Bangladesh corporate tax - guide for international expansion

Are you considering expanding your business to Bangladesh? Understanding the corporate tax landscape is crucial for any company looking to establish operations in this rapidly growing South Asian economy.

Bangladesh offers significant opportunities for international businesses, with its large consumer market and competitive manufacturing sector. However, navigating the local tax system requires careful planning and compliance with the National Board of Revenue (NBR) regulations. Wise Business can help streamline your financial operations in Bangladesh, making it easier to manage payments and maintain compliance with local tax requirements.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Bangladesh Corporate tax rate in 2025

Bangladesh applies a differentiated corporate tax system designed to encourage public listings and greater financial transparency. Publicly traded companies that meet the prescribed listing and compliance conditions are generally taxed at 22.5%, while non-listed private companies are subject to a higher rate of 27.5%. This rate differential is intended to promote capital market participation and improve corporate governance standards.¹

Corporate income tax is levied on a company’s total taxable income, which includes business profits, capital gains, and other Bangladesh-source income. In addition, a minimum tax applies to all companies, requiring payment of at least 0.6% of gross receipts (or higher in certain sectors), even when no taxable profit is reported.²

Foreign companies operating in Bangladesh through a permanent establishment are taxed at the same corporate rates as resident companies on income attributable to that establishment. Non-resident companies without a permanent establishment are taxed through withholding on Bangladesh-source income, as prescribed by domestic law.¹

Read more about Corporate Tax Planning best practices

How to pay corporate tax in Bangladesh

Corporate tax payments in Bangladesh must be made in Bangladeshi Taka (BDT) through the National Board of Revenue’s (NBR) online e-filing portal or designated commercial banks. The NBR has implemented a digital tax payment and return submission system to streamline compliance and improve efficiency in tax administration.³

Companies are required to file their annual income tax returns within nine months of the end of their accounting year, meaning that entities with a 30 June year-end must file by 15 March of the following year. The balance tax due must be paid upon filing, and any unpaid amounts after the deadline are subject to interest and penalties.⁴

During the year, companies must make advance income tax payments in four instalments, on 15 September, 15 December, 15 March, and 15 June, based on estimated annual income. The final return then reconciles these advance payments against the actual tax liability determined for the fiscal year.⁴

Late payments incur a 2% monthly interest charge on any unpaid balance from the due date until full payment is made. In addition, failure to file a return on time can result in a penalty equal to 10% of the tax assessed on the last income year, subject to a statutory minimum penalty as prescribed under the Income Tax Ordinance.⁵

Let's consider a practical example: if your company has an annual turnover of BDT 127.5 million (approximately £1.5 million) and operates with a 10% profit margin, your taxable profit would be BDT 12.75 million.

For a non-publicly traded company at Bangladesh's corporate tax rate of 27.5%, the tax owed would be: BDT 12.75 million × 27.5% = BDT 3.51 million

For a publicly traded company at Bangladesh's corporate tax rate of 22.5%, the tax owed would be: BDT 12.75 million × 22.5% = BDT 2.86 million

When expanding your business to Bangladesh, the right financial tools will make the process smoother. Using a platform like Wise Business makes it easy to manage international finances. A multi-currency account allows businesses to pay for incorporation costs, registration fees, and government taxes in local currency without paying high exchange rate fees.

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Tax Compliance in Bangladesh

The practical steps to help your company stay compliant with tax regulations in Bangladesh:^{4 6}

• Register for taxes early: After incorporation, registering with the National Board of Revenue (NBR) is essential to avoid penalties and meet the corporate tax registration deadline. The NBR oversees compliance and enforces tax laws, so early registration ensures your business can operate legally.
• Stay on top of VAT requirements: Companies with an annual turnover exceeding BDT 30 million must register for VAT, while those between BDT 5 million and 30 million may register voluntarily or opt for turnover tax. VAT returns must be submitted monthly within 15 days of the following month, and payments must be made online.
• File corporate tax returns on time: The due date for filing is the 15th day of the ninth month after the end of the income year or September 15, whichever is later. Missing this deadline may result in an additional tax of 2% per month on unpaid amounts.
• Prepare for tax audits: The NBR may select returns for audit, and businesses should respond promptly to notices. Professional guidance from business and corporate tax planning lawyers can help ensure compliance, minimise risks, and take advantage of tax incentives.

International Expansion to Bangladesh

Bangladesh has marked its position as one of the strongest Asian economies, grabbing attention from global companies considering expansion. Over the past three decades, its GDP has never turned negative. And in the last 10 years, it has maintained growth above 7%. Such economic resilience, combined with a population of over 160 million, creates strong consumer demand across industries ranging from textiles and white goods to fintech and e-commerce.⁷

The country is also attractive because foreign investors benefit from robust legal protections. The Foreign Private Investment Act of 1980 safeguards against expropriation and nationalisation, while ensuring equitable treatment, profit repatriation, and unrestricted exit opportunities.⁷ In addition, Bangladesh offers one of the most liberal FDI regimes in South Asia, allowing 100% foreign ownership, duty-free access to major global markets, and a favourable tax framework that supports corporate tax compliance.⁸ Businesses can easily pay corporate tax online and file corporate tax returns through streamlined digital platforms, reducing the risks of corporate tax evasion and ensuring transparency.

Bangladesh’s young and skilled workforce is another key advantage. More than half its population is under 25, and English is widely spoken, making it easier for international companies to recruit talent.⁸ The government has also invested in ICT parks in Dhaka, Sylhet, Rajshahi, Jessore, and Chattogram, positioning the country as a hub for outsourcing and technology services.⁷ This dynamic talent pool is truly an asset for businesses seeking corporate tax preparation services and long-term scalability.

Geographically, Bangladesh is strategically located between India, China, and ASEAN markets. Its coastline along the Bay of Bengal strengthens its position as a trading hub for Asia and the Middle East. Competitive labour costs, favourable energy prices, and international trade agreements further enhance its appeal. In fact, tariff-free access to the EU, Canada, and Japan has made Bangladesh the top manufacturing exporter among least-developed countries.⁸

Foreign companies can start operations in Bangladesh by following these steps:⁹

1. Conduct thorough market research.
2. Develop a business plan aligned with local opportunities.
3. Choose a business type, name, and location.
4. Register your business with the Registrar of Joint Stock Companies and Firms (RJSC).
5. Register for tax with the National Board of Revenue (NBR).
6. Open a business bank account to manage payments and capital inflows.

If you’re all set to set foot in the Bengali corporate sector, you should do so with due diligence. Find out all about its corporate policies, tax regulations, and growth potential to take the right measures.

Discover the top 5 best Corporate Tax softwares

Incorporation of Business in Bangladesh

To incorporate a company in Bangladesh, you’ll typically go through the Bangladesh Investment Development Authority (BIDA)¹⁰ and the Registrar of Joint Stock Companies and Firms (RJSC&F) via the BIDA One-Stop Service (OSS).¹¹ Here’s what you’ll need:

• Company name: Apply for Name Clearance with RJSC&F. For foreign companies, a fee of BDT 230 (including VAT) applies.
• Corporate bank account: Open a temporary account in the company’s name. Shareholders must deposit capital contributions, and the bank will issue an encashment certificate.
• Registered office: Rent or lease office space in a commercial area. A valid address is required for registration.
• Constitution documents: Prepare the Memorandum of Association (MoA), Articles of Association (AoA), Form I (declaration of compliance), Form IX (consent of directors), and Subscription Page.
• Registration submission: File all documents through the BIDA OSS portal along with applicable fees and stamp duty.
• Certificate of Incorporation: Once approved, RJSC&F issues the Certificate of Incorporation, stamped MoA and AoA, and Form XII listing directors and officers.
• Tax registration: Register online with the National Board of Revenue (NBR) to obtain an Electronic Tax Identification Number (e-TIN) for the company and its directors. This step ensures compliance with the 2025 corporate tax rate.
• Trade license: Apply to the local City Corporation or Municipality to legally operate.
• VAT registration: Register for VAT through the NBR portal.
• Import/Export certificates: Obtain Export and Import Registration Certificates if the company engages in international trade.

Business Entities in Bangladesh

Below are the primary business entities in Bangladesh under the Companies Act:¹²

• Private Limited Company (Ltd): The most common structure, requiring 2-50 members and at least two directors. Foreign-owned private companies must invest a minimum of USD 50,000.
• Public Limited Company (PLC): Open membership, requiring at least seven shareholders, suitable for larger businesses.
• One-Person Company (OPC): Owned by a single natural person, with capital requirements ranging between BDT 2.5 million and BDT 50 million.
• Company Limited by Guarantee: Often used for non-profits, with liability limited to a fixed guarantee amount.
• Unlimited Company: Members are personally liable for company debts.
• Sole Proprietorship: A simple structure for local entrepreneurs, registered through trade licenses rather than RJSC&F.

Seeking support from corporate tax accountants near me can simplify compliance and help businesses adapt to regulatory updates, such as a potential tax increase. Bangladesh’s transparent and structured incorporation framework further supports both local and foreign investors in maintaining corporate tax compliance.

International corporate tax best practices

Here are some essential strategies to ensure compliance with local tax laws, optimise costs, and reduce tax burdens when operating internationally.

Stay compliant with local and international tax laws

Complete the legal registration process in every country where your business operates. File all required tax returns on time to avoid penalties, and ensure you stay up to date with local tax laws to remain fully compliant.

Companies should also understand and adhere to global standards set by organisations like the Organisation for Economic Co-operation and Development (OECD). With frameworks like Base Erosion and Profit Shifting (BEPS) and Pillar Two Global Minimum Tax, companies can ensure transparency, prevent tax avoidance, and avoid legal risks.

Leverage double taxation treaties (DTTs)

DTTs are essential for ensuring that you're not taxed on the same income twice. CFOs and Directors need to have a clear understanding of these treaties between the countries where your business operates and how they can potentially reduce your tax burden. Bangladesh has signed double taxation avoidance agreements with over 30 countries, including the UK, USA, and major European nations.

Maintain up-to-date and transparent financial records

Maintaining clear and up-to-date financial records helps companies prepare accurate tax returns, reducing the risk of errors that could lead to penalties. Additionally, having organised financial records simplifies the process during tax audits and demonstrates good corporate governance to local authorities.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Bangladesh efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Bangladesh

Who is liable for corporate tax in Bangladesh?

All companies incorporated in Bangladesh are liable for corporate tax on their worldwide income. This includes public limited companies, private limited companies, and foreign companies with permanent establishments in Bangladesh. Non-resident companies are taxed only on their Bangladesh-source income through withholding taxes.

Are there any tax incentives for businesses in Bangladesh?

Yes, Bangladesh offers various tax incentives to promote investment and economic development. These include reduced tax rates for certain industries, tax holidays for export-oriented businesses, and special incentives for investments in economic zones. Technology companies and startups may qualify for reduced rates of 10-15% under specific conditions.

What is the tax treatment of dividends in Bangladesh?

Dividends paid by Bangladeshi companies are subject to withholding tax at source. For resident shareholders, the rate is typically 10%, while non-resident shareholders face rates of 20-30% depending on applicable double taxation treaties. Companies receiving dividends may be eligible for tax credits to avoid double taxation.

What is the process for registering for corporate tax in Bangladesh?

Companies must first obtain incorporation from the Registrar of Joint Stock Companies and Firms (RJSC), then register with the National Board of Revenue (NBR) to obtain a Tax Identification Number (TIN). This process typically takes 2-4 weeks and requires submission of incorporation documents, business plans, and director information.

What are the common pitfalls to avoid regarding corporate tax in Bangladesh?

Common mistakes include failing to file quarterly advance tax payments, inadequate record-keeping, missing annual return deadlines, and incorrectly calculating minimum tax obligations. Companies should also ensure proper documentation for transfer pricing and maintain compliance with withholding tax requirements on payments to non-residents.

Sources used in this article:

1. PwC Tax Summaries: Bangladesh Taxes on Corporate Income
2. KPMG: Bangladesh Tax Highlights 2024 (PDF)
3. National Board of Revenue (NBR): E-Services Portal
4. PwC Tax Summaries: Bangladesh Tax Administration
5. bdlaws.minlaw.gov.bd: Income-tax Ordinance, 1984
6. Legal Seba: Bangladesh Company Tax Guide
7. Ministry of Foreign Affairs: Why Invest in Bangladesh
8. Bangladesh China Chamber of Commerce: Why Invest in Bangladesh
9. Multiplier: Bangladesh Company Registration
10. Bangladesh Investment Development Authority (BIDA): FAQ
11. Registrar of Joint Stock Companies and Firms (RJSC): FAQ
12. Jural Acuity: Types of Business Entities in Bangladesh

Sources last checked 06/10/2025