Country intelligence • Bangladesh

Bangladesh: market-entry intelligence

Three decisions an EU company faces with Bangladesh. Bangladesh is the world's second-largest garment exporter ($39bn in FY25, 81.5% of merchandise exports), with duty-free EU access under EBA that will expire around 2029 after LDC graduation. The 12% CIT rate for RMG is the lowest sector-specific rate in the template. The binding constraints are the EBA graduation cliff (GSP+ application required, compliance with 32 international conventions), political instability (July 2024 revolution, interim government), systemic corruption (67.6% of businesses cite as top problem), and infrastructure deficit.

How to read this page: ● measured sourced data · ◐ inferred analyst reading, basis linked · ○ projected anchored to a real starting point. Bracketed citations link to the sources at the foot of the page.

1. Trade with Bangladesh

EU importer / sourcingEBA duty-free (until ~2029, then GSP+ required)BSTI standards + RSC factory auditCorridor (Chittagong / Dhaka EPZ)Payment (BDT, not freely convertible)binding constraint

EU exports to Bangladesh

EUR 211M^[4]

Latest month: 2026-06

EU imports from Bangladesh

EUR 1.5bn^[4]

Latest month: 2026-06

MFN tariff (simple avg)

~14%^[3]

Non-agri: null

EU-Bangladesh FTA

EBA (duty-free, at risk)^[2]

● measured Bangladesh's trade relationship with the EU is built on EBA duty-free access, which has made it the EU's 2nd-largest garment supplier. The approaching EBA graduation cliff (~2029) is the single most important trade-policy risk. GSP+ would preserve most preferences but requires compliance with 27 international conventions, including labour rights and governance standards where Bangladesh faces documented gaps.^[2,3]

EU exports to Bangladesh by sector

SITC section	Latest month (EUR)
7. Machinery and transport equipment	EUR 85M
5. Chemicals	EUR 64M
8. Miscellaneous manufactured articles	EUR 20M
0. Food and live animals	EUR 16M
6. Manufactured goods (by material)	EUR 16M
2. Crude materials (excl. fuels)	EUR 8M
4. Animal and vegetable oils/fats	EUR 1M
3. Mineral fuels and lubricants	829,818
9. Not classified elsewhere	15,154
1. Beverages and tobacco	13,982

Source: Eurostat COMEXT (ds-059331). ^[4]

The Nordic lens: Finland's position

Finland exports to Bangladesh

EUR 3M^[4]

Latest month: 2026-06

Finland imports from Bangladesh

EUR 3M^[4]

Latest month: 2026-06

Finland's largest export sections: Manufactured goods (by material) (EUR 2M), Machinery and transport equipment (242,139), Miscellaneous manufactured articles (183,272). Same COMEXT series, Finland as reporter.

Certification gate

● measured Bangladesh uses BSTI (Bangladesh Standards and Testing Institution) for national standards and product certification. DGDA (Directorate General of Drug Administration) regulates pharmaceuticals. RMG sector: ACCORD/RSC (now RMG Sustainability Council) for factory safety inspections. CE marking not systematically required for imports but gaining recognition.^[5,7]

BSTI mandatory certification for food products, construction materials, electrical appliances, and LPG cylinders
RMG sector: RSC (RMG Sustainability Council, successor to ACCORD) conducts building, fire, and electrical safety inspections; ~1,800 factories covered
DGDA pharmaceutical registration: required for domestic sales; Bangladesh generics benefit from TRIPS LDC waiver (until graduation)
ISO and OEKO-TEX certification increasingly demanded by EU/US buyers for RMG supply chains
Halal certification relevant for food exports to Middle East and Southeast Asia

◐ inferred For EU companies sourcing FROM Bangladesh: RSC factory safety certification and social-compliance audits (BSCI, WRAP, SA8000) are the practical gates. For EU companies exporting TO Bangladesh: BSTI certification is the formal requirement but enforcement is uneven. Pharmaceutical sector: TRIPS waiver expiry post-graduation will reshape the competitive landscape.

Free Trade Agreement

● measured Bangladesh benefits from the EU's Everything But Arms (EBA) scheme: duty-free, quota-free access for all products except arms. This is not an FTA but a unilateral preference for Least Developed Countries. Bangladesh's LDC graduation (recommended 2026) triggers a 3-year transition; EBA access ends ~2029. GSP+ application is under review but requires ratification and implementation of 27 international conventions.^[2] Ratification status: EBA is a unilateral EU instrument, not a bilateral agreement. No ratification required. GSP+ application: Bangladesh must demonstrate compliance with 27 conventions (human rights, labour, environment, governance).

2. Establish in Bangladesh

Entry mode (Private Ltd)BIDA registration + BOI approvalEPZ/SEZ vs mainlandInfrastructure (power, logistics)binding constraintCompliance (CIT 27.5% / 12% RMG, VAT 15%)Profit repatriation (20% WHT + BIDA approval)

Entity forms

Type	What it can do	Route / approval	Timeline
Private Limited Company	Most common structure for foreign investors. 100% foreign ownership permitted in most sectors. Minimum 2 shareholders, maximum 50. No minimum capital requirement (though practical minimum ~$50,000 for BOI registration). Companies Act 1994 governs. RJSC (Registrar of Joint Stock Companies) registration.	RJSC: 1-2 weeks. BIDA registration: 1-2 weeks. Bangladesh Bank FDI approval: 2-4 weeks.	4-8 weeks total
Public Limited Company	Corporation structure required for listing on Dhaka Stock Exchange (DSE) or Chittagong Stock Exchange (CSE). 100% foreign ownership. Minimum 7 shareholders. Minimum paid-up capital BDT 10M for listing. BSEC (Bangladesh Securities and Exchange Commission) regulates listed companies.	RJSC + BSEC (if listed)	6-12 weeks
Branch Office	Extension of foreign parent. Requires BIDA and Bangladesh Bank approval. Not a separate legal entity. Limited to specific activities (typically execution of contracts with government or international organisations). Parent has unlimited liability.	BIDA + Bangladesh Bank: 4-8 weeks	6-12 weeks

FDI sectors: automatic vs government route

Sector	FDI cap	Route	Note
Ready-made garments (RMG)	100%	Automatic (BIDA)	Bangladesh is the world's 2nd-largest garment exporter ($39bn FY2025, 81.5% of total exports). 4,000+ RMG factories. EU is the largest market (60%+ of RMG exports). ACCORD/RSC safety inspections post-Rana Plaza. EPZ and EZ incentives available.
Pharmaceuticals	100%	Automatic (BIDA + DGDA registration)	Bangladesh pharma sector covers 98% of domestic demand. TRIPS LDC waiver allows generic production until graduation (expected ~2026). Local companies (Beximco, Square, Incepta) export to 100+ countries. DGDA (Directorate General of Drug Administration) regulates.
IT / BPO / software	100%	Automatic (BIDA)	Growing sector. Hi-Tech Parks (Bangabandhu Hi-Tech City, Jessore). 10-year tax holiday for IT/ITES in Hi-Tech Parks. English-speaking workforce. Freelancing hub (2nd globally on some platforms). Government target: $5bn IT exports by 2025.
Power and energy	100% (IPPs)	Conditional (BPDB/BERC framework)	Bangladesh Power Development Board (BPDB) procures power from IPPs. Significant capacity additions needed (~25 GW installed, ~40 GW target). LNG imports growing. Renewable energy: solar, wind targets. Paygo Solar Home Systems widespread in off-grid areas.
Banking / financial services	100% (with approval)	Conditional (Bangladesh Bank approval)	Bangladesh Bank (central bank) regulates. Foreign banks present (HSBC, Standard Chartered, Citibank). ~53% adult account penetration. Mobile financial services (bKash, Nagad) dominating digital payments.
Agriculture / food processing	100%	Automatic (BIDA)	Agriculture employs ~40% of workforce. Rice self-sufficient. Shrimp and fish exports. Food processing growing. Foreign investment in cold-chain, processing, and agri-tech encouraged.

Corporate tax rates

Scenario	Basic rate	Effective rate	Note
Standard (non-listed)	27.5%	27.5%	Reduced to 25% if all transactions conducted via bank transfer and tax returns filed by deadline
Listed company	22.5%	22.5%	Incentive for capital-market listing. Further 2.5% reduction for bank-transfer compliance.
RMG (ready-made garments)	12%	12%	Preferential rate for garment manufacturers. Green factory: additional incentives.
EPZ / EZ (Export Processing Zones)	0-10%	0-10%	10-year tax holiday in EPZs (7 years full exemption, 3 years at 50% reduction). BEPZA administers.

MAT: Minimum tax: 0.6% of gross receipts (turnover) even if the company is loss-making.. Foreign company PE rate: CIT rates apply equally to foreign-owned entities. Branch: same rates on Bangladesh-source income..^[1,6]

Value Added Tax (VAT / Mushak)

15%^[1]

Standard VAT system. 15% standard rate. Reduced rates (5%, 7.5%, 10%) for specified goods and services. Turnover tax (4%) for small businesses below VAT threshold (BDT 50L/yr). VAT and Supplementary Duty Act 2012 (implemented 2019 after delays).

Transfer pricing

Aggressive^[1]

Bangladesh introduced transfer pricing rules in 2012 (Finance Act 2012, Section ...

Withholding tax / TDS (key rates for EU parent)

Type	Rate	Note
Dividends to non-resident	20%	One of the higher WHT rates globally. Reducible under DTAs (Bangladesh has ~35 DTAs, but treaty network is smaller than regional peers).
Interest to non-resident	20%	On gross amount. Reducible under DTAs.
Royalties to non-resident	20%	On gross amount. Reducible under DTAs.
Service fees to non-resident	20%	Technical services, management fees, consultancy. Flat 20% on all non-resident payments.

Payment and currency

● measured Managed float. The Bangladeshi taka (BDT) has depreciated significantly: from 84/USD (2021) to 123/USD (mid-2026). Bangladesh Bank manages the exchange rate with periodic adjustments. The BDT is NOT freely convertible on the capital account. Capital controls restrict profit repatriation: Bangladesh Bank approval required for each remittance. Foreign exchange reserves have declined from $46bn (2021) to ~$20bn (mid-2026).^[8,5] Profit repatriation permitted for registered FDI but requires Bangladesh Bank approval for each remittance. Processing time: 2-6 weeks. FX shortage periods have caused delays. EPZ/EZ companies have slightly easier repatriation procedures. Dividend repatriation subject to 20% WHT.

◐ inferred Payment terms in Bangladeshi B2B trade are typically 30-90 days. Letters of credit are standard for import transactions. BDT depreciation creates significant currency risk. Hedging instruments are very limited. Mobile financial services (bKash, Nagad) dominate domestic consumer payments but are not yet integrated into B2B trade finance.^[5]

Production-Linked Incentives

● measured Bangladesh's investment incentive framework centres on Export Processing Zones (EPZs, managed by BEPZA), Economic Zones (EZs, managed by BEZA), Hi-Tech Parks (managed by BHTPA), and sector-specific incentives under the Investment Promotion and Facilitation Act 2022. Key incentives: tax holidays (5-10 years), duty-free import of capital machinery, and bonded-warehouse facilities for export-oriented manufacturing.^[5,6,7,2]

Sector	Status
Ready-made garments (RMG)	World's 2nd-largest exporter ($39bn FY2025). 4,000+ factories employing ~4M workers. EU is the largest market. ACCORD/RSC safety transformation post-Rana Plaza. Green factory movement: 200+ LEED-certified factories, the most of any country.
Pharmaceuticals	98% of domestic demand met locally. Exports to 100+ countries. TRIPS LDC waiver allows generic production without patent restrictions. Post-graduation: must transition to TRIPS-compliant regime. API (active pharmaceutical ingredient) import dependence on India/China.
IT / BPO / software	Hi-Tech Parks: 10-year tax holiday. Bangabandhu Hi-Tech City. Growing freelancing ecosystem (2nd globally on some platforms). Government target: $5bn IT exports. English-speaking young workforce.
Shipbreaking / steel	Chittagong shipbreaking yards: world's largest ship-recycling industry. Environmental and safety concerns. EU Ship Recycling Regulation compliance is the market-access gate. Produces ~60% of domestic steel from ship-sourced scrap.
Leather and footwear	Growing export sector. Savar Leather Industrial Park relocating tanneries from Dhaka (environmental compliance). EU market access under EBA. Italian and Spanish brands sourcing from Bangladesh.

EBA graduation cliff (~2029) will eliminate duty-free EU access unless GSP+ is secured. GSP+ compliance requires meeting labour rights, governance, and environmental standards where Bangladesh has documented gaps. The Jul 2024 political upheaval created policy uncertainty. Infrastructure deficit (power, ports, roads) constrains manufacturing competitiveness.

Labour framework

● measured Bangladesh Labour Act 2006 (amended 2013, 2018) governs employment. National minimum wage set by sector-specific Minimum Wage Boards. RMG minimum wage: BDT 12,500/month (~EUR 93 at mid-2026 rates, effective Dec 2023). Social charges: employer contributions to group insurance. Working week: 48 hours (60 hours with overtime). EPZ workers governed by separate EPZ Workers Welfare Association and Industrial Relations Act. Labour law is national. Labour courts handle disputes. Enforcement is weak, especially in the informal sector (~85% of employment). ILO and EU have raised concerns about freedom of association, workplace safety, and child labour.^[5,7]

RMG minimum wage: BDT 12,500/month (~EUR 93, effective Dec 2023); previous BDT 8,000 (2019); set by tripartite Minimum Wage Board
Post-Rana Plaza reforms: RSC (formerly ACCORD) building/fire/electrical inspections; ~1,800 factories covered; significant safety improvements documented
Work permits for foreign nationals: BIDA/BOI recommendation + work-permit visa; no formal quota but preference for Bangladeshi employment; 1:5 foreign-to-local ratio guideline
EPZ/EZ workers: separate legal framework; union rights more restricted than mainland factories
Child labour: legally prohibited under 14 but prevalent in informal sector; ILO estimates ~3.5M working children

The opportunity

Bangladesh's opportunity is garment-sector scale at the lowest cost point in the template: $39bn in RMG exports (2nd globally after China), 12% CIT for garments, and duty-free EU access under EBA. The demographic dividend (170M people, median age 28) provides the labour base.

RMG exports

$39bn^[5]

FY25; 81.5% of total exports

RMG CIT

12%^[1]

Lowest sector rate in template

EU access

EBA duty-free^[5]

Until ~2029 (LDC graduation)

Population

170M^[5]

Median age 28; labour abundant

World's 2nd-largest garment exporter

● measured $39bn in RMG exports in FY25 (81.5% of merchandise exports). EU is the largest market. Vertical integration has improved: domestic backward linkage now covers spinning, weaving, dyeing, and finishing.^[5]

12% CIT for RMG: lowest sector rate

● measured The 12% CIT rate for ready-made garment manufacturers is the lowest sector-specific rate across all template countries. Rates fixed for 5 years (AY 2026-27 through AY 2030-31), providing unusual certainty.^[1]

EBA duty-free EU access (time-limited)

● measured Bangladesh currently enjoys duty-free, quota-free access to the EU under Everything But Arms (LDC preference). LDC graduation expected ~2026 with a 3-year transition. Bangladesh must obtain GSP+ by ~2029 to maintain preferential access, requiring compliance with 32 international conventions.^[5]

Demographic dividend

● measured 170 million people with a median age of 28. Labour-abundant economy. The young population supports the manufacturing cost advantage but infrastructure and skills are the binding constraints.^[5]

Demographics

3. Dangers register

6 entries across 4 categories. Each states the mechanism (how it bites an EU company), the evidence (sourced), the mitigation, and what evidence would change the assessment.

Political instability: post-revolution transition

The July 2024 student-led revolution ousted PM Sheikh Hasina after 15 years of increasingly authoritarian rule. The interim government under Muhammad Yunus faces the challenge of restoring democratic governance, managing economic crisis, and maintaining investor confidence simultaneously. Elections are expected 2025-2026 but timing is uncertain. Policy direction on trade, investment, and labour regulation may shift under a new government.

● measured Jul 2024: mass protests over job-quota system escalated to revolution. Sheikh Hasina fled to India (5 Aug 2024). Interim government formed under Nobel laureate Muhammad Yunus. Several hundred killed during protests. Bangladesh Nationalist Party (BNP) and other opposition groups positioning for elections.^[10,5]

Corruption: systemic, 67.6% cite as top problem

Bangladesh scores ~25 on the TI CPI (2025), ranking ~149/182. The TI Global Corruption Barometer shows 67.6% of Bangladeshi citizens cite corruption as the country's most important problem. Corruption pervades government procurement, land administration, customs, tax administration, and the judiciary. The Anti-Corruption Commission (ACC) exists but has limited independence and enforcement capacity.

● measured TI CPI 2025: ~25/100, rank ~149/182. TI GCB: 67.6% cite corruption as top problem. 75.9% report having paid a bribe to a public service in the past 12 months. Land administration, police, and judiciary rated most corrupt institutions.^[9,5]

Policy volatility● measured

EBA graduation cliff: duty-free EU access ends ~2029

Mechanism: Bangladesh's LDC graduation (recommended 2026) triggers the loss of EU Everything But Arms (EBA) duty-free access after a 3-year transition (~2029). EBA is the foundation of Bangladesh's garment export model: 60%+ of RMG exports go to the EU duty-free. Loss of EBA would impose standard GSP tariffs (~9.6% on garments), making Bangladesh less competitive relative to Vietnam (EU FTA, 0% phased in), Cambodia (EBA retained), and Ethiopia (EBA retained).

Evidence: EU EBA: duty-free, quota-free for all LDC products except arms. Bangladesh RMG exports to EU: ~EUR 20bn/yr. GSP standard tariff on garments: ~9.6%. Vietnam EU FTA: 0% tariff phasing in. Bangladesh GSP+ application submitted but 27-convention compliance is uncertain (labour rights, governance gaps documented by ILO and TI).^[2]

Current status: Active countdown. Graduation timing is set. The 3-year transition provides a window, but buyers are already diversifying sourcing toward Vietnam and other EU FTA partners. GSP+ is the lifeline but requires compliance reforms that Bangladesh has struggled to deliver.

Mitigation: For EU sourcing: factor in tariff-cost scenarios (EBA vs GSP vs GSP+). Diversify sourcing across EBA and FTA countries. Monitor GSP+ application progress. For Bangladesh-based manufacturers: build compliance infrastructure for 27 GSP+ conventions.

What would change the assessment: Bangladesh securing GSP+ before EBA expiry. EU extending EBA transition period. Bangladesh FTA with EU (unlikely in the medium term).

Policy volatility● measured

Political instability: post-revolution transition

Mechanism: The July 2024 student-led revolution ousted PM Sheikh Hasina after 15 years of increasingly authoritarian rule. The interim government under Muhammad Yunus faces the challenge of restoring democratic governance, managing economic crisis, and maintaining investor confidence simultaneously. Elections are expected 2025-2026 but timing is uncertain. Policy direction on trade, investment, and labour regulation may shift under a new government.

Evidence: Jul 2024: mass protests over job-quota system escalated to revolution. Sheikh Hasina fled to India (5 Aug 2024). Interim government formed under Nobel laureate Muhammad Yunus. Several hundred killed during protests. Bangladesh Nationalist Party (BNP) and other opposition groups positioning for elections.^[10,5]

Current status: Active transition. The interim government has maintained basic economic functions but investment decisions are on hold pending electoral clarity. Garment factories continued operating through the transition, demonstrating sector resilience. Long-term policy direction depends on election outcome.

Mitigation: Delay large capital commitments until post-election policy direction is clear. Maintain existing operations. Monitor political developments through BIDA and embassy channels. Build relationships across political parties, not just the incumbent.

What would change the assessment: Free and fair elections producing a stable government. New government affirming investment commitments and GSP+ compliance. Sustained absence of political violence for 12+ months.

Counterparty and transparency● measured

Corruption: systemic, 67.6% cite as top problem

Mechanism: Bangladesh scores ~25 on the TI CPI (2025), ranking ~149/182. The TI Global Corruption Barometer shows 67.6% of Bangladeshi citizens cite corruption as the country's most important problem. Corruption pervades government procurement, land administration, customs, tax administration, and the judiciary. The Anti-Corruption Commission (ACC) exists but has limited independence and enforcement capacity.

Evidence: TI CPI 2025: ~25/100, rank ~149/182. TI GCB: 67.6% cite corruption as top problem. 75.9% report having paid a bribe to a public service in the past 12 months. Land administration, police, and judiciary rated most corrupt institutions.^[9,5]

Current status: Structural. The interim government has pledged anti-corruption reforms, but institutional capacity is weak. For foreign investors: corruption risk is concentrated at the government interface (customs, land, permits). EPZ/EZ operations provide some insulation through streamlined procedures.

Mitigation: Anti-corruption compliance programme. Use BIDA one-stop service to minimise bureaucratic touchpoints. EPZ/EZ operations reduce government-interface corruption exposure. Avoid informal channels. For import/export: use bonded-warehouse and green-channel facilities.

What would change the assessment: Sustained CPI above 30. Independent ACC with demonstrated enforcement. Digital government services reducing discretionary decisions. Judiciary reform.

Counterparty and transparency● measured

Infrastructure deficit: power, ports, and logistics bottleneck

Mechanism: Bangladesh faces significant infrastructure constraints: power outages (load-shedding affects manufacturing), port congestion (Chittagong handles 98% of container trade with limited capacity), road-network bottlenecks, and gas-supply shortages. These constraints increase operating costs, reduce manufacturing reliability, and limit expansion. The Padma Bridge (2022) and Dhaka metro (2022) demonstrate infrastructure progress, but the deficit remains large relative to competing manufacturing destinations (Vietnam, Indonesia).

Evidence: Power: ~25 GW installed capacity but load-shedding continues (~1-3 hours/day in industrial areas). Chittagong port: average dwell time 8-12 days (vs 3-5 days in competing ports). Gas shortages: industrial gas connections rationed since 2022. World Bank Logistics Performance Index: Bangladesh ranks ~100/160.^[12,5]

Current status: Active constraint. Infrastructure is the binding bottleneck for Bangladesh's manufacturing competitiveness. Matarbari deep-sea port (under construction, JICA-funded) will partially address port constraints by ~2027. Rooppur nuclear plant (Russian-built) expected to add 2.4 GW.

Mitigation: For manufacturing: secure captive power generation (diesel or gas). Locate near Chittagong or Dhaka logistics corridors. Use EPZ/EZ infrastructure (dedicated power supply, internal roads). Factor infrastructure costs into landed-cost calculations.

What would change the assessment: Matarbari port operational. Sustained end of load-shedding in industrial zones. Gas-supply restoration. Chittagong port dwell time falling below 5 days.

Legal and enforcement● measured

Labour rights: Rana Plaza legacy and CSDDD exposure

Mechanism: Bangladesh is rated 5 ('no guarantee of rights') on the ITUC Global Rights Index. The Rana Plaza disaster (2013, 1,134 dead) transformed global awareness of garment-factory safety. The post-Rana Plaza ACCORD (now RSC) framework has improved building safety for ~1,800 factories, but freedom of association remains restricted, union leaders face harassment, and EPZ/EZ workers have fewer rights than mainland workers. The EU CSDDD will require EU companies to conduct human-rights due diligence in their Bangladeshi supply chains.

Evidence: ITUC 2025: rated 5 (worst category). RSC: ~1,800 factories inspected, significant safety improvements. ILO: freedom of association restricted; trade union registration rejection rate high. EPZ Workers Act: separate (weaker) labour framework. Post-Jul 2024: interim government pledged ILO convention compliance but implementation unclear.^[13,5]

Current status: Active. Safety has improved significantly post-Rana Plaza, but freedom of association, living wages, and working conditions remain concerns. The CSDDD exposure is the key operational risk for EU sourcing companies: compliance requires demonstrable supply-chain due diligence.

Mitigation: Conduct CSDDD-aligned due diligence for Bangladeshi supply chains. Source from RSC-inspected factories. Require SA8000, BSCI, or WRAP social-compliance certification. Map sub-tier suppliers. Support freedom-of-association principles in supplier codes of conduct.

What would change the assessment: ITUC upgrade to 4 or better. Full implementation of ILO core conventions. EPZ/EZ labour framework harmonised with mainland Labour Act. RSC coverage expanding to all export-oriented factories.

Payment and currency● measured

BDT depreciation and capital controls

Mechanism: The Bangladeshi taka has depreciated from 84/USD (2021) to 123/USD (mid-2026), a ~47% decline. Foreign exchange reserves have fallen from $46bn to approximately $20bn. Bangladesh Bank manages the exchange rate through periodic adjustments rather than free-floating. Capital controls require Bangladesh Bank approval for each profit remittance, creating delays and uncertainty. FX shortages have periodically disrupted import payments and profit repatriation.

Evidence: BDT/USD: 84 (2021), 95 (2022), 110 (2023), 123 (mid-2026). FX reserves: $46bn (2021) to ~$20bn (mid-2026). Reserve import cover: ~3 months (below the IMF-recommended 5 months). Bangladesh Bank maintains a managed exchange rate with periodic step devaluations.^[11]

Current status: Active. BDT has stabilised somewhat in 2025-2026 but further depreciation is possible given reserve levels. Capital controls remain in place. The risk is most acute for foreign investors needing to repatriate profits in EUR/USD.

Mitigation: Denominate contracts in USD where possible. Use back-to-back L/C structures for export-oriented manufacturing (USD in, USD out). EPZ companies have slightly easier repatriation procedures. Maintain offshore accounts for critical payments. Factor 2-6 week repatriation delays into cash-flow planning.

What would change the assessment: FX reserves recovering above $30bn. BDT stability within +/-5% for 12+ months. Bangladesh Bank streamlining repatriation approvals. Reserve import cover exceeding 5 months.

13 primary sources.

As of August 2026.