An Employer of Record (EOR) is a Bangladeshi company that legally employs staff on your behalf. You choose the people and direct their daily work. The EOR signs the employment contracts, runs payroll, withholds tax and keeps you compliant with the Bangladesh Labour Act 2006. It lets a foreign company hire in Bangladesh in days or weeks, without registering its own entity.
This guide explains how the arrangement works, what an EOR covers, when it makes sense, and the limits you should know before you sign.
How an EOR arrangement works
How an EOR arrangement works · 4 parties
Three parties are involved: you, the EOR and the employee. You sign a service agreement with the EOR and fund the monthly payroll. The EOR signs the employment contract with the employee, pays salary and handles tax and filings with NBR. The employee works for you day to day, but is legally employed by the EOR.
What an EOR handles, and what stays with you
| Area | The EOR | You (the client) |
|---|---|---|
|
Employment contract |
Issues a contract that complies with the Labour Act 2006 |
Agrees the role, salary and terms |
|
Payroll |
Pays salaries in BDT and issues payslips |
Funds the monthly payroll invoice |
|
Tax |
Withholds income tax from salaries and files employer returns with NBR |
– |
|
Statutory benefits |
Manages leave, festival bonuses and any provident fund or gratuity scheme |
Decides on extra benefits such as health cover |
|
Onboarding and records |
Collects documents, keeps employee files, issues ID and letters |
Sets up equipment, systems and training |
|
Daily work |
– |
Assigns tasks, manages performance and sets goals |
|
Termination |
Runs the legal process, notice and final settlement |
Decides when to end the role |
The split matters. The EOR carries the legal and administrative duties of an employer. You keep control of the work itself.
Who should use an EOR in Bangladesh?
An EOR fits when you need people in Bangladesh but a local company isn’t worth setting up yet. Typical cases:
- Testing the market before committing to a subsidiary
- Hiring a small team, such as a few developers, a country manager or sales staff
- Moving fast, when a new hire needs to start before an entity could be ready
- Converting contractors to employees to reduce misclassification risk
- Bridging while your own company registration is in progress
If you plan a large team, a factory or local revenue, your own entity usually makes more sense over time. We compare both in EOR vs setting up a legal entity in Bangladesh. If you already have an entity and only need HR and payroll support, a PEO may fit better; see EOR vs PEO in Bangladesh.
What does an EOR cost?
EOR providers usually charge either a fixed monthly fee per employee or a percentage of each employee’s salary. You also pay the full employment cost, which the EOR passes through at cost.
- Gross salary
- Festival bonuses (customarily two a year)
- Any provident fund or gratuity contributions agreed in the contract
- Statutory leave and other Labour Act entitlements
Ask for a sample cost breakdown for one employee before you sign. It should show the salary, employer costs and the EOR fee separately. To get a breakdown for your hire, visit our EOR services page.
Risks and limits to understand
- Permanent establishment (PE). If your EOR staff sign contracts or generate revenue for you in Bangladesh, the tax authority could treat your company as having a taxable presence. Keep sales authority and contracting outside Bangladesh, or set up an entity.
- Intellectual property. The employee’s contract is with the EOR, so the EOR agreement must assign all work product and IP to you. Check this clause.
- Not a licence to trade. An EOR lets you employ people. It does not let your company sell, invoice or import in Bangladesh.
- Work permits. Hiring foreign nationals through an EOR is more limited than hiring locals. See our work permit guide before you plan an expat hire.
How fast can you hire through an EOR?
For a local hire, the steps are:
- Agree the role, salary and start date with your candidate.
- Share the details with the EOR, which prepares a compliant employment contract.
- The employee signs and submits onboarding documents (national ID, TIN, bank details, certificates).
- The EOR registers the employee on payroll and confirms the start date.
Most local hires can start within 1–2 weeks once the candidate accepts. Notice periods with a current employer are usually the longest wait. Foreign nationals take longer because of the work permit process.
How to choose an EOR provider in Bangladesh
- Own local entity. Check that the provider employs staff through its own Bangladeshi company, not through a further subcontractor.
- Labour law expertise. Ask how they handle termination, festival bonuses and gratuity.
- Clear cost breakdown. Fees, employer costs and pass-through costs shown separately.
- IP and confidentiality terms that assign all work products to you.
- Payroll and tax track record. Ask how they file salary tax and employer returns with NBR.
- A path to your own entity. A good provider can help you move staff across when you incorporate.
Frequently asked questions
Is an Employer of Record legal in Bangladesh?
Do I need a company in Bangladesh to use an EOR?
Who owns the work my EOR employee produces?
Can an EOR hire foreign nationals in Bangladesh?
Can I move EOR employees to my own company later?
Hire in Bangladesh with AccouSource
AccouSource acts as Employer of Record for foreign companies hiring in Bangladesh, covering contracts, payroll, tax and statutory benefits. Get an EOR quote for your first hire.
