BANGLADESH COMPANY REGISTRATION
Bangladesh company registration has been simplified over the years as part of the local government’s effort to attract foreign businesses to set up in the region.
The easiest to set up and most preferred option available for foreign investors is registering a limited liability company in Bangladesh. Registrar of Joint Stock Companies and Firms (RJSC) is the government authority that facilitates the formation of companies and firms.
You can reach out to our team. If you are considering registering a company in Bangladesh and require further professional advice.
REQUIREMENTS FOR PRIVATE LIMITED COMPANY REGISTRATION IN BANGLADESH
As per the Companies Act 1994, a minimum of two directors is mandatory for a private limited company in Bangladesh. Directors can be either local or foreign persons. The directors must be at least 18 years of age and must not be bankrupt or convicted of malpractice. As per the companies act, at least one of the directors must own qualification shares stated in the Articles of Association.
A private limited company in Bangladesh must have at least a minimum of 2 shareholders and can have a maximum of 50 shareholders. A director and shareholder can be the same. 100% foreign shareholding is allowed in Bangladesh. Once the company has gone through the incorporation process, new shares can be issued, or existing shares can be transferred to another person anytime.
Authorized and paid-up capital
There is no minimum or maximum limit for authorized capital in Bangladesh. The authorized capital must be stated in the Memorandum of Association and the Articles of Association. Part of the authorized capital must remain unissued.
The minimum paid-up capital requirement is at least $1 for a private limited company and US$50,000 for a Bangladesh branch. The paid-up capital can be increased after the incorporation. The shareholders must deposit the indicated paid-up capital of the company into the share capital bank account before the registration.
The Bangladesh bank will issue an encashment certificate once the shareholders remit the share capital. This is an important document required by the authorities during company registration.
Registered office address
It is mandatory to provide a local registered office address during the company registration.
All Bangladesh-registered companies must apply for a trade license or business license that certifies the newly incorporated company is permitted to do business in the specified industry indicated in the trade license. You can refer to the following link for information on Bangladesh trade licenses.
TIMELINE OF FORMING A COMPANY IN BANGLADESH
Bangladesh Company Formation
Corporate Bank Account Opening
TYPES OF LEGAL ENTITIES IN BANGLADESH
Private Limited Company
A large number of companies in Bangladesh are registered as Private Limited Companies. The liability is limited to shareholders’ shared capital. Private Limited companies in Bangladesh can be fully foreign-owned. Any person above 18 years of age is eligible to register a company in Bangladesh.
As per the law, a minimum of 2 and a maximum of 50 shareholders and 2 directors are required. The minimum paid-up capital requirement for a 100% foreign-owned company is $1.
When a parent company has an extension, it is called a branch. The branch is not a separate entity. The parent company is responsible to cover all the liabilities of the branch. As per BIDA, a branch is allowed to engage in commercial activities. The average time to open a branch in Bangladesh is 45-60 days.
Like a branch, a representative office should also have a parent company abroad.
The representative office acts as a communication and coordination instrument of the business resources in Bangladesh and its activities are limited. The representative office cannot earn any local income in Bangladesh.
Public Limited Company
In a public limited company, the membership is open to all. The minimum requirement of members is seven, and there is no maximum limit for the members in a Public Limited Company.
Companies Limited by Guarantee
Companies limited by guarantee may not necessarily have share capital or shareholders. A company limited by guarantee is owned by guarantors who agree to pay a set amount of money to cover up the liabilities of the company when the company is in debt.
In unlimited companies, the liabilities of a member are unlimited.
The owner and the business entity are the same in a sole proprietorship. The owner’s liability is unlimited, and the owner is personally liable for all the liabilities. A sole proprietor is not required to register with RJSC.
DOCUMENTS REQUIRED FOR COMPANY REGISTRATION IN BANGLADESH
- Name clearance certificate from the RJSC
- Memorandum of Association and Articles of Association and other relevant corporate documents.
- A detailed narration of the business activity of the company.
- Detailed information of the shareholders.
- If the directors or shareholders are Bangladeshi, a National ID is required.
- A copy of their passports is needed if the directors and shareholders are foreigners.
- The registered office address of the Company.
PROCEDURE FOR PRIVATE LIMITED COMPANY REGISTRATION IN BANGLADESH
Obtain approval for the company name
To register your company in Bangladesh, the shareholders must apply for name clearance of the intended company name. Engaging a professional firm such as Relin Consultants is advisable to assist you with the name clearance application. The authorities will approve or reject the name application within 1 to 2 business days.
Opening a temporary bank account and remittance of the share capital
The shareholders must liaise with one of the Bangladesh banks to open a temporary bank account for share capital remittance. The banks will request the shareholder’s details such as a passport. The company must also submit a copy of the draft memorandum and articles of association and a copy of the name clearance approval certificate from the authorities.
Once the bank approves the temporary bank account, the shareholders must remit the share capital to the above bank account. Obtaining an encashment certificate from the relevant bank after remitting the paid-up capital is necessary. If there are Bangladeshi citizens among the shareholders, this rule does not apply.
Finalisation of the company registration forms, memorandum, and articles of association
Once the above steps are completed, the company must finalize the constitution. The main business goals, the approved and paid-up capital levels, and a list of the shareholders with their respective shareholdings must be stated in the company’s memorandum. The shareholders must also sign all the registration forms.
Submission of the registration application to RJSC
The company can proceed to submit all the documents to RJSC and make the relevant payment to the authorities to initiate the review and approval.
The authorities will usually review and approve the company registration application within 3 to 4 business days upon submission of all the required documents.
Apply for a trade license and register with Bangladesh tax authorities
In Bangladesh, businesses must obtain a trade license from the regional government. This procedure will usually take 2 to 3 weeks.
The company must register with the tax authority to obtain a tax identification number. This procedure will usually take 3 to 4 business days.
The company must also register with the tax authorities if it qualifies for VAT registration. This procedure will usually take 5-7 working days.
Once the company successfully receives the trade license,
Bangladesh corporate bank account opening
Once all the above steps are completed, the company can submit all the documents (certificate of incorporation, trade license, and tax identification cert) to the bank. The bank will process the account opening in 5 to 7 business days.
Alternatives To Setting Up A Private Limited Company In Bangladesh
Setting up a branch office in Bangladesh
A foreign company can set up a Branch office to engage in commercial activities after approval by the Bangladesh Investment Development Authority (BIDA).
A Branch Office is not allowed to undertake any other activity in Bangladesh that is not explicitly approved by BIDA.
After BIDA approves the opening of a branch office, the foreign parent company must remit the initial share capital of US$50,000 and at least an estimated 6 (six) months of operational expenses to the branch bank account in Bangladesh within two months from the date of BIDA approval.
Setting up a liaison office in Bangladesh
The process of setting up a liaison office in Bangladesh is similar to setting up a branch office. Both the liaison office and branch office are the same in Bangladesh.
PROS AND CONS OF INCORPORATING A COMPANY IN BANGLADESH
Bangladesh has maintained a GDP growth rate of an average of 4% to 6% in the past decade which signals strong economic growth as compared to other nearby asia pacific jurisdictions.
Bangladesh is situated on the border of South and Southeast Asia, adjacent to other important markets in the area like China. Additionally, it is significantly simpler to reach Bangladesh’s capital city of Dhaka from its surrounding nations.
The capital serves as the nation’s commercial and financial hub and is the major economic hub in Eastern South Asia. Due to its location along the Bay of Bengal coast, it provides favorable conditions for trade in the Asian and Middle Eastern markets.
Lowest labor costs
The average monthly income for workers in Bangladesh is the lowest as compared to other countries. The rising expenses in industrialised nations like China are the key factor for many businesses to relocate their manufacturing to other locations. This is regarded as one of the advantages of establishing a business in Bangladesh.
100% foreign shareholding and control is permitted. This act as the main attraction for foreign companies.
Poor local consumer market
Most people in Bangladesh cannot afford anything outside the bare basics. They are still a long way from resembling significant metropolises. As a result, it will be difficult to become extremely large unless you are selling goods or services in the international market.
Restrictions in profit repatriation
Although the government does not impose any restrictions on repatriating profits back to the parent company. Such transfers will require a lot of documentation and approval from the authorities and bank. It will take at least 1 to 2 months to secure approval and the company must pay taxes first.
Why You Should Choose Relin Consultants For Your Bangladesh Company Incorporation?
Relin Consultants have an excellent team of experts who have helped many international entrepreneurs enter and expand into the Bangladesh market.
Our team has perfect knowledge of the registration process, all the formalities, and the market conditions in Bangladesh. We have a close working relationship with all the major Bangladesh banks which will help to make the process of registration of your company in Bangladesh faster and easy.
How can I register my company in Bangladesh?
You can register your company in Bangladesh by following the six steps listed below.
Step 1: Obtain approval for the company name
Step 2: Opening a temporary bank account and remittance of the share capital
Step 3: Finalisation of the company registration forms, memorandum, and articles of association
Step 4: Submission of the registration application to RJSC
Step 5: Apply for a trade license and register with Bangladesh tax authorities
Step 6: Bangladesh corporate bank account opening
How much does it cost to register a company in Bangladesh?
The cost to register a company in Bangladesh depends on the activities of the company and the type of your company you wish to set up as the requirements vary between a private limited company and a branch.
How long does it take to register a company in Bangladesh?
Your company’s registration process in Bangladesh normally takes 6-8 weeks.
What are the minimum requirements to register a company in Bangladesh?
The minimum requirements to register a company in Bangladesh vary depending on the type of company you intend to set up.
The minimum requirement to register a private limited company is listed below –
- Minimum of two directors
- Minimum of two shareholders
- Minimum of $1 of share capital
- Registered office address
What is the number of shareholders which are required for company registration in Bangladesh?
A minimum of two shareholders is mandatory for registering a private limited company in Bangladesh.
Is 100% foreign investment and ownership allowed in Bangladesh?
Yes, 100% foreign investment and ownership are allowed in Bangladesh.
Do I require a physical office to be present for the process of company registration in Bangladesh?
No, a registered office address is sufficient to process the registration of a private limited company in Bangladesh.
What are the documents that will be available after the incorporation of a private limited company?
- RJSC will provide a certificate of incorporation of the company with the registration number, name of the company, and the date of Incorporation.
- Form XII which includes a list of the directors of your company.
- RJSC will provide certified copies of the Articles of Association and Memorandum of Association.
- Share certificates for each of the shareholders.
- Company seal for your company registered in Bangladesh.
- A rubber stamp for your company.
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