance.[4] [5]

Is a Bangladeshi employee working abroad taxed in Bangladesh?

Only if resident. Residents are taxed on worldwide income, but foreign income of a Bangladeshi citizen brought home under the remittance laws is exempt under the Sixth Schedule.[4]

Can we transfer a Bangladeshi manager to Singapore?

Yes, on an Employment Pass meeting the qualifying salary. Overseas intra-corporate transferees are exempt from COMPASS, though the salary floor still applies.[12]