Bangladesh, home to more than 163 million people, is the eighth-most populous country in the world and hosts one of the fast-growing economies. With an average GDP growth rate of more than 7% in recent years, a colossal consumer class is emerging and the country is on its way to claim the coveted status as the next ‘Asian Tiger.’ As a result, multinational companies (MNCs) are increasingly selecting Bangladesh as a destination for business investment, expansion and hiring.
Why Hire in Bangladesh?
- The country’s crossroads location places it as an operational hub or regional headquarters for MNCs, strategically linking the powerhouse economies of India, China and Southeast Asia.
- Several ambitious infrastructure projects are underway to accelerate the growth of key industries and international trade, such as the deep-sea port in Matarbari which is expected to be completed by 2025.
- Bangladesh continues to strengthen its intellectual property (IP) protection framework, which means MNCs may confidently bring proprietary ideas and innovative products to the country.
- With more than 2 million young professionals entering the workforce each year, according to the World Bank, Bangladesh’s economy is being fueled by a rising young population and a tech-savvy talent pool of digital natives.
How do employment contracts work in Bangladesh?
Written contracts regarding employment in Bangladesh are standard practice in Bangladesh, with the terms of the contract being legally binding. In the absence of a written employment agreement, employers must issue the employee a letter of appointment in Bengali. Any written documentation must contain specific details, including details of benefits and labor conditions.
Should MNCs be aware of any special regulations around employee termination?
If an employer in Bangladesh wants to terminate an employee, they must generally provide written notice 60 to 120 days in advance. Employees are also usually entitled to 30 days of wages for each year of service they have performed. Employers sometimes offer additional compensation to shorten the notice time. To avoid legal troubles, it is advised that MNCs seek advice from local experts who know the Bangladeshi employment law and customs.
What other specific Bangladesh labor regulations should MNCs be aware of?
Workers in Bangladesh are classified within different categories and there may be different regulations applied to different classes of workers. These categories include apprentice, substitute (‘badli’), casual, temporary, probationer, permanent and seasonal. A worker’s classification will depend on the type of work they perform as well as the conditions of the workplace.
How do benefits work in Bangladesh?
Bangladesh, unlike many other countries, does not maintain a social security program or enforce associated payroll taxes. Therefore, there are no additional contribution requirements from employers. Employees are responsible for filing their income taxes. However, employers in Bangladesh are responsible for filing and reporting corporate taxes. This rate is generally set at 35% for non-listed entities and 25% for listed entities. Corporate tax liability can also vary by industry, such as the reduced 14% rate for the garment industry.
What is driving MNCs to look at Bangladesh for global business ambitions?
The reasons to invest, expand or hire in Bangladesh are compelling, with the GDP projected to soar in upcoming years. The economy is also expected to greatly diversify beyond the garment industry and grow in key sectors, such as digital technology. Recent reforms may also reshape the nation’s economy to become more resilient against external shockwaves in the global economy, according to a recent report by Bloomberg Intelligence. At the same time, the country offers premier access to neighboring economies in South Asia, Southeast Asia and East Asia.
What are the benefits of hiring through an Employer of Record (EOR) in Bangladesh?
While many MNCs wish to be a part of the growth story in Bangladesh, there are still barriers to setting up a legal entity, hiring directly and managing a cross-border team. Some of these challenges include language barriers, cultural differences and regulatory compliance requirements.
For these reasons, MNCs often discover that applying the EOR hiring model, rather than setting up a legal entity and hiring directly, is a more agile, nimble way of building a team in Bangladesh. By partnering with an effective EOR, like GoGlobal, the company can alleviate the risks, requirements and restrictions that typically come along with hiring in Bangladesh. The home country HR team does not need to learn the specific requirements of the labor framework with regard to employment in Bangladesh.
At the same time, by hiring through an EOR, the company is able to tap into the country’s growing, cost-effective workforce.
How does GoGlobal help an MNC build a team and manage HR requirements in Bangladesh?
Our EOR experts in Bangladesh have a proven track record of success in helping MNCs build fully compliant workforces.
We take great pride in embracing a global mindset while maintaining a team of local experts on the ground in every market we operate. Because of this business model, our dedicated team members in Bangladesh know the “ins and outs” of the country’s unique regulatory environment and they stay current on all trends and requirements.
At the same time, our team is also fully immersed in the business customs and unique local culture of Bangladesh. We can service clients and workers in their preferred language, ensuring a positive, customized experience for clients and client-employees alike.
What makes the GoGlobal experience unique?
GoGlobal will help to localize your corporate employee experience and bring it to Bangladesh. Before we begin the onboarding process, our onshore team in Bangladesh will meet with each newly hired team member to explain how the EOR arrangement works. Throughout the arrangement, that same dedicated team remains the point of contact for both the client and client-worker. If questions arise about payroll, taxation or benefits, they will address it while ensuring both compliance and client satisfaction.
Our team in Bangladesh works hard to infuse the end-to-end global hiring experience with agility, efficiency and peace of mind.
Find additional details on benefits and hiring in Bangladesh, or contact us to talk with an international HR expert.