Startup Law in Bangladesh 2026: Structure, Funding, ESOPs and Compliance for Founders

Startup law in Bangladesh: the 2026 framework for founders

Startup law in Bangladesh is the body of company, foreign exchange, tax, employment, intellectual property and data rules that decides whether a young business can raise money, hire talent and exit cleanly. None of it sits in a single statute. Founders work with the Companies Act 1994, Bangladesh Bank's foreign exchange guidance, the Income Tax Act 2023 as amended by the Finance Act 2026, the Labour Act 2006, the Copyright Act 2023 and the Personal Data Protection Act 2026, together with a growing set of startup-specific circulars and funds. In 2026 that framework changed more than at any time since the startup sector emerged.

This guide is written for founders, early employees and the investors who back them. It follows the life of a startup from entity choice and the founders' agreement, through IP assignment, ESOPs and the first funding rounds, to the post-incorporation compliance that keeps the company investable. It explains the Bangladesh Bank startup financing regime of 2025, the startup tax package in the Finance Act 2026, the role of Startup Bangladesh Limited and the new Bangladesh Fund of Funds, and the foreign exchange rules that shape every cross-border round. Where TRW has published a dedicated analysis of a sub-topic, we link to it rather than repeat it.

Summary: A Bangladeshi startup is usually a private limited company under the Companies Act 1994, owned through a founders' agreement and a shareholders' agreement that the articles must reflect. Foreign equity can be issued without Bangladesh Bank's prior permission once the money arrives through banking channels, but SAFEs and convertible notes have no statutory basis. From July 2026 a qualifying startup enjoys a nine-year growth period with nil turnover tax and VAT relief, while Bangladesh Bank and Startup Bangladesh Limited supply concessional debt and equity.

Key point: The biggest legal risk for a Bangladeshi startup is structural, not regulatory: unclear founder ownership, unassigned code, informal option promises and foreign money brought in through the wrong channel. Each one surfaces in investor due diligence, and each is far cheaper to fix before the first round than after it.

At a glance

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Table of Contents

What startup law in Bangladesh covers

Bangladesh has no Startup Act. The legal framework for startups is assembled from general statutes and then adjusted by targeted measures: a definition of "startup" in tax law, a Bangladesh Bank master circular on startup finance, foreign exchange circulars that allow early-stage companies to set up abroad, and state-backed investment vehicles under the ICT Division. Understanding startup law in Bangladesh therefore means knowing which general rule applies and where a startup-specific exception overrides it.

Founders consistently face the same handful of legal issues: the choice of vehicle, ownership among co-founders, ownership of the product itself, how to pay and incentivise early staff, how to accept money from local and foreign investors, what tax and VAT the business owes, and which sector rules apply to the business model. A fintech needs a Bangladesh Bank licence, a health platform faces medical and data rules, and an e-commerce marketplace must follow the Ministry of Commerce's digital commerce guidelines. The corporate and funding layer, however, is common to all of them, and that is the focus of this guide.

Why 2025 and 2026 matter

Three changes reshaped the landscape. In March 2025 Bangladesh Bank allowed young resident companies to remit funds to set up an entity abroad and opened a route for share swaps.[6] In July 2025 it replaced its 2021 startup financing regime with a master circular that defines eligible startups and caps lending rates.[3] [4] And the Finance Act 2026, assented to on 30 June 2026, gave qualifying startups a nine-year growth period with nil turnover tax and wide VAT exemptions.[9] Layered on top are a new personal data statute, a rewritten repatriation regime and the merger of the investment agencies into Invest Bangladesh.

The state of funding in 2026

The legal reforms arrived during a funding drought. Bangladeshi startups raised about USD 6 million in the first half of 2026, and commentators have tied part of that slowdown to the gap between global venture practice and the instruments local law recognises.[12] Over the past decade the sector raised roughly USD 1.2 billion, but local investors supplied only about 7 per cent of that capital.[11] For founders, the practical consequence is clear: most institutional money will be foreign, so the company must be built from day one to pass a foreign investor's legal diligence.

Choosing the right entity

The entity decision fixes how ownership is recorded, who can invest and how the business is taxed. Sole proprietorships and partnerships are quick to set up on a trade licence, but they offer no limited liability, cannot issue shares and are uninvestable for venture purposes. For any business that intends to raise equity, the real choice is between a private limited company and a one person company under the Companies Act 1994.

Private limited company

Section 2 of the Companies Act 1994 defines a private company as one whose articles restrict the right to transfer shares, prohibit any invitation to the public to subscribe for its shares or debentures and limit membership to fifty, excluding employees.[1] That exclusion matters for startups because employees who receive shares under an ESOP do not count towards the fifty-member ceiling. A private limited company can have several founders, issue new shares to investors, create different share classes if its articles allow, and convert to a public company before an IPO. Registration procedure is set out in our guide to private limited company registration in Bangladesh.

One person company

Since the Companies (Second Amendment) Act 2020, a one person company is a company whose only shareholder is a single natural person.[1] As enacted, an OPC must have paid-up capital between Tk 25 lakh and Tk 5 crore or a turnover in the preceding year between Tk 1 crore and Tk 50 crore, and the owner must name a nominee to take the shares on death; an OPC that outgrows those limits can convert into a private or public limited company.[2] An OPC suits a solo founder testing a product, but it cannot take a co-founder or an investor without conversion, so most venture-track founders skip it. Our guide to the one person company in Bangladesh covers formation in detail.

Onshore company, offshore holding company or both

Many venture-backed Bangladeshi startups sit beneath a Singapore or Delaware holding company, because foreign investors prefer familiar law, enforceable preference rights and an exit market. The trade-off is that the startup tax package in the Finance Act 2026 benefits only companies incorporated under the Companies Act 1994, which means the operating subsidiary, not an offshore parent.[12] Founders who flip offshore must still keep the Bangladeshi company compliant, and moving shareholdings abroad requires Bangladesh Bank's permission, discussed below. See our analysis of offshore company formation and holding and subsidiary companies.

Founders' agreements and shareholder arrangements

A founders' agreement is the single most valuable document a startup signs before its first round. It records who owns what, what each founder contributes, how decisions are made and what happens when someone leaves. Bangladeshi law does not require one, but the Contract Act 1872 enforces it as an ordinary contract, and its absence is the root cause of many of the shareholder disputes that reach the High Court Division.

What the agreement should cover

• Equity split and vesting: shares allotted to each founder, with a vesting schedule, typically four years with a one-year cliff, enforced through a right for the company or other founders to buy back unvested shares.
• Roles and time commitment: who is a full-time founder, who is an adviser, and the consequences of taking outside employment.
• Leaver provisions: good-leaver and bad-leaver definitions and the price at which a departing founder's shares are bought back.
• IP assignment: an express assignment to the company of everything each founder created for the business, including code written before incorporation.
• Reserved matters: decisions that need unanimous or supermajority founder consent, such as new share issues or sale of the business.
• Non-compete and confidentiality: drafted narrowly, because the Contract Act 1872 voids agreements in restraint of trade, subject to limited exceptions.
• Dispute resolution: a mediation step followed by arbitration, which keeps founder disputes confidential.

Why the articles of association must match

A shareholders' agreement binds only the parties to it, while the articles of association bind the company and every member. Where the two conflict, Bangladeshi courts generally give effect to the articles, so transfer restrictions, pre-emption rights, drag-along and tag-along rights, board composition and investor vetoes should be written into the articles as well as the agreement. Commentators have proposed that shareholder agreements be given statutory priority over articles so that preferences and drag-along rights are enforced as written, which confirms that today they are not.[12] Our guide to articles of association in Bangladesh explains how to draft them.

Minority protection and disputes

Members holding at least one-tenth of the issued capital can petition the High Court Division under section 233 of the Companies Act 1994 for relief against oppression.[1] A founder diluted below that threshold loses the statutory remedy and must rely on contract, which is another reason to settle exit and deadlock mechanisms in writing. The Commercial Courts Act 2026, enacted in April 2026 as Act No. 23 of 2026, adds a specialist forum for commercial disputes. For the contentious side, see our analysis of shareholder disputes in Bangladesh.

Intellectual property: making sure the company owns the product

Investors buy the company because it owns the product. If the code, brand or content belongs to a founder, a freelancer or an overseas agency, the company has little to sell. Startup law in Bangladesh gives the company some default protection, but not enough to rely on.

Copyright in software and digital works

The Copyright Act 2023, Act No. 34 of 2023, treats software and other digital creations as protected works.[14] The employer owns works created under a contract of service, and under section 15(2)(g) the person who engages someone to complete an information technology-based digital work is the first owner unless the parties agree otherwise.[14] These defaults help, but they do not cover code written by founders before incorporation, work by unpaid contributors, or contracts where the developer reserved ownership.

Assignments that actually work

Sections 16 and 17 of the Copyright Act 2023 require an assignment to be signed and to identify the work, the rights, the duration and the territory. If no duration is stated, the assignment is deemed to run for five years; if no territory is stated, it covers Bangladesh only.[14] An informal "all IP belongs to the company" sentence can therefore leave a startup owning its own code for five years in one country. Every founder, employee and contractor should sign an assignment that is perpetual, worldwide and covers all present and future works connected with the business. Our guide to copyright law in Bangladesh covers the rules in depth.

Trademarks and domains

The brand should be registered in the company's name with the Department of Patents, Designs and Trademarks before launch, and the domain and social media accounts should be held by the company rather than a founder's personal account. See our note on trademark registration with the DPDT.

ESOPs: legality, structure and tax

Employee stock option plans are standard in venture-backed companies, yet Bangladesh has no dedicated ESOP statute for private companies. Analysts reviewing the FY2026-27 budget noted that employee share ownership still has no clear legal framework.[10] That does not make ESOPs unlawful; it means they are built from general company and contract law.

How ESOPs work under the Companies Act 1994

A private limited company can grant options by contract and then allot shares when an employee exercises, provided its authorised capital and articles permit the issue and the board and shareholders pass the required resolutions. Because employees are excluded from the fifty-member limit for private companies, a broad ESOP does not force conversion to a public company.[1] The plan rules should cover the option pool, vesting, exercise price, the treatment of leavers, adjustment on later rounds and the company's right to buy back shares from departing employees. Some companies hold the pool through a trust or a nominee to keep the register manageable.

Listed companies and BSEC

Once a company prepares to list, the Bangladesh Securities and Exchange Commission's public issue rules and listing regulations take over, and any employee allocation must fit within that framework. A private startup is not subject to BSEC approval for a contractual option plan, but founders planning an IPO should design the plan so it can be carried through the listing process.

Tax and foreign-parent plans

There is no ESOP-specific tax regime, so the treatment of a grant, exercise or sale is determined under the general rules of the Income Tax Act 2023 on employment income and capital gains, and should be checked before the plan is launched. Where the option is over shares of an offshore holding company, a further issue arises: residents generally need Bangladesh Bank's permission to acquire foreign securities.[5] Bangladesh Bank's share-swap route under FEID Circular No. 02 of 2025 has been used to consolidate local shareholdings, including option pools, under a foreign holding company, but each swap still requires approval.[6] Employment terms and IP clauses for option holders are covered in our guide to employment contracts in Bangladesh.

Funding stages and the seed funding legal framework

Each stage of a startup's funding life brings a different legal question. Startup law in Bangladesh treats all of them through the same tools: share capital under the Companies Act 1994, contractual investor rights, and, for foreign money, Bangladesh Bank's foreign exchange rules.

Bootstrapping, friends and family

At the earliest stage, founders fund the company through share capital or director's loans. Money from friends and family should be documented as a share subscription at an agreed price or as a written loan, never as an informal promise of "a percentage", which later becomes impossible to reconcile with the register.

Pre-seed and seed rounds

A seed round in Bangladesh is normally a straightforward subscription for ordinary or preference shares, supported by a term sheet, a share subscription agreement and an amended shareholders' agreement and articles. The company increases its authorised capital if needed, passes board and shareholder resolutions, receives the funds, allots the shares and files the return of allotment with the RJSC. Angel investors need no special licence; the same share-issue rules apply to individuals as to funds.

Series A and growth rounds

Later rounds add liquidation preferences, anti-dilution protection, board seats, information rights and drag-along rights. These are enforceable in Bangladesh only to the extent they are consistent with the Companies Act 1994 and written into the articles. Many institutional investors therefore insist on an offshore holding structure by Series A, and commentators observe that venture-backed companies typically switch domicile at their first institutional round.[12] Venture and private equity funds raised inside Bangladesh are themselves regulated by BSEC as alternative investment funds; see our venture capital practice for fund-side advice.

SAFEs and convertible notes

The instruments that dominate early-stage funding in the United States and Singapore are the most problematic. SAFEs and convertible notes have no statutory recognition under the Companies Act 1994, and commentators have concluded that a Bangladeshi private limited company cannot issue them as such.[12] A convertible note from an overseas investor also looks, until conversion, like foreign borrowing, which follows a separate approval route from equity. In practice founders have three options: price the round and issue shares; issue preference shares with conversion terms set out in the articles; or raise the convertible instrument at an offshore holding company. Our analysis of foreign loans in Bangladesh explains the debt route.

Foreign investment and Bangladesh Bank rules

Because most startup capital is foreign, the foreign exchange rules are the part of startup law in Bangladesh that most often decides whether a round closes on time.

Issuing shares to foreign investors

Bangladesh Bank's guidance under the Guidelines for Foreign Exchange Transactions allows a company to issue shares to a non-resident without prior permission. The remittance must arrive through formal banking channels before the shares are issued, and the authorised dealer bank must notify Bangladesh Bank's Foreign Exchange Investment Department within 14 days of issue and completion of RJSC formalities.[7] Investors can open a temporary non-resident taka account for formation without Bangladesh Bank permission, and outside the special zones a company may hold inward equity in a foreign currency account for up to one year.[7]

Secondary transfers and valuation

Transfers from residents to non-residents need no prior permission but must be priced at fair value, and Bangladesh Bank's guidance requires a valuation report from a BSEC-licensed merchant banker or listed chartered accountant above Tk 1 million.[7] Founders selling secondary shares to a foreign investor should commission the valuation early, because it fixes the floor for the price.

Repatriation and exit

Under the share transfer master circular issued in March 2026, banks can process repatriation of non-resident share sale proceeds up to Tk 100 crore without Bangladesh Bank's prior approval, against an independent fair valuation, up from a Tk 10 crore limit. Deals at or below net asset value can be repatriated regardless of amount, deals up to Tk 1 crore need no valuation report, and banks must repatriate within five working days if the papers are in order.[8]

Net-of-tax cash dividends can be remitted without prior approval.[7] A foreign buyer acquiring control of a Bangladeshi company should still plan for Bangladesh Bank engagement.[12] See our analysis of capital repatriation in Bangladesh and the wider guide on how to invest in Bangladesh.

Going abroad: FEID Circular No. 02 of 2025

Bangladesh Bank's FEID Circular No. 02 of 27 March 2025 allows resident enterprises operating in Bangladesh for less than ten years, and individual Bangladeshi nationals with innovative ideas, to remit up to USD 10,000 per remittance to establish an entity abroad that supports a Bangladesh-based startup. Funds must come from internal sources rather than borrowing, the authorised dealer bank reports the remittance, and the investor files annual progress reports and audited accounts of the foreign entity. The same circular lets resident companies apply, through their bank, to acquire foreign shares by swapping their own shares at a ratio consistent with global practice.[6] This is the lawful bridge to an offshore holding structure.

Bangladesh Bank's startup financing regime

Bangladesh Bank issued its startup finance master circular on 9 July 2025, replacing the 2021 arrangements.[3] [4] It is the first instrument to set out in one place which businesses qualify as startups for bank finance.

Who qualifies

An eligible startup is a technology-driven or innovative business or industrial enterprise, registered in Bangladesh, that has not operated for more than twelve years since registration and was not launched by a large industrial group or created by restructuring an existing business. Entrepreneurs must be at least 21, and a loan defaulter among the founders disqualifies the company.[3] [4]

Loans, equity and rates

The maximum startup loan rose from Tk 1 crore to Tk 8 crore, financed through a Tk 500 crore refinancing fund at an interest rate capped at 4 per cent, and banks are exempted from the standard credit-rating guidelines until 30 June 2030 when assessing startup proposals.[3] Limits are tiered by age: up to Tk 2 crore within two years of registration, Tk 5 crore between two and six years and Tk 8 crore between six and twelve years, with matching seed, growth and high-growth equity limits.[4]

The bank equity pool

Since 2021 scheduled banks have set aside 1 per cent of net profit for startups.[5] Under the 2025 circular, banks can no longer lend from those startup funds and must instead invest them as equity in a venture capital company that Bangladesh Bank is forming with the participating banks.[3] For founders, this creates a domestic institutional equity investor alongside the government's own vehicles.

Startup Bangladesh Limited and ICT Division incentives

Startup Bangladesh Limited is the government's flagship venture capital and fund management company under the ICT Division. It has invested about Tk 1.11 billion in 36 technology startups.[11] Its investments are equity rounds documented much like private venture deals, so the same diligence standards apply: clean cap table, assigned IP, compliant filings and a coherent shareholders' agreement.

The Bangladesh Fund of Funds

In August 2026 Startup Bangladesh opened manager selection for a Tk 4 billion Bangladesh Fund of Funds, which will place public money with professionally managed domestic and international venture funds rather than directly into startups, with a co-investment mechanism and a proposed sidecar facility.[11] At the launch the Prime Minister's adviser for posts, telecommunications and IT said the government would protect investors and allow lawful repatriation of profits and capital.[11] For founders, the fund is likely to increase the number of local VC managers able to lead rounds.

Tax holiday for ICT and ITES

Separate from the startup regime, income from listed IT and IT-enabled services is exempt under the Income Tax Act 2023, subject to conditions. That exemption is scheduled to end on 30 June 2027, and industry bodies observed in July 2026 that the FY2026-27 budget gave no indication of an extension.[10] A software startup relying on the exemption should model its tax position from July 2027 on the assumption that it may lapse, and check whether it can instead qualify under the startup provisions.

The startup tax package in the Finance Act 2026

The Finance Act 2026 is the most significant tax development for startup law in Bangladesh to date. For a startup organisation as defined in the Income Tax Act 2023, it extends the growth period to nine years, sets the turnover tax rate at nil during that period and allows losses incurred in the growth period to be carried forward regardless of changes in shareholding.[9] The loss rule is important for venture-backed companies, because each funding round changes the shareholding and would otherwise put accumulated losses at risk.

VAT relief

From 1 July 2026, supplies by a qualifying startup are exempt from VAT, the exemption extends to VAT on imported services and on rent, and buyers need not deduct VAT at source on supplies from a registered startup.[9] Industry commentary describes these VAT exemptions as running until 2035.[10] Imported services such as cloud hosting and software subscriptions are a large cost for tech companies, so this relief has real cash value.

Who qualifies and what remains taxable

The startup definition applies to companies with turnover below Tk 100 crore that are incorporated under the Companies Act 1994.[12] Outside the relief, the general corporate rate for unlisted companies is 27.5 per cent, or 25 per cent where all transactions are through bank transfer.[9] Withholding obligations on salaries, rent and payments to suppliers continue to apply. Our guides to corporate income tax and VAT registration for companies cover the general rules.

Data, e-commerce and business model regulation

Every startup business model sits within one or more sector regimes. The questions to settle before launch are whether the activity needs a licence, what consumer protection rules apply and how personal data is handled.

Personal data

The Personal Data Protection Act 2026, Act No. 63 of 2026, dated 10 April 2026, is deemed to have taken effect on 6 November 2025, except for sections 23 and 31 to 35, which commence by notification after eighteen months.[13] It requires valid, specific and withdrawable consent or another lawful ground, gives data subjects rights of access, correction, portability and erasure, requires security measures and breach notification to the authority, and reaches processing outside Bangladesh connected with goods or services offered to people in Bangladesh.[13] Consumer apps should build consent flows and data maps now. See our analysis of the Bangladesh data protection law 2026.

E-commerce, fintech and platforms

Online marketplaces operate under the Ministry of Commerce's digital commerce guidelines and consumer protection law; payment, wallet and lending models require Bangladesh Bank authorisation; and telecom-dependent services fall under the BTRC. A startup that holds customer money without the correct licence faces enforcement that no contract can cure. Our guides to e-commerce law in Bangladesh and technology law in Bangladesh set out the sector rules in detail.

Post-incorporation compliance: RJSC, tax, VAT and labour

Investors regularly find that a startup's product is ready but its records are not. Post-incorporation compliance is the least glamorous part of startup law in Bangladesh and the part most likely to delay a closing.

RJSC and corporate housekeeping

A company must hold an annual general meeting every calendar year, lay audited accounts before members and file its annual return with the RJSC within 21 days of the AGM.[1] Every allotment, transfer, change of directors and increase in authorised capital must be filed. Statutory registers, board minutes and share certificates should be kept current. See our guide to corporate secretarial compliance and the hub on company law in Bangladesh.

Licences, tax and VAT

The company needs a trade licence from the local authority, an e-TIN, and VAT registration or turnover tax enlistment as its turnover requires, together with annual income tax returns and periodic VAT returns. Even a startup that qualifies for VAT exemption should register so that its exempt status is recognised by buyers. See our guide to the trade licence in Bangladesh.

Employment

The Labour Act 2006, as amended, governs appointment letters, working hours, leave, termination and service benefits for workers, while senior and managerial staff are largely governed by contract. Every hire should receive a written contract with confidentiality and IP assignment clauses, and foreign staff need a work permit before starting work. Our guides to labour law in Bangladesh and termination of employees cover the detail.

Startup law in Bangladesh: a founder's compliance checklist

The sequence below reflects how investors review a company. Completing it before the first institutional round shortens diligence and avoids price chips.

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Two habits make the checklist sustainable: keep a single data room with every signed document and filing, and update the cap table the day any share is issued or transferred.

Comparing the main funding instruments

The right instrument depends on who is investing, from where, and how soon the company expects a priced round.

For most local rounds, a priced share subscription remains the cleanest route. For international rounds, the choice of instrument usually follows the choice of holding structure, which is why the structuring conversation should happen before the term sheet is signed.

Bodies that matter to founders

A startup deals with more regulators than founders expect. The main institutions are set out below.

Mistakes founders make under startup law in Bangladesh

Treating equity as a handshake

Promising a co-founder, an early employee or an adviser "five per cent" without a share allotment or option agreement creates a claim with no defined terms. Record every equity promise in a signed document, the shareholders' agreement or the ESOP rules, and in the register.

Leaving IP with individuals

Code written by founders before incorporation, by freelancers abroad or by an outsourcing agency often belongs to its author. Under the Copyright Act 2023 an unstated duration limits an assignment to five years.[14] Take perpetual, worldwide assignments from everyone.

Bringing money in through the wrong channel

Investor money sent to a founder's personal account, or shares issued before the remittance arrives, breaches the foreign exchange rules and complicates later repatriation.[7] Equity must come into the company's account through an authorised dealer bank.

Copying foreign templates

US-style SAFEs, option plans and preference terms do not transpose automatically into a Bangladeshi company.[12] Adapt the documents, including the shareholders' agreement, to the Companies Act 1994 and the articles, or use them only at an offshore holding company.

Ignoring routine filings

Missed AGMs and unfiled returns are easy to fix early and expensive to fix under deal pressure. A compliance calendar costs little and saves weeks in diligence.

What to watch in late 2026 and 2027

Several developments will shape startup law in Bangladesh over the next year. Reform of the Companies Act 1994 is on the table, and startup advocates are pressing for a startup schedule, statutory recognition of convertible instruments and priority for shareholder agreements over articles.[12] Bangladesh Bank's bank-owned venture capital company and the Fund of Funds managers are expected to begin investing.[3] [11] The ICT and ITES exemption is due to expire on 30 June 2027, so the FY2027-28 budget will be decisive for software exporters.[10] And the deferred sections of the Personal Data Protection Act 2026 will come into force by notification.[13] Founders should review their structure, option plan and data practices against each of these as they take effect.

Frequently asked questions

Is there a dedicated startup law in Bangladesh?

No. Startups are governed by general statutes, chiefly the Companies Act 1994, foreign exchange law, the Income Tax Act 2023 and the Labour Act 2006, adjusted by startup-specific measures such as Bangladesh Bank's 2025 startup financing circular and the startup tax provisions in the Finance Act 2026.[3] [9]

Which company type is best for a startup in Bangladesh?

A private limited company is the usual choice because it can have several shareholders, issue shares to investors and exclude employees from its fifty-member limit. A one person company suits a single founder but must convert before taking a co-founder or investor.[1] [2]

Can a Bangladeshi startup issue a SAFE or convertible note?

Not as such. These instruments have no statutory recognition under the Companies Act 1994, so founders usually price the round, use convertible preference shares written into the articles, or issue the instrument at an offshore holding company.[12]

Do I need Bangladesh Bank approval to take foreign equity?

No prior permission is needed to issue shares to a non-resident, but the money must arrive through the banking channel before allotment and the bank must report the issue to Bangladesh Bank within 14 days.[7]

Are ESOPs legal in Bangladesh?

Yes, through contract and ordinary share issues, although there is no dedicated ESOP statute or tax regime. Employees are excluded from the fifty-member limit for private companies, and options over a foreign parent's shares raise separate foreign exchange questions.[1] [5]

What tax benefits do startups get in 2026?

Under the Finance Act 2026 a qualifying startup has a nine-year growth period with nil turnover tax, can carry forward growth-period losses despite shareholding changes, and is exempt from VAT on its supplies, imported services and rent from 1 July 2026.[9]

Who qualifies for Bangladesh Bank startup loans?

A Bangladesh-registered technology-driven or innovative enterprise no more than twelve years old, not launched by a large group, with founders aged at least 21 and no loan defaulters. Loans of up to Tk 8 crore are available at a capped rate of 4 per cent.[3] [4]

What is Startup Bangladesh Limited?

It is the government's venture capital and fund management company under the ICT Division. It has invested about Tk 1.11 billion in 36 startups and in 2026 launched the Tk 4 billion Bangladesh Fund of Funds.[11]

Can a Bangladeshi startup set up a holding company abroad?

Yes. Under FEID Circular No. 02 of 2025, a resident enterprise under ten years old can remit up to USD 10,000 per remittance from internal funds to establish an entity abroad, and can apply to swap shares for shares in a foreign company.[6]

When does the ICT and ITES tax exemption end?

It is scheduled to end on 30 June 2027, and the FY2026-27 budget gave no indication of an extension.[10]