It depends on who will invest and how the founders expect to exit. International venture capital investors often prefer an offshore parent, such as a Singapore or Delaware company, because the law, documents and exit routes are familiar. But an offshore structure brings set-up and running costs, transfer of IP and operations questions, foreign exchange and tax issues for founders and the local subsidiary, and approvals for outward investment by Bangladeshi residents. A local company can work well for domestic investors and some foreign investors. We compare both options for the specific business before incorporation or the first priced round.

Yes. Most sectors are open to foreign investment, although some are restricted or require sector-specific approval. The investor must remit funds through the banking system into the company's account, the shares must be issued at a value consistent with foreign exchange requirements, and the investment must be reported and, where required, registered with Invest Bangladesh, which took over BIDA's functions on 23 August 2026. Getting these steps right is what allows dividends and sale proceeds to be repatriated later. We manage the process with the company's bank so the paperwork is complete from the outset. Errors are costly to fix.

International instruments such as convertible notes and SAFEs do not map neatly onto Bangladeshi company and foreign exchange law. A local company may be able to issue convertible preference shares or enter into convertible loan arrangements, but borrowing from foreign lenders requires approval and reporting, and an instrument that is neither clearly debt nor clearly equity can create regulatory uncertainty. For a local venture capital round, a priced round or convertible preference shares is often cleaner. We advise on which instrument suits the investor, the company and the timetable, and draft it so the conversion mechanics actually work.

Investor rights should appear both in the shareholder agreement and in the articles of association, because Bangladeshi law gives particular weight to the company's constitution and third parties rely on it. Typical protections include board seats, reserved matters, pre-emption rights, anti-dilution, liquidation preference, information rights, drag-along and tag-along rights and restrictions on founder transfers. Each must be drafted to be consistent with the Companies Act 1994. We align the documents so that they are enforceable, coherent and reflected in the RJSC filings that third parties rely on when dealing with the company. Inconsistent documents are a frequent problem.

Yes, but the mechanics need care. For a Bangladeshi private company, options are usually structured through an option agreement and later issue or transfer of shares, subject to the articles, shareholder approvals and any foreign exchange implications for employees abroad. Some companies use a trust or a pool held by a nominee. Where the parent company is offshore, Bangladeshi employees may receive options over parent shares, which raises tax and foreign exchange questions for them personally. We design plans that are lawful, tax-aware and simple enough for employees to understand and value. Leaver terms need particular care.

Investors usually review corporate records and the cap table, founder and employee contracts, IP ownership and assignments, key commercial and platform contracts, regulatory licences, tax filings, data protection practices and any disputes. For Bangladeshi startups, common findings include incomplete RJSC filings, missing IP assignments from founders and freelancers, informal promises of equity, and licensing gaps for fintech, health or e-commerce activities. Founders can save time by conducting a short legal readiness review before the round. We act for both companies preparing for diligence and investors carrying it out. Investors then price risks or require fixes before closing.

The most common exits are trade sales to strategic buyers, secondary sales to later-stage investors and, for companies with offshore parents, sales or listings outside Bangladesh. Listing on the Dhaka or Chittagong Stock Exchange is possible for mature companies, including through dedicated boards for smaller companies. A foreign investor selling shares in a Bangladeshi company will need to deal with capital gains tax, valuation rules and approvals for remitting proceeds abroad. We plan exits from the first round, by building suitable drag, tag and registration rights into the venture capital documents. Early planning keeps options open.

Yes. BSEC regulates alternative investment funds, including venture capital and private equity funds, through rules that cover fund registration, the fund manager, the trustee or custodian, investor eligibility, investment restrictions and reporting. Sponsors must consider capital, governance and tax at both the fund and investor level. Some sponsors instead form an offshore fund that invests into Bangladesh through local advisers. The rules have been revised over time, so the current requirements should be checked at the outset. We advise on the choice of route, the documents and the registration process with BSEC. Fund economics should be modelled early.