Technology Transfer in Bangladesh (2025): A TRW Global Law Firm Playbook

Prepared by TRW — Tahmidur Rahman Remura. We help multinationals, funds, and Bangladesh corporates design, paper, and operate technology transfer (TT) deals end-to-end: patents, know-how, software, data, brands, technical services, and complex JV/turnkey arrangements.

Executive snapshot

In Bangladesh, “technology transfer” isn’t one statute or one permit. It is a stack:

• Your contracts (licensing, know-how, technical assistance, franchising, software/SaaS, JV/toll/OEM).
• IP regimes (trademarks, patents/designs/copyright, trade secrets).
• Foreign exchange (FX) rules that govern how royalties/fees can be paid through authorized banks.
• BIDA processes that endorse/approve the agreement and (when thresholds are exceeded or timing demands) allow outward remittance.
• Tax/VAT, competition, sector regulators (e.g., telecom, health), customs for tooling/equipment, sanctions/AML, and data/cyber overlays.

Do it right and your IP, know-how, and cash move cleanly; do it wrong and remittances stall, taxes/VAT crystallize as cost, or approvals lapse precisely when your product is scaling.

What counts as “technology transfer” (in practice)

• IP licensing — patent/utility models (where applicable), designs, trademarks/brand, copyright (software, content), mask works (niche).
• Know-how & trade secrets — non-public processes, formulations, manufacturing parameters, supplier lists, test methods.
• Technical services — implementation, calibration, factory acceptance tests, localization, training, secondments.
• Software & data — on-prem licences, embedded firmware, SaaS/managed services, APIs, datasets and labeling.
• Franchising & commercialization bundles — brand + SOPs + training + supply + software + QA + audits.
• JV/turnkey/OEM/toll manufacturing — technology embodied in equipment, tooling, drawings, BOMs, and production recipes.

Each route has a different regulatory and tax/FX footprint—and the wording of the agreement directly controls whether your bank can remit fees offshore.

The legal/FX backbone (Bangladesh-specific)

1. BIDA’s role — In Bangladesh, agreements for royalty, technical know-how/assistance, and franchise fees are endorsed/approved by BIDA, and remittances follow policy thresholds and documentation rules. The agreement paper itself is scrutinized (scope, fee basis/caps, evidence of service/use) and becomes the reference for banks. (bida.gov.bd)
2. Bangladesh Bank (GFET) + AD Banks — All outward payments go through Authorized Dealer (AD) banks under Guidelines for Foreign Exchange Transactions. For royalties/technical/franchise fees, banks follow BIDA’s circularised instructions; a 2024 FEID circular restated that BIDA’s 2021 guidance governs these remittances, and anything outside the listed categories or policy requires prior FEID permission. (BB)
3. Taxes/VAT (high-level) — Cross-border royalties/fees typically attract withholding tax (WHT); VAT consequences depend on place-of-supply and the nature of the service (software/SaaS vs. pure IP licence vs. on-site technical service). Your agreement wording (and actual evidence of service delivery in Bangladesh) drives this analysis.

Bottom line: your contract text + BIDA endorsement/approval + GFET purpose codes & evidence pack are what let money move.

Choosing the right TT structure (and knowing the trade-offs)

1) IP licence (patent/design/trademark/copyright)

• Use when: you’re commercialising a protected asset and want recurring royalties.
• Drafting must-haves: field-of-use, territory, exclusivity, improvements & grant-backs, sublicensing, quality control (trademarks), audit rights, termination & de-branding, remittance annex (see below).
• Regulatory: BIDA endorsement/approval of the licence; remittances through an AD bank under GFET with WHT/VAT handled. (bida.gov.bd, BB)

2) Know-how / trade-secret transfer

• Use when: the value is in non-patented process parameters or recipes.
• Drafting must-haves: precise definition of Confidential Information, disclosure schedule (what/when/how), training deliverables, measurement of “use”, no reverse engineering, improvements & exclusivity, post-termination handling (return/erasure), and audit of process controls.
• Regulatory: falls under technical know-how/assistance fee buckets → BIDA + GFET.

3) Technical assistance & services

• Use when: you need site commissioning, localization, integration, calibration, or staff training.
• Drafting must-haves: SOW with milestones and evidence (reports, logs, access records), warranty of results vs. best efforts, toolkits/parts ownership, EHS roles, and IP carve-outs (foreground vs. background).
• Regulatory: technical assistance category → BIDA endorsed/approved; remittance per GFET with supporting service-completion evidence. (BB)

4) Franchising (technology + brand + ops)

• Bundles brand, recipes/process, software, layout, supply, training, audits.
• Drafting must-haves: territory/site development schedule, QA audits, brand standards, supplier lists & substitution rules, IP policing, data sharing, digital ads/SEO rules, and franchise fees/royalties with performance triggers.
• Regulatory: BIDA endorsement/approval for franchise/royalty; remittance under GFET. (bida.gov.bd)

5) JV, OEM/ODM, toll manufacturing

• Use when: you embed technology in production with a local partner or your own branch/subsidiary.
• Drafting must-haves: BOM and recipe control, change control, yield/quality KPIs, tooling registers and insurance, ownership of foreground IP, audit rights, recall/withdrawal protocol.
• Regulatory: fees may be split into royalty, technical, management buckets → paper each stream and align to BIDA/GFET to avoid “miscellaneous” labels that stall remittances. (BB)

“The Remittance Annex”: the one page that saves months

Embed a Remittance Annex in every TT agreement. It should list, by fee type, the documents your AD bank will expect:

• Executed agreement + BIDA endorsement/approval reference (or number/date). (bida.gov.bd)
• Invoice with fee basis (net sales % / per-unit / milestone), period, calculation worksheet.
• Service evidence for technical assistance (attendance logs, reports, access screenshots, training rosters). (BB)
• Tax proofs (WHT deposit, VAT where applicable).
• Any caps or thresholds the contract/BIDA letter imposes (e.g., annual or implementation-phase ceilings).
• Bank forms + GFET purpose code.

If there’s any advance payment, specify security (bank guarantee/standby LC) and tie it to the later “earned” fee to keep within policy.

Wording pitfalls that block remittances

• Vague fee labels (“platform support”, “brand enablement”) with no mapping to royalty / technical / franchise fee categories. Use GFET/BIDA labels consistently. (BB)
• No evidence plan for services (“advisory assistance as needed”)—banks can’t validate. Add loggable deliverables (hours, tickets, builds, audits).
• Missing caps or policy references—BIDA will ask; your AD bank will follow BIDA. (bida.gov.bd)
• Revenue definition errors in royalty clauses (gross vs. net, returns, rebates, intercompany transfers).
• Trademark licences without quality control—risks invalidating rights and invites DNCRP scrutiny if products disappoint.

Tax & VAT (deal-shaping points)

• WHT on royalties/fees: budget it; verify treaty relief (if any) and who bears the gross-up.
• VAT: imported services may be VATable depending on rules about use/enjoyment in Bangladesh; specify if the fee is royalty for IP (often treated differently) vs. services (technical assistance/SaaS).
• Customs & income tax: if your TT includes tooling/equipment, plan HS classification/valuation and depreciation.
• Transfer pricing: where related parties are involved, set contemporaneous documentation and benchmarks.

Sector overlays (don’t forget these)

• Telecom/ICT: hardware type-approval, spectrum/software-defined features with encryption, and sectoral content rules.
• Health/food: DGDA and food safety rules for equipment/software intended for diagnosis/processing; clinical data claims need evidence.
• Energy/chemicals: hazardous material, EHS permits, and emergency response planning for process tech.
• Public sector: if you supply the Government, factor public procurement rules and localization clauses.

Data & cyber with cross-border tech

• Data flows: define what crosses the border (telemetry, logs, PII), who hosts it, and which party bears breach notice and forensics.
• Security: specify standards (e.g., ISO/IEC 27001, SOC 2), vulnerability windows, and patch obligations—especially if you embed software.
• Access: role-based, least-privilege, and revocation on termination; escrow for critical code where justified.

IP hygiene (Bangladesh reality)

• Trademarks: register your marks early; licensing requires quality control and clear de-branding on exit.
• Patents/designs: protect what truly differentiates you; if relying on trade secrets, invest in practical secrecy (access logs, segmented sharing, return/erasure).
• Copyright/software: licensing terms must match deployment (on-prem vs. SaaS vs. embedded) and audit/reporting.

(For TT contracts, you rarely win arguments about ownership of “improvements” after the fact. Decide now: exclusive grant-back, non-exclusive grant-back, or joint ownership with defined exploitation rights.)

A 90-day “from paper to payment” timeline

Days 1–15 — Deal framing

• Pick the fee taxonomy (royalty vs. technical vs. franchise vs. management) and make it match BIDA/GFET categories.
• Draft commercial model (net sales definition, caps, milestones).
• Map WHT/VAT and land a gross-up rule.

Days 16–30 — Contract hardening

• Lock IP scope (territory, exclusivity, field), improvements, sublicensing, QA/audits, data/cyber.
• Build the Remittance Annex and the Evidence Pack (what logs, what certificates).
• Prepare BIDA endorsement/approval submission package.

Days 31–60 — Endorsement & onboarding

• Submit to BIDA and respond to clarifications; align fee caps/thresholds from the endorsement letter into finance SOPs. (bida.gov.bd)
• Pre-clear with your AD bank: purpose codes, invoice formats, WHT/VAT proofs, and reporting schedules under GFET/Chapter 10. (BB)

Days 61–90 — First remittance

• Deliver services/usage; compile the invoice + evidence + tax bundle.
• Remit via AD bank; fix any gaps the bank flags; update SOPs for quarterly/annual cycles. (BB)

Clause bank (Bangladesh-tuned prompts)

• Fee taxonomy & caps: “Fees comprise (i) Royalty on Net Sales at X%, capped per BIDA letter, (ii) Technical Assistance Fees at rates in Annex B, and (iii) Franchise Fees as per Annex C; all as endorsed/approved by BIDA.” (bida.gov.bd)
• Remittance Annex: list BIDA reference, GFET purpose code, invoices, service logs, WHT/VAT proofs, and bank forms required by the AD bank. (BB)
• Service evidence: “Service completion is evidenced by training rosters, ticket extracts, commissioning reports, and administrator access logs.”
• Quality control (TM): “Licensee will comply with Brand Standards; Licensor may audit and require cure within 30 days; non-conformity triggers suspension.”
• Improvements: “Improvements developed by Licensee are licensed back to Licensor on a non-exclusive, royalty-free, worldwide basis for the term, with source deliverables and integration rights.”
• Change in law/FX: automatic re-opener if BIDA/GFET/tax rules change the net economics beyond X%.

Common pitfalls (and how to avoid them)

1. Paper says one thing, invoice another — If your invoice says “consulting” but your contract says “technical assistance/royalty”, banks will delay. Mirror BIDA/GFET labels end-to-end. (BB)
2. No caps/phase rules — Implementation-phase vs. steady-state caps are common; reflect them in the agreement and in your billing calendar. (bida.gov.bd)
3. Advance fees without security — If you need advances, add bank guarantees/standby LCs and ensure the contract ties advances to later “earned” fees. (BB)
4. Weak evidence — “Advice as needed” won’t pass muster. Build audit-ready logs and reports.
5. Trademark licences without QC — Risk to brand and to validity of the licence.
6. Data surprises — Unspecified cross-border data flows can stall deals with enterprise buyers; specify where data lives, who can access it, and breach duties.
7. Tax/VAT blind spots — If WHT/VAT is not priced in (or gross-up not agreed), your economics erode.

Playbooks by deal type (quick checklists)

Royalty-heavy licence (brand + software-enabled product)

• Trademark licence with QA, de-branding, and IP policing.
• Software licence/SaaS terms with usage metering/audits.
• Royalty calculation (returns/credits), quarterly statements, and BIDA-matched caps. (bida.gov.bd)
• Evidence pack: usage reports, POS logs, licence keys, content IDs.
• Tax/VAT mapping; WHT gross-up.

Know-how + commissioning

• Definition & schedule of disclosures; confidentiality and no reverse engineering.
• On-site commissioning and training SOW; EHS and access rules.
• Fees split: implementation (technical assistance) vs. run-state (royalty, if any).
• Evidence pack: commissioning certificates, training rosters, acceptance tests.

Franchise (F\&B/retail/services)

• Site development schedule; supplier lists & substitution; menu/process controls.
• Brand standards manuals; audits; social media and marketplace rules.
• Fee stack: upfront + ongoing franchise + royalty; all BIDA-endorsed. (bida.gov.bd)
• Evidence pack: sales reports, audit checklists, QA photos.

Disputes & exits

• Payment failures: set cure periods and interest; allow suspension of IP on persistent default.
• IP misuse/leakage: urgent injunctive relief, forensics cooperation, and destruction/return protocols—plus de-branding timelines.
• Audit findings: under-reporting → fee true-up + audit costs; repeat violations → termination.
• Post-termination: data handback/erasure, tooling return, staff de-training, consumer notices where relevant.

How TRW makes TT deals bankable

• Front-load design: pick fee buckets and KPIs that banks and BIDA readily recognise.
• Paper it right: IP scope, improvements, QA, data/cyber, and Remittance Annex aligned to BIDA/GFET. (BB)
• Run the remittance: we pre-clear with your AD bank, assemble the evidence pack, and train finance teams.
• Tax/VAT/TP: model gross-ups, treaty relief, and defendable benchmarks.
• Disputes: fast injunctions for IP/data, audit programmes, and negotiated exits.

If you want, we’ll turn this into a one-page Technology Transfer Readiness Map tailored to your product stack, fee model, and bank.

References (max 3)

1. BIDA — FAQ / Services: confirms BIDA’s role in approving/endorsing agreements for royalty, technical know-how/assistance, and franchise fees. (bida.gov.bd)
2. Bangladesh Bank — FEID Circular No. 02 (Nov. 20, 2024): instructs banks to follow BIDA’s 2021 instructions for royalty/technical/franchise remittances; sets permission mechanics for purposes outside policy. (BB)
3. Bangladesh Bank — GFET Vol. 1, Chapter 10 (Commercial Remittances): baseline rules for outbound services/IP payments via AD banks. (BB)

Disclaimer: This guide is general information, not legal advice. BIDA processes, FX practice, and tax/VAT rules evolve; obtain tailored counsel for your sector, fee model, and counterparties.