To simulate the plastic deformation and the progressive failure process of fiber reinforced polymer composites under 3D stress conditions, a new elastic–plastic damage model is proposed to satisfy the objectivity of 3D stress conditions. A new two-parameter 3D plasticity criterion and a simple non-associated flow potential, expressed by stress invariants of a transversely isotropic unidirectional (UD) lamina, are developed to characterize plastic deformation in an objective way. Moreover, the material degradation model and damage evolution laws are constructed on a matrix fracture angle-dependent coordinate system to ensure the objectivity of the continuum damage mechanics (CDM) approach. In addition, a new linear law alleviating mesh dependence is derived to govern the damage variable evolution in the elastic–plastic damage process. The effectiveness and objectivity of the proposed material model are demonstrated by a series of test cases.