Planning to hire employees in Bangladesh? Here’s a quick guide

Bangladesh continues to attract international companies due to its large, capable workforce and competitive labor costs. These factors make it a practical choice for businesses looking to expand or hire talent in the region.

But before you hire in Bangladesh, there’s a legal framework you need to get right. The employment regulations in Bangladesh touch everything from contracts and leave to payroll and termination. 

This guide breaks down the hiring process in Bangladesh, so you know what to expect at each step.

How to hire in Bangladesh

Companies that want to engage talent in Bangladesh generally have three routes available. Each comes with trade-offs around cost, speed, and compliance risk.

1) Set up a legal entity in Bangladesh

The process is handled by the Registrar of Joint Stock Companies and Firms (RJSC). If the individual is a foreign investor, an additional requirement would be to obtain approval from the Bangladesh Investment Development Authority (BIDA). While this option appears to be the easiest, it is rather lengthy, costly, and involves regular tax obligations.

However, if you only plan to hire a handful of people in Bangladesh, setting up a full entity might be more trouble than it’s worth. You can use an Employer of Record in Bangladesh instead.

2) Hire contractors in Bangladesh

This is one of the fastest options as it enables you to skip entity setup entirely. However, worker misclassification is a real risk. Under the Bangladesh Labor Act, the line between contractor and employee depends on how much control you exercise, whether they follow a set schedule, and how integrated they are into your operations. 

Get it wrong, and you’re looking at penalties and back-pay claims. Alternatively, a contractor management system can help streamline the process.

3) Use an Employer of Record (EOR) in Bangladesh

An EOR is a third-party organization that hires employees on your behalf and acts as the legal employer. It includes handling contracts, payroll, taxes, leave, and benefits. 

In other words, you manage the day-to-day work; the EOR supports workforce management as per local compliance.

It’s a practical middle ground, especially for companies testing the Bangladeshi market or hiring in multiple countries at once. Moreover, Payoneer Workforce Management offers EOR services across 160+ countries.

Where to find employees in Bangladesh

Employment in Bangladesh begins with sourcing the right local talent. You can post openings where Bangladeshi candidates actually look for work, and offer Bengali language support during the application stage.

1) Popular job boards in Bangladesh

Some of the popular job boards functional in Bangladesh include: 

• Bdjobs.com: the largest job portal in Bangladesh
• Chakri.com (by Prothom Alo)
• LinkedIn
• Indeed Bangladesh
• MyJobs.com.bd
• Skill.jobs
• eJobs.com.bd
• Government employment portal (NIS by BMET)

2) Work with local recruitment agencies

Bengali is the country’s primary language, and is mandatory for all government-related matters. If your team doesn’t speak it, a local recruitment agency can bridge that gap. It can write job postings in Bengali, filter applicants, and help negotiate offers in local currency.

3) EOR support

An EOR typically assists with engaging local talent and paying them, without a local entity.

Beyond payroll, an EOR can help you draft employment contracts that meet local standards and manage onboarding paperwork. A single EOR solution can cover the entire workforce management in Bangladesh. 

So with the critical employment aspects covered with an EOR’s support, you can completely focus on sourcing suitable candidates for your business.

Onboarding employees in Bangladesh

There’s no government-mandated onboarding checklist in Bangladesh. What the Labor Act does require is a formal letter of appointment and a photo identity card for every worker. 

Beyond that, here’s what a standard hiring process in Bangladesh looks like:

• Run a background check on the new hire
• Issue a written appointment letter that spells out the role, terms, and pay
• Set up payroll enrollment (Salary paid in Bangladeshi Taka (BDT)) and, if applicable, private health insurance
• Configure work accounts and ship any required devices
• Book an orientation call for day one
• Confirm the probation period, as it cannot be more than six months under any circumstances. 

Through Payoneer Workforce Management, the employee onboarding process in Bangladesh can be streamlined. You can also use our Employee Cost Calculator to get a cost estimate before making a hiring decision.

Key employment regulations in Bangladesh

The backbone of employment in Bangladesh is the Bangladesh Labor Act, 2006. Here’s what matters most when you hire employees in Bangladesh. 

Employment contracts

Written appointment letters are required by law. Each one needs to spell out job title, duties, working hours, pay, leave entitlements, notice period, and probation terms. 

The primary types of employment contracts in Bangladesh are:

• Permanent Employment or Indefinite Contract: This is typically for employees with an ongoing job with no end date, usually after probation is completed.
• Temporary Employment or Fixed Contract: A job for a fixed time or specific task, ending once the time or work is finished.

Here are some additional types of employment contracts (subject to local regulations): 

• Casual Employment: Work given as needed, with no promise of regular or continuous work.
• Apprenticeship: A job focused on training for a set period, with a chance to become permanent later.
• Substitute (Badli) Employment: Temporary job to replace another employee until they return.
• Trainee (Learner) Engagement: Role mainly for training, where a stipend may be paid instead of a full salary.

Employment benefits

Statutory benefits in Bangladesh cover several categories:

• Annual leave: One day earned for every 18 days worked (kicks in after a full year of service)
• Sick leave: 14 paid days a year, subject to a medical certificate
• Casual leave: Ten days a year, with no carry-forward
• Maternity leave: Up to 120 days of paid leave to eligible female employees

However, paternity leave is not mandated by law, although some employers choose to offer it. 

Two festival bonuses are standard each year. Each one equals roughly a month’s basic salary. Muslim employees typically receive theirs during Eid, Hindu employees during Durga Puja, and Christian employees during Christmas.

There’s also an end-of-service benefit that covers 30 days’ wages per completed year. After a decade of service, that jumps to 45 days’ wages per year.

Working hours and holidays

Here’s what the Labor Act says about work schedules: 

• Eight-hour workday, capped at 48 hours a week
• Overtime cannot exceed 10 hours per day or 60 hours per week. The rate is double the basic wage
• One weekly rest day
• Employees are also entitled to 11 days of public holiday
• Employees who work on a festival holiday get a substitute day off plus two days’ compensatory pay

Tax obligations

Income tax works on a progressive scale, and rates go from 0% to 30%. 

The National Board of Revenue (NBR) oversees collection. Employers are responsible for withholding and remitting tax from each paycheck. 

The tax-free income threshold sits at BDT 350,000 per year for most individuals. Women and persons with disabilities get a higher exemption. 

On the employer side, there are no mandatory social security contributions in the traditional sense. The Employees’ Provident Fund exists but is voluntary.

However, if a company has 100+ employees, health insurance becomes a mandatory benefit.

Additionally, minimum wage stands at BDT 12,500 per month. 

Termination and severance

Employment can end through resignation, mutual agreement, misconduct, or redundancy. The notice requirements depend on who initiates: 

• Employer-initiated: At least 60 days’ notice (the statute actually says 120 days for monthly-paid permanent staff, though 60 days is common in practice)
• Employee resignation: 60 days’ notice
• During probation: No mandatory notice, but 14 days is a good practice
• Severance pay: One month’s salary per completed year of service

A written termination notice with the stated reason is required. Given how employee-friendly Bangladeshi courts tend to be, it is advisable to work with a workforce management partner when handling separations.

Explore Payoneer Workforce Management in Bangladesh

Between labor law compliance, payroll setup, leave tracking, and tax withholding, the hiring process in Bangladesh demands attention to detail. Most companies would rather spend those resources on growth.

Payoneer Workforce Management helps reduce the administrative overhead. It supports compliant hiring in Bangladesh and 160+ other countries, without requiring you to set up a local entity. It helps you with

• Onboarding international talent
• Global payroll processing
• Assistance in staying compliant with local labor laws
• Help managing taxes, benefits, timesheets, and more

Book a demo today!