BangladeshBusinessUltimate Guide On Foreign Company Registration In Bangladesh 2023

November 5, 2021by Tetra Consultants0
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Due to low employee wages and rental costs, Bangladesh is an attractive location for companies seeking to outsource their production processes. As one of the fastest-growing economies in the world, Bangladesh’s economy is largely driven by its export sector where goods such as ready-made garments, seafood, agricultural products and food items are exported mainly to the U.S. and European countries. Having achieved lower-middle-income status in 2015, Bangladesh is poised to graduate from the United Nation’s Least Developed Countries (LDC) list in 2026. As such, you may wish to consider a foreign company registration in Bangladesh, especially if your company is in the manufacturing business. The steps to register company in Bangladesh for foreigners are as follows:

Steps to complete foreign comapny registration in Bangladesh

Step 1: Choose an optimal business entity

Step 2: Reserve company name

Step 3: Foreign company registration in Bangladesh with the RJSC

Step 4: Apply for a trade license

Step 5: Complete tax registration

Step 6: Open corporate bank account

ultimate-guide-on-foreign-company-registration-in-bangladesh-2021

[ps2id id=’step1′ target=”/]#1 Choose an optimal business entity for foreign company registration in Bangladesh

Bangladesh Limited Liability Company (LLC)

  • A Bangladesh private limited company, also commonly referred to as an LLC, is seen as a separate legal entity from its owners and shareholders. This means that the business owns a separate legal personality and the directors and shareholders in the company will only be held liable for debts and obligations incurred by the business up to the amount of investment they hold in the company.
  • To set up a private limited company in Bangladesh, you will need at least 2 directors and 2 shareholders. There are no nationality or residence requirements for directors or shareholders in a Bangladesh private limited company. This means that the company can be wholly foreign-owned. The maximum number of shareholders allowed in a private limited company is 50. 

Bangladesh Public Limited Company (PLC)

  • Similar to a Bangladesh LLC, a Bangladesh PLC also enjoys limited liability. However, unlike an LLC, a PLC can be listed or unlisted on the Dhaka Stock Exchange or the Chittagong Stock Exchange. This will allow them to issue shares and debentures to the public to raise capital. To set up a PLC, you will need at least 3 directors and 7 members. Similarly, there are no nationality or residence requirements for directors or shareholders in a Bangladesh PLC.  There is also no cap on the number of shareholders in a PLC. If a company wishes to register as a PLC, it will have to first obtain a Certificate of Commencement of Business.

Partnership

  • A partnership is formed when two or more co-owners decide to set up a business together. The partnership and the business partners are not treated as separate legal entities. Hence, all partners will be subjected to unlimited liability, meaning that they will be held personally liable for all the debts and obligations incurred by the business. Instead of paying corporate income tax, partners in a partnership will pay personal income tax based on the share of income they derive from the partnership business. While it is not mandatory for a partnership to register with the Registrar of Joint Stock Companies and Firms (RJSC), it is strongly recommended to register your Bangladesh partnership so that you can enforce contracts and file a suit against other companies if necessary. To register a partnership, business owners will have to draft a partnership deed and register it with the RJSC.

Branch Office

  • Foreign companies incorporated outside of Bangladesh can choose to set up a branch office to conduct business activities in Bangladesh. A branch office is regarded as an extension of the parent company and is an alternative to registering a Bangladesh LLC. After attaining the approval of the  Bangladesh Investment Development Authority (BIDA), a branch office can trade with locals and engage in commercial activities within the country. Besides paying corporate income tax on its branch income, a branch office will also have to submit account statements of remittances quarterly and appoint a statutory auditor to audit its accounts.

Representative Office

  • Also known as a liaison office, this business entity is restricted under the law when it comes to the type of activities it can conduct. Primarily, they are allowed to liaise or coordinate between the principal and local agents, collect and disseminate business information. However, they will not be allowed to conduct regular business activities such as importing and exporting goods, renting an office space, buying property and more. Generally, representative offices are not permitted to conduct any business activities that generate a local source of income. All costs incurred by the representative office will be borne by its foreign parent company. Registration of a representative office can also be done through the BIDA.

[ps2id id=’step2′ target=”/]#2 Reserve company name 

  • After you have decided on the optimal business entity, the next step is to decide on your company’s name and search for the availability of your company’s name through the company search service in the Registrar of Joint Stock Companies and Firms (RJSC). This will allow you to determine the uniqueness of your company’s name so that it will not conflict with the names of any of the existing business entities in Bangladesh. After you have confirmed the availability of your company name, you will have to submit a name clearance application through the RJSC portal. Once you have received the name clearance for your company name, you will be required to register your company within 1 month.

[ps2id id=’step3′ target=”/]#3 Foreign company registration in Bangladesh with the RJSC

  • Before you proceed with business registration in Bangladesh, you will have to prepare the necessary incorporation documents such as the Form X11, copies of shareholders passports and the Memorandum and Articles of Association (MOA/AOA). After you have paid the fee for registration and submitted all the required documents to the RJSC, you will receive a Certificate of Incorporation, and the approved MOA and AOA. If you instead would like to register a branch office or a representative office, you will have to obtain the approval of the BIDA instead.

[ps2id id=’step4′ target=”/]#4 Apply for a trade license

  • It is mandatory for all businesses to procure a trade license if they wish to operate in Bangladesh. Every company must apply for a trade license from the City Corporation in the province it does business in. Depending on the type of business activity your company conducts, you can apply for a general trade license, commercial license or manufacturing license. 

[ps2id id=’step5′ target=”/]#5 Complete tax registration

  • After you have completed Bangladesh company registration and obtained a trade license, you can proceed to submit your company’s tax registration application. All companies in Bangladesh are required to apply for a tax identification number (TIN number) and Business Identification Number (BIN) from the National Board of Revenue (NBR). The TIN number will allow the company to pay corporate income tax while the BIN number will allow the business to pay value-added taxes (VAT). A business is required to pay VAT if the annual turnover is more than 30 Lakhs taka. 

[ps2id id=’step6′ target=”/]#6 Open corporate bank account

  • The last step is to open a corporate bank account with a local bank or an international bank. Typically, the documents required to open a bank account in Bangladesh include a bank form, a copy of the company’s trade license and tax identification certificate, copies of the shareholders’ passports, the company’s Certificate of Incorporation and Articles of Association.

How we can help you with foreign company registration in Bangladesh

Generally, the most common business entity in Bangladesh is a limited liability company. However, the type of business entity you choose will ultimately depend on the goals, activities and structure of your business. Tetra Consultants can recommend the type of business entity suitable for your business accordingly.

To simplify the company registration process in Bangladesh, you can opt to engage the services of Tetra Consultants. Tetra Consultants provides you with a fast and simple way to register company in Bangladesh through our service package, which includes registration of your company with the RJSC; provision of local company secretary; application of trade license; opening of corporate bank account; tax registration; and annual accounting and tax services.

Contact us to find out more about registering a company in Bangladesh. Our dedicated team of consultants will revert within 24 hours.

Tetra Consultants

Tetra Consultants is the consulting firm that works as your advisor and trusted partner in your business expansion. We tell our clients what they need to know, instead of what they want to hear. Most importantly, we are known for being a one-stop solution for our valued clients. Contact us now at enquiry@tetraconsultants.com for a non-obligatory free consultation. Our team of experts will be in touch with you within the next 24 hours.

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