Foreign Investment

Foreign Investment Law & Advisory Services in Bangladesh

Navigating Foreign Direct Investment (FDI) in South Asia’s Emerging Hub

Bangladesh is one of South Asia’s fastest-growing and most resilient economic engines. Its strategic location as a link between South and Southeast Asian markets offers foreign investors a vibrant workforce, growing industrial infrastructure, and attractive government incentives such as tax holidays, duty-free imports of capital machinery, and the benefits associated with Special Economic Zone (SEZ) status.

Foreign capital needs skilled legal navigation to enter a developing market. Bangladesh regulates foreign direct investment through a complex system of rules involving the Bangladesh Investment Development Authority (BIDA), the Bangladesh Bank (the central bank), the National Board of Revenue (NBR), and the relevant municipal and sectoral authorities.

Our foreign investment practice at Advocacy Legal in Uttara, Dhaka—just a short distance from Hazrat Shahjalal International Airport—serves as a reliable link between international businesses and Bangladesh’s regulatory system. Recognized by Asia Business Outlook as one of the Top 10 Most Promising Corporate Law Consultants in Bangladesh, our law firm has established itself as a full-service provider by combining international corporate standards with a thorough understanding of local regulations. This enables foreign investors to enter the Bangladeshi market with confidence by reducing potential risks while arranging legal and financial structures for long-term growth.

Comprehensive Legal Services for Foreign Investors

Advocacy Legal provides end-to-end legal support across every stage of the foreign investment lifecycle:

Investment Structuring & Entity Selection

Determining the optimal legal vehicle is critical for tax efficiency, regulatory approval, and commercial agility:

• 100% Foreign-Owned Subsidiaries: This involves setting up private limited companies under the Companies Act, 1994, so that there is complete international equity ownership without any requirement for local equity in most commercial sectors.
• Joint Venture (JV) Formation: This involves forming JV companies in partnership with local partners in Bangladesh, preparing thorough Joint Venture Agreements, including shareholder lock-in provisions, mechanisms for resolving deadlocks, and safeguards for minority shareholders.
• Branch & Liaison Office Setup: helping foreign organisations to set up local, non-incorporated presences through BIDA approvals for commercial activity (in the case of a Branch Office) or for market coordination (in the case of a Liaison Office).

Regulatory Approvals, BIDA Clearances, & Central Bank Compliance

Securing administrative permissions is essential for seamless foreign capital inflow and profit repatriation:

• BIDA Registration: Carrying out the necessary statutory registrations to be eligible for foreign investment incentives, expatriate work permits, and approvals for technology transfer.
• Foreign Exchange Compliance: Providing advice on the Foreign Exchange Regulation Act of 1947 and ensuring full compliance with the Bangladesh Bank rules concerning the remittance of equity capital, royalty payments, transfers of technical fees, and the approval of cross-border loans.
• Profit Repatriation Frameworks: Establishing legal mechanisms for the repatriation of profits through the form of dividends, capital gains, and the liquidation of equity back to the parent company’s home jurisdiction.

Joint Venture & Commercial Agreement Drafting

Cross-border agreements require robust drafting to ensure enforceability under local and international law:

• Customized JV & Shareholder Agreements: drawing up the governing contracts which include provisions on voting rights, the make-up of the board, rules concerning equity dilution, tag-along and drag-along rights, and non-compete covenants.
• Technology Transfer & Licensing Agreements: When drafting agreements relating to technology transfer and licensing, ensure that those covering the licensing of intellectual property, the transfer of technical know-how, and the use of trademarks comply with the BIDA limits on royalty payments.

Due Diligence, Risk Mitigation, & Property Vetting

Minimizing legal exposure before capital commitment:

• Corporate & Legal Due Diligence: Carrying out thorough legal audits of potential local partners, the target acquisition companies, and the commercial assets.
• Land Title Verification for Industrial Setup: For industrial setups, verifying land titles by checking the land ownership records, obtaining zoning clearances, securing approvals from RAJUK, and verifying encumbrance certificates.

Intellectual Property (IP) & Brand Protection

Protecting global brand equity upon entering the Bangladeshi market:

• Trademark & Patent Filing: obtaining statutory registration for global trademarks, trade names, patents, and designs via the Department of Patents, Designs and Trademarks (DPDT).
• IP Litigation & Infringement Protection: Enforcing the rights related to brand protection against local counterfeiters or unauthorized distributors in the courts of Bangladesh.

Step-by-Step Foreign Investment Guide

Advocacy Legal guides foreign investors through a structured, 5-stage investment journey to ensure regulatory compliance and operational speed:

The 5-Stage Foreign Investment & Setup Process

Stage 1: Initial Consultation & Business Evaluation

We review your business model against local foreign ownership laws, check sector-specific equity limits (if applicable), assess your eligibility for tax incentives in Special Economic Zones or High-Tech Parks, and decide on the best entity structure.

Stage 2: Legal Compliance & Inward Capital Remittance

We help foreign-owned companies open a temporary inward remittance bank account with an authorized dealer bank in Bangladesh; the foreign equity capital is then remitted, and the bank issues an official Encashment Certificate to meet the legal investment requirements.

Stage 3: Company Registration & JV Agreements

We will have the corporate name registered with the Registrar of Joint Stock Companies and Firms (RJSC), prepare a custom Memorandum and Articles of Association (MoA & AoA), enter into Joint Venture Agreements (if partnering locally), and obtain the official Certificate of Incorporation.

Stage 4: Licensing, BIDA Approval & Tax Registration

The legal team obtains the necessary secondary operating permits, such as registration with BIDA as an investor, commercial Trade Licenses, Electronic Tax Identification Numbers (e-TIN), Business Identification Numbers (BIN) for VAT, and Import/Export Certificates (IRC/ERC).

Stage 5: Ongoing Legal, Expatriate & Corporate Support

We offer ongoing corporate retainer services, including handling BIDA work permits for foreign executives, obtaining Special Branch security clearances, preparing employee handbooks under the Bangladesh Labor Act, 2006, and handling annual compliance submissions.

Key Regulatory Framework & Governing Agencies

When setting up a business or carrying out its operations, foreign investors have to interact with several statutory bodies, and Advocacy Legal acts as your legal representative before these organizations:

Regulatory Body	Abbreviation	Jurisdiction & Role in Foreign Investment
Bangladesh Investment Development Authority	BIDA	Prime Minister’s Office agency overseeing foreign investment registration, branch/liaison office approvals, work permits, and technology transfer royalties.
Bangladesh Bank	BB	Central bank regulating foreign exchange inflows, profit/dividend repatriation, outward remittances, and foreign commercial borrowing.
Registrar of Joint Stock Companies and Firms	RJSC	Statutory authority executing entity incorporation, constitutional document approval, and corporate filings.
National Board of Revenue	NBR	Tax authority administering corporate income tax, double taxation avoidance agreements (DTAA), VAT (BIN), and customs tariffs.
Special Economic Zones Authority	BEZA	Governs industrial land allocation, tax holidays, and specialized infrastructure for investors operating within Economic Zones.

Real-World Investment Case Studies

Our firm’s track record demonstrates our practical expertise in resolving complex foreign investment challenges:

Case 1: Cross-Border Joint Venture in Manufacturing

The challenge was to establish a 50:50 joint venture with a well-known developer from Bangladesh while protecting its technology rights and maintaining management control.
As for our solution, Advocacy Legal prepared a comprehensive joint venture agreement that included special clauses to resolve board deadlocks, mechanisms to protect minority interests, and technology transfer terms compliant with BIDA.
Outcome: The registration was successful, the facility was built smoothly, and a secure long-term commercial partnership was established.

Case 2: 100% Foreign-Owned Subsidiary & Expatriate Mobility

The challenge was to set up a 100% foreign-owned software development subsidiary in Dhaka, staffed by international executives.
Our solution covered the entire incorporation process, including obtaining foreign equity encashment certificates, securing BIDA investment approvals, and processing BIDA E-Visas and Work Permits for key foreign personnel without administrative delays.
Outcome: We achieved operational readiness within a few weeks and ensured full compliance with local labour and foreign exchange regulations.

Case 3: Global Brand IP Safeguarding & Market Entry

Challenge: An international food and beverage company entering the South Asian market risked encountering local trademark squatting.
As our solution, the IP team conducted thorough trademark searches, submitted priority registrations in the appropriate classes under the Trademarks Act, 2009, and sent cease-and-desist notifications to unauthorized local mark users.
Outcome: We obtained complete intellectual property protection before the commercial launch.

Why Invest in Bangladesh?

Bangladesh offers compelling economic fundamentals for international businesses looking to expand into Asia:
Rapid Economic Growth: This is due to strong industrial output, the expansion of infrastructure, and lively consumer demand.
Demographic Dividend: A labor force consisting of more than 70 million skilled and semi-skilled workers who are young, adaptable, and cost-competitive.
Strategic Location: Its closeness to India, China, and the ASEAN countries makes it suitably positioned as a manufacturing and export hub.
Investor-Friendly Incentives: Incentives aimed at attracting investors such as tax holidays of between 5 and 10 years in designated economic zones, the right to repatriate both profits and dividends, and exemptions from duties on imports of capital machinery.

Q1: Can foreign investors fully repatriate the profits and dividends they earn from Bangladesh?

A: Yes, under the Foreign Private Investment (Promotion and Protection) Act of 1980, foreign investors have the legal right to fully repatriate their net profits, dividends, and original capital investments (together with any capital gains) through authorized dealer banks, provided they have settled local tax liabilities.

Q2: Is there any sector which is prohibited from having 100 per cent foreign direct investment in Bangladesh?

A: Foreign investment is allowed in nearly all commercial and industrial sectors, with only four “reserved sectors” closed to private investment—namely, arms and ammunition, nuclear energy, forest plantations and the extraction of materials from reserved forests, and security printing and minting.

Q3: What is the process for employing foreign workers in a company owned by foreign investors?

A: Foreign nationals must obtain an Employment (E) Visa recommended by either BIDA or BEPZA and then apply for a BIDA Work Permit within 15 days of arriving in Bangladesh. The company must maintain a statutory local-to-foreign employment ratio (generally 5:1 for commercial offices and 20:1 for industrial facilities).

Q4: What rules apply to technology transfer fees and royalties in the case of foreign companies?

A: Royalty payments, technical assistance fees, and franchise fees must be registered with BIDA. According to BIDA guidelines, recurring royalty payments up to a certain percentage of net sales (excluding taxes) do not require prior clearance from the central bank, provided the agreement is properly registered with BIDA.

Why Choose Advocacy Legal for Foreign Investment Guidance

Supreme Court Practice & Judicial Authority: the senior advocates in our firm are registered with the Supreme Court of Bangladesh, which enables them to provide authoritative legal representation in complicated commercial disputes or applications brought before the High Court.
Strategic Location Near Dhaka Airport: Situated in Sector-3, Uttara, Dhaka, our office is conveniently located near Dhaka International Airport, providing international investors who arrive at Hazrat Shahjalal International Airport with easy access.
End-to-End Retainer Services: We provide you with support for your business after you’ve incorporated, including ongoing assistance with labour compliance, tax filing, contract review, and regulatory reporting.

Considering expanding your business or investing in Bangladesh?

You can reach our foreign investment law firm by telephone at +880 1977-125595 or by emailing info@advocacylegalbd.com to arrange an executive consultation in Uttara, Dhaka.