Do I Need a Local Entity to Hire in Bangladesh?

In Bangladesh, a "local entity" typically refers to a registered business presence, such as a subsidiary or branch office, that can legally employ staff. This setup allows your company to fulfill local payroll and employment obligations, ensuring compliance with Bangladeshi labor laws.

Without a local entity, your company cannot manage payroll, register as an employer, or comply with local employment regulations. An alternative is to use an Employer of Record (EOR), which can hire employees on your behalf, managing all compliance and payroll responsibilities.

What is Required to Employ Someone in Bangladesh?

• Local employing entity required to directly employ? Yes (you need a registered entity to hire employees directly)
• Payroll registration required? Yes (mandatory registration with the National Board of Revenue)
• Withholding/tax remittance required? Yes (employers must withhold income tax from employee salaries)
• Social contributions required? Yes (employers must contribute to the Employees' Provident Fund)
• Local employment agreement required? Yes (written contracts are mandatory for employment)
• Mandatory benefits to budget? Yes (statutory leave, social security, and other entitlements)
• Works council/collective agreements considerations? Usually (certain sectors may have collective agreements)

Best Options If You're Hiring in Bangladesh

Can I Hire Contractors Instead of Setting Up an Entity?

Yes, but be cautious. Hiring contractors can be a viable option, but you need to ensure they operate independently to avoid misclassification.

In Bangladesh, contractors don't require a local entity, but if their work resembles that of an employee, you could face legal risks. Consider the following:

• Ensure the contractor has multiple clients and isn’t solely dependent on your business.
• Maintain minimal control over their work hours and methods.
• Keep the relationship clearly defined in a contract to avoid any ambiguity.

How Long Does Entity Setup Take And What Does It Cost?

Typical entity setup timeline: It often takes 4–6 weeks to set up an entity in Bangladesh, depending on the type of business and required registrations.

Ongoing cost categories (entity route):

• Accounting, bookkeeping, and statutory filings: Estimated 15,000–30,000 BDT per month ($140–$280)
• Payroll provider: Estimated 1,500–3,000 BDT per employee per month ($14–$28)
• Employer registrations and recurring compliance: Estimated 10,000–20,000 BDT per year ($93–$186)
• Corporate tax filings and annual reporting: Estimated 20,000–50,000 BDT per year ($186–$465)

EOR cost components (no-entity route):

• A per-employee EOR service fee (from $399 p/month with Playroll)
• Pass-through statutory costs (e.g., employer social security contributions)
• Any optional benefits you choose to provide beyond statutory minimums

How an Employer of Record Can Help You Hire in Bangladesh

Hiring in Bangladesh can be complex, but it doesn’t have to require setting up a local entity or taking on long-term overhead. With an Employer of Record like Playroll, you get a simple, predictable way to hire compliantly while keeping costs transparent and under control. We help you:

• Hire employees in Bangladesh quickly without establishing a local entity, eliminating incorporation costs, ongoing administration, and exit complexity.
• Stay fully compliant with local payroll, tax, and employment regulations with Playroll’s managed payroll services.
• Control your total employment costs, with a clear monthly EOR service fee (from $399 per employee).
• Focus on growing your business, while we manage contracts, payroll, compliance, and labor law obligations end to end.
• Scale up or exit the market easily, without the financial or legal burden of closing a local entity.