Not always, but every foreign loan needs to fit a recognised route. Bangladesh Bank's framework distinguishes between categories of borrower, lender and facility. Some loans need specific prior approval, some fall within general permissions subject to stated conditions, and some short-term trade-related credit follows separate rules. Even where no specific approval is required, registration with or reporting through the authorised dealer bank is usually needed before funds are received or repaid. Because the rules were consolidated in September 2026, it is worth checking the current position rather than relying on an earlier transaction or precedent.

Since 23 August 2026, BIDA, BEZA and the PPP Authority have operated as a single body, Invest Bangladesh, under the Invest Bangladesh Act 2026. Functions BIDA previously had in relation to foreign borrowing by industrial and commercial enterprises now sit within that framework, alongside Bangladesh Bank's foreign exchange rules. Enterprises in BEPZA zones and Hi-Tech Parks continue to deal with their own authorities. The correct foreign borrowing route depends on the borrower and the loan. We confirm the applicable body and process before preparing any application, because transitional practice can still vary in individual cases.

Yes, often. Parent loans are a common form of foreign borrowing. A July 2026 Bangladesh Bank circular set out a conditional route for certain fully foreign-owned industrial enterprises to borrow from parent companies, associates and shareholders. It does not apply to every borrower, and its conditions on terms, documents and reporting must be met. Joint ventures, commercial companies and enterprises outside the qualifying categories may need a different route. We assess eligibility, draft a loan agreement that reflects the conditions, and set up the remittance and reporting steps with the authorised dealer bank before any funds are transferred to Bangladesh.

The all-in cost, the tenor and the purpose are the usual pressure points in practice. Regulators look at interest margin, upfront and commitment fees, agency fees and other charges together, and some routes set limits or expectations for them. Default interest, make-whole payments and broad increased-cost clauses can also attract questions. A foreign borrowing approved for one purpose cannot simply be redirected to another. We review the term sheet early so that the commercial terms and the regulatory terms are aligned before the lender's credit approval is finalised and documents are circulated for signature.

Yes. Foreign lenders in Bangladesh commonly take mortgages over land and buildings, hypothecation over plant, machinery, stock and receivables, pledges of shares and assignments of key contracts and accounts. Practical issues include stamp duty, registration of charges with the Registrar of Joint Stock Companies, land registration, the use of a local security agent and the time enforcement can take in Bangladesh courts. Some security arrangements, and guarantees given by Bangladesh residents for foreign obligations, can raise separate foreign exchange questions. We advise on a security package that is realistic to perfect and to enforce.

Interest paid by a Bangladesh borrower to a non-resident lender is generally subject to withholding tax at source. Under the Finance Act 2026, the rate on interest paid to non-residents is 10%, reduced from 20%. A double tax treaty between Bangladesh and the lender's country of residence may allow a lower rate if the lender provides the required evidence of residence and entitlement. Tax gross-up clauses in the facility agreement determine who bears any withholding. Deductibility of interest and transfer pricing for related-party loans also need attention, so we coordinate with the borrower's tax advisers.

Most foreign borrowing by Bangladesh companies is in US dollars or another major currency, which leaves the borrower with currency risk. Taka-linked or Taka-settled structures are sometimes discussed, particularly with development finance institutions, but they raise specific regulatory, documentary and hedging questions and are not available as a matter of course. Hedging currency exposure through Bangladesh banks is subject to Bangladesh Bank rules on derivatives. We advise on what is permitted for the particular borrower and help the parties document the currency, payment and hedging arrangements in a way that matches the approval.

Act early and avoid making further payments until the position is understood. The first step is to establish what was approved or reported, what was actually drawn and repaid, and through which bank. In some cases the authorised dealer bank or Bangladesh Bank may accept a regularisation application with an explanation; in others, the loan may need to be restructured or repaid through a permitted channel. Tax and accounting consequences should be reviewed at the same time. We handle these foreign borrowing reviews confidentially and help prepare any submission to the regulator with the client's auditors.