Understanding Bangladesh

Cultural intelligence is key to achieving sustainable business outcomes. Being able to read cultural clues and respond appropriately helps develop relationships, communicate effectively and build trust. While cultural and communication norms are changing as virtual modes of engagement increase, core cultural values remain an important factor in business. Not understanding the particularities of doing business in Bangladesh can lead to missed opportunities, delays and lost engagements.

Communication

Like other South Asian countries, Bangladeshi culture tends to favour indirect communication style. It is polite to avoid strongly worded statements. Bangladeshis may tell you what they think you wish to hear. For example ‘I can try’ or ‘that might be difficult’ can be a subtle ‘no’. It is advisable to confirm next steps in writing to ensure all parties are aligned.

A calm, serious demeanour is considered desirable, so locals may not use many facial expressions or smile, particularly in professional settings. Bangladeshis tend to be softly spoken, as being too loud is considered undignified.

A handshake is an acceptable greeting in professional settings. It is usually followed by placing the right hand over the heart as a signal of respect. Men should not shake a woman’s hand unless she offers it first. Business contacts should be addressed as ‘Sir’ or ‘Madam’ until being invited to use a first name or other title. The right hand should always be used when offering or receiving items such as business cards, documents or small gifts. 

English serves as a second language for the middle and upper classes in Bangladesh and many business people are proficient in English. A translator may be required in some situations. Bangladeshis may converse amongst themselves in Bangla, also known as ‘Bengali’, although it is not intended to be exclusionary.

While punctuality is valued in Bangladeshi culture, locals can have a flexible approach to time and may arrive late. This is not considered a sign of disrespect. Meetings are often unstructured and the conversation may be nonlinear. In an initial meeting, expect a fair amount of small talk. Often, first meetings are used to establish a relationship and decisions will be made in subsequent meetings. Foreigners should be aware that achieving the goal of a meeting is often more important than sticking to a schedule which may mean discussions extend beyond their allotted time.

Bangladesh’s social norms are influenced by both its majority-Islamic society and its strong national culture. Islam influences daily rhythms, greetings, dress, festivals and ideas around modesty. During Ramadan, working hours typically shorten and business activity slows, with major decisions often deferred until after Eid. Eid al-Fitr and Eid al-Adha holidays bring extended closures that can disrupt logistics, customs and government services, so timelines should be planned accordingly. The country’s wider Bengali culture also encourages coexistence, hospitality and shared participation across different faith communities.

Navigating culture in business - the importance of core cultural values

Relationships

Establishing strong relationships is essential to successfully operating in Bangladesh. Bangladeshis tend to be community-oriented and social connections are important for building trust. It is common to begin a professional relationship with an informal lunch or dinner before discussing business. Maintaining harmony with contacts and avoiding highpressure business tactics is crucial to building and sustaining strong network ties.

Hierarchy

Bangladeshi society is hierarchical. Age and social position determine the level of respect and deference an individual will be shown. In business meetings attendees will generally defer to the most senior person, who will also be the key decision maker. Australians can show respect through formal greetings and following social customs. For example, foreigners are encouraged to accept invitations to meals, meetings or social gatherings, as refusals can be interpreted negatively. Always use formal greetings and titles when meeting new business contacts.

The importance of partnerships

Successfully navigating the Bangladeshi business landscape often requires local talent, knowledge and expertise, making partnerships an important model for doing business.

Identifying potential partnerships requires having relationships in place that can facilitate introductions. After a potential partner has been identified, it is essential to conduct due diligence to ensure they are well-suited to a business’ goals, understands the target customers or clients and has appropriate reach and reputation across the market. Businesses should undertake reference checks and risk assessments before formalising local partnerships.

Strong local partnerships bring advantages across many aspects of commercial operations including procurement, contracting and gaining credit. Importantly, a local partner can often assist with navigating bureaucracy, including company and product-specific approval processes. Building long‑term and sustainable partnerships takes time and patience but can be highly advantageous in the Bangladeshi market which relies heavily on networks and connections.

Bangladesh offers opportunities for informed and well-prepared Australian businesses but doing business in any new market can involve a range of uncertainties. These should be identified and mitigated as much as practicable – and managed carefully once business operations are established. Australian businesses are successful across a range of countries (from low to high risk) where they undertake relevant due diligence.

Risk factors in Bangladesh

Economic – including the potential for government default (sovereign risk), fiscal, monetary and exchange rate risk.

Bangladesh faces significant macroeconomic pressures, and growth has been modest compared with historical standards. Although conditions are improving, Bangladesh’s taka (BDT) has been subject to consistent depreciation against the US dollar in recent years, resulting in a shortage of foreign reserves. The banking sector presents credit risks, due to billions of dollars in non-performing loans and poor fiscal controls. Accounting for these risks, Bangladesh’s sovereign credit risk is rated B+ by Fitch Ratings and B by S&P.

With one of the lowest tax-to-GDP ratios globally and reliance on indirect trade-related taxes such as duties and VAT, Bangladesh’s fiscal position presents challenges for businesses. The IMF assesses Bangladesh as facing a moderate risk of external and overall debt distress. These pressures may contribute to delayed government payments, tighter foreign exchange controls, constraints on profit repatriation and erosion of returns for foreign investors.

Potential mitigations for foreign exchange and fiscal risk include forward contracts, foreign currency options, utilising foreign bank accounts and loans to manage currency inflows and outflows, and maintaining sufficient working capital buffers. Businesses with government contracts or regulated revenue streams should assess counterparty payment capacity, agree clear payment terms and seek advice on currency, repatriation and sovereign-risk protections.

Political – including the potential for political instability and restrictive government policies.

Bangladesh has a history of civil unrest and political instability. The country experienced a major political transition between 2024 and 2026, following a student-led uprising in July 2024 and subsequent national elections. The new Government has a strong electoral mandate and has announced an ambitious reform agenda focused on governance, accountability and economic management. However, Bangladesh’s political institutions remain fragile, and the government’s reform program has not yet been tested.

Although challenges remain, the international outlook on the country’s future is positive. Bangladesh ranks 69th lowest out of 137 countries on the BTI Political Transformation Index, based on its low levels of political participation, institutional stability and political and social integration.

Consider performing political risk due diligence for any major investments and be mindful of political affiliations of potential partners. For significant investments, political risk insurance may provide potential mitigation.

Corruption – including the potential for bribery, embezzlement and conflicts of interest.

While the new government offers some optimism for the future, corruption remains an impediment to business in Bangladesh. Corruption is particularly a concern in public procurement, land distribution, customs and the financial sector. Anti-bribery laws exist, but enforcement is inconsistent. Although the Anti-Corruption Commission was reconstituted after the 2024 uprising, lingering nepotism and political favouritism pose a threat to continued reform. Considering these factors, Bangladesh ranks 150th out of 180 countries on Transparency International’s Corruption Perceptions Index.

Businesses should familiarise themselves with Australia’s foreign corruption and bribery legislation and ensure they have a robust anti-corruption strategy.

Regulatory – including the potential for regulations that increase the cost of doing business, reduce the attractiveness of an investment or change the competitive landscape.

Bangladesh ranks 120th out of 184 countries in the Heritage Foundation's Index of Economic Freedom. Rules are often poorly communicated, making compliance challenging for foreign investors. Although the Government of Bangladesh's reform agenda promises to streamline FDI procedures, bureaucratic delays are common. The judicial system in Bangladesh tends to move slowly and laws are unevenly enforced. Fair and timely resolutions for business disputes remain a challenge.

A trusted local partner can help you understand and navigate complex regulatory processes. Engaging professional services firms can also support compliance with local laws and regulations.

Intellectual property (IP) – including the potential for weak or underdeveloped IP protections and enforcement mechanisms.

IP protection in Bangladesh is weak. Counterfeit goods are readily available across sectors such as apparel, pharmaceuticals and software. The country is recognised as a top global source for counterfeit clothing. ‘Copy molecules’, or counterfeit pharmaceutical ingredients, regularly enter the pharmaceutical supply chain, posing significant risks for drug manufacturers. Bangladesh is gradually bringing its IP framework in line with international standards, although enforcement capacity is a limiting factor.

Businesses should understand where their activities may be vulnerable, stay aware of changes in IP enforcement practices and know their options if violations are uncovered.

Geopolitical – including the potential for trade relationships, security partnerships and territorial disputes to impact business activities.

Bangladesh’s geopolitical risk profile is shaped by its relationships with India, China, Japan, Pakistan and the United States. The government's 'Bangladesh First' policy agenda seeks to maintain mutually beneficial relationships with these key international partners. However, the United States has voiced concerns over growing Chinese influence in the country. A complex and changing geopolitical landscape may result in more challenging risk assessments for Australian businesses.

Boards and leadership teams should understand where their supply chains, customers, technology systems and logistics arrangements may be exposed to friction in Bangladesh’s relationships with India, China, Japan, Pakistan or the United States. Where relevant, companies should develop scenario plans, diversify suppliers or routes, and seek external geopolitical risk advice.

Supply chain – including the quality of infrastructure, levels of corruption, corporate governance, supply chain visibility and timeliness.

FM Global’s Resilience Index ranks Bangladesh 120th out of 130 countries. Lagging infrastructure development is a drag on efficiency in the logistics sector. Limited freight corridors can slow transportation times and drive up costs. Many businesses report delays at ports due to manual customs processes. Energy security and supply constraints pose further risks to manufacturing and distribution in the country. Businesses should also consider exposure to imported energy and other cross-border infrastructure dependencies, particularly where operations require reliable power supply. The Government of Bangladesh's commitment to improving logistics through the development of special economic zones is a positive step toward alleviating supply chain constraints.

Potential mitigations include supplier diversification, holding additional inventory and implementing new operating models and processes. Technology is also providing improved analytics, sensors and automation.

Climate – including the potential for extreme weather events and rising sea levels to impact trade routes, supply chains and infrastructure.

The Notre Dame Global Adaptation Initiative ranks Bangladesh 170th for climate vulnerability and 167th for adaptation preparedness, out of 190 countries. Weather events frequently disrupt economic activity. Inland agricultural and logistics operations are increasingly vulnerable to monsoons, tropical floods, cyclones and landslides. More frequent heatwaves also pose risks to energy reliability and public health. Rapid industrialisation and poor waste management have led to severe environmental degradation. Dhaka consistently ranks among the most polluted cities in the world.

Identifying and mitigating climate change risks should be embedded in all elements of a company’s strategy and operating model.

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