Bangladesh
Kurdistan
This page has to start with the honest position rather than the attractive one.
The Kurdistan Region will permit a Bangladeshi founder to own 100% of a company, register it in two to four weeks and tax it at 15%. Bangladesh Bank will generally not permit the money to leave Bangladesh to fund it.
That asymmetry is the whole subject. Everything else on this page follows from it.
Key facts for Bangladeshi founders
| Question | Answer |
|---|---|
| Can a Bangladeshi resident own 100% of a Kurdistan company? | Yes, as a matter of Kurdish law |
| Can they legally fund it from Bangladesh? | Usually not, without specific permission |
| Governing rule at home | Foreign Exchange Regulation Act 1947, administered by Bangladesh Bank |
| Who has been approved | A small number of large exporting companies with international experience |
| Bangladesh-Iraq double tax treaty | None |
| Kurdish corporate tax | 15%, including oil and gas |
| Registration time in the Region | 2 to 4 weeks |
The Region is not the constraint here. Dhaka is. A Bangladeshi founder who plans the Kurdish side first will have a company they cannot capitalise.
The Bangladeshi analysis: outward investment is restricted by default
Bangladesh does not operate a permissive outbound regime with exceptions. It operates a restrictive one with narrow permissions.
| Element | Position |
|---|---|
| Outward direct investment | Generally restricted by Bangladesh Bank |
| Legal basis | Foreign Exchange Regulation Act 1947 |
| Default rule | Any outward remittance requires general or special permission |
| General permissions | Granted by circular for specified categories of transaction |
| Outside those categories | Specific approval must be obtained, case by case |
| Who has been permitted | Export-related enterprises, and only a few large exporters have been approved |
| Policy direction | Guidelines to allow outbound investment have been under consideration since 2016 |
- 1Are you an export-related enterprise with international experience?This is the category through which outbound investment has actually been approved, and few applicants have succeeded
- 2Does your remittance fall within an existing general permission?Bangladesh Bank grants general permissions by circular for specified categories. Capitalising a foreign company is not normally one
- 3If not, will you seek specific approval?It must be obtained case by case, and the outcome is not predictable
- 4Is there capital already lawfully outside Bangladesh?A non-resident Bangladeshi, or funds already held abroad, is a different question from a resident remitting out
- 5Only then, the Kurdish sideRegistration takes two to four weeks and full foreign ownership is available
The 2025 easing, and what it does not cover
Restrictions were eased so that subsidiaries may make outward remittances through authorised dealers where the parent or group company holds more than 50% of the shares and the services received are not available locally.
That is a service payment relief, not an investment one. It helps a Bangladeshi subsidiary pay its foreign group for services. It does not help a Bangladeshi resident capitalise a new Kurdish company.
Who this actually works for
Rather than list the ways it does not work, it is more useful to be precise about who is not blocked.
- Non-resident Bangladeshis. Residency, not nationality, drives the exchange control question. Funds already held abroad are outside the remittance regime.
- Established exporters with international operating experience, who fall in the category through which approvals have been granted.
- Bangladeshi-owned businesses already outside Bangladesh, funding the Kurdish entity from that existing offshore base.
- Employment and service arrangements, where a Bangladeshi individual works for or contracts with a Kurdish entity rather than owning it.
- Anyone whose capital is already outside the country lawfully.
For a resident individual with funds in Bangladesh and no export business, this is a wall rather than a hurdle, and it is better to know that before paying for anything.
The Kurdish side, in short
| Element | Position |
|---|---|
| Ownership | Up to 100%, the only route to that in Iraq |
| Registration | 2 to 4 weeks in practice |
| Minimum capital | IQD 1,000,000, fully paid, roughly USD 850 |
| Published government total | IQD 4,425,000 for a local company, including that capital |
| Mandatory appointments | A lawyer and an accountant, both reported to require Iraqi nationality |
| Corporate tax | 15%, with no 35% oil and gas rate in the Region |
| Territorial limit | A Kurdish entity is reported not to trade in federal Iraq |
The capital figure is worth noting for a different reason here. IQD 1,000,000 is roughly USD 850, which is a small amount by any standard. The obstacle is not the size of the remittance, it is the permission to make one at all.
Detail in company registration in Kurdistan.
The labour corridor is the real relationship
Bangladeshi workers are part of the South Asian workforce in the Region, alongside Pakistani, Indian, Nepali and Filipino communities.
- General labour wages run at USD 15 to 25 per day, with monthly earnings reported between USD 500 and 1,200.
- The KRG introduced a framework regulating foreign worker employment on 8 March 2024.
- Iraq has signalled tighter security screening for visitors from Bangladesh, India and Pakistan.
- Remittances flow toward Bangladesh, which is exactly why the regime restricts flows in the other direction.
No treaty either
Bangladesh has no double tax treaty with Iraq, which places it with eight of the ten origins in this cluster. Only Pakistan has one.
| What a treaty would give | What applies instead |
|---|---|
| Allocation of taxing rights between the two states | Both may assess, and you manage the overlap |
| A capped withholding rate on a non-resident | The Region's own Instruction No. 7 of 2022, at 15% on deemed profit |
| A mutual agreement procedure for disputes | None. Nothing to escalate to |
| A treaty definition of taxable presence | No permanent establishment concept exists in Iraqi law at all |
The Kurdish side is set out in Kurdistan withholding tax, which also explains why there is no presence threshold to plan around.
- 1947Foreign Exchange Regulation Act, still the governing instrument for outward remittance
- Since 2016Government considering guidelines to allow outbound investment by local companies
- OngoingApprovals granted mainly to a small number of large exporters with international experience
- 2025Easing for subsidiaries remitting for services unavailable locally, where the group holds over 50 percent
Common mistakes from Bangladesh
- Registering the Kurdish company first. The permission question comes before the entity, not after.
- Treating the 2025 easing as an investment permission. It covers intra-group service payments, not capitalisation.
- Assuming a small amount is exempt. The regime turns on permission, not on size, and USD 850 needs one just as much.
- Confusing nationality with residency. A non-resident Bangladeshi is in a different position entirely.
- Planning a Kurdish entity to serve all of Iraq. It is reported not to trade in the federal territory.
- Overlooking the annual Kurdish costs. A mandatory local lawyer and accountant, renewed each year.
The bottom line, and how CorpSec helps
For most Bangladeshi residents this is not a structuring problem with a clever answer. It is a permission problem, and the permission is rarely granted.
There are three situations where it does work: you are a non-resident Bangladeshi, you already hold capital lawfully outside the country, or you are an established exporter in the narrow category through which approvals have been given. If you are in one of those, the Kurdish side is straightforward and quick.
CorpSec can register and run the Kurdish entity. We cannot obtain a Bangladesh Bank permission, and we would rather say so at the start than after you have paid for a company you cannot fund. Establish the Dhaka position first, then come back.
Frequently asked questions
Can a Bangladeshi resident own a company in the Kurdistan Region?
As a matter of Kurdish law, yes, and up to 100%. The obstacle is Bangladeshi exchange control, which generally restricts outward direct investment.
Can I send money from Bangladesh to fund it?
Usually not without permission. Under the Foreign Exchange Regulation Act 1947 any outward remittance requires general or special permission from Bangladesh Bank, and capitalising a foreign company does not normally fall within a general permission.
Who has been allowed to invest abroad from Bangladesh?
Export-related enterprises, and in practice only a few large exporting companies with international experience have been approved.
Does the amount matter?
No. The Kurdish minimum capital is IQD 1,000,000, roughly USD 850, and the regime turns on whether a remittance is permitted rather than on how large it is.
What changed in 2025?
Subsidiaries were allowed to make outward remittances through authorised dealers where the parent or group holds more than 50% of the shares and the services received are not available locally. That is a service payment relief, not an investment permission.
Does it help if I am a non-resident Bangladeshi?
Yes, substantially. Exchange control turns on residency rather than nationality, and funds already held lawfully outside Bangladesh are outside the remittance regime.
Is there a tax treaty between Bangladesh and Iraq?
No. Relief depends on Bangladesh's unilateral foreign tax credit rules, and there is no treaty rate or mutual agreement procedure available.
Can I work for a Kurdish company instead of owning one?
Yes, and that is the more common relationship. The KRG introduced a framework regulating the employment of foreign workers on 8 March 2024, and a work permit runs for one year at a time.
How long does Kurdish registration take?
Two to four weeks in practice, against six to twelve weeks or longer in federal Iraq where every foreign shareholder needs Ministry of Interior clearance.
What should I do first?
Establish in writing whether Bangladesh Bank will permit the remittance, before registering anything. A Kurdish company with no lawful route to its capital deposit cannot complete registration, because the capital must be fully paid before it does.
Sources
- US Department of State, Bangladesh Investment Climate Statement 2025: outward direct investment generally restricted by Bangladesh Bank
- Bangladesh Bank Foreign Exchange Guidelines: outward remittance requires general or special permission under the Foreign Exchange Regulation Act 1947
- US Department of State, Iraq Investment Climate Statement 2025: the January 2022 IKR Companies Law amendment
- KRG eRegulations portal: registration procedures, documents and published fees
Bangladesh's outward investment position follows the Foreign Exchange Regulation Act of 1947 as administered by Bangladesh Bank, and the practical position is described by the US State Department's investment climate reporting rather than by a single prohibiting provision; the position has been under review since 2016 and eased for certain intra-group service remittances in 2025, so it should be confirmed with an authorised dealer before any plan depends on it. Bangladesh has no double tax treaty with Iraq. Kurdish registration figures come from the KRG eRegulations portal. This page states plainly where a Bangladeshi founder is likely to be blocked, because a page that omitted that would be worse than no page. This is not legal or tax advice.