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Contract Under Bangladeshi Law

Contract Under Bangladeshi Law

The 6 Essential Elements of a Contract Under Bangladeshi Law

As in many other jurisdictions, a Contract Under Bangladeshi Law is considered legally enforceable when it incorporates six essential elements: Offer, Acceptance, Awareness (also known as Consensus Ad Idem or a meeting of the minds), Consideration, Capacity, and Legality. It is crucial that all six elements are present; a contract lacking any one of these elements can be deemed invalid and unenforceable.

This article provides a detailed explanation of each element and its importance in the context of Bangladeshi law. Please note that this information is for general purposes only and does not constitute legal advice.

What is a Contract?

In its simplest form, a contract is an agreement intended to be enforceable by law. The process of getting all necessary parties to sign a finalized agreement is called contract execution.

Contract Under Bangladeshi Law By Trw Law Firm Best Law Firm In Dhaka
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The Elements of a Contract

To ensure that your agreement is enforceable under Bangladeshi law, it must include the following six elements:

  1. Offer

    An offer is a clear statement of terms by which the offeror (the party making the offer) is willing to be bound. Without an offer, there can be no acceptance and thus no contract. The offer must be communicated to the offeree (the party to whom the offer is made) and must express the terms on which the offeror is willing to be legally bound.The offer marks the start of the contract process. Upon receiving an offer, the offeree can accept, negotiate, clarify, ignore, or reject the offer. It is important to understand the other party’s contract processes, as different offerors may handle counteroffers differently—some may see them as automatic terminations of the original offer, while others may not.
  2. Acceptance

    Acceptance occurs when the offeree agrees to the specific terms and conditions proposed by the offeror. For acceptance to be valid, it must be unequivocal and correspond precisely with the terms of the offer.Acceptance can be explicit, where the offeree provides a clear affirmative statement, often by signing the contract. Alternatively, acceptance can be implicit, where the offeree’s actions indicate agreement. While implicit acceptance may not have the same legal status as explicit acceptance, it can still create an implied contract enforceable under certain circumstances.
  3. Awareness (Consensus Ad Idem)

    Awareness, or consensus ad idem, refers to a meeting of the minds where both parties fully understand and agree to the contract terms. Both parties must acknowledge the existence of the contract and agree to be bound by its terms of their own free will.If awareness cannot be established, the contract may be voided and unenforceable. This element helps protect against undue influence, deception, or fraud, ensuring that both parties willingly and knowingly enter into the agreement.
  4. Consideration

    Consideration is what each party promises to give or do as part of the contract. It represents the value exchanged between the parties and can include goods, services, money, or other things of value. For example, in a contract to buy a car, the buyer’s consideration is the money paid, and the seller’s consideration is the car.Under Bangladeshi law, consideration is a critical component for the validity of a contract. According to Section 2(d) of the Contract Act 1872, consideration is defined as follows:”When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something, such act or abstinence or promise is called a consideration for the promise.”This legal definition underscores that consideration can be past, present, or future and must involve some detriment to the promisee or a benefit to the promisor.The principle of consideration ensures that there is a mutual exchange of value, which is fundamental to the concept of a binding agreement. Without consideration, a contract typically cannot be enforced, as it would lack this essential element of reciprocity.
  5. Capacity

    Capacity refers to the legal ability of the parties to enter into a contract. All parties must have the mental and legal capacity to understand the contract terms and the consequences of their agreement.Individuals who may lack capacity include minors, individuals under the influence of drugs or alcohol, and those who do not understand the language of the contract. Ensuring capacity is crucial as it confirms that each party fully understands what they are agreeing to.
  6. Legality

    The contract’s purpose and terms must comply with Bangladeshi law. Contracts involving illegal activities or goods are not enforceable. Additionally, contracts must adhere to public policy and cannot contravene any statutory provisions.

Why TRW Law Firm is the Best for Contract Agreements

TRW Law Firm stands out as a premier choice for handling contract agreements in Bangladesh for several compelling reasons:

  1. Expertise and Experience: TRW Law Firm boasts a team of highly experienced lawyers who specialize in contract law. Their deep understanding of the legal intricacies involved in contract formation, execution, and enforcement ensures that your agreements are robust and compliant with all relevant laws.
  2. Comprehensive Legal Services: The firm provides a full range of services related to contracts, including drafting, reviewing, negotiating, and litigating contract disputes. This comprehensive approach ensures that all aspects of your contractual needs are addressed efficiently and effectively.
  3. Tailored Legal Solutions: TRW Law Firm understands that every client and every contract is unique. They offer personalized legal solutions that are tailored to meet the specific needs and objectives of their clients, ensuring that the contracts are not only legally sound but also aligned with the clients’ business goals.
  4. Strong Track Record: The firm has a proven track record of successfully handling complex contract matters for a diverse clientele, including multinational corporations, small businesses, and individuals. Their success stories and client testimonials speak volumes about their capability and reliability.
  5. Commitment to Client Satisfaction: TRW Law Firm prioritizes client satisfaction by maintaining transparent communication, providing timely updates, and offering strategic advice. Their client-centric approach ensures that clients are well-informed and confident in their legal decisions.
  6. Legal Compliance and Risk Mitigation: The firm’s lawyers are adept at identifying potential legal risks and ensuring that all contracts comply with Bangladeshi laws and regulations. This proactive approach helps in mitigating risks and avoiding future legal complications.
  7. Efficient and Effective Resolution of Disputes: In the event of a contract dispute, TRW Law Firm’s skilled litigators and negotiators work diligently to resolve issues efficiently, whether through litigation, arbitration, or mediation. Their expertise in dispute resolution ensures that clients’ interests are protected and upheld.

By choosing TRW Law Firm, clients can be confident that their contract agreements are in capable hands, backed by legal professionals who are dedicated to achieving the best possible outcomes.


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Setting up a new factory in Bangladesh

Setting up a new factory in Bangladesh

Setting up a new factory in Bangladesh in 2024

Are you considering expanding your manufacturing operations to Bangladesh? With its growing economy, strategic location, and favorable investment climate, Bangladesh has become an attractive destination for setting up new factories. However, navigating the legal and regulatory requirements can be complex and daunting. That’s where TRW Law Firm comes in. With our expertise and experience, we can guide you through the entire process, ensuring smooth and hassle-free establishment of your factory. In this article, we’ll deep dive into the various legal and regulatory aspects of setting up a new factory in Bangladesh, and explain why TRW Law Firm is the best choice for your legal needs.

In order to meet the structural/building safety standards every factory in all the targeted sectors need the building permit from RAJUK/city corporation/development authorities according to the factory location.

• The business or factory owners have to submit a number of documents such as Drawing AutoCAD (DWG), City Survey Porcha, Copy of Allotment Letter, Copy of Duplicate Carbon Receipt (DCR), Environment clearance, Key Point Installation Defense Committee (KPIDC) clearance copy, and an exhaustive list of other relevant documents.

In order to get fire safety license and fire safety plan, entrepreneurs need to submit the filled-in prescribed form with the necessary documents such as trade license, land deed, approved building design, and NOC (no objection certificate) safety plan, among others.

• To fulfil environmental safety compliances, factories need to collect the Environmental Clearance Certificate from the Department of Environment (DoE).

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Requirements for building permit from RAJUK

Mandatory DocumentsOther DocumentsClearanceCertificate
  Indemnity Bond  Drawing AutoCAD(DWG)  Action taken according to Gadget  City Survey Porcha  Copy of Allotment Letter  Copy of Duplicate CarbonReceipt (DCR)  Copy of Power of Attorney  Dhaka Transport Co-ordination Authority  FAR Calculation Document  Instrument documents  Letter of Gov. allottedLand/Plot  Mutation copy  NID copy  Civil Aviation clearance copy Clearance  Certificate NOC from different authorities  Clearance from the Department of Housing and Public Works  Environment clearance  Key Point Installation Defence Committee(KPIDC) clearance copy  Special Security Force(SSF) clearance copy  Titas ClearanceCertificate  City Corporation Certificate  DC Traffic Certificate  Developer’s RAJUKEnlistment Certificate  Electricity Certificate  Enlistment Certificateof Civil Engineer  Fire Service Certificate  Land Use ClearanceCertificate  Special ProjectPermission Certificate  WASA Certificate

Requirements for building permit from RAJUK (Cont.)

Drawing and MapDEED (Whichever required)Tax and SignatureOthers
  Ammonia Sheet (JPG)  Auto Cad (DWG)  Old Drawing (for 3RC)  Draft survey map  Gazette wise map and deeds description  Mouza map  Plot joining map  Heba Deed  Lease Deed  Ownership Deed  Purchase deed  Land tax copy  Holding tax receipt  Engineer signature copy  Architect Signature Copy  If any other queries related to construction permit  Plot joining paper  Revisional Settlement(RS) Porcha  Soil test Report (ifany)  Undertaken papers  Owner’s photo

Building Permits: City Corporations

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• City corporations also have the authority to issue building permits for factories. In this report only Dhaka City Corporation (DCC) and Narayonganj City Corporation (NCC) are covered as these are the most factory dense industrial areas

Required Documents for construction permit from Dhaka City Corporation (DCC)

License nameRequired document
Construction permit from DCCFilled up No objection Certificate (NOC) for multistoried building application (For the areas under Dhaka North City CorporationTk 250 has to be submitted as the application fee through challanIf the land owner is not applying by himself and nominating someoneon his behalf then the attested copy power of attorneyLand ownership documentAttested copy of holding taxThe drawing and design of the buildingAs per the format of the agreement mentioned in the form on a non-judicial stamp equivalent to tk 300

Relevant Required Licenses for setting up a factory in Bangladesh

  1. Name Clearance Certificate: This certificate is obtained from the Registrar of Joint Stock Companies and Firms (RJSC). It verifies that the proposed name for your factory is unique and not already registered by another entity. The process involves submitting an application to RJSC, along with the desired name for your factory. If the name is available, RJSC will issue the clearance certificate.
  2. Export Registration Certificate (Permit): This certificate, issued by the relevant authority, allows your factory to engage in export activities. The process typically involves submitting an application to the Export Promotion Bureau (EPB) along with necessary documents such as company registration, tax identification number, and business plan.
  3. Import Registration Certificate (IRC): Similar to the export registration certificate, the IRC is required for importing goods into Bangladesh. The process involves applying to the Chief Controller of Imports and Exports with relevant documents such as company registration, trade license, and tax identification number.
  4. Value Added Tax (VAT) Registration Certificate: Obtained from the National Board of Revenue (NBR), this certificate is necessary for collecting and remitting VAT on sales of goods and services. The process involves submitting an application to the VAT Commissionerate along with required documents such as company registration, trade license, and bank solvency certificate.
  5. Trade License (for Manufacturing): Issued by the local municipal authority, a trade license authorizes your factory to carry out manufacturing activities within a specific jurisdiction. The process involves applying to the respective local authority with necessary documents such as company registration, building construction approval, and environmental clearance.
  6. Tax Identification Number (TIN): This unique identification number is assigned by the tax authority (NBR) to track tax-related activities of businesses. The process involves submitting an application to the respective tax circle office along with relevant documents such as company registration, memorandum of association, and bank solvency certificate.
  7. Export Promotion Bureau (EPB) Enrollment Certificate: This certificate is obtained from the EPB and is necessary for availing export promotion schemes or incentives. The process involves applying to the EPB with necessary documents such as company registration, export-import license, and business plan.
  8. Bank Solvency Certificate: Issued by a bank, this certificate confirms your factory’s financial solvency and ability to meet financial obligations. The process involves submitting an application to your bank along with necessary financial documents such as balance sheet, income statement, and bank statements.
  9. Article of Memorandum: This document outlines the objectives, structure, and rules governing your factory’s operations. It is prepared and filed during the company registration process with RJSC.
  10. Certificate of Incorporation: Issued by RJSC, this document certifies that your factory has been legally incorporated and recognized as a separate legal entity. The process involves submitting an application for company registration along with necessary documents such as memorandum and articles of association, board resolution, and director’s details.
  11. BOND License & General BOND: If your factory will operate in a bonded warehouse or engage in bonded manufacturing, obtaining a BOND license is essential. The process involves applying to the relevant authority (e.g., Customs Authority) with necessary documents such as company registration, factory layout plan, and security arrangements.
  12. PDB Testimonial: This testimonial confirms that your factory meets the necessary requirements for electricity connection. The process involves applying to the Power Development Board (PDB) with necessary documents such as factory location details, load requirements, and electrical layout plan.
  13. BIDA Registration (Local and Foreign Investment Projects): The Bangladesh Investment Development Authority (BIDA) registration is required for both local and foreign investment projects. The process involves submitting an application to BIDA along with necessary documents such as project proposal, feasibility study, and environmental impact assessment.
  14. Ad-hoc IRC/BIDA Recommendation/BIDA Suparishnama: These documents may be required for specific types of investment projects and approvals from BIDA. The process involves applying to BIDA with necessary project details and supporting documents.
  15. Bonded Warehouse License: If your factory will operate a bonded warehouse, obtaining a bonded warehouse license is necessary. The process involves applying to the Customs Authority with necessary documents such as factory layout plan, security arrangements, and bond agreements.
  16. Police Clearance Certificate: This certificate verifies that the directors and key personnel of your factory have no criminal record. The process involves applying to the local police department with necessary personal details and identification documents.
  17. Construction Certificate: If your factory will involve construction activities, a construction certificate may be required to ensure compliance with building regulations. The process involves obtaining approval from the relevant municipal authority after submitting building plans and other necessary documents.
  18. Registration Certificate of Patent, Trade Marks, and Copyright: If your factory will produce patented products or use trademarked logos, obtaining registration certificates is necessary to protect intellectual property rights. The process involves applying to the Department of Patents, Designs, and Trademarks with necessary documents such as product designs, logos, and copyright statements.
  19. Work Permit for Foreign Nationals: If your factory will employ foreign nationals, obtaining work permits is essential to ensure legal employment status. The process involves applying to the Department of Immigration and Passports with necessary employment details and visa documents.

Overall, the process of obtaining these certificates and registrations involves thorough documentation, compliance with regulatory requirements, and coordination with relevant authorities. With TRW Law Firm by your side, you can navigate these complexities with ease and ensure timely establishment of your factory in Bangladesh.

Audits/standards in the export-oriented RMG sector

  • After the Rana Plaza incident, a new public and private audit administration was introduced as the third phase of the factory inspection system in Bangladesh
    • As part of this, the Accord and Alliance on Fire and Building Protectionprogramme was formed
    • The national safety standards are the minimum, and the audits go beyondthat
  • In the RMG sector, RMG Sustainability Council (RSC), Amfori, Okotex, ISO 100 are the most familiar names that conduct audits.
  • The BGMEA has partnered with the BKMEA to develop a unified code of conduct for the RMG industry as multiple audits usually create confusions
  • This unified audit will be carried out a thorough assessment of the feasibility of a common code of conduct for social audits

• These include national laws, rules, policies, international conventions such as the United Nations Guiding Principles (UNGPs), and buyers code of conduct and third-party audit protocols

RSC is a private national tripartite initiative to continue the significant accomplishments in workplace safety further in Bangladesh.

• It conducts structural, electrical, fire and life safety and boiler safety inspections, along with operating an independent occupational safety and health complaints mechanism available to workers in covered RMG factories

• Under the Technical Remediation Guidance of RSC, they have Electrical Single Line Diagram Guidance, Fire Rating Requirement of Steel Construction, Fire Safety Testing and Commissioning Verification Inspection Guidance, Glossary Of Terms, Information Sheet on Third-party Certificates for Fire Safety Systems

  • RSC Fire Safety Manual for RMG Buildings
  • RSC Guidance on Product Certification and Certification Marks
  • RSC requirements: Extension of Factory Buildings
  • RSC Boiler Safety Programme: Summary of findings of External VisualInspection, Technical Guidance on Verifying Passive Fire Protection Measures (Intumescent Paint or Cementitious Coating) on Steel Building and many more

Audits/standards in the export-oriented RMG sector

Required documents for Audits

Audit NameRequirements
Amfori  Performance area 1: Social Management System and Cascade Effect  Performance area 2: Workers Involvement and Protection  Performance area 3: The rights of Freedom of Association andCollective Bargaining  Performance area 4: No Discrimination  Performance area 5: Fair Remuneration  Performance area 6: Decent Working Hours  Performance area 7: Occupational Health and Safety  Performance area 8: No Child Labour  Performance area 9: Special protection for young workers  Performance area 10: No Precarious Employment  Performance area 11: No Bonded Labour  Performance area 12: Protection of the Environment  Performance area 13: Ethical Business Behaviour

Audits/standards in the export-oriented RMG sector

Audit NameOriginal Certificate/ License/ PermissionBuilding Approval and LayoutTest ReportPolicy and Procedures
TUV Rheinland Bangladesh Pvt. Ltd. Document Checklist (BSCI Audit)  Incorporation Certificate  Factory License  Trade License  Fire License  EPZ Permission (Only for EPZ Area)  Boiler License  Generator Waiver/ License  Environment ClearanceCertificate  Acid Using License (Only forTextileand Washing Plant)  Group Insurance Certificate/Updated Evidence of Biometric System/ Group Insurance Premium Copy  Bond License, Export Promotion Bureau (EPB) Certificate, TIN Certificate  Export and Import Registration Certificate (ERC/IRC)  BGMEA/ BKMEA/ LFMEAB Membership Certificate  Fire Insurance Copy (If any)  Building Approval Plan  Floor/ Machine Layout Approval  Accord/Alliance Report or anyother assessment report related to building  Drinking Water, WasteWater, Stack Air Emission, Air Quality, Noise Level, Temperature and Humidity Level, etc.  Environmenta l ImpactAssessment (EIA), Energy Survey/ Assessment (Water Consumption, Gas and Electricity Consumption etc.)  Child Labour and Child Labour Remediation  Young Labour  Recruitment  Prohibition of ForcedLabour  Harassment or Abuse,Compensation andBenefits  Leave  Maternity Benefit  Working Hour  Working Hour Approval  Prohibition ofDiscrimination  Disciplinary ActionProcedure  Health and Safety  Emergency PreparednessProcedures  Freedom of Associationand Collective Bargaining  Environment, WastageManagement Procedure  Anti-Corruption or Anti-Bribery Policy

Audits/standards in the export-oriented RMG sector

Audit NameDocuments – PA1 to PA4Documents—PA5 to PA6Documents – PA7 and Others
TUV Rheinland Bangladesh Pvt. Ltd. Document Checklist (BSCI Audit)  Company Organogram and Job Responsibilitiesaccording to Organogram, Authorization Letter of BSCI MR  Supply Chain Mapping, Stake Holder Mapping  Contract Agreement with Service Provider (Security, Cleaning, Food, Transport, etc.)  Sub-Contractor/ Sub supplier Policy andProcedure and MonitoringRecord  Capacity Planning,Contingency Plan  Company’s Mission and Vision, Long Term Goal  Trade Union/ PC/ WWA/ WWC Formation Record, Meeting Minutes  Grievance Procedure, Grievance Record, Survey Record on Grievance Procedure  Attendance Summary, Wage Sheet, Time Card, Pay Slip  Fair Remuneration or Living Wage Template  Resign or Terminate Workers List and Files  Maternity Register and Files  Annual Leave Encashment Record  Festival Bonus Record  Increment Record  Provident Fund Record(If any)  Production Record andPiece Rate Calculationfor Piece Rate Workers  Leave Register  Risk Assessment and Internal Audit Report, Workers Health Checkup Record  Safety Committee Record and Meeting Minutes  Training Record: First Aid, PPE, H&S, ChemicalSafety, Fire Fighting (Internal and External), FireDrill (Internal and External)  Firefighting Equipment List, Fire Team Allocation,First Aider List, Machine List, Chemical List, ToiletList  Accident Register and Investigation Records,Hospital Agreement  Maintenance Schedule and Record: Fire FightingEquipment, Electrical Equipment and Machineries, Compressor, Boiler and Generator Maintenance, House Keeping Record, Wastage Agreement and Disposal Record, PPE Issue Register  Others Training: Orientation, BSCI CoC, Mid-Level Management, Local Law, Grievance Procedure, Disciplinary Action Procedure, Risk Assessment Awareness, Injury Analysis Awareness, Environmental Awareness, Anti-Corruption or Anti-Bribery Mapping and Training  Personal File: Fire Safety Officer, Welfare Officer, Doctor, Nurse, Boiler Operator, Generator Operator, Electricians, Security Guard, W3o9rkers

Authorities Responsible for Licensing for Fire Safety

Fire safety in Bangladesh is definitely the most questionable element of industrial safety as majority of the industrial accidents are actually fire incidents

  • From June 2021 to March 2022 157 industrial accidents happened involving fire
  • Factories from all the sectors need to collect fire license and fire safety plan from Fire Service and Civil Defense (FSCD).Required Documents for Fire license from Fire Service and Civil Defense (FSCD)
Permit nameRequirements
Fire License with FSCD1. Assessment form
2. Filled-in prescribed application form/online application
3. Land deed
4. Certification to the effect that there is no case
5. Trade license
6. No Objection Certificate (NOC) safety plan (7 floors and above) 7. Building design by an engineering firm
8. Memorandum of Association in case of limited companies
9. Deed of agreements10. Cover letter from BEPZA (in case of EPZ factories)

Source: Authors’ compilation from the FSCD website and other sources

The factories that are multi-storied buildings (above six stories) need to collect this permit from FSCD

Required Documents for Fire safety plan from FSCD

Permit nameRequirements
Fire Safety Plan for multistoried building with FSCD1. Assessment form
2. Filled-in prescribed application form/online application form
3. Land Deed
4. Certification to the effect that there is no case
5. Trade license
6. No Objection Certificate (NOC) safety plan (7 floors and above)
7. Building design by an engineering firm
8. Memorandum of Association in case of limited companies
9. Deed of agreements
10. Covering letter from BEPZA (in case of EPZ factories)
11. Submission of the engineering drawing or design (the design has to be made and finalised by an engineering consulting firm
12. Filled in prescribed application form

Source: Authors’ compilation from the FSCD website and other sources

Authorities Responsible for Factory & Establishment License

• If anyone starts to set up a factory he/she needs to submit the documents to Department of Inspection for Factories & Establishments (DIFE) for the license

Required Documents for Factory license from DIFE

Required forms and challanRequired documents with form no. 76Required documents with form no. 77
  For approving the factory lay-out planfilled form no.76  Full filled form no.77  License fee throughtreasury challan  Trade license copy  Rent agreements/ copy of landrejection  Copy of NID ofowner/MD/CEO/director  Soil test report  Structural design/drawing prepared by a renowned engineer or engineering consulting firm  Load bearing capacity certificate provided by a renowned engineer or engineering consulting firm  Building construction certificate provided by a renowned engineer or engineering consulting firm  Building design certificate approved by local authority (city corporation  Trade license copy  Rent agreements/ copy of landrejection  Copy of NID ofowner/MD/CEO/director  Electricity demand note  Memorandum of article  Copy of approved factory layoutplan  Local authority (CityCorporation) approved building design copy of the factory and letter of approval and layout plan  Main copy of treasury challan  List of employees/workers of thefactory  Fire license copy
Setting Up A New Factory In Bangladesh
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Required Documents for Drug License from DGDA

License nameRequirement
Drug License from Drug Administration’s General Directorate (DGDA)  Filled in Form 7 from Drug Administration’s General Directorate (DGDA)  Bank statement of license fee payment  Treasury challan with filled in form no. 7  Receiving the store deposit or photocopying the rentagreement.  The ownership deed

Source: Authors’ compilation from DGDA website

Authorities Responsible for Standard certificate for food processing

Additional to all the previously mentioned licenses, certificate and registrations he/she will also have to collect Bangladesh Standards and Testing Institution (BSTI) registration is only applicable to the processed foods that are under the products list brought under Mandatory Certification Marks Wing

Required Documents for Bangladesh Standards and Testing Institution (BSTI) Certificate

Safety compliancesRequirements
Standard certificate from BSTIFilled in BSTI Certificate Mark (CM)Trade LicensePermit from BOI/BSCICTrademark Registration/Copy of ApplicationLabel/Marking/Logo

Source: Authors’ compilation from the BSTI website

Relevant links to the government website:


→ Registrar of the Joint Stock of Companies also known as RJSC
→ Name clearance certificate
→ Export registration certificate (Permit)
→ Import registration certificate (I.R.C)
→ Value Added Tax (VAT) registration certificate
→ Trade license (for manufacturing)
→ Tax identification number (TIN)
→ Export Promotion Bureau (EPB) enrolment certificate
→ Bank Solvency Certificate
→ Article of Memorandum
→ Certificate of incorporation
→ BOND license & General BOND
→ PDB Testimonial
→ BIDA registration (Local and Foreign Investment Projects)
→ Ad-hoc IRC/BIDA Recommendation/BIDA Suparishnama
→ Bonded warehouse license
→ Police clearance certificate
→ Construction certificate
→ Registration certificate of patent
→ Trade marks registration
→ Copyright registration
→ Work permit for foreign nationals

Comprehensive guide on Foreign Company Registration in Bangladesh

Comprehensive guide on Foreign Company Registration in Bangladesh

Foreign Company Registration in Bangladesh

Bangladesh has emerged as a top alternative for international investors seeking to establish a foreign company due to its booming economy and large local clientele base. The implementation of several policies aimed at attracting foreign investment, such as tax breaks, simplified processes, and a slew of other changes, has transformed Bangladesh into a business-friendly environment.

Furthermore, Bangladesh allows firms with 100% foreign value to be established (BIDA). This is why international company registrations in Bangladesh have increased dramatically in recent years. This blog digs deeply into the process of registering a foreign company in Bangladesh, as well as the legal aspects of doing so. 

A Comprehensive Guide for Foreign Company Registration in Bangladesh

The current state of investment policies makes Bangladesh an appealing place to do business. One of the most important things you can do to build your business here is to register your company. Now, the registration process is a little complicated. But do not worry! This article provides a step-by-step instruction for international company registration in Bangladesh. 

With Bangladesh’s fast increasing economy, now is the ideal time to expand your business in Bangladesh. Foreign corporations can explore establishing a variety of entities in Bangladesh, including:

  • Liaison/Representative Office
  • Branch Office
  • Subsidiary/Private Limited Company
  • The Liaison Office

A liaison office primarily acts as a representation for the parent corporation. They serve as a liaison between the parent firm and its partners in Bangladesh. Their operations are often small. They coordinate, collect, and evaluate business data pertaining to their field. They primarily stimulate trade and involvement, both technically and financially. 

Factors to Consider for establishing a Liaison Office in Bangladesh:

Age of the Parent firm: The parent firm must be at least two years old and properly registered outside of Bangladesh.
Minimal Investment Requirement: The parent firm must pay at least $50,000, or six months of operations costs, including the first office setup cost. 
No Income Generating Operation: The parent firm is responsible for all operational costs. The liaison office shall not have a source of income in Bangladesh.
Name and Approval of the Liaison Office: The name must be identical to the parent firm and approved by BIDA (Bangladesh Investment Development Authority).
Taxation in Bangladesh: The Liaison office in Bangladesh is subject to all types of taxes, with the exception of profit taxes, as the office does not generate any money. 
Prerequisite Documents for Setting Up the Liaison Office:

For BIDA permission:

  • Foreign Company Incorporation Certificate
  • Memorandum and Articles of Association.
  • Audited Financial Statements of the Parent Company (Previous Two Years).
  • Board Resolution for establishing the Liaison Office in Bangladesh
  • Perfect Details of Directors
  • Complete information about the shareholders of the applicant company
  • A declaration explaining the nature of the parent company’s activity.
  • A declaration explaining the nature of the planned Liaison Office’s activities.
  • Total Employee List for the Proposed Liaison Office
  • Authorization Letter to the Consultant, who will process the application on behalf of the applicant.
  • The prerequisite documents listed in points 1–4 must be translated into English and confirmed by the Bangladesh High Commission of the respective country. 

For Bank Account Opening:

  • Foreign Company Incorporation Certificate
  • Memorandum and Articles of Association.
  • Audited Financial Statements of the Parent Company (Previous Year)
  • Board Resolution for Opening a Bank Account
  • Share Tree Analysis for the Foreign Parent Company
  • Complete information about the shareholders of the applicant company
  • BIDA approval letter
  • Tax Registration Certificate for the Bangladesh Liaison Office
  • Passport Copy and Photograph of Bank Signatories 
  • Passport copy and photograph of the parent company’s directors and shareholders.
Foreign Company Registration In Bangladesh
Comprehensive Guide On Foreign Company Registration In Bangladesh 12


Step-by-Step Liaison Office Setup

Step 1: Obtain BIDA permission.

The following procedure must be followed to obtain BIDA permission:

Creating an Account with the BIDA Web Portal: After paying the government charge for account creation, you must generate a user ID. 
Fill out the BIDA Applicant- Online, submit your liaison office’s application to BIDA.
Approval of Application by EC- The BIDA’s executive committee meets twice a month. After checking the documentation and the executive committee’s decision, BIDA will approve the application. The average time it takes to gain permission is one month.
BIDA Permission Letter- BIDA issues an e-letter granting BIDA permission, which is the primary legal document required to be recognized as an approved liaison office. BIDA licenses are good for three years. To renew, reapply two months before the current term expires. 

Step 2: Tax ID Number

Bangladesh’s Income Tax Department issues an exclusive 12-digit number known as TIN (Tax Identification Number). Once the E-TIN is obtained, the liaison office can open a bank account.

Step 3: Open a bank account.

Opening a bank account with any bank in Bangladesh is required.

Step 4: Initial Investment.

An initial investment of $50,000 must be made within two months following the BIDA approval. In the event of noncompliance with the mentioned two-month period, an additional 5% of the total remittance must be brought to Bangladesh as punishment. 

Step 5: VAT Registration.

Following the initial investment, a 13-digit online VAT registration/BIN (Business Identification Number) will be issued. 

After completing all of the stages, the liaison office will be able to begin its daily operations.

Branch Office by a Foreign Company in Bangladesh

A branch office is an extension of the parent firm that can be established in Bangladesh by a foreign corporation. However, without BIDA approval, a branch office cannot operate. The branch office can conduct business in the same manner as its international parent firm. It can export and import commodities, provide consultancy, strengthen technical and financial alliances, act as a representative of the parent company, provide IT services and software development, and conduct research in all areas where the parent firm operates. However, they are not permitted to participate in manufacturing processes.  

Factors to Consider for a Branch Office Setup in Bangladesh:

Age of the Parent firm: The parent firm must be at least two years old and properly registered outside of Bangladesh.
Minimal Investment Requirement: The parent firm must pay at least $50,000, or six months of operations costs, including the first office setup cost. 
Operation Expenses: A Branch Office must pay all of its expenditures using remittances from the head office or revenue received from BIDA-approved operations in Bangladesh. 
Name and Approval of the Branch Office: The name must be comparable to the parent firm and approved by BIDA (Bangladesh Investment Development Authority).
Taxation in Bangladesh: As a revenue generator, the Branch Office is subject to all ordinary taxes.
Prerequisite Documents to Establish the Branch Office:

BIDA (Bangladesh Investment Development Authority) Permission:

  • Foreign Company Incorporation Certificate
  • Memorandum and Articles of Association.
  • Audited Financial Statements of the Parent Company (Previous Two Years).
  • Board Resolution for establishing the Branch Office in Bangladesh.
  • Perfect Details of Directors
  • Complete information about the shareholders of the applicant company
  • A declaration explaining the nature of the parent company’s activity.
  • A declaration explaining the scope of the proposed Branch Office’s activities
  • Total Employee List for the Proposed Branch Office
  • Authorization Letter to the Consultant, who will process the application on behalf of the applicant.
  • The prerequisite documents listed in points 1–4 must be translated into English and confirmed by the Bangladesh High Commission of the respective country. 

Step-by-Step Process for Branch Office Setup

Step 1: Obtain BIDA permission.

The following procedure must be followed to obtain BIDA permission:

  • Creating an Account with the BIDA Web Portal: After paying the government charge for account creation, you must generate a user ID. 
  • Fill out the application to BIDA online.
  • Approval of Application by EC- The BIDA’s executive committee meets twice a month. After checking the documentation and the executive committee’s decision, BIDA will approve the application. The average time to obtain approval is one month.
  • BIDA Permission Letter- BIDA issues an e-letter granting BIDA permission, which is the primary legal document required to be recognized as an approved liaison office. 


Step 2: RJSC Certificate.

You need to register the Branch Office with the RJSC (Register of Joint Stock Company).

Step 3: Trade Licence.

To perform Branch Office commercial activities in Bangladesh, you must first apply to the local government for a trade license. Obtaining a trade license requires a business office address and a leasing agreement. 

Step 4: Tax ID Number

Bangladesh’s Income Tax Department issues an exclusive 12-digit number known as TIN (Tax Identification Number). Once the E-TIN is obtained, the branch office can open a bank account.

Step 5: Open a Bank Account

Opening a bank account with any bank in Bangladesh is required.

Step 6: Initial Investment.

An initial investment of $50,000 must be made within two months following the BIDA approval. In the event of noncompliance with the mentioned two-month period, an additional 5% of the total remittance must be brought to Bangladesh as punishment. 

Step 7: VAT Registration

Following the initial investment, a 13-digit online VAT registration/BIN (Business Identification Number) will be issued. 

After completing all of the stages, the branch office will be ready to begin everyday operations.

Subsidiary Company

A subsidiary company is a private limited corporation whose most shareholders are corporate entities. It can conduct its relevant business operations and declare earnings in Bangladesh. A foreign corporation can own it entirely. 

Statutory Requirements for Subsidiary Companies:

  • The lowest number of directors is two, while the highest is fifty.
  • The minimum number of stockholders is two, while the maximum number is fifty.
  • Each shareholder contributes the smallest amount of share capital, BDT 1.
  • Shareholders might be natural or artificial persons (corporate).
  • Foreign shareholders and directors may own 100% of the company.
  • All directors and members of the company must be at least 18 years old and of sound mind.
  • The subsidiary office must have a registered address in Bangladesh. 
  • Additionally, annual audited account submission, filing of annual returns, and filing of tax returns are required as part of the annual compliance conditions.

The liabilities of a subsidiary company are:

  • An Annual General Meeting
  • An appointed statutory auditor.
  • Submit all financial accounts and board meeting reports.
  • Income tax returns are filed every fiscal year.


Prerequisite Documents to Establish the Branch Office:

To create a non-operational bank account in Bangladesh:

  • Name clearance certificate from RJSC.
  • Draft Memorandum of Agreement and Articles of Association for the new corporation in Bangladesh.
  • Board Resolution/Promoters’ Meeting Minutes
  • NID/Passport copies for all shareholders (natural people)
  • 3 copies of pictures of all shareholders and directors in the proposed firm
  • Signed and completed Bank Account Application Form


Additional documentation required for corporate shareholders include:

  • Share tree analysis for a corporate shareholder.
  • Passports and photos of all nominee directors.
  • Passports and photographs of all shareholders in the parent company/corporate shareholder.
  • Corporate shareholders must provide their incorporation certificate, memorandum, and AOA audit report from the preceding fiscal year.


For company registration:

  • Copy of the proposed company’s Memorandum of Agreement and Articles of Association
  • Signed Form-VI (Declaration of Registered Address)
  • signed Form-IX (permission of the directors).
  • Signed Subscriber Page


Step-by-Step Process for Establishing a Subsidiary Company

Step 1: Company Name Approval.

Select an appropriate available name.
Apply using the web portal of RJSC.
Deposit the government fees with the bank.
Get the name clearance certificate from RJSC.


Step 2: Creating Requirement Documentation

Memorandum of Association (MoA)
Articles of Association (AOA)
Form-VI (Notice of Situation with Registered Address)
Form IX (permission of the directors to act)
Board Resolution/Promoters’ Meeting Minutes


Step 3: Open a non-operational bank account.

Before applying for company registration with RJSC, a non-operating bank account with any scheduled commercial in Bangladesh must be opened to receive inward remittances, in accordance with the Bangladesh Foreign Exchange Regulations. After receiving the remittance, the recipient bank will provide an Encashment Certificate that includes the purpose of the payment. RJSC will check the Encashment Certificate with the issuing bank before confirming the company registration.  

Step 4: Inward Equity Remittance in Bangladesh.

According to the Bangladesh Foreign Exchange Regulations, the procedure of inward equity remittance must be completed before submitting the company registration application to RJSC. The technique goes as follows:

  • The shareholders must deposit the original paid-up capital in the non-operating bank account.
  • Remittances must be sent using SWIFT.
  • In Bangladesh, receiving the payment could take 48-72 hours.
  • The bank will provide an Encashment Certificate upon receiving the equity remittance.
  • The remittance must be designated as “Equity Investment” on SWIFT. 
  • Step-5: Online Filing to the RJSC Web Portal 

Upload the documents listed below to the RJSC web page.

  • MOA and AOA
  • Signed Form VI and Form IX. 
  • Signed Subscriber Page
  • Encashment Certificate. 
  • Finally, the registration process will be completed. 

Step 6: Company Registration Documents.

RJSC will send the following documents as evidence of approval of company registration if the online application is approved by the RJSC register:

  • Incorporation Certificate
  • Certified copy of MOA and AOA
  • Certified Copy of Form XII (Particulars of Directors) 


Step 7: Other Licenses and Registration

Following the company formation, additional registrations and business permits are required. They are as follows.

  • Trade License
  • Tax registration (E-TIN
  • Vat registration (BIN
  • Membership of the Chamber of Commerce (for import and export enterprises)
  • Import Registration Certificate (For Import Businesses)
  • Export Registration Certificate (For Export Businesses)
  • Depending on your sector of employment, you may additionally require additional permits and registrations from the appropriate government agencies. 

After completing all of the stages, your subsidiary firm will be ready to start operations. 

If you require a dependable hand to guide you through this complex process, Tahmidur Rahman & Co. is more than willing to assist. We assist foreign companies in setting up their operations in Bangladesh, as well as offering conventional accounting and compliance services. 

Bangladesh’s constantly increasing economy and valuable geographic location make it an ideal commercial hub. This is why numerous foreign companies are interested in establishing themselves here. However, the legal complexity associated with starting a business may intimidate you. Don’t worry! This blog offers a comprehensive guide on foreign company registration in Bangladesh. Foreign enterprises considering establishing a presence in Bangladesh have three options: liaison office, branch office, and subsidiary company. It provides step-by-step instructions for establishing the liaison office, branch office, and subsidiary firm. If you are still bewildered and hesitant about the process, contact Tahmidur Rahman & Company. We will ensure that your overseas company registration goes smoothly!

To get a free consultation, you can contact us at +88 01713 143 224 (WhatsApp & Direct) or info@tahmidurrahman.com.

Frequently Asked Questions (FAQ)

Is it feasible to register a foreign corporation in Bangladesh?

Any foreign company can conduct business in Bangladesh by following the legal standards outlined in the blog. 

What is the minimum investment required for international enterprises to register Liaison Offices in Bangladesh?

The parent firm must invest $50,000, which equates to six months of operations costs, including the initial office setup cost. 

Can a branch office established by a foreign corporation operate without BIDA approval?

A foreign company’s branch office cannot operate legally without the consent of BIDA (Bangladesh Investment Development Authority). 

How to get BGMEA Membership in Bangladesh

How to get BGMEA Membership in Bangladesh

BGMEA Membership in Bangladesh

The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) stands as a cornerstone of the country’s textile and garment industry, representing the interests of manufacturers and exporters. Membership in BGMEA is highly sought after by businesses looking to establish themselves in the textile sector, offering a plethora of benefits and opportunities. In this comprehensive guide, TRW Law Firm delves into the requirements and process for obtaining provisional and permanent membership with BGMEA, providing invaluable insights for textile entrepreneurs in Bangladesh.

Provisional Membership Requirements:

To initiate the process of obtaining provisional membership with BGMEA, businesses must submit a series of documents and fulfill specific criteria. The following documents are required for provisional membership:

  1. Application on company letterhead addressed to the Secretary General, BGMEA.
  2. Duly filled Prescribed Membership Form of BGMEA.
  3. Registration of DOT (Department of Textile) or BOI (Board of Investment).
  4. Specimen Signature of Board of Directors/Managing Partners/Proprietor with two copies of photographs, attested by a Lien Bank.
  5. Copy of Memorandum & Articles of Association & Incorporation Certificate.
  6. Copy of National ID/Passport for Board of Directors/Managing Partners/Proprietor.
  7. Copy of up-to-date Trade License.
  8. Copy of L/C of Machinery/Commercial Invoice, Bill of Lading & Bill of Entry.
  9. List of Machineries on Company letterhead.
  10. Copy of Fire License.
  11. Copy of TIN Certificate.
  12. Copy of Deed Agreement with Land Owner/land ownership documents.
  13. Copy of Soil Test Report & details of issuing company.
  14. Copy of Approved Building Plan (Architectural Design).
  15. Copy of Structural Design signed by an IEB registered Engineer.
  16. Completion certificate provided by an IEB registered Engineer.
  17. Factory Layout Plan.
  18. Membership fee payable to BGMEA as per declaration.

Permanent Membership Requirements:

Businesses seeking permanent membership with BGMEA must meet additional requirements and submit specific documents. The following documents are required for permanent membership:

  1. Application on company letterhead addressed to the Secretary General, BGMEA.
  2. Copy of VAT registration Certificate.
  3. Copy of ERC (Export Registration Certificate).
  4. Copy of IRC (Import Registration Certificate).
  5. Worker Group Insurance Certificate (Provided by BGMEA).
  6. Workers Biometric database certificate (Provided by BGMEA).

Application Process:

Once all requisite documents are gathered, businesses can proceed with the application process for BGMEA membership. Applications should be submitted to the Secretary General, BGMEA, along with the necessary fees and supporting documentation. Upon receipt, BGMEA conducts a thorough review of the application, including verification of documents and compliance with membership criteria.

Membership in BGMEA opens doors to a host of benefits and opportunities for businesses operating in Bangladesh’s textile and garment industry. By understanding the requirements and process outlined by BGMEA for provisional and permanent membership, textile entrepreneurs can navigate the application process with confidence and position themselves for success in this dynamic sector. With TRW Law Firm’s expert legal guidance and support, businesses can streamline the membership process and embark on their journey towards industry excellence and growth.

How To Get Bgmea Membership In Bangladesh
How To Get Bgmea Membership In Bangladesh 14
→ Application on company letter head to Secretary General, BGMEA for Provisional Membership
→ Duly filled up Prescribed Membership Form of BGMEA
→ Registration of DOT (Department of Textile) / BOI (Board of Investment)
→ Specimen Signature of Board of Directors /Managing Partners/ Proprietor with 2 Copy Photographs of each attested by Lien Bank
→ Copy of Memorandum & Articles of Association & Incorporation Certificate
→ Copy of National ID / Passport (Board of Directors / Managing Partners/ Proprietor
→ Copy of up to date Trade License
→ Copy of L/C of Machinery/ Commercial Invoice, Bill of Lading & Bill of entry
→ List of Machineries (On Company letter head)
→ Copy of Fire License
→ Copy of TIN Certificate
→ Copy of Deed Agreement with Land Owner/land ownership documents
→ Copy of Soil Test Report & details of issuing company
→ Copy of Approved Building Plan. (Architectural Design)
→ Copy of Structural Design signed by IEB registered Engineer
→ Completion certificate provided by IEB registered Engineer
→ Factory Lay-Out Plan
→ Membership fee pay to BGMEA as per declaration:

a) Machine: 52 – 100=Tk. 40,500/-
b) Machine: 101 – 200=Tk. 42,500/-
c) Machine: 200 above =Tk. 47,500/-

→ Application on company letter head to Secretary General, BGMEA for Permanent Membership
→ Copy of VAT registration Certificate
→ Copy of ERC
→ Copy of IRC
→ Worker Group Insurance Certificate. (Provided by BGMEA)
→ Workers BIO Metric database certificate. (Provided by BGMEA)

For further information, visit the following links:

WEBSITE | FACEBOOK | YOUTUBE

Media Details:Company: Tahmidur Rahman Remura Wahid Law Firm

Contact Person: Tahmidur Rahman

Email Address: INFO@TAHMIDUR.COM

Website: HTTPS://TAHMIDURRAHMAN.COM/

Phone Number: +8801847220062 & +8801779127165

Directorate of Textile Registration Permit in Banlgadesh

Directorate of Textile Registration Permit in Banlgadesh

Directorate of Textile Registration Permit in 2024

In Bangladesh, the textile industry stands as a cornerstone of the nation’s economy, contributing significantly to its GDP and providing employment opportunities to millions. With the sector’s rapid growth and evolving regulatory landscape, obtaining the requisite permits and registrations from the Directorate of Textile emerges as a crucial step for entrepreneurs and businesses. In this comprehensive guide, TRW Law Firm explores the intricacies of navigating the Directorate of Textile Registration Permit in Bangladesh, providing invaluable insights for stakeholders seeking to venture into this vibrant industry.

Understanding the Directorate of Textile Registration Permit:

The Directorate of Textile, under the Ministry of Textiles and Jute, serves as the regulatory authority overseeing the textile sector’s operations in Bangladesh. One of its pivotal functions is the issuance of registration permits to textile businesses, ensuring compliance with statutory regulations and fostering industry transparency.

Types of Textile Registration Permits: The Directorate of Textile offers various registration permits tailored to meet the diverse needs of textile enterprises. These permits include:

  1. Manufacturer’s Registration: This permit is essential for textile manufacturers, encompassing a wide range of activities such as spinning, weaving, knitting, dyeing, and printing. To obtain this registration, businesses must fulfill specific criteria outlined by the Directorate, including compliance with environmental and safety standards.
  2. Exporter’s Registration: Designed for textile exporters, this permit facilitates international trade by certifying the exporter’s compliance with export regulations and quality standards. Businesses seeking to export textiles from Bangladesh must obtain this registration from the Directorate of Textile.
  3. Importer’s Registration: Importing textile machinery, raw materials, or finished products into Bangladesh necessitates an importer’s registration permit. This permit ensures adherence to import regulations and tariffs set forth by the government, streamlining the importation process for textile businesses.

Application Process and Requirements:

To obtain a registration permit from the Directorate of Textile, applicants must adhere to a structured application process and fulfill specific requirements. Key steps in the application process include:

  1. Submission of Application: Applicants must submit a comprehensive application form along with supporting documents, including business registration certificates, trade licenses, environmental clearances, and relevant financial statements.
  2. Inspection and Assessment: Upon receiving the application, the Directorate conducts thorough inspections of the applicant’s premises to assess compliance with safety, environmental, and labor standards. The inspection process plays a crucial role in determining the eligibility of the applicant for registration.
  3. Approval and Issuance: Following a successful inspection and assessment, the Directorate grants approval for the registration permit, issuing the necessary documents to the applicant. Registered businesses are then authorized to commence textile operations in accordance with the terms specified in the permit.

Importance of Compliance and Regulatory Oversight:

Compliance with regulatory requirements and standards set forth by the Directorate of Textile is paramount for textile businesses operating in Bangladesh. Adherence to safety protocols, environmental regulations, and labor laws not only ensures the sustainability of the industry but also fosters trust and credibility among stakeholders, including consumers and international partners.

Challenges and Solutions: Despite the streamlined application process, textile businesses often encounter challenges in obtaining registration permits from the Directorate of Textile. These challenges may include bureaucratic delays, documentation errors, and compliance issues. To address these challenges, TRW Law Firm offers expert legal guidance and assistance, navigating clients through the registration process with efficiency and precision. With a team of seasoned legal professionals well-versed in Bangladesh’s regulatory framework, TRW Law Firm provides comprehensive support to textile businesses, ensuring compliance and facilitating seamless operations.

The Directorate of Textile Registration Permit plays a pivotal role in regulating Bangladesh’s thriving textile industry, safeguarding the interests of stakeholders and promoting sustainable growth. By understanding the intricacies of the registration process and prioritizing compliance with regulatory requirements, textile businesses can navigate the regulatory landscape with confidence and achieve success in this dynamic sector. With TRW Law Firm’s expert legal guidance and support, stakeholders can embark on their textile ventures with assurance, knowing they have a trusted partner dedicated to their success.

For further information, visit the following links:

WEBSITE | FACEBOOK | YOUTUBE

Media Details:Company: Tahmidur Rahman Remura Wahid Law Firm

Email Address: INFO@TAHMIDUR.COM

Website: HTTPS://TAHMIDURRAHMAN.COM/

Phone Number: +8801847220062 & +8801779127165

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