How to pay foreign contractors in Bangladesh

October 26, 2021

Bangladesh foreign investment is common these days and the highest paying software companies in Bangladesh are CISIN, Enosis Solutions, and PIISTECH. Teams of Bangladesh software development has been significantly increased and the freelancer statistics in Bangladesh is 650,000 out of which 500,000 are actively working throughout the country. An independent contractor agreement sample in Bangladesh is developed for people working remotely from Bangladesh for a US company tax. It defines the procedures of hiring independent contractors in Bangladesh and salary to foreign employees in Bangladesh.

Payments to foreign contractors for services and payments to foreign contractors for services tax are sent through various remittance services such as Remitly, money gram, and PayPal. These remittance services charge fees for sending payments to overseas contractors. The remittance services are comparatively cheaper than bank transfers and thus, these services have eased the process of paying wages to overseas employees in Bangladesh. Working remotely from Bangladesh for a US company tax depends on the freelancer statistics in Bangladesh.

Working as an independent contractor in Bangladesh for a US company:

Overseas contractor services in Bangladesh involve web designing, search engine optimization, and freelancers of the software industry in Bangladesh. Hiring independent contractors in Bangladesh is done according to legal and tax liabilities in Bangladesh. The IRS of the US design the laws for working as an independent contractor in Bangladesh for US company and an independent contractor agreement sample in Bangladesh is developed according to it.

Language and currency of Bangladesh:

The national language of Bangladesh is Bengali which is the primary language of Bangladesh. English is usually an official language used for hiring independent contractors in Bangladesh and sending payments to foreign contractors for services tax. The currency of Bangladesh is Bangladeshi Taka which is used for paying wages to overseas employees in Bangladesh. The exchange rate of Bangladeshi Taka in USD is 85.73. 

Benefits Bangladesh will receive if foreigners invest in Bangladesh:

The average salary of a software developer in Bangladesh is 40,000 BDT. However, the average salaries in Bangladesh are expected to reach 15100.00 BDT per month. The United States has the highest investment in Bangladesh that is increased by 996.0 USD in March 2021 according to FDI. If foreigners invest in Bangladesh the software developers of Bangladesh will enjoy various benefits such as retirement benefits and full repatriation of their savings. Also, if foreigners invest their retained savings it would be called a new investment.

Remittance services available in Bangladesh:

Sonali Bank Limited is the best bank for remittance in Bangladesh. Other services such as PayPal are also available in Bangladesh through which people can open an account and send Payments to foreign contractors for services in Bangladesh. Another service called Google Pay is also available in the country for paying wages to overseas employees in Bangladesh. Opening a foreign currency account in Bangladesh is also possible for some authorized Bangladesh individuals with Authorized Dealer Branches of AB Bank Limited. People have to fill a prescribed form and submit personal documents for opening a foreign currency account. A Visa card is also available in the country.

Following are the remittance services to send payments to foreign contractors in Bangladesh:

  1. Remitly:

Remitly is a cost-effective, and safe method of sending foreign independent contractor pays in Bangladesh. It also provides transfers over $1000 without a fee. Economy transfer service deposits contractor pays within 3-5 days. However, Express transfer supports instant delivery. The fee for transfers is $2.99 and a 3% remittance fee is charged on card payments in Bangladesh. The company also provides promotional packages for new customers. A 2% cashback incentive is also provided to the recipient.

  1. RIA:

RIA is easy to use in Bangladesh, offers a $10 welcome bonus, and provides free transfers through banks. The contractor pays are delivered in almost 3 days with good customer service. The service is safe for money transfers and provides 1-month of free debit card transfers. However, credit card payments are relatively expensive. RIA has an extensive security check which takes up to one month. Therefore, RIA is not recommended for emergency transfers.

  1. Xoom:

Xoom in Bangladesh is available through banks such as Sonali bank, Janata, Agrani, and Rupali bank in Bangladesh. Xoom is a user-friendly service based in California for fast money transfers without a fee. The process of signing in and paying contractor salaries is convenient if compared to other remittance services. Xoom also provides free transfers over $1000 if banks are used as the sending medium. Furthermore, the remittance cost is very low in locked-in exchange rates.

  1. Transfast:

Transfast offers faster transactions with competitive exchange rates. The transfer fee is impressively low along with a high degree of safety and security. The deposits occur instantly to major banks of India such as Sonali, Rupali, and Janata. It also offers a transfer of over $1000 without a fee if sent through a bank account. The application is available for both Android and IOS with good customer service. Cash pickups are also available throughout the country along with promotional packages to the new customers. 

  1. Western Union:

Western Union is another method for money transfers, bill orders, and bank transfers. Price Estimator Tool of Western Union helps to calculate remittance fees. Foreign contractor salaries can be received in minutes to days through Western Union. Similar to Xoom the application helps in the simplification of money transfers. Agents are present all over the country that makes cash payments and pickups convenient.

  1. Direct deposit:

Paying independent contractors through direct deposit is another frequently used method. After choosing the bank checks are required to process Pay to the Order of drop-down arrow. After selecting the option for independent contractors transfer date is entered. The amount is entered and the Pay Online method is verified.

  1. Wise International Payment:

It is the least expensive method to send money to Bangladesh. Fast transfers in up to 2 days of contractor pays can be done through the channel along with low remittance cost i.e. 1,29 GBP+ 0.58% of the amount converted. The service provides a high level of security and accepts credit and debit cards. The tool called Wise Batch Payment helps foreign countries to pay multiple salaries in Bangladesh in one go.

  1. World Remit:

World Remit charges the lowest contractor pay transfer fee. The exchange rate is better than its competitor Xoom i.e. 1 GBP=112.73035. The company provides services of Cash pickup, bank transfer, mobile money, and airtime top-up for sending money through phones instantly in Bangladesh. An account is signed up for free and the payment options are Credit, Debit, bank account, Poli, and Google pay. For example, World Remit charges $3.99 when the independent contractor's salary is $50. World Remit provides instant payments with a transaction limit of $5,000 from the U.S via credit or debit card.

  1. Azimo:

Payments to overseas contractors are also sent through Aximo. Instant one-hour delivery is available in 80+ countries including Bangladesh in 30 minutes. The company provides the first two transfers free of cost. The company also has anti-fraud and encryption technology due to which it is trusted by more than 1 million customers. Like Xoom, the employers make an account through which they can transfer the contractor payments. The remittance cost depends upon where the amount has to be sent. The company claims to save 90% of the remittance costs when compared to other remittance services.