Bangladesh has gradually become a popular production hub owing to various factors including its strategic location in South Asia, its skilled and cheap labour force, and more. The government further attracts foreign investors and business owners through its business-friendly policies including Intellectual Property protection policies. In this article, we will highlight the various types of companies in Bangladesh and the process to register company in Bangladesh.
6 main types of companies in Bangladesh
What are the available types of companies in Bangladesh?
- Before you begin registration in Bangladesh, you need to understand the various types of business entities available for your business. You are then required to choose one entity you wish to incorporate based on multiple factors including liability protection, management authority, government requirements, and more. You must also keep in mind your business activity, needs, and long-term business goals when deciding on a suitable business entity. Tetra Consultants will assist you in choosing the best-suited business entity for your business and explain to you the various compliance requirements you will need to meet.
Sole Proprietorship
- This is the simplest form of business that you can incorporate in Bangladesh.
- It is owned and operated by one individual who has complete control over the business. He or she will benefit from all the profits generated by the business.
- A sole proprietorship is not considered to be a separate legal entity. Thus, the owner will be personally liable to bear any debt obligations and liabilities of the business. Thus, owners have unlimited liability.
- There are almost no reporting requirements that a sole proprietor needs to perform.
- The transfer of ownership in a sole proprietorship business is difficult and therefore, this form of a business lasts in the short run and has a limited life.
Partnership
- A Partnership is a business form where two or more people come together to conduct business activities in Bangladesh.
- Such a business is to be registered with the Registrar of Joint Stock Companies and Firms (RJSC).
- The partners should prepare a partnership deed containing the details about the nature of the business, profit-sharing ratio, decision-making process, and more. However, this is not compulsory.
- A partnership business is not considered to be a separate legal entity and hence, the partners are accountable for all the debt obligations and liabilities of the business.
Limited Liability Company (Private Limited Company)
- A Limited Liability Company is one of the most popular business entities for foreigners in Bangladesh.
- This form of business is considered to be a separate legal entity and therefore, shareholders have limited liability. This means that the owners will not be personally held liable for the repayment of any debt obligations or liabilities.
- An LLC must be registered with the Registrar of Joint Stock Company and Firms (RJSC).
- Some of the compliance requirements to set up a Limited Liability Company is:
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- The firm must have 2 to 50 shareholders of any nationality.
- The firm must have at least 2 directors are required of any nationality
- There is no minimum paid-up share capital
- An annual audit report must be submitted to the relevant authorities
Public Limited Company (PLC)
- A public limited company is a form of business that can be listed on the Dhaka Stock Exchange (Securities Market of Bangladesh). Therefore, such a business can raise funds from the public.
- A PLC must be registered with the Registrar of Joint Stock Company and Firms (RJSC) and is governed under the Bangladesh government’s Securities and Exchange Commission Act 1993.
- Some of the compliance requirements for a public limited company are:
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- The business must have at least 3 directors of any nationality.
- The business must have at least 7 shareholders of any nationality.
Branch Office
- A foreign business can set up a branch office in Bangladesh in order to conduct business activities here. It is considered to be an extension of the parent company in Bangladesh.
- For such a business structure, the business must receive approval from the Bangladesh Investment Development Authority (BIDA).
- A Branch Office is not considered to be a separate legal entity from the parent company. This is why the parent company will be liable for any debt obligations and liabilities of the Branch.
- Branch Offices cannot perform manufacturing activities.
- Some of the compliance requirements for a Branch Office is:
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- Businesses must renew Branch Office licenses as per the instructions of BIDA.
- Businesses are subjected to tax on the income earned in Bangladesh
- Branch Offices are required to submit quarterly audited statements
Representative Office (Liaison Office)
- A foreign business can also set up a representative office in Bangladesh.
- The business activities are limited in this form of business structure. A representative office cannot conduct regular commercial activities in Bangladesh that generate any income.
- These businesses can only conduct marketing and other non-transactional activities in Bangladesh such as market research.
- To set up a representative office, the business must seek the approval of the Bangladesh Investment Development Authority (BIDA).
- Some of the compliance requirements for a Branch Office is:
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- This form of business is not subjected to any taxes.
How to complete business registration for different types of companies in Bangladesh
Step 1: Planning and Strategising
Step 2: Meeting all the pre-registration requirements
Step 3: Opening a corporate bank account
Step 4: Registering your business
Step 5: Applying for Business Licenses
Step 7: Staying Compliant with government regulations
- In order to complete the Bangladesh company registration process, you must follow the steps below:
[ps2id id=’step1′ target=”/]Step 1: Planning and Strategising
- You need to select a suitable business entity for your business based on your business activities, requirements, and long-term goals.
- In order to understand which business entities are available, you can refer to the previous section.
- Tetra Consultants will recommend the best-suited entity for you.
[ps2id id=’step2′ target=”/]Step 2: Meeting all the pre-registration requirements
- Tetra Consultants will apply for name clearance of your preferred business name with the Registrar of Joint Stock Companies and Firms (RJSC).
- We will also prepare all the required documents needed for incorporating the business.
[ps2id id=’step3′ target=”/]Step 3: Opening a corporate bank account
- All firms registered in Bangladesh must have a corporate bank account. Our banking team at Tetra Consultants will assist you in opening an account at a reputable bank.
- You will then need to deposit the required minimum paid-up share capital into the account.
[ps2id id=’step4′ target=”/]Step 4: Registering your business
- Depending on your chosen business entity, Tetra Consultants will proceed with the registration of your business with the Registrar of Joint Stock Companies and Firms (RJSC) or the Bangladesh Investment Development Authority (BIDA) by submitting the application form, the relevant incorporation documents, and making the required fee payment.
[ps2id id=’step5′ target=”/]Step 5: Applying for Business Licenses
- To carry out some business activities in Bangladesh, you need to obtain certain trade licenses and Tetra Consultants will assist you in obtaining the same.
[ps2id id=’step6′ target=”/]Step 6: Registering for Tax
- Tetra Consultants will assist you in registering your business for tax with the National Board of Revenue
[ps2id id=’step7′ target=”/]Step 7: Staying Compliant with government regulations
- Even after registration is completed, Tetra Consultants will ensure your compliance with the government regulations by preparing your annual financial statements, tax returns, and more.
Find out more about the different types of companies in Bangladesh
With Tetra Consultants by your side, the incorporation process of your business in Bangladesh will be straightforward. Our comprehensive service package includes assisting our clients with deciding a suitable legal entity for their business, registering the business for them with the relevant authorities, and ensuring the compliance of the business with the government regulations.
Contact us to know more about the company registration process in Bangladesh and our dedicated and experienced team will revert within the next 24 hours.
