Hire in Bangladesh,
compliantly,
without the complexity.

Bangladesh is one of South Asia's economic growth leaders, achieving consistent 6% to 7%+ annual GDP growth and expanding its economy past $450 billion USD. Transitioning out of Least Developed Country (LDC) status, Bangladesh is aggressively diversifying its industrial footprint from textile manufacturing into high-value technology exports, generic pharmaceuticals, and global business services.

Key Economic Strengths & Talent Dynamics

• Large, Tech-Savvy Demographic: A population exceeding 170 million with a median age under 28. Bangladesh hosts one of the world's largest online freelance workforces and an expanding engineering graduate pipeline.
• Cost-Competitive IT & BPO: Highly competitive developer and professional service rates relative to India, the Philippines, and Eastern Europe, with English fluency prevalent in corporate and tech hubs.
• Export Processing & Hi-Tech Zones: Strategic industrial corridors managed by BEPZA and BEZA, alongside state-backed Hi-Tech Parks supporting software and electronics assembly.
• Digital Financial Services: A global leader in mobile financial services (MFS) via platforms like bKash and Nagad, driving nationwide financial inclusion and digital payroll adoption.

Major Industries & Commercial Hubs

• Ready-Made Garments (RMG) & Textiles: Over 80% of national export earnings, serving top global fashion and apparel retailers.
• Software, IT & ITES: Enterprise software, web/mobile development, QA engineering, and BPO operations centered in Dhaka.
• Pharmaceuticals: World-class generic drug manufacturing and formulation exporting to over 150 countries.
• Commercial Centers: Dhaka (commercial, financial, and tech capital), Chattogram / Chittagong (primary maritime port and trade gateway), and the Gazipur/Narayanganj industrial clusters.

Employment relations are governed by the Bangladesh Labour Act, 2006 (as amended in 2013 and 2018) and the Bangladesh Labour Rules, 2015.

Contract & Appointment Letter Requirements

• Mandatory Written Appointment Letter: Employers must issue a formal written appointment letter and identity card to every worker upon engagement.
• Language Standards: Drafted in Bengali for statutory filings and factory compliance; bilingual Bengali/English appointment letters are standard in IT, corporate, and multinational environments.
• Mandatory Inclusions: Must clearly specify job classification, responsibilities, workplace location, date of joining, salary breakdown (basic wage, house rent, medical allowance, conveyance), payment schedule, leave entitlements, and termination notice periods.

Worker Classifications Under the Labour Act

• Permanent Worker: Confirmed employee engaged for indefinite-duration work following successful probation completion.
• Probationer: A worker provisionally employed to fill a permanent post during a trial period.
• Temporary Worker: Engaged for work of an essentially temporary or seasonal nature.
• Casual Worker: Engaged on a short-term or ad-hoc basis for intermittent tasks.

Probation Period Rules

• Skilled & Technical Roles: Up to 6 months (extendable by up to 3 additional months with documented justification).
• General / Non-Technical Roles: Maximum 3 months.
• Confirmation: Upon completing probation without written objection, the employee is automatically confirmed as permanent, with statutory service continuity accruing from day one.

Standard Working Hours

• Statutory Standard: 8 hours per day, 48 hours per week as a statutory maximum.
• Corporate & IT Norm: 40 to 45 hours across a 5-day working week (Sunday through Thursday) in professional offices and technology firms in Dhaka.
• Manufacturing Schedule: 5.5 to 6 days per week in export manufacturing and logistics.
• Weekly Rest: Minimum 1 full 24-hour rest day per week (typically Friday, with Friday–Saturday observed as the weekend in corporate offices).
• Meal Breaks: Mandatory 1-hour rest/meal interval for workdays exceeding 6 continuous hours.

Overtime Regulations

• Statutory Premium: Overtime is compensated at double the ordinary basic wage rate (200% / 2.0×) for hours worked beyond standard daily or weekly thresholds.
• Statutory Limits: Total working hours including overtime cannot exceed 10 hours per day or 60 hours per week (with an annual average cap of 56 hours/week).

Annual Earned Leave

• Statutory Accrual: 1 day of earned leave for every 18 days worked in commercial establishments and factories (yielding approximately 10 to 16+ days per year).
• Encashment & Carry-Forward: Unused earned leave can be accumulated (up to statutory caps) or encashed upon contract separation.

Casual & Sick Leave

• Casual Leave: 10 days per year with full pay for unforeseen personal matters (non-cumulative).
• Sick Leave: 14 days per year with full pay upon submitting a registered medical practitioner's certificate (non-cumulative).

Maternity Leave

• Duration: 16 consecutive weeks (112 days) — structured as 8 weeks pre-natal and 8 weeks post-natal leave.
• Compensation: Fully paid at 100% of average daily earnings, employer-funded, for employees with at least 6 months of continuous service (applicable up to 2 surviving children).
• Dismissal Protection: Termination of an employee during pregnancy or maternity leave is strictly unlawful under the Labour Act.

Public Holidays

Bangladesh observes approximately 11 to 22 official public and festival holidays annually, blending secular commemorations and multi-religious celebrations:

• International Mother Language Day (21 February)
• Independence Day (26 March)
• Bengali New Year / Pohela Boishakh (14 April)
• May Day / Labour Day (1 May)
• Eid-ul-Fitr (multi-day government holiday)
• Eid-ul-Adha (multi-day government holiday)
• National Mourning Day (15 August)
• Janmashtami & Durga Puja (Bijoya Dashami)
• Eid-e-Miladunnabi
• Victory Day (16 December)
• Christmas Day (25 December)

Provident Fund (PF)

Recognized Provident Funds represent a core retirement and retention benefit in Bangladesh's formal corporate and IT sectors:

• Employer Contribution: Typically 8% to 10% of basic salary.
• Employee Contribution: Matching 8% to 10% of basic salary deducted at source.
• Vesting & Payout: Accumulates interest in a dedicated trust fund, paid out upon retirement, resignation (subject to fund vesting rules), or contract termination.

Statutory Gratuity

• Payable in establishments where no recognized provident fund exists (or in addition as per company policy).
• Calculated as 30 days' basic wages for every completed year of continuous service (increasing to 45 days for service exceeding 10 years).

Festival Bonuses (Customary & Expected)

• Annual Practice: 1 to 2 festival bonuses disbursed annually (each equivalent to 1 month's basic salary), paid prior to major religious festivals (e.g. Eid-ul-Fitr, Eid-ul-Adha, Durga Puja, or Christmas based on the employee's faith).
• Industry Standard: Deeply entrenched across Bangladesh's tech, corporate, and garment industries.

Customary Corporate Allowances

• House Rent Allowance: Typically 40% to 50% of basic salary (common for tax-efficient salary structuring).
• Medical & Conveyance Allowances: Monthly stipends covering outpatient healthcare and local transit.
• Private Health & Life Insurance: Supplemental hospitalization insurance covering employees and direct dependents.

Personal Income Tax (TDS – Tax Deducted at Source)

Salaries in Bangladesh are subject to progressive individual income tax withheld monthly at source and remitted to the National Board of Revenue (NBR):

Payroll Mechanics & Employer Duties

• Currency & Frequency: Bangladeshi Taka (BDT), processed on a monthly cycle.
• Payment Channels: Direct commercial bank transfer or licensed Mobile Financial Services (MFS: bKash, Nagad).
• Monthly TDS Remittance: Taxes withheld at source must be deposited into the government treasury via e-Challan within statutory deadlines.
• TIN & Annual Reporting: Employers file annual withholding statements and issue Salary Tax Certificates to employees for annual NBR return submissions.

Key Compliance Standards

• DIFE Inspections: The Department of Inspection for Factories and Establishments (DIFE) enforces labor code standards, workplace safety, and wage records.
• Worker Participation Committees (WPC): Required in qualifying commercial and industrial establishments to facilitate structured dispute mediation.
• Labour Courts & Appellate Tribunal: Specialized labor courts with jurisdiction over wage claims, wrongful dismissals, and trade union disputes.

Statutory Notice Periods

• Termination by Employer (Permanent Monthly Worker): 120 days' written notice (or 120 days' wages in lieu of notice).
• Termination by Employer (Other Workers): 60 days' notice (or pay in lieu).
• Resignation by Permanent Monthly Worker: 60 days' written notice to the employer.

Lawful Termination Grounds & Severance

1. Termination by Notice / Discharge: Requires full statutory notice (120 days for permanent monthly staff) plus statutory compensation (typically 30 days' wages per year of service) and earned leave payout.
2. Retrenchment (Redundancy): Redundancy due to operational downsizing requires 30 days' notice, compensation of 30 days' wages per completed year of service, and adherence to the "last in, first out" (LIFO) rule.
3. Summary Dismissal for Misconduct: Gross misconduct (theft, fraud, bribery, riotous behavior, habitual unexcused absence) requires strict procedural compliance: formal charge sheet -> at least 7 days to reply -> domestic inquiry committee hearing -> dismissal order.

Expatriate Work Authorization via BIDA

Foreign nationals seeking employment in Bangladesh require an official Work Permit issued by the Bangladesh Investment Development Authority (BIDA) or the Bangladesh Export Processing Zones Authority (BEPZA for EPZ units).

The Work Authorization Process

1. E-Visa / Employment Visa: Foreign expert secures an employment visa from the Bangladesh embassy abroad based on an employer sponsorship letter.
2. BIDA Work Permit Application: Within 15 days of arrival, the sponsoring entity submits the application to BIDA with the employment agreement, passport, attested degrees, and company incorporation credentials.
3. Security Clearance & Police Verification: Coordinated through the Ministry of Home Affairs / Special Branch.
4. Permit Issuance: Granted for 1 to 2 years (renewable).

Timeline: Processing typically requires 4 to 8 weeks.

Private Limited Company Registration (RJSC & BIDA)

Direct incorporation in Bangladesh involves multiple sequential government bodies:

• Registrar of Joint Stock Companies (RJSC): Name clearance, Memorandum & Articles of Association, capital registration.
• Inward Capital Remittance: Foreign shareholders must open a temporary inward account and secure a bank Encashment Certificate proving capital deposit.
• BIDA Investment Registration: Mandatory for foreign-invested enterprises to obtain work permits and repatriate royalties/dividends.
• Trade Licensing & Tax: City Corporation Trade License, NBR TIN, and VAT registration.
• Total Entity Timeline: Realistically 10 to 16+ weeks (stretching to 4–8+ months for factory or regulated manufacturing).
• Annual Compliance: USD $8,000 to $25,000+ annually in RJSC filings, statutory audit, trade license renewals, and NBR returns.

Key Advantages of an EOR in Bangladesh

• Fast-Track Market Entry: Hire software developers, QA engineers, merchandisers, and BPO agents in 2 to 4 weeks without establishing a local company.
• Labour Act 2006 Compliance: Automated compliance with complex 120-day notice provisions, probation rules, and statutory retrenchment calculations.
• Full NBR Tax & Provident Fund Administration: Monthly TDS calculation and remittance, salary tax certificates, and provident fund management.
• Festival Bonus Coordination: Seamless disbursement of customary Eid and religious festival bonuses.
• BIDA Expatriate Sponsorship: End-to-end management of BIDA/BEPZA work permit applications.

EOR vs. Bangladesh Entity Setup Comparison