Foreign Company Registration in Bangladesh
Foreign Investors and Companies from all over the world are considering Bangladesh a feasible place to do business. With a dynamic economy, large domestic market, and progressive government policies in place, Bangladesh presents itself as an appealing target for foreign direct investment (FDI). In this article, you can gain a clear understanding of the category of foreign company registration in Bangladesh, including alternative options for registration, costs, required documents, benefits, and more.
Why Bangladesh for Business?
Bangladesh has also been one of Asia’s fastest-growing economies. The country also has been producing real G.D.P. growth of 6 percent or more every year for the last decade, according to the World Bank and the I.M.F.
Here are some of the key reasons foreigners look to Bangladesh:
Strategic Location
With India, China, and Southeast Asia to its north, Bangladesh is ideally positioned to be a gateway to more than 2.25 billion consumers.
Competitive Labor Cost
Until now, the lowest labor costs in the regime have been attributed to Bangladesh being a popular destination for labor-intensive industries.
Favorable Government Policies
Foreign investors are entitled to several incentives, including tax holidays, the right to repatriate profits, and duty-free import of raw materials and capital machinery.
Sectors Set to Thrive for Investment Opportunities.
Key industries, such as textiles and garments, IT and software, agro-processing agro-processing, energy, and infrastructure, are flourishing.
Legal Forms for Foreign Companies
Foreign companies wishing to set up a business in Bangladesh may decide to opt among various business organizations:
Liaison Office
A liaison office serves as a communication link between the parent company and local business entities, but it is unable to carry out commercial activities of its own.
Branch Office
A branch office can conduct business under the same name as its parent company. However, it’s shut out from manufacturing.
Subsidiary Company
A Private Limited Company may be established under the Companies Act of 1994 using a subsidiary or a joint venture. This structure is the most widely used and flexible of all.
How to Register a Foreign Company in Bangladesh?
Here’s a detailed look at the process:
Name Clearance from RJSC: Get Name Clearance for the Pvt Company.
The Government body responsible is known as the Registrar of Joint Stock Companies and Firms (RJSC) who is in charge of company registration in Bangladesh and maintain the record of company. The first thing you want to do is obtain name clearance.
Document Drafting and Preparation
You’ll want to have the following essentials in place:
- Memorandum of Association and Articles of Association (MoA and AoA)
- Board Resolution for the Opening of a Company by Daynighthealthcare.
- Passport copies of directors
- Evidence of registered address in Bangladesh
Open a Bank Account
Open a provisional account with the scheduled bank in Bangladesh. The capital has to be first transferred from a foreign account for investment purposes.
Documents delivered for registration with RJSC
Please attach all the necessary documents, including:
- Name clearance certificate
- MoA and AoA
- Form IX, XII, VI
- Proof of capital remittance
RJSC will review the forms and documents, and upon approval, the Certificate of Incorporation will be issued.
Obtain a Trade Licence, TIN, VAT, etc.
Upon incorporation, you must:
- Obtain a Trade License from the appropriate City Corporation.
- Get registered and TIN (from NBRjourd find a Qualified CDS Account holder Bank__(“QCHB”).
- Register for VAT if required.
Approval of BIDA (For Liaison / Branch Offices)
BIDA must approve liaison and branch offices. Required documents include:
- Application form
- MoA and AoA
- Company profile
- Board Resolution
- Certificate of Remittance for the Initial Capital.
Registering the Bangladesh Bank
All domestic investment is to be reported to the Bangladesh Bank by the AD bank.
Taxation and Compliance Foreign Corporations
Local tax laws must also be observed when foreign companies operate locally:
Corporate Tax Rates
- General corporate tax: 27.5%
- For listed companies: 20%-22%
- For EPZ/SEZ entities: 0% to 15% (varying according to sector and length)
VAT and Customs
- Standard VAT rate: 15%
- The import tax rate is based on the type of goods.
Withholding Tax
- Apply to dividends, interests, royalties, and payments to foreigners.
Annual Filings
- Annual Return to RJSC
- Income Tax Return to NBR
- VAT Return (if applicable)
Main challenges and how to overcome them
Bureaucratic Delays
Government approval can take time. A local law expert can aid in this process.
Language Barrier
Many of these documents will need to be translated into Bengali. Hire a local consultant so that it doesn’t end up the other way around.
Regulatory Compliance
Rules are changing, and it’s something we need to continue to monitor.” e) Cast with compliance left to a team or local consultant.
Advantages of Company Registration in Bangladesh
Market Access
Access to a market of more than 170 million consumers, increasing in purchasing power.
Investment Incentives
Many sectors are eager to offer tax holidays, bonded warehouse facilities, and 100 percent foreign equity.
Repatriation of Profits
Profits and capital may be repatriated, subject to the payment of taxes due.
Legal Protection
Bangladesh has become a member of the ICSID and the WTO, which ensures legal protection for investments made by foreign investors.
Pro tips for getting registered without trouble
- Hire a trusted local lawyer or consultant
- Deciding on the best business structure for you
- Document everything very well
- Open a bank account with a well-known local bank.
Stay up to date with regulatory changes through BIDA and RJSC.
FAQs About Foreign Company Registration in Bangladesh
Can a foreigner hold 100% shares in a company organized in Bangladesh?
Yes. Most sectors are open to 100% foreign equity unless otherwise specified.
How quickly can I register a company?
Usually 4-6 weeks, depending on the documents being ready and any possible clearance required.
Do foreign directors have to be physically present?
No, local nominees may also act for foreign directors.
Can the profits be repatriated to the company’s country of origin?
Yes. Profits can be repatriated in compliance with tax regulations.
Do I need a local partner to conduct business?
Not necessarily. Only specific, limited industries require a local partner.
Restrictions on Investment in the Vietnamese Sectors?
Yes. Sectors such as arms manufacturing, nuclear energy, and forest-based extraction are banned or require special permits.
How does BIDA contribute to the registration of a foreign company?
BIDA assists and endorses foreign investments, particularly those involving liaison and branch offices.
Can a liaison office be converted into a subsidiary?
Yes. You are free to wind up the liaison office and form a new private limited company.
Conclusion
Company registration in Bangladesh for foreign nationals is an excellent and exciting resource to tap into a burgeoning market. Although the registration steps, compliance requirements, and local approvals are numerous, the rewards more than compensate for the effort. Through proper direction, legal assistance, and strategic planning, foreign businesses can indeed establish and thrive in the ever-vibrant, ever-vibrant, vibrant business environment of Bangladesh.
If you plan to launch your overseas company in Bangladesh, Zivadra is here to help. Our team has the expertise to guide you every step of the way, from consultation to registration and compliance support, making it a quick and easy experience to get set up with Stormpay. Contact us today to discover what you can do!