Financial Preparation

• Calculate your total investment budget including property, transaction costs, and reserves
• Develop a currency exchange strategy (BDT fluctuates against USD/CAD)
• Arrange international wire transfer capabilities with your home bank
• Research the potential for opening a Bangladeshi bank account (requirements have tightened)
• Understand tax implications in both Bangladesh and your home country
• Evaluate financing options (typically more limited than in North America)
• Prepare source of funds documentation for regulatory compliance

Market Research

• Identify target cities based on investment goals (Dhaka vs. secondary markets)
• Research neighborhood-specific price trends and rental yields
• Analyze property developer track records and completed projects
• Understand infrastructure development plans in target areas
• Research tenant demographics and rental demand in target locations
• Study types of available properties (apartments, commercial, land)
• Plan a market visit to evaluate areas firsthand if possible

Professional Network Development

• Connect with legal counsel experienced in foreign property purchases
• Identify reputable real estate agents with international client experience
• Research property management companies in your target market
• Establish contact with currency exchange specialists
• Find a Bangladeshi tax accountant familiar with foreign investor issues
• Connect with the Bangladesh Board of Investment for guidance
• Network with other foreign investors in the Bangladesh market

Expert Tip: Consider joining expatriate forums and social media groups focused on Bangladesh to gain practical insights from other foreign investors. These communities often share valuable on-the-ground information about navigating the legal system, identifying trustworthy professionals, and understanding neighborhood characteristics that might not be apparent from traditional market research.

Regulatory Consideration: Foreign company ownership of property may be subject to additional scrutiny under Bangladesh’s anti-money laundering regulations. Ensure transparent documentation of all fund sources and maintain clear corporate governance records. Regulatory frameworks have been tightening globally, and Bangladesh has strengthened its compliance requirements for foreign investments in recent years.

Banking Setup

• Bank Account Options:
  • Foreign Currency Accounts: Available but with specific documentation requirements
  • Non-Resident Foreign Currency (NFCD) Accounts: For foreign nationals
  • Non-Resident Investor’s Taka Account (NITA): For property-related transactions
  • International banks with Bangladesh presence: HSBC, Standard Chartered
• Typical Requirements:
  • Passport and identification documents
  • Proof of income and source of funds
  • Visa documentation
  • Tax identification numbers
  • Reference letters from home country banks
  • Address verification in home country
• Alternative Approach: Many foreign investors operate without a local bank account by using their solicitor’s client account for the purchase transaction and setting up property management with direct international transfers for rental income.

Financing Options

Financing for foreign investors in Bangladesh is more limited than in developed markets:

1. Local Bank Financing:
   • Availability: Limited for foreign individuals; somewhat better for established foreign companies
   • Down Payment: Typically 40-50% for foreign buyers (when available)
   • Interest Rates: Significantly higher than North American rates, typically 9-13%
   • Terms: Shorter than U.S./Canadian mortgages, often 10-15 years maximum
   • Requirements: Extensive documentation of income, assets, and credit history
2. Developer Financing:
   • Some major developers offer payment plans (not true mortgages)
   • Typically requires 30-50% down payment
   • Installment periods of 3-5 years
   • May include built-in interest or price premium
   • Less formal than bank financing but more accessible
3. Home Country Financing:
   • Leveraging equity in home country properties
   • HELOCs or second mortgages in North America
   • Personal loans against investment portfolios
   • Often more favorable rates than local financing
   • Eliminates cross-border lending complications

Currency Management

The Bangladeshi Taka (BDT) has historically exhibited moderate volatility against the USD and CAD, creating both risks and opportunities:

• Exchange Rate Considerations:
  • Monitor BDT/USD and BDT/CAD trends for favorable exchange windows
  • Consider working with a currency specialist rather than standard bank exchanges
  • Factor in potential currency movements to investment returns
• Fund Transfers:
  • International wire transfers are the primary method for property purchases
  • Official banking channels are essential for regulatory compliance
  • Document all transfers thoroughly for future repatriation
  • Transfer fees can be substantial; factor these into overall costs
• Rental Income Repatriation:
  • Requires proper documentation of original investment
  • Bangladesh Bank approval may be needed for larger amounts
  • Tax clearance certificates typically required
  • Currency conversion timing can impact effective yields

Currency management is particularly important in the Bangladesh context, as official and unofficial exchange rates can sometimes differ significantly. Using proper banking channels is essential not only for compliance but also to ensure the ability to repatriate funds in the future.

Property Search Resources

• Online Property Portals:
  • Bproperty – Leading property portal with extensive listings
  • Bikroy – Classified site with property listings
  • Lamudi – International portal with Bangladesh properties
  • Developer websites – Often have exclusive pre-launch offerings
• Real Estate Agents:
  • Local agencies specializing in specific neighborhoods
  • International firms with Bangladesh presence (limited)
  • Developer sales teams for new projects
  • Note: Agent regulation is less formalized than in North America
• Property Exhibitions:
  • REHAB housing fairs in Bangladesh
  • International property shows featuring Bangladesh
  • Developer-specific launch events
  • Networking events for investors
• Direct Developer Approach:
  • Major developers: Building Technology & Ideas (BTI), Concord, Rangs, Sheltech
  • Sales offices in upscale areas like Gulshan and Banani
  • Model apartments and display centers
  • Special programs for foreign buyers in some cases

Property Viewing Trip Planning

For international investors, an efficient property viewing trip requires careful planning:

1. Pre-Trip Research:
   • Identify potential properties and neighborhoods before arrival
   • Schedule viewings with multiple agents and developers
   • Research travel logistics within congested cities like Dhaka
   • Arrange meetings with legal advisors and banking representatives
2. Trip Logistics:
   • Plan for adequate time (at least 5-7 days recommended)
   • Account for traffic congestion in urban areas
   • Consider hiring a local guide or translator
   • Visit both developments and surrounding neighborhoods
3. During Viewings:
   • Document properties with photos and notes
   • Ask about developer track record and completed projects
   • Inquire about foreign ownership history in the development
   • Check for quality of construction and materials
   • Assess neighborhood infrastructure and amenities
4. Beyond Property Viewings:
   • Meet with legal advisors to understand process and requirements
   • Speak with property management companies
   • Visit comparable completed developments by the same developer
   • Network with other foreign investors if possible

Property Evaluation Criteria

Assess potential investments using these key criteria:

• Location Factors:
  • Proximity to major commercial areas and job centers
  • Transportation access (critical in congested cities like Dhaka)
  • Neighborhood safety and security arrangements
  • Educational institutions and healthcare facilities nearby
  • Development potential and infrastructure improvements
• Building Quality:
  • Developer’s reputation and track record
  • Construction quality and materials used
  • Earthquake resistance design (important in Bangladesh)
  • Utilities reliability (water, electricity, backup systems)
  • Amenities and common spaces in the development
• Rental Potential:
  • Local tenant profiles and demand patterns
  • Realistic rental rates for similar properties
  • Expatriate rental potential in premium areas
  • Furnishing requirements and preferences
  • Typical lease terms and conditions
• Financial Considerations:
  • Price per square foot compared to area average
  • Historical appreciation rates in the neighborhood
  • Maintenance costs and service charges
  • Property tax liabilities
  • Total ownership cost projections

Expert Tip: In Bangladesh’s urban centers, particularly Dhaka, electricity reliability can vary significantly by neighborhood. Properties with backup generators or solar systems command premium rents, especially from expatriate tenants and higher-income professionals. When evaluating properties, assess not just the backup power availability but also how quickly it activates during outages and what building systems it supports (elevators, water pumps, air conditioning).

Legal Due Diligence

• ✓
  Title Verification: Confirm clean ownership history and absence of disputes
• ✓
  Land Records Search: Verify property documentation with municipal authorities
• ✓
  Developer Approvals: Check RAJUK (Dhaka development authority) or relevant local approvals
• ✓
  Foreign Ownership Eligibility: Confirm the specific property can be legally purchased by foreigners
• ✓
  Utility Connections: Verify legal water, electricity, and gas connections
• ✓
  Tax Compliance: Check if property has outstanding tax liabilities
• ✓
  Encumbrance Check: Ensure no liens, mortgages, or legal restrictions
• ✓
  Regulatory Compliance: Verify building code compliance and occupancy permissions

Developer Due Diligence

• ✓
  Company Registration: Verify developer is properly registered and licensed
• ✓
  Track Record: Inspect previously completed projects for quality and timeliness
• ✓
  REHAB Membership: Check if developer is a member of the Real Estate Housing Association of Bangladesh
• ✓
  Financial Stability: Assess financial health to ensure project completion capability
• ✓
  Legal History: Research any litigation or disputes involving the developer
• ✓
  Foreign Buyer Experience: Determine if they have previously sold to international buyers
• ✓
  Customer Feedback: Speak with previous buyers about their experience

Physical & Financial Due Diligence

• ✓
  Construction Quality: Engage an engineer to assess structural integrity and materials
• ✓
  Infrastructure Assessment: Evaluate utility connections, backup systems, and common areas
• ✓
  Environmental Factors: Check for flooding risks, soil stability, and pollution exposure
• ✓
  Market Valuation: Compare price with similar properties in the area
• ✓
  Expense Projection: Calculate all ownership costs including taxes and maintenance
• ✓
  Rental Analysis: Research actual achieved rents for comparable properties
• ✓
  Return Calculation: Develop comprehensive ROI projections

Expert Tip: Land records in Bangladesh can be complex, with some dating back to the British colonial era. Multiple types of deeds exist, including registered and unregistered documents, making title verification particularly challenging. For apartment purchases, ensure the building’s land title is properly documented, not just the apartment unit itself. This background verification is essential even when buying from reputable developers, as land disputes can affect entire developments.

Offer and Negotiation

1. Expression of Interest: Communicated through developer or agent
2. Initial Booking: Often with a nominal booking fee to secure the unit
3. Price Negotiation: Typically less room for negotiation in new developments
4. Payment Schedule Agreement: Especially relevant for under-construction properties

For new developments, prices are often fixed with limited negotiation potential beyond potential payment term adjustments or inclusion of fixtures and fittings. For resale properties, there is typically more negotiation flexibility, though foreign buyers may face premium pricing in some cases.

Foreign Buyer Requirements

1. Official Approvals:
   • Bangladesh Board of Investment clearance
   • Bangladesh Bank permissions for fund transfers
   • Local police station notification
2. Documentation:
   • Passport copies and identification verification
   • Source of funds documentation
   • Income verification
   • Tax identification documents
3. Financial Arrangements:
   • Currency transfer approvals
   • Payment method confirmation
   • Bank validations

These foreign buyer requirements introduce additional steps compared to local purchases and typically extend the timeline by several weeks or more. Patience and thorough documentation are essential throughout this process.

Purchase Completion

1. Agreement Preparation: Formal sale and purchase agreement drafted
2. Document Review: Legal counsel should review all documentation
3. Deposit/Down Payment: Typically 10-30% depending on property type
4. Payment Transfers: Via official banking channels with proper documentation
5. Deed Registration: With municipal authorities (Sub-Registry Office)
6. Tax Payments: Including registration fees and stamp duties
7. Final Documentation: Receipt of all ownership certificates and approvals
8. Property Handover: Physical possession of the property

For under-construction properties, payment is typically made in installments linked to construction milestones. This creates additional considerations regarding developer reliability and completion timelines that should be thoroughly addressed in the purchase agreement.

Transaction Costs

Budget for these typical transaction expenses in Bangladesh:

• Registration Fee: 1.5-3% of property value (varies by location)
• Stamp Duty: 1.5-3% of property value
• Value Added Tax (VAT): 2-4.5% depending on property size and type
• Local Government Taxes: 2-3% of property value
• Legal Fees: 1-2% of property value for foreign buyers
• Agent Commissions: 2-3% if applicable (often paid by seller)
• Currency Transfer Costs: Varies by method and amount (1-3%)
• Documentation Fees: Various minor administrative charges

Total transaction costs for foreign investors typically range from 8-15% of the property value, depending on the specific location, property type, and individual circumstances. These costs should be factored into the overall investment calculations from the beginning.

Expert Tip: Consider appointing a Power of Attorney to a trusted local representative if you cannot be physically present throughout the transaction process. This legal arrangement allows your representative to sign documents and handle administrative matters on your behalf. The Power of Attorney should be carefully drafted by legal experts, with specific limitations and timeframes clearly defined to protect your interests.

Administrative Tasks

• ✓
  Tax Registration: Register with local tax authorities for property tax purposes
• ✓
  Utility Transfers: Transfer water, electricity, and gas connections to your name
• ✓
  Property Insurance: Arrange appropriate property and liability insurance
• ✓
  Foreign Ownership Record: Ensure proper recording with relevant authorities
• ✓
  Building Society Registration: Register with apartment association or management committee
• ✓
  Local Security Notification: Inform local police/security about your ownership
• ✓
  Record Keeping: Establish proper filing system for all property documentation

Property Preparation

Preparing your property for occupancy or rental requires attention to several areas:

• Property Inspection: Detailed assessment of condition upon handover
• Essential Maintenance: Address any immediate repair needs
• Security Systems: Install or upgrade security features
• Furnishing (if applicable): Furnish according to target tenant expectations
• Utility Connections: Ensure all utilities are active and functioning
• Backup Systems: Install power backups if not already provided
• Pest Control: Initial treatment recommended in tropical climate
• Locks and Keys: Change locks or secure additional sets

If preparing for rental, consider the preferences of your target tenant demographic. Expatriate tenants typically expect higher standards of furnishing and amenities, while local professional tenants may have different priorities regarding location and features.

Management Setup

For remote investors, establishing proper management is essential:

• Property Management:
  • Engage professional property management or building services
  • Establish clear reporting and communication protocols
  • Arrange regular property inspections
  • Set up maintenance schedules appropriate for tropical climate
• Financial Management:
  • Set up banking arrangements for expenses and income
  • Establish accounting systems for tax compliance
  • Arrange currency transfer mechanisms for rental income
  • Budget for regular maintenance and contingencies
• Local Representation:
  • Consider ongoing power of attorney arrangements
  • Establish local contacts for emergencies
  • Develop relationships with maintenance contractors
  • Connect with other property owners in the building

For foreign investors who cannot regularly visit their property, professional management is strongly recommended. Bangladesh’s tropical climate, infrastructure challenges, and administrative requirements make hands-on management difficult for remote owners.

Expert Tip: When setting up property management, consider using technology to bridge the distance gap. Several property management companies in Bangladesh now offer digital dashboards with photo documentation of inspections, online payment tracking, and video conferencing for virtual property walkthroughs. These tools can provide greater peace of mind for international investors managing properties remotely.

Bangladesh Tax Obligations

• Property Registration Taxes:
  • Stamp Duty: 1.5-3% of property value
  • Registration Fee: 1.5-3% of property value
  • Local Municipal Taxes: 2-3% of property value
  • VAT: 2-4.5% depending on property size and location
• Annual Property Tax:
  • Municipal holding tax based on property value
  • Rates vary by location and property type
  • Typically 5-10% of assessed annual rental value
  • Payable to local government authorities
• Rental Income Tax:
  • Non-resident landlords taxed at flat rate of 30%
  • Limited deductions for expenses compared to some countries
  • Withholding requirements may apply for some tenants
  • Annual tax filing requirements through Bangladesh tax authorities
• Capital Gains Tax:
  • 30% tax rate on property sale profits for non-residents
  • Reduced rate of 15% possible for properties held more than 5 years
  • Calculation based on acquisition price vs. sale price
  • Limited indexation or inflation adjustments

Home Country Tax Obligations

Bangladesh has tax treaties with several countries that may affect taxation of income and capital gains. Professional tax advice from experts familiar with both jurisdictions is strongly recommended to ensure compliance and optimize tax positions.

Tax Planning Strategies

• Entity Structure: Evaluate whether personal ownership or company structure is more tax efficient
• Expense Documentation: Maintain meticulous records of all allowable expenses to maximize deductions
• Depreciation: Understand and apply appropriate depreciation schedules
• Income Timing: Consider timing of income recognition between tax years
• Sale Timing: Plan property disposals with consideration of holding period benefits
• Currency Management: Strategic timing of profit repatriation to optimize exchange rates
• Tax Treaty Benefits: Leverage applicable provisions in bilateral tax treaties
• Capital Improvements: Document all capital expenditures which may reduce future capital gains tax

Tax rules can change frequently in both Bangladesh and your home country. Regular consultation with tax professionals is essential to maintain compliance and optimize your tax position as regulations evolve.

Expert Tip: Many foreign investors in Bangladesh underestimate the importance of local tax compliance. While focusing on home country tax obligations is natural, maintaining proper Bangladesh tax filings is equally important. Non-compliance can lead to penalties, difficulties with property registration, and problems when attempting to repatriate funds or eventually sell the property. Engage a local tax professional familiar with non-resident investor requirements from the beginning of your investment.

Selecting a Property Manager

Evaluate potential property managers using these criteria:

• Experience with Foreign Owners:
  • Track record managing properties for international investors
  • Understanding of expatriate tenant needs
  • Experience with cross-border financial transactions
• Professional Credentials:
  • Licensing and certifications where applicable
  • Professional association memberships
  • References from other foreign owners
• Service Scope:
  • Comprehensive vs. a la carte services
  • Emergency response protocols
  • Vendor and contractor networks
• Communication Capabilities:
  • English proficiency and communication clarity
  • Reporting frequency and quality
  • Technology platforms for remote monitoring
• Financial Management:
  • Accounting practices and transparency
  • Fund transfer capabilities
  • Tax document preparation assistance

Management Agreement Essentials

Ensure your property management contract includes these key elements:

• Scope of Services: Detailed listing of included and excluded services
• Fee Structure: All management fees, commissions, and additional charges
• Contract Term: Duration of agreement and notice periods
• Reporting Requirements: Frequency, format, and content of reports
• Maintenance Authority: Spending limits requiring owner approval
• Tenant Selection Criteria: Standards for tenant screening and approval
• Rent Collection Procedures: Methods, timing, and arrears handling
• Insurance Requirements: Coverage expectations and responsibilities
• Termination Conditions: Circumstances and procedures for ending the agreement
• Dispute Resolution: Process for handling disagreements

The management agreement should be carefully reviewed by your legal advisor to ensure it provides appropriate protections for a foreign owner and clearly establishes responsibilities and performance standards.

Expert Tip: When selecting property management in Bangladesh, prioritize companies with established reputations for serving international clients and those offering digital platforms for remote monitoring. Since you’ll be managing from a distance, strong communication systems and transparent reporting are particularly valuable. Request sample reports and client references specifically from other foreign owners to evaluate their experience with remote property management.

Exit Options

Sale Process

When selling your Bangladesh property:

1. Pre-Sale Preparation:
   • Property condition assessment and improvements
   • Documentation assembly and verification
   • Tax compliance confirmation
   • Initial valuation research
2. Marketing Strategy:
   • Agent selection (specialized in your property type)
   • Target buyer identification (local vs. foreign)
   • Property presentation and staging
   • Digital marketing approach
3. Sale Execution:
   • Price negotiation and terms agreement
   • Buyer verification and qualification
   • Contract preparation and review
   • Due diligence management
4. Transaction Completion:
   • Deed transfer and registration
   • Tax clearances and payments
   • Fund receipt arrangements
   • Property handover coordination
5. Fund Repatriation:
   • Bangladesh Bank approvals
   • Documentation of original investment
   • Tax compliance verification
   • Currency conversion strategy

The selling process for foreign owners typically takes 3-6 months from listing to completion of sale, with additional time potentially required for fund repatriation procedures.

Exit Planning Considerations

Several factors should influence your exit planning decisions:

• Market Timing: Bangladesh’s property market has historically shown cyclical patterns with periods of strong growth followed by consolidation
• Currency Exchange Planning: Significant fluctuations in the Taka can substantially impact your returns when converting back to your home currency
• Infrastructure Development: Major infrastructure completions near your property can create opportune selling windows
• Political Cycles: Stability around election periods can impact market sentiment and foreign investment flows
• Tax Planning: Holding period benefits (reduced capital gains rates after 5 years) should factor into timing decisions
• Buyer Demographics: Understanding whether local buyers or other foreign investors are likely purchasers affects marketing strategy
• Fund Repatriation Rules: Regulatory changes regarding foreign currency transfers should be monitored
• Personal Investment Goals: Alignment with your broader portfolio objectives and timelines

The most successful investors establish clear performance benchmarks and regularly evaluate their Bangladesh property investments against both local and global alternatives. This proactive approach allows for timely exit execution when market conditions or personal circumstances align optimally.

Expert Tip: Documentation of your original investment is absolutely critical for eventual fund repatriation when selling property in Bangladesh. Maintain comprehensive records of all foreign currency transfers used for the property purchase, along with Bangladesh Bank approvals, purchase contracts, and tax payments. These will be required to demonstrate the legitimate source of funds and facilitate approval for transferring sale proceeds out of the country.