Hiring in Bangladesh

The letter sets out role, basic wage and allowances in BDT, working hours, leave and notice. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Post-termination non-competes are generally void under the Contract Act, so rely on confidentiality and IP assignment clauses instead.

Temporary contracts are permitted for genuinely temporary work, but using them for an ongoing role risks the employee being treated as permanent, and most EORs default to permanent terms.

Set probation from day one. Only a skilled worker's probation can be extended, by a further three months, and only where performance genuinely could not be assessed.

Probation already served counts if the same employer rehires someone within three years, which matters if you bring a former employee back through the same EOR.

Overtime is calculated on basic wage plus any dearness allowance, not on gross pay, and hours including overtime must average no more than 56 a week across the year.

Managerial, administrative and supervisory staff fall outside the statutory worker definition, so for them overtime becomes a contractual matter. Since the 2026 amendments the test is actual duties, not job title, so put the position in writing either way.

Casual leave is 10 days and sick leave 14 days, both on full pay, so the statutory total is well above the annual leave figure. Budget for the whole stack, not one line of it.

Maternity leave is 120 days on full pay, split evenly before and after the birth, and the employer funds all of it. There is no statutory paternity leave, so confirm what the EOR offers by policy.

Either side may terminate on notice or pay in lieu. Severance follows a statutory formula rather than market practice: termination without cause, retrenchment and discharge each carry 30 days' wages per completed year, and even dismissal for misconduct can carry 15 days' wages per year.

The EOR runs the process as the legal employer and must settle final pay, unused leave and compensation within 30 days. Dismissal for misconduct needs a written charge and an inquiry, and the Director General of Labour can now order compensation without a court case where a dismissal looks union-related, so keep a documented reason.

Each festival bonus is capped at one month's basic wage and is due once the employee has a year's service. A provident fund becomes mandatory at 100 or more permanent workers if two-thirds of them ask for one in writing, and that headcount is the EOR's, not yours.

Private medical cover and group life are common for professional roles even though they are not mandatory. Ask what is included in the fee and what is billed on top.

There are no employer social security contributions, so the main add-on is the two festival bonuses, worth up to two months' basic pay a year. That is before the EOR fee.

Basic pay is the trap. Overtime, festival bonuses, provident fund and end-of-service compensation are all calculated on basic wage, so the split between basic and allowances sets most of your liabilities.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and the ratio, roughly five local staff per foreign hire for commercial offices, applies to the sponsor, not to you.

The permit application is filed within 15 days of arrival on the visa, so set start dates after the permit is issued, not on arrival. Foreign staff must also clear tax on their salary before leaving Bangladesh.

Get the data processing terms in the service agreement, not just the privacy notice. Cross-border transfers carry conditions, and sensitive data such as health and financial records gets stricter treatment.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation takes four to eight weeks for a foreign-owned company, and most bring in around 50,000 USD of paid-up capital to support work permit sponsorship. The running cost is the point: two directors, quarterly board meetings, a statutory audit, tax and VAT filings and payroll software set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.