There are many reasons why Bangladesh is becoming one of the most promising new markets in the world. Some of the key factors include openness to foreign investment, competitive labor costs, and rapid economic development.
Before investing, it is important to know which legal entity is available to foreign investors. In this article, you will find a simple guide to registering companies in Bangladesh.
Overview of Legal Institutions in Bangladesh
|Type of Entity||Maximum allowed foreign ownership||Minimum paid-up capital||Minimum no. of shareholders|
|Private Limited Company||100%||$1*||2|
|Public Limited Company||100%||$1*||7|
|Branch Office||100%||No Capital*||No Shareholders|
|Representative Office||100%||No Capital*||No Shareholders|
Registration Requirements of Company in Bangladesh
Foreign ownership is allowed
Bangladesh is very open about foreign ownership, allowing 100% foreign ownership in most sectors. In some sectors, however, you need government approval and some sectors restrict both domestic and foreign investment.
Similarly, other benefits include the right to buy land and property in the name of the company, tax incentives, etc.
Minimum capital requirements
There is no government minimum capital requirement in Bangladesh. For this reason, $ 1 is considered a minimum capital contribution. However, investors should keep in mind that they need to make internal remittances of less than 50,000 wards if they intend to hire foreign workers.
There are many types of legal entities in Bangladesh
1 Private Limited Company
Many companies in Bangladesh are registered as Private Limited (LLC). The liability is limited to the shareholders’ partnership capital and the LLC can be wholly foreign owned in Bangladesh.
Anyone over the age of 18 is eligible to register for a company. Furthermore, the law stipulates a minimum of two and a maximum of 50 shareholders and two directors. Also, note that you can form a joint venture with a local entity to share energy and reduce risk.
2 Public Limited Company
In contrast, a public limited company may invite the public to hold shares and are usually registered on the stock exchange.
A public limited company does not have a minimum of seven members, three directors, and the maximum number of shareholders. Its shareholders can be any legal person or anyone over the age of 18 who qualifies by Bangladesh law.
It can raise funds from the public. It must also comply with the Securities and Exchange Commission Act-3, excluding the Companies Act.
Step-by-step process of registering companies in Bangladesh
# 1: Name exemption
First, you need the approval of your company name from the Registrar of Joint Stock Companies and Firms (RJSC).
# 2: Draft the required documents
Second, your article needs to be drafted by the Association (AOA) and the Memorandum of Association (MOA). When preparing them, you will need to draft it with other forms as a requirement of adherence to the RSJC.
# 3: Open the bank account
Third, if you are planning to hire a foreign worker, you need to open a bank account in the name of the company and make an internal remittance of at least US $ 1.50.
# 4: Submit the document to the RSJC
In this step, you will need to submit all the required paperwork to the RJSC and pay the registration fee. You can also search the RSJC for inclusion certificates during the standard process period.
# 5: Compliance with Registration Next
During this time, you have your Certificate of Inclusion, Articles of Association (AOA) and Memorandum of Association (MOA), and you have a new registered company in Bangladesh.
Here are some additional licenses and registrations you may need:
- Trade license
- Tax Identification Number (TIN)
- VAT registration certificate
- Fire Certificate
- Environmental Approval Certificate (required)
Option to set up a company in Bangladesh
A branch is an extension of its parent company and not an individually incorporated entity. In other words, the parent company is responsible for the responsibility of its branch.
After approval of the BIDA, a branch may be involved in commercial activities. However, the Exchange Control Guide strictly monitors its functions.
The average establishment period for a branch of Bangladesh is 45-60 days.
Representatives / Communications Office
Just as a branch, also called a representative office, is subject to BIDA approval as its primary requirement. It must have a parent company abroad and its operations are limited as it only serves as a means of communication or coordination of business entities.
Also, note that a communications office cannot generate any local income in Bangladesh. The parent company remits all its expenses and operating expenses through remittance.
Except the amount brought from abroad, there can be no external remittance of any kind from Bangladesh. Similarly, it also follows the general process of business registration in Bangladesh.
Franchise operation with local publicists
Foreign-owned companies can also enter into franchises in Bangladesh. With a franchise, you can allow local campaigners to use your brand, provide them with technical assistance and charge fees or commissions on their activities.
A franchise operation complies with both the purchase and license agreement.
Are you planning to register a company in Bangladesh?
Contact S & F Consulting Firm Limited by filling out the form below. Our consultants will be happy to assist you in registering the company in Bangladesh.