Business & Investment
BangladeshBusiness & Investment
Bangladesh’s GDP grows by 7.2% in 2026 as it becomes one of the fastest growing economy of the world. 35% of Bangladesh GDP is being generated by the capital city Dhaka as it steadily becoming a major hub for businesses and start-ups. If you're planning to start a new venture or an entrepreneurial activity in this country, Bangladesh has opened up many opportunities. Many startups has found Bangladesh an ideal place to make profitable businesses due to its low cost of doing business in Dhaka, the country’s capital.
Please find below the list of regulations, requirements or compliance issues that need to be followed to establish a firm/business in Bangladesh. Registration with Registrar of Joint Stock Companies and Firms, securing necessary licences and adhering to tax compliance are a few of the formalities that need to be considered. For foreign investments the Bangladesh Investment Development Authority (BIDA) is the regulatory body and it facilitates foreign investment in the country by offering various incentives including exemption from income tax, repatriation of dividend and profit etc. This country note highlights the specific issues that foreign investors need to be aware of in Bangladesh and provides the background information for the assessment carried out in the respective sub-sections.
With more than 50% of the population under the age of 25, Bangladesh presents an opportunity of utilizing the youth bulge and leveraging the vast talent pool. Expert Insight: Bangladesh has a large, highly skilled and young workforce which is one of the key factors which contribute to the country’s emergence as an attractive investment destination.
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In Bangladesh, the Business environment of the country features a growing economy with GDP growth rate of 7.2% in 2026. The Capital city Dhaka is the economic hub accounting for 35% of GDP of the country. The coastal city Chattogram is the main sea port, responsible for conducting 80% of country’s foreign trade. Low cost of living in Dhaka affords great flexibility in running businesses as average monthly cost is BDT 50,000 (USD 470, EUR 440).
Bangladesh government is looking to achieve its Vision 2041 that turns the country into a developed nation based on the principles of high economic growth through effective industrialization, automation, modern communication and higher productivity and quality of work to achieve a competitive and higher economic status, inculcating a positive and progressive change in all aspects of national life leading to its progress in line with the requirements of a developing nation through building and developing infrastructure projects including construction of Padma Bridge and the Dhaka Metro Rail project. Besides, cities like Khulna and Rajshahi have huge potentials as there are less costs involved here.
Companies are usually Private Limited or Public Limited. The minimum paid up capital is BDT 100,000 which works out to approximately USD 940 or EUR 870.there's no restriction on the maximum amount of share capital.
The majority of the companies are based in Dhaka and Chattogram and Khulna. For sole proprietorship, the companies are generally based in smaller cities such as Sylhet and Barisal due to the low costs of setting up the business. In case of partnership, the minimum requirement is of two partners and many family based businesses are set up in the city of Rajshahi.
In Dhaka, registration of a company takes a short time as the Regional Joint Stock Companies (RJSC) office is there. In Chattogram and Khulna there are regional offices too for the ease of businesses. One needs to apply for a Trade License from City Corporation or Municipality. The charges vary from BDT 5,000 to BDT 20,000 (approximately USD 47-188 or EUR 44-174) depending on the type of business.
Most people are unaware that the Permission for Industrial Investment from BIDA has to be obtained by foreign investors, which can now also be done online. BIDA – Bangladesh Investment Development Authority – plays a significant role in the facilitation of foreign investment. The process of registration takes maximum 30 working days depending on the complexity of business activities. There has been recent change in law which now allows online submission of tax returns by companies not only in the capital city of Dhaka but also in other major cities such as Sylhet & Barisal.5 percent. This new rate is 12 percent for export oriented companies. The tax authority in Dhaka, the National Board of Revenue (NBR), allows firms to file taxes online.
The incentives included tax holidays for industries set up in the Special Economic Zones (SEZs) for up to 10 years. The Chattogram Export Processing Zone (EPZ) offers further incentives and allows duty free import of inputs. Similarly, incentives have been introduced for agro-based industries in Khulna and Rajshahi.
Bangladesh offers a 50% tax rebate on income from IT services up to 2030? The VAT standard rate in Bangladesh is 15% and is levied on almost all sales made by a supplier in Bangladesh, excluding sales by certain specified persons engaged in pharmaceuticals and agriculture and a few other specifically exempted sectors. The National Board of Revenue (NBR) implemented digital tax payment systems in 2026, thereby reducing the time required for compliance by 30%. There has been an increase in investment in Sylhet and Barisal due to tax incentives offered to SMEs.
A total of 61 scheduled banks are operating in Bangladesh, with the capital Dhaka serving as the main hub of the financial sector. The interest rates for business loans in Bangladesh lie between 9% and 12% per annum, while the rates offered by microfinance institutions to small and medium-scale enterprises remain much lower. The fintech industry in Chattogram and Khulna has seen a dramatic increase, primarily through the provision of digital lending services.
Bangladesh Bank, the central bank of Bangladesh, regulates the financial sector.it promotes inclusive banking through policies such as agent banking which has spread across rural Bangladesh including Rajshahi and Sylhet regions. Foreign investors can also withdraw or repatriate their profits through any authorized dealer banks after getting approval from BIDA.
of these facts: - Bangladesh Bank is going to launch a Green Transformation Fund, aiming to help environmentally friendly businesses with concessionary interest rates. - The 2026 monetary policy, which was published a week ago, has announced the digital banking license among other things that will help further improve financial inclusion. - Barisal is turning into a hub for Islamic banking. The SME Foundation, for the first time, is launching a scheme that will provide loans to start-ups without any collateral.
The labour force of Bangladesh is over 70 million with the majority employed in urban areas such as Dhaka and Chattogram. The minimum wage for Bangladesh’s garment industry is BDT 8,000 (USD 75, EUR 70) a month, though wages can be higher in other sectors. The Labor Act 2006, which reforms employment relations and sets out many key labour rights, is in force.
Agriculture is the dominant sector for employment in Khulna and Rajshahi while Sylhet and Barisal have economies heavily dependent on remittances. The government is simultaneously promoting skill development in several sectors, especially in IT and manufacturing.
Bangladesh is a country that has a large young graduate population who are often highly competent in the English language? Well, this just adds up to one more reason why Bangladesh might be an attractive destination for outsourcing projects. the latest 2026 reports are also getting an update, focusing on changes to labor laws that now contain better maternity benefits and standards for workplace health and safety. To recruit people, employers are increasingly turning to new online job boards and websites — which are a lot more common in urban areas. And for some time now the Export Processing Zones or EPZs have encouraged foreign investment in Bangladesh by keeping labor rules and regulations down.
The textile and garments sector is the largest sector of the economy and contributes more than 80 per cent to the country’s foreign exchange earnings. The capital of Bangladesh, Dhaka, along with Chattogram, has turned into the production hubs of garments with huge investments in modern machineries and automation. The IT sector has been growing up fast with the government initiatives to set up software technology parks in Khulna and Rajshahi.
Agro-processing industry of Sylhet and Barisal region has huge scope for value addition and exports. The pharmaceutical industry is fast developing in Dhaka and more focusing on generic drugs. The solar energy sector is emerging gradually getting good support from the state policy and regulations.
Bangladesh is the second largest producer of jute in the world and also has a lot of potential in terms of jute exports. The blue economy policy is going to be emphasized in 2026 to promote the use of marine resources in the Bay of Bengal. The Tourism industry in Cox’s Bazar and Sundarbans is also a sector that has a huge amount of potential and work is currently underway to develop the necessary infrastructure. The construction industry is also thriving due to high demand for housing caused by migration to cities from rural areas as well as infrastructure projects.
Foreign investors can own up to 100% equity in most sectors with the assistance of BIDA. The two main investment destinations for the foreign direct investment (FDI) are Dhaka and Chattogram and they prefer investment in manufacturing and services sector. They can repatriate their profits and capital provided they follow all tax regulations.
Khulna and Rajshahi have Special Economic Zones (SEZs) with tax holiday & duty on capital machinery. The Foreign Exchange Regulation Act 1947 is governing the foreign currency transactions but with some amendments to ease out the transactions. The foreign exchange transactions are easing out with some amendments. Sylhet & Barisal regions are targeted to attract more investments in agro based sector being more favorable to the investors.
Most people won't know this but Bangladesh has signed Bilateral Investment Treaties (BITs) with more than 30 countries ensuring protection of investment. 2026 updates also include easier visas for foreign investors and executives, among others. Time taken to process investment proposals through digital platforms has reduced by 40 percent. The government is working to boost the investment climate by streamlining procedures, increasing the provision of infrastructure services, and reducing costs and constraints for foreign investors.
The startup ecosystem in Bangladesh has seen a huge growth over the years with over 1,000 startups based in Dhaka and Chattogram. The government of Bangladesh has also set up Startup Bangladesh Limited, which has a fund of BDT 500 crore (USD 47 million, EUR 44 million). Incubators and accelerators have also been established in tech hubs in Khulna and Rajshahi.
ICT Division is offering grants and mentoring in fintech, e-commerce, agritech and other sectors. The two new cities in Bangladesh where startups are taking root are Sylhet and Barisal, with each having a university and several research organisations.
Infrastructure bottlenecks in major cities like Dhaka and Chattogram remain a key challenge for businesses. The government is working to address this through massive infrastructure development projects like the Dhaka Elevated Expressway. While regulatory hurdles can act as a major entry barrier to the country, the new online system for tax compliance is seen as a move in the right direction.
Even after a decade of economic growth, access to finance remains a major challenge to the SME sector in countries such as Bangladesh, particularly in the regions of Khulna and Rajshahi. The SME Foundation of Bangladesh and Bangladesh Bank have been providing financial assistance to the sector through advance of concessional loans. Solar power projects have significantly helped in reducing the impact of power shortages in regions such as Sylhet and Barisal.
| Indicator | Value | Local Currency (BDT) | USD | EUR |
|---|---|---|---|---|
| GDP Growth Rate (2026) | 7.2% | - | - | - |
| Cost of Living in Dhaka (Monthly) | - | 50,000 | 470 | 440 |
| Ease of Doing Business Rank (2026) | 150th | - | - | - |
| Business Entity Type | Minimum Shareholders | Minimum Paid-up Capital | Local Currency (BDT) | USD | EUR |
|---|---|---|---|---|---|
| Private Limited Company | 2 | 100,000 | 940 | 870 | |
| Public Limited Company | 7 | No upper limit | - | - | |
| One Person Company (OPC) | 1 | - | - | - |
| Requirement | Cost | Local Currency (BDT) | USD | EUR |
|---|---|---|---|---|
| Name Clearance from RJSC | 500 | 4.70 | 4.40 | |
| Registration Fee (based on authorized capital) | 2,000 | 19 | 17 |
Bangladesh offers a dynamic business environment with a young labor force and consistent GDP growth. The government’s focus on infrastructure and digital transformation aims to enhance the ease of doing business. Entrepreneurs can choose from various business entities, with streamlined registration processes facilitated by the RJSC and regional offices.
Digital Tax Payment Systems introduced to simplify tax compliance.
Green Transformation Fund launched to support eco-friendly businesses.
Startup Tax Exemptions offering five-year tax relief for new startups.
Visa Process Simplification to help foreign investment.
Labor Law Revisions enhancing worker rights and safety standards.
RJSC, Trade License and Tax BIDA assists foreign investors.
Yes, including tax holidays, duty-free imports, and profit repatriation.
Textiles, IT, pharmaceuticals, and renewable energy are key growth sectors.
Typically, it takes around 10-30 days, depending on the business type.
Yes, foreigners can own up to 100% equity in most sectors.
Minimum wage in Bangladesh is set to vary between different industries, the garment sector is to see its wage hike to BDT 8,000 (USD 75) a month.
Yes, through Startup Bangladesh Limited, offering funding and mentorship.
Bangladesh has a variety of banks offering numerous banking services across the country including loans, digital banking and microfinance.
Starting a business in Bangladesh presents many opportunities. With its relatively young population, an increasing economy and being a member of SAARC, the country has lot to offer. Main steps in the process include compliance with relevant registration requirements, availing of tax incentives that apply to companies like OSGs and business opportunities in sectors such as IT and textiles. Bangladesh also benefits from government endorsement of private enterprise and strategic location that's poised to strengthen its position in the international business arena.
As of March 2026. Pricing and package details subject to change. Verify with provider.
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Arin Vale