Employment of foreigners in Bangladesh: challenges of good governance and ways of overcoming

Although Bangladesh is known as a supplier of migrant workers, a significant number of foreign nationals also work in Bangladesh and, as a result, they send a large amount of remittance out of the country. The need for foreign workers in Bangladesh gradually increased since the development of various industries about four decades ago. Transparency International Bangladesh (TIB) published a study on the challenges of good governance in the employment of foreign workers on 5 February 2020, which reviews the legal framework for foreign employment, analyzes the reasons, types, and nature of foreign employment, and discusses irregularities and mismanagement related to the recruitment process and salary-benefits of foreigners.

Based on the findings of the study, a set of recommendations was proposed and sent in the form of a policy brief for consideration by the concerned authorities and all stakeholders. This updated policy brief, based on research data, identifies the necessary steps to tackle various challenges in the employment of foreigners in Bangladesh and aims to assist in the more effective implementation of various government initiatives.

The study found that despite the rule that no other visa except specific ones allows employment, foreigners are illegally working in various sectors in the country with the connivance of local employers using “tourist visas”, “visa on arrival”, and “business visas” without proper work permits. Most foreign nationals do not follow the proper procedures regarding arrival, stay, and employment in Bangladesh. Before the expiry of their visa, they return to their home country or a neighboring country and reapply for the same type of visa.

In hiring foreign workers, the ratio of local to foreign employees is not maintained. Usually, with the intent of evading income tax, the official documents show a lower salary for legally employed foreign workers. In such cases, one-third of the actual salary is paid legally through a bank account, while the rest is illegally paid in cash.

Due to the employment of foreign workers, local candidates are deprived of job opportunities, and there is unfair competition for specific positions. In many cases, hiring foreign workers results in a waste of valuable foreign currency from the country in the form of salary and benefits. Most foreign nationals are laundering money through illegal hundi channels in violation of the law.

The number of foreign workers legally and illegally employed in Bangladesh, the amount of illegally transferred remittance from the country, and the amount of revenue loss are alarming. There is no reliable institutional data on the actual number of foreign workers and the amount of remittance laundered illegally.

According to TIB’s estimate, in 2020, the minimum number of foreign workers employed in Bangladesh was about 250,000, the amount of minimum annual remittance sent illegally was about 3.15 billion US dollars or about 26,400 crore taka, and the amount of minimum annual revenue loss was about 1.35 billion US dollars or about 12,000 crore taka (assuming 1 USD = 85 BDT).

Click here for the full policy brief.