---
title: "Bangladesh EOR vs Entity 2026 | Crossover + When to Switch"
description: "Bangladesh EOR vs entity. No mandatory social insurance. Provident fund 10% where established. Setup USD 3,000 to 10,000 typical. Crossover guide."
canonical: https://www.teamed.global/country-hiring-guides/bangladesh/eor-vs-entity
---

Bangladesh · EOR vs entity child

Served by Teamed vetted partner-entity network in Bangladesh

# When do you graduate from an *EOR to your own Bangladesh entity*?

Bangladesh has no mandatory national social insurance levy. The employer provident fund contribution of 10% only applies where your entity has established a scheme. That changes the crossover maths. An EOR hire from $599 per employee per month stays cheaper than running your own Private Limited Company until typically 6 to 10 employees. The RJSC registration, tax identification, and bank account together take around 8 to 12 weeks before the first payroll can run.

Last reviewed 13 June 2026 · Bangladesh guide

![A view over the Buriganga River toward the Dhaka skyline at dusk.](/images/country-guides/bangladesh-eor-vs-entity.webp)

Illustration · Dhaka, Bangladesh

Answer.cite this

Bangladesh has no mandatory national social insurance for private-sector employers. The employer rate is 0%. That removes one of the biggest fixed cost lines you see in comparable EOR-vs-entity comparisons.

The main employer cost beyond salary is the provident fund. The rate is 10% of basic pay where your entity has established a scheme. It applies on both sides of the comparison.

Setting up your own Private Limited Company in Bangladesh typically costs USD 3,000 to 10,000 all-in. Running it costs roughly USD 1,500 to 3,000 per month. The crossover with an EOR from $599 per employee per month typically lands around 6 to 10 employees. Those are typical ranges, not law figures.

![Hands reviewing employment paperwork at a desk in a Dhaka office.](/images/country-guides/bangladesh-eor-vs-entity-polaroid-1.webp)

Sign here

## The crossover maths

EOR cost scales with headcount. One fee per employee per month. Entity cost has a fixed overhead. That fixed line and the EOR line cross at around 6 to 10 employees for typical Bangladesh-based knowledge worker salaries.

Teamed charges from $599 per employee per month. Your own Bangladesh Private Limited Company carries a typical fixed monthly overhead of USD 1,500 to 3,000 for payroll, bookkeeping, filings, and HR admin.

The calculation below uses USD 599 as the Teamed fee. Entity cost figures are illustrative typical ranges. They are not law figures.

All entity cost figures in this table are typical ranges. They cover outsourced payroll, bookkeeping, RJSC filings, provident fund administration, and HR admin for a small Private Limited Company in Dhaka. They are illustrative. Actual costs vary with the complexity of your structure and whether you outsource or hire in-house.

Bangladesh has no mandatory national social insurance. Employer social insurance is 0%. This means the statutory on-costs beyond salary are lower than in most comparable markets. The provident fund at 10% of basic pay applies on both sides of the comparison where a scheme is in place, so it does not shift the crossover. [Run the Crossover Calculator with your own headcount and salary band.](/tools/crossover-calculator/bangladesh)

1. Calculate the EOR cost Multiply the Teamed fee (from $599 USD) by your planned Bangladesh headcount. This is the fixed variable cost. It grows linearly as you hire.
2. Estimate the entity fixed overhead Typically USD 1,500 to 3,000 per month for a small Private Limited Company in Dhaka. This covers payroll bureau, bookkeeping, filings, provident fund admin, and first-point HR. This cost does not grow much until headcount exceeds 15.
3. Find the crossover headcount The crossover is where EOR monthly cost equals entity monthly overhead. For most Bangladesh knowledge-worker salary bands, this is around 6 to 10 employees. Use the Crossover Calculator for your own numbers.
4. Factor in non-financial triggers The maths gives you a headcount threshold. Profit repatriation, local contracting requirements, and foreign-ownership sector rules are separate questions that may override the cost crossover in either direction.
5. Plan the graduation date Allow around 10 to 12 weeks for entity formation before the first payroll on your own entity. Factor in the RJSC registration, TIN, trade licence, and bank account opening. Start the GEMO process while EOR continues running.

## Bangladesh entity setup: what it actually costs

Forming a Private Limited Company in Bangladesh typically costs USD 3,000 to 10,000 all-in. The RJSC registration fee itself is low. The gap is professional fees, tax identification, employment contracts, and banking.

Allow roughly 8 to 12 weeks from the decision to your first payroll run. The bank account and the tax registration are typically the gating steps.

These are typical ranges. They are not law figures. There is no law that sets what a Private Limited Company costs to form. The range reflects real market rates for professional services in Dhaka. It varies with how much substance your structure needs and how much you outsource to a local corporate services firm.

| Cost item | Typical range | One-off or recurring |
| --- | --- | --- |
| RJSC name clearance and incorporation | USD 100 to 300 | One-off |
| Memorandum and Articles drafting | USD 300 to 1,500 | One-off |
| Trade licence (City Corporation) | USD 50 to 200 per year | Recurring |
| Tax Identification Number (TIN) registration | USD 0 direct (admin time) | One-off |
| VAT registration | USD 0 direct (admin time) | One-off |
| Bangladesh business bank account | USD 0 to 500 | One-off plus monthly fees |
| Employment contracts template | USD 300 to 1,500 | One-off |
| Provident fund trust deed (where applicable) | USD 500 to 2,000 | One-off |
| D&O and employer liability insurance | USD 300 to 1,500 per year | Recurring |
| **Realistic total setup cost** | **USD 3,000 to 10,000** | **Mostly one-off** |

### Why the bank account and tax clearance are the hidden bottlenecks

Foreign-parented companies face additional scrutiny from Bangladeshi banks, particularly if the parent entity is domiciled outside South Asia. Expect 4 to 8 weeks from application to an opened account. The Bangladesh Investment Development Authority (BIDA) work permit and tax registration processes add further lead time. Together, these typically turn a 3-week RJSC incorporation into a 10 to 12-week wait before the first payroll can run. Plan for this before committing a first hire date.

## Bangladesh entity ongoing cost: typically USD 1,500 to 3,000 per month

Running a small Bangladesh Private Limited Company typically costs USD 1,500 to 3,000 per month. That covers outsourced payroll, bookkeeping, annual tax filings, trade licence renewal, and basic HR admin.

Below 5 employees, this fixed overhead dominates the per-head cost. Above 10 employees the overhead amortises and the entity starts to look cheaper.

These figures are typical market ranges for a small Private Limited Company in Dhaka with 1 to 15 employees. They are illustrative. They are not law figures. Actual costs depend on whether you outsource or hire local staff, and the complexity of your payroll and benefits programme.

| Monthly cost item | Typical range | What it covers |
| --- | --- | --- |
| Outsourced bookkeeping and monthly accounts | USD 400 to 900 | Cash reconciliation, accruals, monthly accounts |
| Payroll service (1 to 15 employees) | USD 150 to 400 | Monthly payroll runs, payslips, TDS submissions |
| Annual tax return (amortised) | USD 100 to 300 | Around USD 1,200 to 3,600 per year divided by 12 |
| Trade licence renewal (amortised) | USD 20 to 50 | City Corporation annual renewal divided by 12 |
| Provident fund administration (where established) | USD 50 to 150 | Contribution submissions, trust administration |
| HR and employment law advisory | USD 150 to 500 | Contract reviews, policy updates, Labour Act queries |
| HR and People Ops | USD 400 to 700 | Onboarding, leave admin, employee queries |
| Software subscriptions (HRIS, payroll, accounting) | USD 100 to 300 | Per-user SaaS |
| Insurance amortised | USD 30 to 100 | D&O and employer liability premiums divided by 12 |
| **Total ongoing monthly** | **USD 1,500 to 3,000** | **1 to 15 employee Private Limited Company** |

Above 15 employees, dedicated local HR capacity and an in-house finance function typically become necessary. The cost band widens at that point.

## The cost nobody quotes: director liability

Bangladesh directors of Private Limited Companies carry personal duties under the Companies Act 1994. These duties cannot be delegated. Incorrect or late filings attract personal fines. Repeated failures can result in disqualification.

EOR clients do not carry these duties. Teamed holds them as the legal employer.

Most cost comparisons skip the director-liability dimension because it is hard to put a number on. It is worth naming explicitly before you decide.

### Personal director duties

Under the [Bangladesh Companies Act 1994](http://www.roc.gov.bd/), every director must act in the interest of the company, avoid conflicts of interest, and maintain proper books of accounts. A director who signs accounts they have not reviewed is personally responsible for any material misstatement. These are personal duties. They cannot be outsourced to an accountant or legal firm.

### The compliance treadmill

- **Annual return to RJSC**: filed within 21 days of each annual general meeting. Late filing attracts penalties per day of default.
- **Annual financial statements**: within 18 months of incorporation, then annually. Signed by the director personally.
- **Tax return**: filed with the National Board of Revenue (NBR) annually. Late filing attracts a minimum penalty of BDT 5,000.
- **Trade licence renewal**: annually with the City Corporation. Operating without a current licence is an offence.
- **TDS withholding and deposit**: monthly. Errors attract interest and penalties from NBR.
- **Labour Court exposure**: the Bangladesh Labour Act 2006 gives employees access to the Labour Court for wrongful dismissal. There is no statutory cap on awards. Court discretion is wide. Exposure is personal where the director is also the operational employer.

Each obligation is individually manageable. Stacked across a year, they consume real management attention. An EOR carries all of these on its own entity.

## When you should stay on EOR

Below 5 employees, with project-based hires, or while you are still testing the Bangladesh market, the EOR is the right answer. The crossover is a maths threshold. It is not a strategic verdict.

Reversibility matters. Entity setup in Bangladesh is sticky. Winding down a Private Limited Company involves RJSC filings, tax clearance certificates, and a formal strike-off process. EOR is not.

- **Under 5 Bangladesh employees on average salaries**: EOR is cheaper and faster every month. The entity overhead has nothing to amortise against.
- **Market validation phase**: you are hiring 1 or 2 people to test commercial fit. Entity setup commits capital and management attention before you know whether the Bangladesh market will deliver.
- **Project-based hires**: 6 to 12 month engagements where the formation cost will not amortise before the project ends.
- **Foreign ownership complexity**: some sectors in Bangladesh restrict foreign equity percentages. If your planned entity structure requires BIDA approval or has sector-specific caps, the setup timeline extends further and the cost case for EOR strengthens.
- **Regulatory uncertainty**: Bangladesh has been updating its Labour Act through amendments. Running on EOR while the regulatory picture settles avoids locking in entity overhead during a transition period.

## When you should switch to your own entity

Above 6 employees consistently, with a multi-year Bangladesh plan, or with profit repatriation or IP-holding requirements, your own entity beats EOR on cost. It also unlocks capabilities the EOR structure cannot provide.

The single biggest structural pull in Bangladesh is profit repatriation control. Foreign parent companies need a registered local entity to repatriate profits in an orderly, tax-efficient way.

- **Sustained headcount above 6 Bangladesh employees** at average salaries: the entity overhead amortises across enough people that per-head cost falls below the EOR fee.
- **Profit repatriation requirements**: Bangladesh requires a registered local entity for formal profit repatriation under Bangladesh Bank regulations. If your business generates revenue in Bangladesh, your own entity gives you a regulated repatriation path.
- **Local contracting and procurement**: government contracts and major enterprise procurement in Bangladesh typically require a locally registered company with a valid trade licence and TIN. EOR employment does not create that local entity presence.
- **IP and technology holding**: if your Bangladesh team is producing IP, code, or technology assets, an entity structure gives you cleaner ownership and assignment mechanisms than an EOR arrangement.
- **Strategic commitment to the market**: if Bangladesh is becoming a permanent delivery centre rather than a test, the entity structure signals commitment to clients, regulators, and employees.

## How Teamed's Graduation Model handles the transition

Teamed graduates customers from EOR to their own entity on the same platform. Same Bangladesh specialist. Same employment contracts, novated to the new entity. No break in employee tenure or benefits.

Most providers treat graduation as a re-onboarding event. Employees re-sign and sometimes lose continuous service. Teamed treats it as a planned stage of the employment lifecycle.

The technical mechanic is **contract novation**: the employment contract transfers from Teamed's partner entity to your new Private Limited Company on a specified date. All terms carry across. Salary, provident fund contributions, leave entitlement, and continuous service date all remain unchanged. The employee sees a different employer name on their payslip. Nothing else changes.

What we do operationally:

- Stand up your Bangladesh entity through [GEMO](/entity-management), typically around 10 to 12 weeks, while EOR continues running in parallel.
- Register the entity with RJSC, obtain TIN and trade licence, and open the business bank account.
- Novate every active employment contract on a single effective date.
- Migrate ongoing provident fund administration without any lapse where a scheme is in place.
- File final EOR-period payroll submissions and open new payroll on the entity from the novation date.
- Provide the same People Ops specialist as the post-graduation primary contact.

The Graduation Model exists because every other EOR makes this hard. We treat the move as something we help you plan for from the day you hire your first employee through us.

## How does Teamed handle Bangladesh employment for you?

Teamed becomes your legal [employer of record](/lp/employer-of-record) in Bangladesh for [**from $599 per employee per month**](/pricing), with **zero FX mark-up** in any currency.

Payroll, benefits, and the full Bangladesh employment law stack run on **one platform**.

**Real HR and legal experts** handle your Bangladesh hires from the first offer letter through every monthly payroll submission and annual tax filing. **An actual person**, not a chatbot or a pooled queue. There is **no setup fee** and **no exit fee**. Every employer cost **passes through at cost, itemised** on every invoice. You see the social insurance line at 0%, the provident fund line at 10% where a scheme applies, and the leave accrual for 1 day per 18 days worked. Nothing is hidden inside the management fee.

EOR payroll, contractor onboarding, and entity setup all live on **one platform**. Run the [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator) to see the month the model flips. Start from the Bangladesh hiring overview. Key sources: [Registrar of Joint Stock Companies and Firms (RJSC)](http://www.roc.gov.bd/) and the [Bangladesh Investment Development Authority (BIDA)](https://bida.gov.bd/).

## Frequently asked questions

At what headcount does an EOR stop being cheaper than a Bangladesh entity?

The crossover typically lands at 6 to 10 Bangladesh employees at average knowledge-worker salaries. Below that, the EOR fee (from $599 per employee per month) is cheaper than the typical entity overhead of USD 1,500 to 3,000 per month. Above it, the entity overhead amortises and per-employee cost falls below the EOR fee. Use the Crossover Calculator to run your own salary band.

Does Bangladesh have a mandatory social insurance contribution for employers?

No. Bangladesh has no mandatory national social insurance scheme for private-sector employers. The employer social insurance rate is 0%. The primary employer cost beyond salary is the provident fund at 10% of basic pay, and only where your entity has established a provident fund scheme.

How long does it take to set up a Bangladesh entity and run the first payroll?

Around 10 to 12 weeks from the incorporation decision to first payroll. The RJSC registration itself takes 2 to 3 weeks. The business bank account, TIN registration, and trade licence together add 6 to 8 more weeks, particularly for foreign-parented companies. Plan for this before you commit a first payroll date.

What is Teamed's Graduation Model for Bangladesh?

Teamed graduates customers from EOR to their own Bangladesh Private Limited Company on the same platform. Employment contracts are novated to the new entity on a single date. Salary, provident fund contributions, leave entitlement, and continuous service date all carry over unchanged. Teamed handles the entity formation through GEMO, manages the RJSC and TIN registrations, and migrates payroll without any lapse.

What employer costs apply on both sides of the Bangladesh comparison?

Bangladesh has no mandatory social insurance, so the employer social insurance rate is 0% on both sides. The provident fund at 10% applies on both sides where a scheme is established. Annual leave accrues at 1 day per 18 days worked under the Bangladesh Labour Act 2006 on both sides. These are the same whether you employ via EOR or your own entity.

Teamed Legal Operations

In Bangladesh, the crossover maths works faster than most clients expect because there is no mandatory social insurance levy on the entity side. But the setup timeline is longer. RJSC, TIN, trade licence, and a bank account that will actually open for a foreign-parented company takes three months, not three weeks. By the time the numbers tip to entity, formation should already be underway.

A note from Tom Price-Daniel

Bangladesh has no mandatory social insurance. The crossover to your own entity typically lands around 6 to 10 employees.  
Setup takes around 10 to 12 weeks. The RJSC and bank account together are the bottleneck.  
When the maths flips, we tell you and move you across. That is the only honest version of this.

Tom Price-Daniel · Co-founder, Teamed

## Related Bangladesh guides

- Hiring in Bangladesh, overviewparent
- [Bangladesh employer cost breakdown](/country-hiring-guides/bangladesh/cost-breakdown)sibling
- [Bangladesh tax and payroll guide](/country-hiring-guides/bangladesh/tax-and-payroll)sibling
- [Bangladesh termination and severance](/country-hiring-guides/bangladesh/termination-and-severance)sibling
- [Employer of Record overview](/lp/employer-of-record)core
- The Graduation Modelcore
- [Entity Management (GEMO)](/entity-management)core
- [Crossover Calculator](https://www.teamed.global/tools/crossover-calculator/bangladesh)tool
- [Talk to an expert](https://www.teamed.global/contact)CTA

A note on this page.

This is a guide, not legal, tax or accounting advice. Rules change and vary by jurisdiction. Verify current requirements with the Registrar of Joint Stock Companies and Firms (RJSC), the National Board of Revenue (NBR), and the Bangladesh Investment Development Authority (BIDA) before relying on any specific framework. Entity setup cost ranges and ongoing cost ranges in this guide are typical market figures based on professional services pricing. They are illustrative only and not law figures. Rates cited (social insurance, provident fund, annual leave) are verified or corroborated figures from Bangladesh Labour Act 2006 and related sources.