Business Registration in Bangladesh
End-to-end legal support for company formation, BIDA approvals, trade licences, and corporate compliance.
Company Registration Bangladesh
Bangladesh is a very ideal place for investment. The country is located in geographically strategic position with a vast number of populations fit to work. The population of the country is about 170 million so the local market is quite big as well. At the moment the main business sectors are Ready made Garments (RMG), Leather and leather goods, Jute, Home Textile, IT, Service sector, Poultry, Agro based industry, Banking finance and insurance, Infrastructure development, Power and Energy, Tourism and hotels, Education, Health, Pharmaceuticals, Telecom, Information Technology etc. Lets highlight on the main steps of Company Formation in Bangladesh/ Business registration in Bangladesh.
Entity Types
For Private limited company/ Subsidiary
- The first step is to carry out a name clearance with Registrar of Joint Stock & Companies (RJSC)
- After the Name clearance is done a blocked bank account is required to be opened with any banks in Bangladesh where the paid up capital of proposed company needs to remit from outside Bangladesh.
- Memorandum of Article and Association is drafted and prepared. Once the paid up capital is remitted the bank issued an encashment certificate and afterwards all documents are submitted to RJSC for incorporation. Relevant Govt fees need to be paid.
- RJSC issues Incorporation certificate and MoA&A and other relevant documents.
For Liaison office/ branch office
- A board resolution from the parent company needs to be issued with declaration to open a branch office or liaison office in Bangladesh
- The Incorporation certificate, MoA&A of the parent company in English needs to Attested from relevant Bangladesh embassy/ High Commission.
- An application with all supporting documents listed above needs to be filed with Bangladesh Investment Development Authority (BIDA) and the application once approved in BIDA board, Government fees is required to be paid. After payment of Government fees , permission for Branch office or liaison office is granted.
Required Licences
Subsequent licenses for all Entities
- Trade license issued by City Corporation (Trade license fee in Bangladesh may vary yearly)
- An ETIN no issued by National Board of Revenue
- A VAT Bangladesh registration issued by National Board of Revenue
Licenses if the company intends to import and Export
- Membership of any trade organization /chamber of commerce in Bangladesh
- Import export license/ registration certificate issued by Registrar of Import and Export
- Export registration certificate issued by Registrar of Import and Export
Licenses required for manufacturing plants/company
- Factory license from Department of Factories & Establishment
- Environment certificate
- BIDA registration
- Fire safety license
Business law in Bangladesh
We at S Hossain & Associates law firm in Bangladesh provide one stop service to set up business in Bangladesh. Our lawyers in Bangladesh have practical experience in setting up business in Bangladesh without any surprises and in a business friendly manner in align with business law in Bangladesh.
**Process flow for setting up business in Bangladesh. Prepared by S Hossain & Associates Law office, Law firm, lawyer, Advocate in Bangladesh
Foreign Investment Law in Bangladesh: An Overview
Bangladesh, with its growing economy and strategic location in South Asia, has become an attractive destination for foreign direct investment (FDI) in recent years. The country's government has implemented a range of policies and laws aimed at promoting and facilitating foreign investment, offering a favorable business environment for international investors. The Foreign Investment Law in Bangladesh governs the entry, protection, and regulation of foreign investments in the country. This article provides an overview of the laws and regulations that shape foreign investment in Bangladesh.
The Foreign Private Investment (Promotion & Protection) Act, 1980
The primary law governing foreign investment in Bangladesh is the Foreign Private Investment (Promotion & Protection) Act, 1980. This act was designed to encourage and protect foreign investments by establishing a legal framework that ensures the protection of foreign investor's rights. The law covers several key areas:
Guarantees for Foreign Investors
The Act guarantees the right to remit profits, dividends, and capital, allowing foreign investors to repatriate earnings from their investment.
Protection Against Nationalization and Expropriation
The law ensures that foreign investments will not be nationalized or expropriated except in cases of public interest, with fair compensation.
Dispute Resolution
The law allows foreign investors to seek resolution of disputes through international arbitration if necessary.
The Bangladesh Investment Development Authority (BIDA)
The Bangladesh Investment Development Authority (BIDA) is the central government body responsible for facilitating and promoting both domestic and foreign investments in the country. BIDA serves as a one-stop service center for investors, streamlining procedures related to business registration, permits, and licensing. It plays a key role in attracting foreign investment by:
Investor Guidance
Providing investment information and guidance to investors.
Permits & Licenses
Assisting in obtaining necessary permits and licenses.
Investor Incentives
Offering various incentives to foreign investors, such as tax exemptions and reduced import duties on capital equipment.
Incentives for Foreign Investors
The Government of Bangladesh offers various incentives to foreign investors to make the investment environment more appealing. Some of the key incentives include:
Tax Exemptions and Reductions
Foreign investors in certain sectors, such as export-oriented industries and infrastructure development, are eligible for tax holidays ranging from 3 to 10 years. Additionally, there are exemptions on duties for machinery and raw materials used for production.
Repatriation of Earnings
Foreign investors are allowed to repatriate their earnings, including dividends, royalties, and the capital invested, without any restrictions.
Exemption from Import Duties
Foreign investors can benefit from exemptions on import duties for capital machinery and raw materials used for the production of goods for export.
Special Economic Zones (SEZs)
The government has established Special Economic Zones to attract foreign investment. These zones offer attractive incentives, including tax breaks, infrastructure support, and simplified business registration processes.
Investment Sectors and Restrictions
Bangladesh encourages foreign investment in a wide range of sectors. However, some areas restricted or require government approval for foreign investment. Foreign investment is particularly encouraged in the following sectors:
Manufacturing
Bangladesh offers strong incentives for investment in the manufacturing sector, especially in textiles, garments, and leather goods.
Telecommunications and IT
The government has been keen to develop the country's ICT sector, offering various incentives to investors in the field of telecommunications and information technology.
Infrastructure and Energy
Investment in infrastructure projects, including energy production, transportation, and port development, is highly encouraged.
Some sectors, such as defense, and industries that may affect national security, may be restricted or require special government approval before foreign investments can be made.
Foreign Exchange and Repatriation of Capital
The Foreign Exchange Regulation Act, 1947 governs foreign exchange transactions in Bangladesh, and it lays down rules for the repatriation of capital, dividends, and earnings. Foreign investors can repatriate their profits and dividends in foreign currency with the approval of the Bangladesh Bank, the country's central bank. However, the repatriation process is generally straightforward and does not involve any significant restrictions.
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