What is the difference between an EOR and a PEO?
An Employer of Record (EOR) is the sole legal employer of your staff in Bangladesh and requires no local entity from you. A Professional Employer Organisation (PEO) co-employs staff with a client that already has its own registered entity in the country. If you have no Bangladesh company, only the EOR model applies.
EOR and PEO compared for a foreign company hiring in Bangladesh.
| Criterion | EOR (EORBangladesh) | PEO |
|---|
| Do you need your own Bangladesh entity? | No | Yes |
| Legal employer | EOR entity (sole) | You and the PEO (co-employment) |
| Who signs the employment contract | EOR | Your entity (PEO administers) |
| Payroll, NBR withholding, PF and gratuity | Run and carried by EOR | Run by PEO, carried by your entity |
| Employment-law liability | EOR as employer; you direct the work | Shared; primarily your entity |
| Time to start | 5–7 business days | After incorporation (8–12 weeks) |
| Typical cost model | Fixed USD 299 per employee per month | Fee per employee or 3–8% of payroll |
| Best for | No entity, 1–15 hires, speed, fixed cost | Existing entity wanting outsourced HR/payroll |
Why does the distinction matter in Bangladesh?
Employment in Bangladesh is governed by the Bangladesh Labour Act 2006 and the Labour Rules 2015, and the employer must be a person or entity in Bangladesh that can be held to those obligations. A foreign company with no local registration cannot be that employer, so it cannot enter a co-employment arrangement. The EOR structure solves this by making a Bangladesh-registered company the employer and providing the employees' services to you under a commercial agreement.
What if we already have a Bangladesh entity?
If you already employ staff through your own Bangladesh company, you do not need an EOR. EORBangladesh provides payroll outsourcing from USD 45 per employee per month and managed HR services to your entity, which delivers the administrative relief a PEO offers elsewhere while your entity remains the employer.
Which questions decide the model?
- Do you have, or will you soon have, a registered company in Bangladesh? No → EOR.
- Do you need the employer relationship in your own name for regulatory or customer reasons? Yes → incorporate, then outsource payroll and HR.
- Is headcount uncertain or below 15? Yes → EOR, with the option to transfer later.
This page is informational only and is not a substitute for licensed legal or tax advice in Bangladesh or in your own jurisdiction. Statutory figures are quoted from the Bangladesh Labour Act 2006 as amended, the Bangladesh Labour Rules 2015 and current NBR rules, and were reviewed by Farhana Rahman, LL.M on 1 September 2026.