Found the right person in Dhaka or Chattogram but don’t have a company in Bangladesh? Many international businesses hire Bangladeshi software developers, designers, customer support agents and sourcing managers, and then realize they cannot legally put them on payroll. This guide explains, in plain language, how foreign companies can hire employees in Bangladesh without opening a local entity, and which option suits which situation in 2026.
- Can a foreign company hire staff in Bangladesh directly?
- Option 1: Hire as a freelancer or contractor
- Option 2: Use an Employer of Record (EOR)
- Option 3: Register a subsidiary, branch or liaison office
- How the EOR process works
- Frequently asked questions
Can a foreign company hire staff in Bangladesh directly?
Usually not. To employ someone in Bangladesh, a company normally needs a registered local presence. That means registration with the Registrar of Joint Stock Companies and Firms (RJSC) or approval from the Bangladesh Investment Development Authority (BIDA), plus a tax identification number (TIN) and a local bank account. Only then can it issue a Bangladesh employment contract, deduct income tax at source from salaries under the Income Tax Act 2023, and meet obligations under the Bangladesh Labour Act.
Simply paying a full-time worker in Bangladesh every month from an overseas account may seem easy. However, it leaves tax unpaid, gives the worker no legal protection, and can expose your company to disputes and “permanent establishment” tax risk.
Option 1: Hire as a freelancer or contractor
Bangladesh has one of the world’s largest freelance workforces. For short, clearly defined projects, a service agreement with an independent contractor can work well. But if the person works only for you, full-time, on your schedule and under your managers, the relationship looks like employment. Contractors also don’t receive statutory benefits such as festival bonuses or paid leave, which makes it harder to keep good people long-term.
Option 2: Use an Employer of Record (EOR)
An Employer of Record is a licensed local company that legally employs your worker on your behalf. People also call this “global employment outsourcing” or “hiring through a local partner.” The EOR:
- Issues a written employment contract that complies with Bangladeshi law
- Runs monthly payroll in Bangladeshi taka (BDT) and deducts income tax at source
- Pays the two annual festival bonuses and manages leave and holidays
- Handles provident fund or pension arrangements where required
- Manages onboarding, documents and, if needed, a compliant termination
You still choose the employee, set their tasks and manage their daily work. For companies testing the Bangladesh market or hiring a small team, an EOR is usually the fastest and lowest-risk route.
Option 3: Register a subsidiary, branch or liaison office
A private limited company (subsidiary) gives you full control and is the right choice for a large, long-term operation. It involves company registration, BIDA formalities, bank account opening with foreign capital inflow, tax and VAT registration, and ongoing accounting and audits. Branch and liaison offices are also possible, but their permitted activities are limited. For a step-by-step overview, read our guide on starting a business in Bangladesh.
Quick comparison
| Contractor | Employer of Record | Own entity | |
|---|---|---|---|
| Local company needed | No | No | Yes |
| Time to start | Days | Days to 2 weeks | Several weeks to months |
| Labour law protection for worker | No | Yes | Yes |
| Compliance risk for you | Medium to high | Low | You manage it |
| Best for | Short projects | 1–20 employees, market entry | Large, long-term teams |
How hiring through an EOR works
- Agree on the offer. Confirm job title, gross monthly salary in BDT, start date and any extra benefits such as health insurance.
- Contract and onboarding. The EOR prepares the employment contract and collects the employee’s documents, such as their National ID (NID) and TIN.
- Monthly payroll. Salary is paid to the employee’s bank or mobile financial account. Under the Labour Act, wages must be paid within seven working days after the wage period ends.
- Compliance. The EOR deducts and deposits income tax, issues salary certificates and keeps the required registers.
- One invoice. You pay one monthly invoice that covers salary, benefits and the service fee, and you can budget in US dollars.
Curious about the numbers? See our guide to the cost of hiring an employee in Bangladesh.
Frequently asked questions
Q: Can I hire a remote employee in Bangladesh if my company is in the US, Europe or China?
A: Yes. The usual way is through an Employer of Record, which employs the person locally while they work for you.
Q: Is it legal to pay Bangladeshi freelancers from abroad?
A: Yes, for genuine freelance work. But a long-term, full-time role should be set up as proper employment.
Q: Who owns the work my Bangladesh employee creates?
A: You do, as long as the contract includes intellectual property and confidentiality clauses, which a good EOR contract does.
Q: Can I hire foreigners to work in Bangladesh the same way?
A: Foreign nationals need a work permit and the right visa. Our expat employment service can help.
Hire in Bangladesh with NNRoad
NNRoad helps companies worldwide hire and pay employees in Bangladesh without setting up a local entity. Learn more about our Employer of Record service in Bangladesh, or email [email protected] for a free consultation.
This article is for general information only and does not constitute legal or tax advice. Rules are current as of 2026 and may change.