PEO and EOR Services in Bangladesh for Staged Entry
PEO and EOR services in Bangladesh are two employment routes that PayrollBD runs as one plan: employer of record for your first hires while you have no entity, then co-employment for the same people once your company is incorporated. The staff are hired once, transferred on one written date, and never lose a month of pay or service.
What is the staged entry route?
A staged entry is the order most foreign companies actually hire in. The first people are needed before the company exists, so PayrollBD employs them as employer of record. The company is incorporated while they work. When it can run a payroll of its own, the people are transferred to it, and PayrollBD stays on as the PEO that runs the administration.
The two routes differ in one thing: who is the legal employer. Under the EOR it is PayrollBD, so the appointment letter, the payroll and the statutory duties are ours. Under the PEO it is your company, and PayrollBD runs payroll, records and compliance on your behalf. Everything else, the people, the pay, the managers and the desks, stays the same across the switch.
This page covers the plan that joins the two: what must exist before the transfer, how the transfer runs, and what is settled on the day. The EOR service and the PEO service each have their own page for what they include, and short projects or independent specialists use contractor management instead of either.
Which route fits which stage?
Four stages, and the route follows the stage rather than a preference. The question that decides it is whether your company exists and can run a payroll. Until it can, PayrollBD is the employer. Once it can, your company is the employer and PayrollBD administers. The table names the legal employer at each stage and the document that must exist before that stage can begin.
| Stage | Route | Legal employer | What must exist first |
|---|---|---|---|
| First hires, no entity yet | Employer of record | PayrollBD | A signed EOR agreement and the appointment letters |
| Entity incorporated, staff still under EOR | EOR with a transfer plan | PayrollBD until the transfer date | Incorporation certificate, TIN and a company bank account |
| Own entity running | PEO co-employment | Your company | The new appointment letters and the payroll records |
| Short projects or independent specialists | Contractor management | The contractor | A written contract for each engagement |
The employer duties on both sides of the switch come from the Bangladesh Labour Act 2006, Act No. XLII of 2006, published on the Laws of Bangladesh site and in an English text hosted by the International Labour Organization. Section 5 provides that no employer shall employ any worker without giving such worker a letter of appointment, and that every such employed worker shall be provided with an identity card with photograph. Sections 26 and 27 govern termination of employment by employers and by workers. The Bangladesh Investment Development Authority states on its own site that any form of company needs to be registered with the Registrar of Joint Stock Companies and Firms according to the Companies Act 1994, that any company in Bangladesh is mandated to obtain a Taxpayer Identification Number from the National Board of Revenue, and that companies and commercial offices must have registration issued by BIDA to appoint foreign nationals. Reviewed by Eicra Binte Islam
How does the transfer to your entity run?
Eight steps, and the first is already the EOR hiring you know from its own page. The middle four are the transfer itself, fixed to one month end so that each employer runs exactly one payroll for the month it is responsible for. The last three are the PEO routine that carries on until you take administration in house. Nothing in the sequence is skipped to save a week.
- 1Hire the first people under the EOR. PayrollBD issues the appointment letters and runs the payroll.
- 2Incorporate your Bangladesh company and obtain its own registrations while the team is already working.
- 3Fix the transfer date at a month end and agree it in writing with each employee.
- 4On that date PayrollBD ends its employment, with every statutory due settled in full.
- 5Your company issues new appointment letters from the transfer date, recording the original joining date.
- 6Payroll, leave and personnel records move to your entity, with PayrollBD running them under the PEO agreement.
- 7Provident fund, tax deduction and benefits restart under the new employer with no gap in the month.
- 8The EOR agreement closes and the PEO agreement runs until you take administration in house.
What does PayrollBD commit to across both routes?
Four commitments, each written into both agreements before the first hire. They cover the single switch date, the continuity of pay and records across it, the settlement of statutory dues on the day, and the way the two agreements are drafted as one plan. Each is a clause you can point to, not a promise made at a meeting.
One switch date, agreed in writing
The transfer from PayrollBD’s employment to your company’s happens on one date, at a month end, named in the written plan and in each employee’s letter. No one is moved early, no one is left behind, and the payroll for the month closes once under each employer.
No gap in pay or records
The last EOR payroll and the first payroll run of your company are made against the same records, so provident fund, tax deducted at source and leave balances continue from the same figures. Every personnel file moves as a complete file, not as a fresh start.
Statutory dues settled, not deferred
When the EOR employment ends, the dues the Labour Act and the appointment letter carry are settled in full on the transfer date and shown on a statement per person. Nothing is carried forward into your company as an unpaid liability.
Both agreements read together
The EOR agreement and the PEO agreement are drafted as one plan, with the same definitions, the same notice and the same ownership of records. What you sign on the first day already says how the second stage begins and ends.
What gets asked before a staged entry?
Four questions come up before nearly every staged engagement: whether a company can start under an EOR and move later, what must exist before the transfer, whether the transfer breaks anyone’s service, and how the two stages are priced. Each is answered below, and each answer names the document, the registration or the section of the Act it rests on.
Four answers, each on its basis
Each answer opens with the position and then gives its source: a section of the Bangladesh Labour Act 2006 read for this page, a registration BIDA names on its own site, or a clause in the written plan every client signs. Where a point depends on headcount, salaries or the months on each side, the answer says so instead of offering a figure.
Can we begin under an EOR and switch to our entity?
Yes, and that is the route this page describes. The first people are employed by PayrollBD as employer of record while your company is incorporated. On a transfer date fixed at a month end, PayrollBD ends its employment with every statutory due settled, and your company issues new appointment letters from that date. PayrollBD then runs payroll and records for your entity under a PEO agreement. The people keep their desks, their pay and their managers; only the name on the appointment letter changes.
What must exist before staff transfer to our entity?
Four things, all named in the transfer plan. The certificate of incorporation from the Registrar of Joint Stock Companies and Firms, obtained through the corporate secretarial file. The company’s Taxpayer Identification Number from the National Board of Revenue. A bank account in the company’s name that can run a payroll. And, where the company hires foreign nationals, BIDA registration, because BIDA states that companies must hold its registration to appoint them. Until all four exist, the people stay on the EOR side and nothing is lost by waiting.
Does the transfer break the employees' service?
Not in the written terms PayrollBD uses. The EOR employment ends under section 26 of the Labour Act with the dues that section and the appointment letter carry, and the new appointment letter from your company records the date of first joining under the EOR, so length of service is honoured in the new employment. The employee signs both documents on the same day. The point is agreed with each person in writing before the transfer date rather than explained after it.
How is a staged engagement priced?
In two written parts. The EOR part is a monthly fee per employee that covers the employment, the payroll and the statutory costs while PayrollBD is the employer. The PEO part, from the transfer date, is a lower monthly fee per employee for administration only, because your company now carries the employment. No figure sits on this page because both parts depend on the headcount, the salaries and the months on each side, and the written terms name the exact switch date and the fee that applies after it.
Send the first roles you will hire
Send the roles you need before the company exists, the date you expect incorporation, and the headcount you expect a year out. We come back with the EOR terms for the first hires, the transfer plan with its month-end date and the four documents it waits for, and the PEO terms that apply after it, so you sign one plan rather than two unrelated contracts.