Foreign Business Incorporation To Register New Company In Bangladesh.
Bangladesh is home to an increasing number of foreign companies, thanks to a liberal industrial policy that provides foreign investors with a variety of lucrative opportunities, making Bangladesh one of the fastest-growing foreign entity hubs in the world. The economy has been consistently growing at over 6% over the last decade, and it has a large local consumer base, making it an appealing destination for investment in a wide range of sectors. Bangladesh, unlike some other emerging economies, allows companies to be formed with 100 percent foreign ownership. We help to open a branch office & liaison office in Bangladesh. A foreign investor with plans to do business in Bangladesh has three options for establishing a presence:
- Locally registered company
- Branch office
- Liaison office
- Representative Office
The most flexible option for an investor is to incorporate or purchase a locally registered company. In most sectors, foreign investors are permitted to invest, own shares, and form businesses. Some industries require prior approval. Foreign investors can form a joint venture company with a local partner or another foreign investor. The corporation can be either a private or a public limited company. A locally registered company will be treated as a domestic company for tax purposes.
Establishing a branch office of a foreign company in Bangladesh allows an investor to conduct business there. A branch office functions similarly to a company, with the exception that it can only conduct business in areas that the Bangladesh Investment and Development Authority ("BIDA") has approved. A branch office is an extension of the foreign company, whereas a locally registered company is a separate legal entity. After three years.
A liaison office allows a foreign investor to have a more direct line of communication with the Bangladesh market. It is forbidden for a liaison office to engage in any commercial activity. Few Selected activities are a liaison office is allowed to do, according to the BIDA: Liaison can use correspondences, personal contracts, and other electronic media to handle liaison between principal and local agents, distributors/exporters' institutions. Establishing a liaison office.
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The Companies Act of 1994 regulates the formation of companies and their subsequent governance. The Registrar of Joint Stock Companies and Firms (RJSC) is the Act’s statutory body, and it provides detailed instructions on everything from name clearance to incorporation.
Public limited companies and private limited companies are the two types of companies that can be registered in Bangladesh, according to international practice. Private limited company setup is the most popular choice among foreign investors. The following are the steps to forming a Private Limited Company in Bangladesh:
Get your name cleared
Before a company can be incorporated in Bangladesh, the proposed name must be approved. A name clearance application must be submitted to the RJSC, along with the completed application form and the proposed name.
For the purpose of company incorporation, the following documents must be prepared and compiled:
a) Articles of Association (AOA) and Memorandum of Association (MoA) (AoA)
b) Foreign promoters’ decision to establish a business in Bangladesh
Obtaining and completing the forms listed below
- Filled in Form I: Declaration on Company Registration
- Filled in Form VI: Notice of Registered Office Situation
- Filled in Form IX: The consent of Director to Act
- Filled in Form X: List of Persons Consenting to Be Directors (minimum 2 Directors Required)
- Filled in Form XII: Particulars of the Directors, Managers, and Managing Agents
The promoters must open a temporary bank account in the proposed company’s name with any scheduled bank, with the understanding that the account will be regularized once the company has been properly registered with the company house. After the temporary account has been formed, the capital contribution must be remitted to it, and an Encashment certificate from the bank certifying that the appropriate capital contribution has been remitted and received must be obtained.
After receiving BIDA approval, a bank account must be opened with the intention of remitting at least USD 50,000. The money will be used to cover the first six months’ worth of startup and operational costs. The foreign investor must pay this amount within two months of receiving BIDA approval.Documents are submitted to the Registrar
Become a member of the RJSC. The RJSC must be notified of the branch or liaison office’s existence. The following information or documents will be required to register with the RJSC:
- BIDA’s approval letter
- Copies of all constitutional documents that have been certified
- A list of all of the Board of Directors and the Secretary
- Address of the main business location
- Address of the main business location in Bangladesh
- Every person authorized to accept any document that must be served on the foreign company’s name and address.
Finally, an application must be submitted to the RJSC, along with all of the above-mentioned documents, as well as the government fees. After reviewing all documents, the RJSC registers the business and issues a certificate of incorporation.
Following the completion of the registration process, a Private Limited Company may be required to obtain any or all of the following documents:a) Investment Registration Boardb) A trade license from the local government.c) Tax Identification Number (TIN) from National Board of Revenue ( NBR)d) NBR Vat Registration Certificatee) Bangladesh Fire Service and Civil Defense Authority Fire Certificate (for industrial ventures)f) If the company is involved in industrial projects, an Environment Clearance Certificate from the Department of Environment is required (for industrial ventures)g) Foreign national investor visas, work permits, and employee visas.
Then you must apply for a Trade License and Tax Identification number. Depending on your company’s operations, you may need to obtain additional company permits.Requirements for filing Returns Annual Report
Every calendar year, an annual general meeting is required. The AGM must take place within 18 months of the company’s incorporation, and no more than 15 months must pass between AGMs after that.
A corresponding return must be submitted to the RJSC within a specified period in the event of any change in the board of directors, the shareholding structure, or any other change.
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High Economic Growth
One of the most notable indicators of Bangladesh's rapid economic development is its surging GDP. According to IMF reports, the average GDP growth rate for emerging and developing countries is 4.9 percent. As a result, Bangladesh's GDP growth has been excellent.
Low Labour Cost
The lowest is $63 (BDT 5300), which is the average monthly wage for Bangladeshi garment workers. However, in China, it costs around $347 per month. The main reason that many companies are shifting their manufacturing to other countries is because of rising costs in developed countries like China. One of the most significant advantages of opening a business in Bangladesh.
The Ideal Location
Due to its location on the border of South and Southeast Asia, Bangladesh is close to other major markets in the region, including China. Bangladesh's capital city, Dhaka, also has much easier access to its neighboring countries. The capital is the country's commercial and financial hub.
Increased Internet Users
In 2018, more than 80 million Bangladeshis use the Internet. According to the Bangladesh Telecommunication Regulatory Commission's most recent reports (BTRC). It means that more than 49% of Bangladesh's population has access to the internet. Bangladeshis now have more Internet access as a result of this. It has created excellent opportunities for online businesses.
Company Formation Or Registration In Bangladesh
There are numerous advantages to starting a business in Bangladesh. The country is one of the most promising emerging markets in the world, as foreign investors are gradually realizing. We'll show you what advantages there are to starting a small business or foreign entity in Bangladesh.
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Companies frequently struggle with the complexities of meeting local requirements and navigating bureaucratic layers. Elements alleviates these burdens by providing a Customized Registration and Formation Service, as well as international entity services that are tailored to the organization's specific needs and overall business objectives. A dedicated Client Success Manager will walk you through the process from beginning to end, ensuring a smooth and compliant incorporation and registration of your company.
FAQs On Foreign Entity Consultation Service
Yes, Bangladesh allows 100 percent foreign ownership of a company. It is absulately legal.
Yes, foreign investors are permitted to bring in workers from other countries. For such workers, a work permit is required.
Yes. Profits and dividends from foreign investments may also be shifted in full.
Yes, local and foreign private investment is restricted in four sectors for strategic reasons, as stated in the Industrial Policy 2010.