Top Liaison Office Registration in Bangladesh – 100% Legal

For foreign companies, Bangladesh offers a near-untapped market full of opportunities in the form of potential new customers and business partners. Among the various modes for entering the market, setting up liaises is low risk and very strategic.

A liaison office facilitates necessary, non-business operations such as marketing a company’s goods, conducting business intelligence, and association.

In this guide, we provide step-by-step instructions on the registration process with relation to old documents that require requirements, regulatory submission approval steps followed by compliance post registration check through after completing an operational checklist. This guide is targeted for businesses intending to explore or expand into Bangladeshi Market

What is a Liaison Office?

A liaison office, or representative office, serves as a level of contact that a foreign company can set up in Bangladesh for limited non-commercial functions. It integrates the parent company overseas to business contacts in Bangladesh. Notably, a liaison office does not have any earning capability and shall not trade directly nor undertake business activities dealing with sales or profit.

The following key activities are authorized for a liaison office:

Facilitating exchange of information between the parent firm and local stakeholders

Performing market and feasibility studies

Fostering the export and import opportunities for the parent organization

Actively engaging in trade fairs and exhibitions

These operations enable foreign companies to understand the domestic market and build groundwork for subsequent commercial activities.

Legal Basis for Liaison Office Registration

In Bangladesh, liaison offices are registered under the Bangladesh Investment Development Authority (BIDA). BIDA is positioned within the Ministry of Commerce and provides investment services as a one-stop center.

The legal provision for registration of a liaison office is composed of:

– The Companies Act 1994 (in respect of foreign companies)

– Foreign Exchange Regulation Act, 1947

– BIDA policy on overseas investment and liaison office operations

For legal establishment and operational commencement of the office, licensing conditions set by BIDA must first be complied with.

Why Open A Liaison Office In Bangladesh?

An expanding economy and lower labor costs make Bangladesh strategically advantageous for business expansion. Establishing a foreign liaison office in the country is beneficial as it allows companies to:

Evaluate opportunities without substantial investment

Establish preliminary brand recognition prior to full operation launch

Develop early stakeholder connections
Understand customs, laws, and consumer behavior with minimal financial exposure

Additionally, policies tailored to attracting investors and streamlined procedures by BIDA have prompted offices from global telecoms, energy executives, garment industry leaders, and pharmaceutical firms to establish liaison offices.

Eligibility For Establishing A Liaison Office

In order to open a liaison office in Bangladesh, foreign companies need to be legally registered and in good standing within their home country. The company needs to possess an appropriate reputation, stable finances, and clear non-commercial objectives for operating within Bangladesh.

The government and regulatory bodies, most notably BIDA, evaluate the application on the following criteria:

Investigation of the primary entity’s legal status and its registration documents.

Intent and extent of proposed operations.

The financial integrity of the foreign company.

Adherence to national security frameworks and policies.

Liaison Office Registration Procedure in Bangladesh

Initial Planning Steps

Prior to applying for BIDA approval, foreign companies need to define their objectives and prepare all relevant documentation such as potential office locations. It is prudent to engage a local consultant or legal practitioner who specializes in BIDA compliance matters.

Submission at BIDA

This marks the beginning of the process where an application alongside supporting documents must be submitted both online and physically to BIDA. This includes:

Certificate of incorporation from the parent company

Memorandum and Articles of Association

Board decision on establishing a liaison office

Power of attorney appointing a local representative \/ agent

Proposed organizational structure in Bangladesh
Details regarding office address with lease agreement (if available)

Financial statements for two preceding years however these should be audited

Documents are attestations with Bangladeshi embassies abroad or Notary public then they are notarized properly

BIDA Review and Approval Process

After analyzing the documents, BIDA sends the application to:

Bangladesh Bank (BB)

National Security Intelligence (NSI)

Ministry of Home Affairs

Other relevant authorities as deemed necessary

BIDA issues an approval letter that describes the activities permitted, the validity period, usually three years, and other stipulations after all departments have cleared the application.

Opening a Bank Account and Fund Injection

Upon receipt of BIDA’s approval, the foreign company is required to create a local bank account in Bangladesh where they will bring in inward remittance based on operational expenditure. Usually there is a minimum remittance requirement which must be reported to Bangladesh Bank through an Authorized Dealer (AD) bank.

Tax Compliance and Other Regulatory Requirements

While not subjected to corporate income tax, a liaison office must obtain:

Taxpayer Identification Number (TIN)

Trade License from local City Corporation
VAT Registration if applicable

The liaison office will also be required to submit annual activity reports and undergo financial audits even in the absence of revenues.

List of Documents Needed for Liaison Office Registration

The approval process for a liaison office is quite detailed. Below is the list of foundational documents:

BIDA Application Form Submission

Company Incorporation Certificate (authenticated)

Memorandum and Articles of Association (authenticated)

Board meeting decision record approving the establishment of the liaison office

Proposed structure, hierarchy, and layout of the office

Summary of Proposed Business Activities

Passports and photographs of authorized representatives

Files containing signed power(s) to attorneys representing the

Audited financial statements from parent company for the last two fiscal years

Cover letter detailing rationale as well as context

BIDA may have some additional document requests based on specific circumstances.

Liaison Office Approval Renewal and Validity Period

Typically, BIDA issues permissions for three years with possibility to renew afterwards. Renewal application must be started not earlier than two to three months before expiration date and requires submission of:

Updated application form

Activity report for previous term

Financial statement audit report or reports
Proofs with corresponding remittance received, along with expenditure reports.

Please note; late submission will result in non-compliance risks or loss of granted license due to operational cessation until reconciliations are settled.

Post-Registration Responsibilities

After establishing the liaison office, continuous adherence to compliance requirements is critical for operational continuity and risk mitigation. Primary obligations entail:

Submission of annual activity reports to BIDA

Submission of audited financial statements, including tax filings

Retention of documents evidencing incoming foreign currency remittances to the bank

Licenses such as trade licenses, TINs, and others where applicable shall be renewed

Informing BIDA on changes in personnel, physical address, or organizational structure

Failure to comply may attract penalties inclusive but not limited to revocation of BIDA approval or future permissions may be barred.

Bangladesh Liaison Office Registration Expenses

In Bangladesh, a liaison office’s total registration costs include:

BIDA government charges

Costs pertaining to notarization and legalization

Consulting and legal expenditures

Office supplies translation services (where applicable)

Initial inward remittance towards operational budget

Setting up the office along with utilities related expenditures

Considering complexity and legal representation needs, foreign companies tend to spend more than the nominal USD 3,000 BIDA fee suggests – upwards $7-$15K.

Challenges and Considerations

While the setup process for a liaison office in Bangladesh is smooth with professional help, foreign companies should take note of:

Slow processing timelines (6-12 weeks or longer)

Sending remittances out of the country. Strict adherence to Bangladesh’s foreign exchange regulations.

Earning Limitations

Local language service for translation and document attestation
Legal documentation and compliance changes

Engaging a reliable local consultant or liaison registration expert greatly streamlines operational processes while optimizing regulatory compliance through reduction administrative workloads.

FAQs

What activities can liaison offices engage in within Bangladesh?

A liaison office is limited to communication, coordination, promotional endeavors, as well as marketing research activities. Trade, commercial sales and revenue generation activities are prohibited from being conducted within or outside Bangladesh.

Can a liaison office hire local staff?

Yes, a liaison office can hire local staff. However, foreign nationals employed must obtain proper work permits and visas as per the rules set by the Ministry of Home Affairs and BIDA.

What is the estimated duration for registering a liaison office in Bangladesh?

During our research, we found the estimate of 6 to 12 weeks offered by other sources, however along with other agency clearances this time may vary.

What are the repercussions if I do not renew my liaison office approval?

The sanction is that you must and can no longer operate the registered liaison office. The more severe ramifications involve penalizing you when trying to register next time. From our research, it became clear that an ideal timeframe would be applying two months prior to avoid issues.

Is tax registration applicable for a liaison office?

In compliance with government regulation, all offices need to obtain a TIN, though not generating income and filing documents does not spark any business operations.

Final remarks

Liaison offices serve as building blocks for deeper investments down the line while enabling companies to understand local ecosystems during pre-emptive groundwork. Such an approach helps foreign companies smoothly branch into a quickly growing and promising market like Bangladesh.

BIDA’s policies and legal frameworks guide the process to be smooth and successful. Further, working with registration consultants or lawyers ensures operational compliance at all times.

Should you be contemplating establishing a liaison office in Bangladesh, this is the moment to start exploring this prospect. With adequate assistance, your organization will be able to gain strategic visibility and foster partnerships along with creating enduring value in the Bangladeshi market.