Private equity (PE) refers to the investment of capital into private companies that are not publicly traded on stock exchanges. The private equity industry in Bangladesh is still in its early stages of development, but it has been showing steady growth in recent years.
Bangladesh has a rapidly growing economy, with a GDP growth rate of around 7% in recent years. The country has a large and young population, a growing middle class, and a rapidly expanding consumer market. These factors make Bangladesh an attractive destination for private equity investment.
Private Equity Industry in Bangladesh:
The private equity industry in Bangladesh is dominated by domestic players, with a few international firms also active in the market. The main sectors that attract private equity investment in Bangladesh are consumer goods and services, healthcare, education, and infrastructure.
One of the main challenges facing the private equity industry in Bangladesh is the lack of a well-developed legal and regulatory framework. The country’s legal system is not fully developed and there are significant gaps in the laws and regulations that govern private equity transactions. This makes it difficult for private equity firms to invest in Bangladesh and for companies to access the capital they need to grow.
For example, there are no specific rules or regulations for the registration and reporting of private equity funds, and there is no specific legal framework for the protection of minority shareholders. This lack of legal protection makes it difficult for private equity firms to invest in Bangladesh and for companies to access the capital they need to grow.
Another challenge facing the private equity industry in Bangladesh is the lack of a developed exit market. Private equity firms typically invest in companies with the expectation of exiting their investments after a certain period of time. However, in Bangladesh, there are very few options for private equity firms to exit their investments. This makes it difficult for private equity firms to achieve a good return on their investments.
New Rules for the regulation of Private equity fund and venture capital fund in Bangladesh:
In June 2015, the Bangladesh Securities and Exchange Commission approved new rules for private equity and venture capital firms, allowing them to pool funds and make equity investments in non-listed companies.
To create and manage funds for equity financing, private equity and venture capital firms must adhere to the Alternative Investment Rules.
The fund managers, who must be registered with the BSEC, will raise capital from eligible investors, which could include institutions, high-net-worth individuals, and foreign fund managers.
The funds cannot be raised through a public issue or an initial public offering; they can only be raised through a private placement and, unlike other mutual funds, will not be listed or traded on stock exchanges.
BSEC approved the draft Alternative Investment Rules and published it on the commission’s website as well as in national dailies for public comment.
Regulation
Details
Introduction
Bangladesh Securities and Exchange Commission (BSEC) introduced the regulation on June 22, 2015
Effective Date
June 22, 2015
Coverage
Private equity fund and venture capital fund operated by a fund manager through a registered trust
Registration
Fund manager and trustee must be registered with the BSEC
Investors
Eligible investors may be institutions, high-net-worth individuals and foreign fund managers
Capital Raising
Funds cannot be raised through public issue or initial public offering and can only be raised through private placement, not listed or traded on stock exchanges
Venture Capital Investment
Primarily in non-listed equity and equity-linked securities of start-ups or green field companies or emerging early-stage undertakings
Paid Up Capital
Tk. 50 million (local fund management company), Tk. 150 million (fully-owned subsidiary), Tk. 100 million (partially-owned subsidiary foreign firm)
Net Worth
Minimum 75% of total paid up capital, must be increased if goes below required level
Professional Experience
CEO/CIO and compliance officer must have relevant academic background and at least 7 years of relevant experience, no loan defaulters among applicant or directors
Registration and Annual Fees
Tk. 1 lakh and Tk. 50,000, respectively
Fund Management Fee
Up to 4% of NAV (impact fund), up to 3% of NAV (venture capital fund), up to 2% of NAV (private equity fund)
Profit Sharing
Fund manager may share up to 20% of the net annual profit of a fund
Alternative Investment Fund Formation
Minimum Tk. 100 million, subscription by sponsor not less than 10%, sponsor must subscribe at least 20% of total subscription before registration
Fund Manager Investment
Minimum 2% of the fund size, not more than 25% of units held with connected persons
Sponsor Investment
Continuous investment of not less than 2.5% of fund size
Dividends
Cash dividends declared to unit holders, locked in for 3 years from date of issuance
Venture Capital Association in Bangladesh
Despite these challenges, the private equity industry in Bangladesh is showing steady growth. The government of Bangladesh has recognized the importance of private equity in the country’s economic development and has taken steps to improve the investment climate. The government has also set up a number of initiatives to support the private equity industry, such as the Bangladesh Private Equity and Venture Capital Association (BPEVCA).
In addition to the government’s efforts, there are also a number of private sector organizations working to support the private equity industry in Bangladesh. For example, the Bangladesh Venture Capital and Private Equity Association (BVCA) works to promote the private equity industry in Bangladesh by fostering relationships between private equity firms, companies, and investors.
Plans to establish a stock exchange for SME
Despite the challenges, the private equity industry in Bangladesh has the potential to play a significant role in the country’s economic development. The large and growing population, the rapidly expanding consumer market, and the government’s efforts to improve the investment climate all make Bangladesh an attractive destination for private equity investment. As the private equity industry in Bangladesh continues to grow and develop, it will become an increasingly important source of capital for companies looking to expand and grow.
In conclusion, the private equity industry in Bangladesh is still in its early stages of development but it has been showing steady growth in recent years. The country has a rapidly growing economy, with a GDP growth rate of around 7% in recent years. The main sectors that attract private equity investment in Bangladesh are consumer goods and services, healthcare, education, and infrastructure. The main challenges facing the private equity industry in Bangladesh are the lack of a well-developed legal and regulatory framework and the lack of a developed exit market.
Despite these challenges, the private equity industry in Bangladesh has the potential to play a significant role in the country’s economic development. The government of Bangladesh is taking steps to improve the investment climate and a number of private sector organizations are working to support the private equity industry in Bangladesh.
The government of Bangladesh has announced plans to establish a stock exchange for small and medium-sized enterprises (SMEs) that will provide a platform for SMEs to raise capital. This will likely increase opportunities for private equity firms to invest in SMEs and provide a viable exit option for private equity firms.
Relevant laws regarding Private Equity in Bangladesh
The following is a table that includes some of the relevant laws, regulations and initiatives related to private equity in Bangladesh:
Laws/Regulations/Initiatives
Description
Bangladesh Securities and Exchange Commission (BSEC)
The main regulatory body responsible for overseeing the securities market, including private equity transactions
Bangladesh Private Equity and Venture Capital Association (BPEVCA)
An initiative set up by the government to promote the private equity industry in Bangladesh by fostering relationships between private equity firms, companies, and investors
Stock exchange for small and medium-sized enterprises (SMEs)
A planned stock exchange that will provide a platform for SMEs to raise capital and provide a viable exit option for private equity firms
As the private equity industry in Bangladesh continues to grow and develop, it is likely that more laws and regulations related to private equity will be put in place and more options for exits will be created.
Amendments made to the Alternative Investment Rules in 2020
The definition of “eligible investor” and “investor” has been expanded to incorporate “founda’ons” and “approved gratuity funds”.
Also in the descrip)on of a provident fund which was already eligible as an investor has been prefixed with “recognised”. A similar prefix has been added to “supperanua)on fund” with “approved” . A similar addi)on was made to “gratuity fund” with “approved” being added. The repercussion for such changes is going to require cer)fica)on or accredita)on of the said funds in order to be eligible to invest.
The required opera)on track record for eligibility of “private equity fund” has been increased by a year to three years.
The amendment here has enabled “venture capital funds” to invest in companies that have already been in opera)on for three years instead of the earlier limita)on of two years. This will broaden the investable op)ons of “venture capital funds”
Amendments have been made to prepare financial statements as per Interna)onal Financial Repor)ng Standards as applicable in Bangladesh and the audited financials to be prepared as per Interna)onal Standards on Audi)ng
Amendment has been made to ensure that the fund manager should obtain consent from the trustee before disbursement of fund to any non-listed securi)es of porGolio companies.
The exercise of an independent valuer , conduc)ng a valua)on of the investments of the fund has been relaxed to a minimum of once every year instead of twice a year.
Apart from cons)tu)ve documents, financial documents and other documents will have to be shared to eligible investors with the added flexibility of being shared in electronic form instead of printed hard copy.
A check has been placed to ensure that the fund manager cannot share the profit from the fund twice as performance fee.
Made amendment to enable the fund manager to hold up-to 30% of unit funds as opposed to 25% before.
The lock in for investments in funds has been brought down to 2 years from 3 years .
Investments of connected persons’ of the fund manager in alterna)ve investment fund will also have to be disclosed in the annual reports.
Registra)on fee has been halved to 0.05% of the fund corpus
Annual fee of the fund has been reduced by 20% to 0.04% of NAV of the fund.
The minimum subscrip)on by each investor has been brought down to BDT 1,000,000 from BDT 5,000,000.
Allowed flexibility of investment diversifica)on according to risk management policy of fund. Allows the fund to jointly investment in a porGolio company along with another fund.
New provision allows the life of the fund to be shortened by a vote of 2/3 majority similar to the previous manned of extension of the life of the fund.
[doc id=373015]
Although all unlisted companies in Bangladesh are assumed to be supported by private equity, Bangladesh Regulator introduced formal private equity venture capital in 2015 through the Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015. Since then, the firm has advised on the formation of several venture capital funds. However, because this is a new concept, the application is limited.
Tahmidur Rahman Remura ‘s Experience in the Private Equity Industry:
The firm also has extensive experience in private equity injection in listed companies through “Private Investment in Public Equity (PIPE)” transactions.
Furthermore, the firm advises on simple registrations, incorporation, contractual matters, and uncomplicated ventures, as well as complex investment projects, finance, M&A, and corporate restructurings involving private equities.
Some of the firm’s recent significant projects in Bangladesh include:
Manufacturing Sector: Marathon Petroleum Corporation, USA – Joint Venture Home Appliance Manufacturing Project
Manufacturing Sector: Patrick Industries Inc., USA – Joint Venture Food Product Manufacturing Project
Manufacturing Sector: Tire Manufacturing Project, Pilgrim’s Pride Corp.
Copper Manufacturing Sector: Star Alliance, Japan Joint Venture Manufacturing Project
Steel Manufacturing Project: PEB Steel, Vietnam
Oil Sector: ENOC, Dubai
Manufacturing Sector: LG, Korea – SKD Plant in collaboration
Hatero, UAE – Cancer production through a joint venture
Manufacturing Sector: Trial Foods, UK – Health drink production Industry
Sector of Service: Nokia, Finland – Service center
Service Sector: Gates Foundation, USA – significant investment in mobile banking
Sinopec, People’s Republic of China – petroleum service sector
Logistics and freight forwarding are examples of service industries.
Petrostar, People’s Republic of China – petroleum service sector
We also have included some of the details of our clients and their growth in the markets:
Company
Headquarters
% of Revenue Growth
% Profit Margin
1
Thor Industries Inc.
Jackson Center, OH
58.6
5.16
2
Align Technology Inc.
San Jose, CA
36.44
15.75
3
Pilgrim’s Pride Corp.
Pittsburg, TX
35.77
6.67
4
Patrick Industries Inc.
Elkhart, IN
33.8
5.24
5
LCI Industries
Elkhart, IN
27.93
6.19
6
Sherwin-Williams Co.
Cleveland, OH
26.39
11.83
7
Sanderson Farms Inc.
Laurel, MS
18.68
8.37
8
Lear Corp.
Southfield, MI
10.29
6.42
9
Clorox Co.
Oakland, CA
3.68
11.74
10
Lancaster Colony Corp.
Westerville, OH
.9
9.59
Tahmidur Rahman Remura Wahid advises large-scale construction and infrastructure project sponsors, lenders, contractors, and other industry participants. The firm provides non-contentious specialist services to domestic and international projects, covering every industry sector, location, procurement, and financing structure combination.
The firm offers efficient and proactive solutions based on a thorough understanding of the commercial forces and legal aspects that shape construction projects. It brings together experts to provide expert insights into the business implications of new industry initiatives, local legislation, globalization, and private/project finance.
The formal PPP framework was introduced in Bangladesh in 2010 through a policy guideline and was later achieved through legislative integration in 2015 with the passage of the PPP Act, 2015. The firm has extensive experience in project structuring and has been involved in the majority of the first generation PPP projects in Bangladesh, including transportation, water, economic zones, large scale plants, power, mining, and telecommunication. The firm has been involved in almost all major PP projects, including all three toll road projects that have been tendered. In addition, the firm was involved in a large number of constriction projects in the G2G and public procurement models.
Hire the best consultancy law firm in Bangladesh
Tahmidur Rahman Remura Wahid has earned its stellar reputation thanks to its proficiency in a wide range of financial transactions, including those involving power and energy, mergers and acquisitions, and large-scale projects. Led by Barrister Tahmidur, the law firm also consults on behalf of international financial institutions like the World Bank and gives advice to large local and international banks on local corporate governance issues. Remura Mahbub is another instrumental part of the team, and she is a big reason why the company gets does so much cross-border work in Southeast Asia and Europe.
In addition, this elite lawfirm in Bangladesh also deals with shipping law practices assisting in both wet and dry contentious and non-contentious matters, aviation law, capital markets law, bankruptcy and creditors’ rights, and family law. Additional practice areas include asset acquisition, dispute resolution, ICC, LCIA and UNCITRAL arbitration proceedings, finance and securitization law, and aviation law. It consists of an international division comprised of attorneys specializing in foreign and cross-border business and providing premium solutions for international clients.
For further information, visit the following links:
Project Management Consultancy law firm and EPMC company in Bangladesh
Tahmidur Rahman Remura Wahid (TRW) is a well-established law firm and one of the leading Engineering and Project Management Consultancy (EPMC) companies in Bangladesh. The company has been providing legal and consulting services to clients in the private and public sectors for over a decade.
The law firm’s legal practice covers a wide range of areas, including corporate and commercial law, banking and finance, intellectual property, and labor and employment law. The firm’s team of experienced attorneys has a deep understanding of the legal landscape in Bangladesh and is well-equipped to handle complex legal issues.
EPMC company in Bangladesh
In addition to its legal practice, TRW is also recognized as one of the top EPMC companies (and a consultancy law firm) in Bangladesh. The company’s team of experts has extensive experience in engineering and project management and has successfully completed a wide range of projects in the country. TRW’s services in this area include project management, engineering design, cost estimation, and construction supervision.
One of the key strengths of TRW is its ability to provide integrated legal and consulting services to clients. This enables the company to offer a comprehensive solution to clients’ needs, whether it is legal advice or project management services.
TRW’s commitment to quality and excellence is reflected in its long-standing relationships with clients. The company has a reputation for providing reliable and efficient service, and its clients include some of the largest and most respected companies in Bangladesh.
TRW’s EPMC and consultancy law firm services include project management, engineering design, cost estimation, and construction supervision. The company’s project management team is well-versed in the use of project management tools and techniques and is able to provide clients with a comprehensive project management solution. This includes the development of project plans, schedules, and budgets, as well as the management of project risks and issues.
Engineering Design by Tahmidur Rahman Remura
The company’s engineering design services include the preparation of detailed engineering designs and drawings for a wide range of projects. This includes the design of infrastructure projects such as roads, bridges, and buildings, as well as the design of industrial and manufacturing facilities. TRR’s team of engineers is well-versed in the use of the latest engineering design tools and software and is able to provide clients with high-quality engineering designs that meet their specific needs.
As a consultancy law firm, the cost estimation services include the preparation of detailed cost estimates for a wide range of projects. The company’s team of cost estimators is well-versed in the use of cost estimation tools and techniques and is able to provide clients with accurate and reliable cost estimates.
The company’s construction supervision services include the supervision of construction works to ensure that they are carried out in accordance with the approved plans and specifications. The company’s team of construction supervisors is well-versed in the use of the latest construction management tools and techniques and is able to provide clients with a comprehensive construction supervision solution.
Hence, TRW is a well-established law firm and one of the leading Engineering and Project Management Consultancy (EPMC) companies in Bangladesh. The company’s team of experts has extensive experience in engineering and project management and has successfully completed a wide range of projects in the country. TRR’s EPMC services include project management, engineering design, cost estimation, and construction supervision, which provides clients with a comprehensive solution to their needs.
Certification or Expertise
Expertise as a consultancy law firm
Project Management Professional (PMP)
A globally recognized certification for project managers offered by the Project Management Institute (PMI). Holders of this certification have demonstrated a high level of knowledge and experience in project management.
Construction Management Professional (CMP)
A professional certification for construction managers offered by the Construction Management Association of America (CMAA). Holders of this certification have demonstrated a high level of knowledge and experience in the field of construction management.
Professional Engineer (PE)
A professional license for engineers, typically granted by state or territorial governments in the United States, that demonstrates a high level of knowledge and experience in engineering.
Six Sigma
A methodology for process improvement that seeks to eliminate defects and improve efficiency. Six Sigma certification demonstrates a high level of knowledge and experience in this methodology.
ISO 9001
An international standard that specifies requirements for a quality management system. Organizations that are certified to this standard have demonstrated a commitment to quality and have implemented a system for continuously improving their processes.
OSHAS 18001
An international standard that specifies requirements for an occupational health and safety management system. Organizations that are certified to this standard have demonstrated a commitment to providing a safe and healthy work environment for their employees.
Procurement as a consultancy law firm in Bangladesh
The firm’s procurement department deals with both local and foreign procurement of engineering tools and materials, safety and fire alarm systems, telecommunication tools and gadgets, oil and gas tools accessories such as flanges, valves, and seals, drilling and production materials, and more.
In terms of civil engineering and oilfield installation services, the firm offers location preparation and civil works, land reclamation, access road construction, construction of drainages, construction of buildings, and maintenance services for well heads, Xmass tree and other equipment.
For mechanical works, the firm’s services include pipeline and flowline construction, sand blasting and painting of tanks and steel structures, fabrication and maintenance of steel works, tank cleaning, fabrication of wellhead hook-ups, rigging and scaffolding, fabrication and installation of spools, gas injection systems, and pressure pipe work, cathodic protection, maintenance of production equipment, pumps, valves, and air compressors, pipeline maintenance and repair works, corrosion control, rigging and scaffolding works, and hydrotesting.
In terms of instrumentation works, the firm offers installation of switch gears, circuit breakers, changeover, electrical aspect of heavy-duty generators and re-wiring, installation of earthing systems, fabrication of cable trays and support instrument for cable and power transmission, installation and maintenance of electrical control panels. The firm also has a deep knowledge and expertise on the local laws and regulations, which enables them to provide services and solutions that are compliant with the laws of the land.
Because modularization is not a one-size-fits-all solution, Tahmidur Rahman Remura Wahid works closely with each client to develop a project execution strategy that creates the best value in accordance with Bangladesh’s law. Tahmidur Rahman Remura ‘s integrated approach to fabrication solutions offers a range of options to fit clients’ specific needs.
Tahmidur Rahman Remura ‘s extensive modular project experience and comprehensive knowledge of the engineering, procurement, fabrication, construction, and project management process, result in fabrication and construction strategies optimized for cost and schedule benefits in the context of Bangladesh’s law.
The advantages that Tahmidur Rahman Remura Wahid brings to fabrication projects include:
Engineering Solutions to Meet the Most Complex Challenges
With offices in Bangladesh, Tahmidur Rahman Remura Wahid as a consultancy law firm can meet clients’ project needs anywhere. Tahmidur Rahman Remura ’s engineering disciplines include civil, electrical, mechanical, piping and structural engineering, as well as advanced specialties such as simulation, enterprise integration, integrated automation processes and interactive 3D and 4D modeling.
Tahmidur Rahman Remura Wahid as a consultancy law firm collaborates with client counterparts to develop comprehensive services that may include engineering, procurement, fabrication, construction, maintenance and project management. From the earliest stages of project design, we involve the construction and commissioning teams to provide capital and schedule efficiencies.
iii) Assist international renowned organizations, major corporations and leading businesses in various industries in identifying cost-effective solutions and recommending strategies for price negotiation.
iv) Post award of contract:
We Prepare detailed design and production drawings, ensuring compliance with industry standards, regulations and client’s specific requirements for international renowned organizations, major corporations and leading businesses in various industries.
v) We Develop Quality Assurance Plan (QAP) and assist the client in implementing quality control measures to ensure project deliverables meet the required standards and specifications. iii Provide planning and scheduling support to international renowned organisations, major corporations and leading businesses in various industries to ensure timely completion of projects and meet project deadlines.
vi) Prepare comprehensive Work Instructions, which include procedures, processes, and instructions for each stage of the project, to ensure consistency and efficiency for international renowned organizations, major corporations and leading businesses in various industries.
vii) Identify and recommend potential vendors for procurement based on their technical capabilities and experience, to international renowned organizations, major corporations and leading businesses in various industries. vi Prepare technical specifications for procurement and subcontracting and assist international renowned organizations, major corporations and leading businesses in various industries in evaluating bids and selecting suitable vendors.
viii) Provide technical support during the procurement process, including assisting international renowned organizations, major corporations and leading businesses in various industries in technical negotiation and replying to technical queries of bidders.
x) Provide technical support during construction, launching, testing, and commissioning phases, including troubleshooting and identifying solutions to technical issues for international renowned organizations, major corporations and leading businesses in various industries.
xi) Assist international renowned organizations, major corporations and leading businesses in various industries in addressing and rectifying defects during the warranty period, ensuring timely completion and satisfaction with the end product.
FAQ about Range of Service provided by Tahmidur Rahman Remura Wahid in Bangladesh:
FAQ
Answers
What services does Tahmidur Rahman Remura Wahid provide?
Tahmidur Rahman Remura Wahid provides a range of services including procurement, civil engineering, and oilfield installation services, mechanical works, hydrotesting, and instrumentation works.
How does Tahmidur Rahman Remura Wahid optimize cost and schedule benefits for fabrication projects?
Tahmidur Rahman Remura Wahid uses an integrated approach to fabrication solutions that offers a range of options to fit clients’ specific needs. This includes utilizing global fabrication facilities, advanced commodity sourcing methods, and input in design to optimize constructability.
What industries does Tahmidur Rahman Remura Wahid serve?
Tahmidur Rahman Remura Wahid serves clients across various industries including oil and gas, engineering, construction, and telecommunications.
What are Tahmidur Rahman Remura ‘s engineering capabilities?
Tahmidur Rahman Remura Wahid offers civil, electrical, mechanical, piping, and structural engineering services, as well as advanced specialties such as simulation, enterprise integration, integrated automation processes, and interactive 3D and 4D modeling.
How does Tahmidur Rahman Remura Wahid collaborate with clients?
Tahmidur Rahman Remura Wahid collaborates closely with clients to develop comprehensive services that may include engineering, procurement, fabrication, construction, maintenance, and project management. This includes involving construction and commissioning teams in the early stages of project design.
Does Tahmidur Rahman Remura Wahid have a global presence?
Yes, Tahmidur Rahman Remura Wahid has offices in Bangladesh and the surrounding region and is able to meet clients’ project needs anywhere in the country.
How does Tahmidur Rahman Remura Wahid ensure safety and quality in fabrication projects?
Tahmidur Rahman Remura Wahid has a dedicated fabrication group that supports global project strategies and resources with an emphasis on safety, environmental and quality benefits with shop fabrication.
What is Tahmidur Rahman Remura ‘s approach to project management?
Tahmidur Rahman Remura Wahid uses a construction-driven execution and design capabilities approach, with front-end engineering and design (FEED) and project management services.
What is Tahmidur Rahman Remura ‘s experience in modular project?
Tahmidur Rahman Remura Wahid has extensive modular project experience and comprehensive knowledge of the engineering, procurement, fabrication, construction, and project management process.
Does Tahmidur Rahman Remura Wahid provide maintenance services?
Yes, Tahmidur Rahman Remura Wahid offers maintenance services for well heads, Xmass tree, production equipment, pump, valves, and air compressor, pipeline maintenance and repair works, cathodic protection, and Corrosion control.
Hire the best consultancy law firm in Bangladesh
Tahmidur Rahman Remura Wahid has earned its stellar reputation thanks to its proficiency in a wide range of financial transactions, including those involving power and energy, mergers and acquisitions, and large-scale projects. Led by Barrister Tahmidur, the law firm also consults on behalf of international financial institutions like the World Bank and gives advice to large local and international banks on local corporate governance issues. Remura Mahbub is another instrumental part of the team, and she is a big reason why the company gets does so much cross-border work in Southeast Asia and Europe.
In addition, this elite law firm in Bangladesh also deals with shipping law practices assisting in both wet and dry contentious and non-contentious matters, aviation law, capital markets law, bankruptcy and creditors’ rights, and family law. Additional practice areas include asset acquisition, dispute resolution, ICC, LCIA and UNCITRAL arbitration proceedings, finance and securitization law, and aviation law. It consists of an international division comprised of attorneys specializing in foreign and cross-border business and providing premium solutions for international clients.
For further information, visit the following links:
An affidavit is a written statement that is sworn or affirmed to be true. In Bangladesh, an affidavit is a legal document that can be used in a variety of situations, including court cases, property disputes, and immigration matters. In this article, we will explain the steps for preparing and submitting an affidavit in Bangladesh.
Step 1: Prepare the Affidavit Form
The first step in preparing an affidavit is to obtain the correct form. The form can typically be obtained from a lawyer, government office, or court. The form should include all of the necessary information, including the name and address of the person making the affidavit, the statement being made, and the signature of the person making the affidavit.
Step 2: Write the Statement
Once you have the form, you will need to write the statement that you wish to make. This statement should be written in a clear and concise manner and should be limited to the facts relevant to the matter at hand. It is important to ensure that the statement is true and accurate.
Step 3: Get the Affidavit Sworn
Once the statement has been written, the next step is to get the affidavit sworn. This can be done by going to a lawyer or a notary public. The lawyer or notary public will administer an oath or affirmation to the person making the affidavit, and will then witness the signature on the form.
Step 4: Submit the Affidavit
After the affidavit has been sworn, it can be submitted to the relevant government office or court. The office or court will then review the affidavit and determine whether it is acceptable. If the affidavit is accepted, it will be kept on file for future reference.
Step 5: Keep a copy of the Affidavit
It is important to keep a copy of the affidavit for your own records. This will ensure that you have a record of the statement that you have made, and will allow you to refer to it in the future if necessary.
In conclusion, preparing an affidavit in Bangladesh is a straightforward process that requires obtaining the correct form, writing a clear and accurate statement, getting the affidavit sworn, submitting the affidavit to the relevant government office or court and keeping a copy of the Affidavit. It is important to ensure that the statement is true and accurate and that the form is completed correctly before submitting it.
An affidavit is a legal document that contains a sworn statement or declaration. A notarized affidavit is one that has been sworn to before a notary public, who acts as an official witness to the signing of the document. In Bangladesh, notarized affidavits are typically made on stamp paper and must be submitted to the relevant government office or court.
Affidavits are commonly used in a variety of situations, including court cases, property disputes, and immigration matters. They are considered to be reliable evidence of the facts stated in them.
Types of Affidavits
There are two main types of affidavits: judicial and non-judicial. Judicial affidavits are used in cases filed in court, while non-judicial affidavits are used for other purposes, such as commercial or administrative matters. Judicial affidavits are made on legal paper with appropriate court fees and stamps, while non-judicial affidavits are made on non-judicial stamp paper.
To create an affidavit online, you can use the services of Tahmidur Rahman Remura, a top law firm in Bangladesh. The firm offers a web-based platform that allows you to provide the necessary information for the affidavit and have it made on a manual or e-stamp paper. You can also schedule an appointment with a certified notary public to execute and complete the affidavit. The firm offers a variety of affidavit services, including:
Affidavit regarding late birth registration and relationship for USCIS Request for Evidence (RFE) notice, visa/immigration/other purposes
Affidavit of financial sponsorship, undertaking and relationship
Affidavit for change/specimen signature
Affidavit of loss
Affidavit for the change of religion
Affidavit regarding bona-fide/legitimate marriage for visa/immigration/other purposes
Affidavit regarding unmarried certificate for visa/immigration/other purposes
Overall, with the help of Tahmidur Rahman Remura, you can get your affidavit done easily and quickly without leaving your home or office.
What is an affidavit notarized?
A “notarized” affidavit implies that you have sworn to the veracity of the affidavit’s contents. Additional affidavit stamp paper is to be used. Plain paper cannot be used for affidavits.
Why are Affidavits Filed?
Affidavits are considered common and are used frequently in our daily lives. It has been presumed and assumed that any declaration made by a citizen in an affidavit could be deemed accurate and appropriate action could be taken.
Varieties of Affidavits
There are two different types of affidavits: judicial and non-judicial. In court-filed cases, judicial affidavits are utilized. Non-Judicial Affidavits are used “for other purposes.” Judicial affidavits are required for various reasons, including but not limited to providing evidence or supporting an application.
Non-judicial affidavits are “basically for commercial or administrative purposes.” Judicial affidavits are written on legal paper with the appropriate court fees and stamps attached. Non-judicial affidavits are executed on non-judicial stamp papers.
How to Get an Affidavit Outside of Court Online?
Considering how to create an online affidavit? Using our web-based platform, Tahmidur Rahman Remura , you can get an affidavit created online; however, you must provide us with the information required for the affidavit. Then, we will create your affidavit on either manual/traditional stamp paper or electronic stamp paper. You can order Non-Judicial Stamp Paper by sending an email to info@trfirm.com or by purchasing e-stamp paper on our website.
Then, you can execute and complete your affidavit via our online platform at www.tahmidurrahman.com with a prior appointment schedule with a Certified Notary Public of Bangladesh Government, or we can send you a printed copy on Non-Judicial Stamp Paper or e-stamp paper via mail / courier. “Simple and Rapid.” You can obtain an affidavit without leaving your home or place of business.
A directory of Affidavit Service
AFFIDAVIT REGARDING LATE BIRTH REGISTRATION AND RELATIONSHIP FOR USCIS REQUEST FOR EVIDENCE (RFE) NOTICE, VISA / IMMIGRATION / OTHER PURPOSE
Regarding Late Birth Registration and Claimed Biological Relationship by Father/Mother/Sister/Brother/Uncle/Aunty/Other AFFIDAVIT OF FINANCIAL SPONSORSHIP, UNDERTAKING, AND RELATIONSHIP.
Sponsorship / Assistance for Student / Visit / Medical / Family Visa AFFIDAVIT FOR MODIFICATION / SAMPLE SIGNATURE
Variation in Signature Affidavit AFFIDAVIT OF LOSS
Loss of any item (Academic Certificate, Mark Sheet, Marriage Certificate, NIKAHNAMA, Birth Certificate, Death Certificate, Passport, Medical Documents, Property Documents, Driver’s License, ATM Card, Car/Vehicle Documents, Bank Cheque, Mobile Phone, etc.) AFFIDAVIT FOR RELIGIOUS CONVERSION
Change of religion from one to the next (From Hinduism / Buddhism / Christianity / Adibashi to Muslim AFFIDAVIT REGARDING BONA FIDE / LEGITIMATE MARRIAGE FOR VISA / IMMIGRATION / OTHER PURPOSE.
Father/Mother/Sister/Brother/Uncle/Aunty/Other Affidavit to Establish a Legitimate/Bona Fide Marriage AFFIDAVIT CONCERNING SINGLE CERTIFICATE FOR VISA/IMMIGRATION/OTHER PURPOSES
Regarding Unmarried Status Certificate Declared by Parents
FAQ about Affidavits in Bangladesh
Questions
Answers
Laws
What is an affidavit?
An affidavit is a legal document that contains a sworn statement or declaration that is made before a notary public. It is used as evidence in court cases, property disputes, and immigration matters.
The Evidence Act 1872 of Bangladesh
What is a notarized affidavit?
A notarized affidavit is one that has been sworn to before a notary public, who acts as an official witness to the signing of the document.
The Evidence Act 1872 of Bangladesh
What are the types of affidavits?
There are two main types of affidavits: judicial and non-judicial. Judicial affidavits are used in cases filed in court, while non-judicial affidavits are used for other purposes, such as commercial or administrative matters.
The Evidence Act 1872 of Bangladesh
What is the difference between judicial and non-judicial affidavits?
Judicial affidavits are made on legal paper with appropriate court fees and stamps and are used in court cases, while non-judicial affidavits are made on non-judicial stamp paper and are used for other purposes, such as commercial or administrative matters.
The Evidence Act 1872 of Bangladesh
How can I prepare an affidavit in Bangladesh?
To prepare an affidavit, you must first obtain the correct form, then write a clear and accurate statement, get the affidavit sworn by a notary public, and submit it to the relevant government office or court.
The Evidence Act 1872 of Bangladesh
What is the process for submitting an affidavit?
Once the affidavit has been sworn, it can be submitted to the relevant government office or court. The office or court will then review the affidavit and determine whether it is acceptable. If the affidavit is accepted, it will be kept on file for future reference.
The Evidence Act 1872 of Bangladesh
Is it necessary to keep a copy of the Affidavit?
Yes, it is important to keep a copy of the affidavit for your own records, as it will ensure that you have a record of the statement that you have made and will allow you to refer to it in the future if necessary.
The Evidence Act 1872 of Bangladesh
How can I get an Affidavit online in Bangladesh?
You can use the online platform of a reputable law firm such as Tahmidur Rahman Remura Wahid to provide the necessary information for the affidavit and have it made on a manual or e-stamp paper. You can also schedule an appointment with a certified notary public to execute and complete the affidavit.
The Evidence Act 1872 of Bangladesh
What are the different types of affidavit services available in Bangladesh?
Some of the different types of affidavit services available include Affidavit regarding late birth registration and relationship, Affidavit of financial sponsorship and undertaking, Affidavit for change/specimen signature, Affidavit of loss, Affidavit for change of religion, Affidavit regarding bona-fide/legitimate marriage, Affidavit regarding unmarried certificateThe Evidence Act 1872 of BangladeshWhat are the laws related to Affidavit in Bangladesh?
Are you planning to register a private limited company in Bangladesh?
Company formation and registration at Tahmidur Rahman Remura: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman, The Law Firm in BangladeshRemura: The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:
E-mail: info@trfirm.com Phone: +8801847220062 or +8801779127165
What is the meaning of a Sales and Purchase Agreement (SPA)?
A Sales and Purchase Agreement (SPA agreement in Bangladesh) is a legal contract between a property buyer and seller. This agreement is legally binding and clearly explains the terms and conditions of the transaction. A SPA’s purpose is to define the legal obligations and protect the rights of the transaction’s parties. Common SPA transactions include the sale of real estate, goods, stock, or other assets. SPAs are not used to sell services.
The SPA is negotiated throughout the transaction during the M&A process. After the buyer has completed due diligence to determine the true state of the company for sale, the final phase of the transaction is to draft the SPA and determine the company’s sale price.
Key Learning Points
The SPA is the principal document that lays out the terms of a transaction and is negotiated by the buyer and seller.
Clear and solid financial terms in the SPA are essential to closing a successful transaction.
Prior to drafting the SPA, the parties usually negotiate and execute a term sheet, which addresses all the principal terms of the transaction, which can then be incorporated into the SPA.
An M&A transaction is typically accompanied by extensive due diligence before the SPA is finalized.
SPAs may also be affected by existing shareholders’ agreements between the shareholders of a target company
Key components of a SPA
In essence, the sale and purchase agreement clarifies the terms of the transaction so that both parties are on the same page. Typical contract terms include the purchase price, the closing date, the amount of earnest money the buyer must submit as a deposit, and a list of included and excluded items.
The purchase and sale agreement is one of the most significant documents in a business owner’s life. Due to this, it should be approached with caution and rigor, with legal professionals guiding both the seller and the buyer.
For example:
What should a purchase agreement include?
Common characteristics and terms of a Sale and Purchase Agreement (SPA).
1 The parties to the contract
In the simplest form of a sale, there are only two parties to the agreement: the seller and the buyer. However, additional parties may be involved if, for instance, the company being sold has multiple shareholders. To sell their shares, each of these shareholders will be required to sign the sale and purchase agreement.
2 Contract for sale and purchase
This provision is typically the shortest and simplest in the SPA. However, it is one of the most important, as it ensures that full legal ownership of the shares (also known as “title”) and all rights that attach to the shares are properly transferred (e.g., rights to dividends). Typically, this provision also states that the shares are unencumbered, reassuring the buyer that the seller has not pledged any of the shares to a bank or other lender.
Consideration No. 3
Buyers pay a seller for an acquired company in the form of cash, debt (such as a promissory note issued by the buyer), shares of the buyer, or a combination of these.
4 Restriction clauses
The purchaser will want to prevent the seller from launching a new, competitive business that will detract from the value of the company being sold. Therefore, the sale and purchase agreement will include restrictive covenants prohibiting the seller (for a specified time period and within specified geographic regions) from soliciting existing customers, suppliers, or employees, and from competing with the company being sold in general. These covenants must be reasonable in terms of geography, scope, and duration. Otherwise, they could be in violation of competition law.
5 Warranty and indemnity provisions
Warranties are factual assertions made by a seller in the SPA regarding the condition of the sold company. If a warranty later proves to be false and the company’s value decreases, the buyer may have a claim for breach of warranty. All aspects of the company, including its assets, accounts, material contracts, litigation, employees, property, insolvency, intellectual property, and debt, are covered by the warranties.
If more specific risks are identified during due diligence, they are likely to be covered by an appropriate indemnity in the sale and purchase agreement, in which the seller agrees to reimburse the buyer pound for pound for the indemnified liability.
(6) Precedent conditions
Simultaneous signing and closing (where the parties sign the SPA and close the sale on the same day) is the preferred and simplest method for concluding a transaction. Occasionally, however, there is a need for a delay between the signing and completion of a contract in order to satisfy certain final conditions. These are commonly known as “conditions precedent” and include tax authority clearances, merger approval by authorities, and third-party consent (for example, where a change of control provision exists in a material contract of the company being sold).
Unless the parties agree otherwise, the sale and purchase agreement terminates if all specified conditions are not met by a certain date (the “longstop date”), unless the parties agree otherwise. Therefore, it is crucial that the SPA specifies how to determine when the conditions precedent have been met and when they can no longer be met. Additionally, it should specify which party is responsible for fulfilling each condition precedent. The obligated party must use reasonable efforts to satisfy the relevant conditions precedent by the longstop date.
7) Finalization
Legal ownership of the shares is transferred to the buyer, resulting in the buyer’s ownership of the target company. Typically, a completion schedule in the SPA will include a list of all documents to be signed and other actions required to close the deal.
8) Post Completion
The sale and purchase agreement continues to be an important reference document following the closing, as it outlines the terms of any earn-out and includes restrictive covenants, confidentiality obligations, warranties, and indemnities, all of which may remain highly relevant.
Depending on the size of the transaction, a single SPA may contain a substantial amount of content. Here are a few instances of what you may encounter in an SPA.
What information does SPA agreement generally include:
The information outlined in a purchase contract can vary by state but it usually includes:
Buyer and seller names
The names of all parties who have held or will hold title to the property.
Property information
The property address, square foots, and land plot information.
Price and financing information
The home’s final purchase price and the amount of the mortgage, if any, the buyer has taken out for the purchase.
Possession date
The possession date: when the buyer can take control of the property.
Closing date
The date the transaction is finalized, and the home officially changes hands.
Addition or Exclusion
Any fixtures that the seller intends to leave behind, such as a washer/dryer or range, as well as any large items/furniture that they are bringing with them.
Earnest money deposits
Sums indicating good faith the buyer has made, typically put into an escrow account.
Closing costs
Any closing costs required, as well as who pays them.
Contingencies
The conditions that must be satisfied before a transaction can be consummated. Home sale, home inspection, appraisal, and financing are examples of common contingencies. Often, contingencies include a specified time frame. For example, a customer may be required to obtain financing by a certain date.
Asset Identification
A SPA describes the particular asset being sold. In the case of real property, the physical location is identified (i.e., by address and parcel number). This section is less robust for the sale of easily interchangeable duplicate goods.
Cost and Terms of Purchase
A SPA defined the transaction’s exchange rate. In addition, the agreement specifies what portion of the purchase price is due as a down payment and how that deposit will be made. This section of the contract specifies how the remaining balance (total purchase price minus deposit) will be paid.
Due Dilligence
For the sale of larger assets, the SPA typically contains a section requiring the purchaser to acknowledge their due diligence. Additional due diligence periods that correspond to additional deposits or upfront payments may be outlined in the PSA.
In addition to indemnification statements and the purchaser’s acknowledgment of the condition of the assets, this section likely contains both. In addition, the buyer typically affirms their right to terminate the contract under certain conditions. This section may also include clarification regarding which members of the purchaser’s team are authorized to speak on behalf of the company.
Covenants/Conditions Prior to Close
Generally, an SPA describes the next steps in a transaction. In order for the sale to be legally binding, these conditions must be met; failure to comply with these conditions constitutes a breach of contract. Under these conditions, the buyer may have the right to cancel the sale (if such rights are identified in the section prior).
Many of these covenants concern risk mitigation and asset protection. This section typically describes what a seller must do if unforeseen litigation threatens the transaction. In addition, it specifies what insurance requirements should cover the asset through the sale, what warranties will continue to exist, and confirms the asset’s exclusivity.
Damages/Remedies
In certain instances, it may be necessary to communicate what each party will do if the asset being sold is damaged prior to sale or during transit. This section frequently defines various degrees of damage, such as minor and major. The contract then specifies several remedies for each level of damage.
Other Chapters
If applicable, an SPA may contain additional sections. Title and survey information regarding a property is commonly included in real estate transactions. Existing tenants or the current state of the space may be referenced in particular restrictions and conditions.
A SPA typically specifies the applicable broker commissions. In addition to the dollar amount to be paid, an SPA specifies who is responsible for paying commissions and the process and timeline for issuing those payments.
For transactions requiring confidentiality, an SPA outlines the terms of the transaction. This includes the stipulations regarding public or press releases, the use of promotional materials referencing the sale, and the remedies in the event that one party breaches this provision of the contract.
If the sale is contingent on the completion of other transactions, the SPA will outline the consequences of a sale’s termination if the other deal falls through. Imagine a real estate developer attempting to purchase two adjacent properties with the intent of demolishing both to construct a single building. The developer may include language in one SPA that makes the transaction contingent on the execution of the second SPA.
Examples of Spas Available on the Market:
Real estate transactions are one of the most common occurrences of SPAs. As part of the negotiation process, both parties reach an agreement on the final sales price. In addition, other transaction-related details, such as a closing date or contingencies, are included.
Large, publicly traded companies use SPAs in their supply chains. A SPA may be utilized when acquiring a large quantity of materials from a supplier or when making a single large-scale purchase. A company may, for instance, enter into an SPA with a supplier to purchase a specified quantity of goods at a fixed price.
A SPA may also function as a contract for revolving purchases such as a monthly delivery of raw materials, inventory, or other tangible goods. Even if delivery is delayed or spread out over time, the purchase/selling price can be established in advance. SPAs are established to assist suppliers and buyers in forecasting demand and costs, and their importance increases as the size of the transaction grows.
In another instance, an SPA is frequently required during the acquisition of one business by another. Because the SPA specifies the exact nature of what is being bought and sold, the agreement may allow a business to sell its tangible assets to a buyer without selling the naming rights associated with the business.
Example of SPA:
Tahrem Investment Holding Limited (the purchaser) and 3DOM Inc (the seller) entered into an SPA for the purchase of the entire issued and paid-up share capital of 3DOM (Singapore) Spc. Ltd. (the target). Under the terms of the SPA, the buyer must acquire from the seller the entire issued and paid-up capital of the target.
Key Sales and Purchase Agreement (SPA) Terms:
The purchaser hired an independent, qualified appraiser to complete a report on the target’s value. The independent expert in valuation, the buyer, and the seller all agreed that the value of the target should be S$1,700,000,000.
Consideration:
The consideration was agreed upon on a willing-buyer and willing-seller basis, following substantive negotiations with the seller, and is based on a 20% discount to the actual valuation of the target as determined by an independent, qualified valuation expert.
The parties have agreed that the consideration will be paid in shares. The buyer shall issue and allot to the seller 1,813,333,333 new fully paid common shares (the shares) in its capital (the consideration shares) at a pre-consolidation issue price of S$0.75 per share.
Following the acquisition, the target organization will become a subsidiary of the acquirer.
The parties agreed that the buyer will be responsible for paying the transaction fees.
Conditions:
The proposed acquisition is contingent upon the satisfaction or waiver of customary conditions precedent for a transaction of this nature, including but not limited to:
the consideration derived from the actual valuation being at least S$1.36 billion;
the completion of financial, legal, operational, and any other due diligence on the target by the buyer, and the results of such due diligence being reasonably satisfactory to the buyer;
the findings and methodology presented in the valuation report to be issued by the independent qualified valuer being satisfactory to the buyer;
the entry into service agreements by the key management of the target, on mutually agreeable terms;
the seller procuring the target shall obtain such approval(s) as may be required from the respective target’s board of directors and its shareholder(s) in connection with the SPA;
the buyer obtaining such approval(s) as may be required from its directors and shareholders the proposed share issuance;
the allotment and issuance of consideration shares at completion;
In Bangladesh, the merger and acquisition of companies is regulated by the Bangladesh Securities and Exchange Commission (BSEC) under the Securities and Exchange Ordinance, 1969 and the Securities and Exchange Commission Act, 1993. Additionally, the Bangladesh Competition Act, 2012 regulates the merger and acquisition activity to prevent the creation of monopolies or anti-competitive practices.
In accordance with these laws, any merger or acquisition of a public limited company in Bangladesh must be approved by the BSEC and the shareholders of the companies involved. The BSEC will review the proposed merger or acquisition to ensure that it is fair and in the best interests of the shareholders. Any proposed merger or acquisition that may result in a substantial lessening of competition must be notified to the Bangladesh Competition Commission for review.
Given this context, the following changes will be made to the SPA:
The parties involved in the merger or acquisition agree to comply with all relevant laws and regulations in Bangladesh, including but not limited to the Securities and Exchange Ordinance, 1969, the Securities and Exchange Commission Act, 1993 and the Bangladesh Competition Act, 2012.
The parties also agree to obtain all necessary approvals and clearance from the BSEC and the Bangladesh Competition Commission before closing the transaction.
The proposed acquisition is conditional upon the fulfillment or waiver of customary conditions precedent for a transaction of this nature, including but not limited to the following:
The seller procuring the target shall obtain such approval(s) required from the respective target‘s board of directors and its shareholder(s) in connection with the SPA;
The buyer obtaining such approval(s) as may be required from its directors and shareholders and the proposed share issuance;
It is important to note that the above is not a comprehensive list and that it’s highly recommended to seek legal and financial advice before finalizing any SPA, as laws and regulations are subject to change.
Here are the steps involved in a merger or acquisition (M&A) of a company in Bangladesh:
Column 1
Column 2
Column 3
Compliance with laws and regulations
The parties agree to comply with all relevant laws and regulations in Bangladesh, including but not limited to the Securities and Exchange Ordinance, 1969, the Securities and Exchange Commission Act, 1993 and the Bangladesh Competition Act, 2012.
Obtain legal advice to ensure compliance with all relevant laws and regulations.
Approvals and clearance
The parties agree to obtain all necessary approvals and clearance from the BSEC and the Bangladesh Competition Commission before closing the transaction.
Submit the necessary documents and applications to the BSEC and the Bangladesh Competition Commission for review and approval.
Due Diligence
The parties conduct a thorough due diligence exercise on the target company, including financial, legal, operational, and any other relevant aspects.
The parties appoint an independent qualified appraiser to complete a valuation report on the target company.
Review and negotiate the valuation report with the seller to arrive at a mutually agreed upon price.
Consideration and Payment
The parties agree on the terms of the consideration and payment, such as the price, payment method, and any contingencies.
Review and negotiate the terms of the consideration and payment with the seller.
Structure
The parties agree on the post-acquisition structure of the target company and any related companies.
Review and negotiate the post-acquisition structure with the seller.
Closing and Completion
The parties finalize all necessary documents, approvals, and conditions for the closing and completion of the transaction.
Ensure that all closing and completion requirements are met before finalizing the transaction.
Are you planning to register a private limited company in Bangladesh?
Company formation and registration at Tahmidur Rahman Remura: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman, The Law Firm in BangladeshRemura: The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:
E-mail: info@trfirm.com Phone: +8801847220062 or +8801779127165
Start up law in Bangladesh and what exactly is a start up?
A startup is a company in its early stages of development. It is founded by one or more entrepreneurs in order to meet a specific need for a product or service. Startups are high-cost, low-revenue businesses that must rely on outside investors for capital until they can turn a profit.
Types of business entities for startups in Bangladesh
Parameter
Sole Proprietor
Partnership
Private Limited Company
Ownership
Single Owner
Minimum two owners
More than two Shareholders
Taxation
Tax Free up to BDT 3 lacs
Tax Free up to BDT 3 lacs
Corporate Tax at 30%
Investment Policy
Loan or Profit sharing financing
Loan or Profit sharing financing
Equity Investment/Loan/Profit sharing financing
Liability
Proprietor shall be liable
Partners shall be liable
Company Shall be liable
Nationality
Bangladeshi
Bangladeshi
Any national or body corporate
What is the process of startup funding?
Startup funds are given to individuals or groups of individuals in order to raise funds for their new business, allowing it to grow. When investors contribute to the funding of a startup, they do so in the hope of receiving a larger sum of money from the business in the long run. Depending on how much a person has invested in a company, they may be able to make business decisions that affect how the company operates in regards to Start up law in Bangladesh.
Stage
Description
Relevant Laws
Legal Structure
Pre seed
The startup is in the early stages of development, with a concept or prototype but no functional product or service. This stage is typically used to fund the development of a prototype, conduct market research, and build a team.
The startup has developed a functional product or service and is looking to conduct market research and build a team. This stage is typically used to fund the development of the product or service, conduct market research, and build a team.
Sole proprietorship, partnership, private limited company
Series A
The startup has a functional product or service and is looking to scale its operations and enter new markets. This stage is typically used to fund the expansion of the product or service, enter new markets, and achieve profitability.
Sole proprietorship, partnership, private limited company
Series B
The startup has achieved significant growth and is seeking additional funding to support its expansion. This stage is typically used to fund further expansion, acquire other companies, and achieve profitability.
Sole proprietorship, partnership, private limited company
Series C and beyond
The startup has achieved significant growth and is seeking additional funding to support further expansion and profitability. This stage is typically used to fund further expansion, acquire other companies, and achieve profitability.
Sole proprietorship, partnership, private limited company
Let’s take a closer look at the various stages of fundraising in the startup lifecycle in Bangladesh and the Start up law in Bangladesh.
1. Pre Seed Funding:
This prime stage of seed funding occurs so early in the process that it is not even considered startup funding. The pre-seed funding stage generally refers to the time when a startup is getting its operations up and running.
Pre seed funding is an early stage of startup financing that occurs before a company has developed a fully functioning product or service. It is typically used to fund the development of a prototype, conduct market research, and build a team. In Bangladesh, pre seed funding is an increasingly important source of support for entrepreneurs looking to turn their ideas into reality.
There are several ways to secure pre seed funding in Bangladesh, including through grants, angel investors, and accelerator programs. Grants, such as those provided by the Ministry of Finance’s Startup Dhaka program, can be a valuable source of funding for startups in the pre seed stage.
Angel investors, who are typically successful entrepreneurs or business professionals, can also provide financial support and mentorship to startups in the early stages of development. Accelerator programs, such as Grameenphone Accelerator and BD Venture, provide startups with funding, workspace, and mentorship in exchange for equity in the company.
Pre seed funding is an important step for startups in Bangladesh, as it allows them to develop a solid foundation and build momentum for future growth. It is essential for entrepreneurs to carefully consider their funding options and choose the right path for their business. With the right support, startups in Bangladesh can take their ideas from concept to reality and pave the way for future success.
During the pre-series stage, investors are unlikely to make an investment in exchange for equity in the startup. This stage can last a long time or you can receive pre-series funding quickly. It is determined by the nature of your startup as well as the initial costs that must be considered while developing the business model.
Bootstrapping refers to the stage of pre-seed funding. Simply put, it means leveraging your existing resources to scale your startup. Startup founders invest from their own pockets in order to grow their businesses as efficiently as possible.
During the startup’s development stage, entrepreneurs may be required to work overtime or take on a second job in order to invest their extra income into their new venture.
To add to what Jonathan said, the pre-seed funding stage enables a fledgling startup to effectively build and distribute their product(s) or service(s). Entrepreneurs typically assess the viability of their idea during the research or development phase. They may have a working prototype of their product and are looking for appropriate funding to scale their startup full-time.
Many entrepreneurs seek advice from founders who have been there and gone through a similar experience as them during this stage. It enables them to calculate the costs of their idea or project, create a winning business model, and gather ideas on how to turn their plan into a running business.
During the pre-series stage, entrepreneurs should also work out any necessary partnership agreements, copyrights, or other legal issues, as similar issues are best resolved during this stage. Later on, they may become prohibitively expensive, if not impossible to overcome. Furthermore, no investor will provide funds to a startup that has legal issues prior to its launch.
Pre-Seed Stage Potential Investors:
The following are the most common pre-series investors:
The most common pre-series investors are:
Startup Owners
Friends and Family
Early Stage Venture Funds (Micro VCs)
Bootstrapping a company can be extremely difficult, particularly during the pre-seed funding stage. Entrepreneurs may have to deplete their savings and even take on additional jobs to fund their businesses.
It takes a tremendous amount of dedication and effort because success is not guaranteed and there are numerous risk factors to consider when investing your own money in a startup.
However, if done correctly, bootstrapping can provide advantages that traditional investments do not, such as allowing entrepreneurs to retain control over their businesses while potentially achieving higher long-term returns on investment.
Startup Valuation in Pre-Seed Stage
During the pre-seed funding stage, startups value anywhere between $10,000 to $100,000.
It’s time to plant the seed after the pre-seeding stage. “Seed funding” is the first stage of startup funding. Almost 29 percent of startups fail due to a lack of capital while bootstrapping, making seed capital critical to getting a business off the ground.
Starting a business in Bangladesh can be a complex and daunting process, but with the right legal support, entrepreneurs can navigate the legal landscape and set their startups up for success.
One of the first steps for any startup in Bangladesh is to choose the appropriate legal structure. The most common legal structures for startups in Bangladesh are sole proprietorship, partnership, and private limited company. Each structure has its own advantages and disadvantages, and it is important for entrepreneurs to carefully consider their options and choose the one that best meets the needs of their business.
Startups in Bangladesh will also need to comply with a range of other legal requirements, including obtaining necessary licenses and permits, registering for taxes, and complying with labor laws. Failure to comply with these requirements can result in fines, penalties, and other legal consequences.
To ensure that their startups are in compliance with all relevant laws, entrepreneurs in Bangladesh should consider seeking the advice of a legal professional. An experienced lawyer can help entrepreneurs understand their legal obligations and ensure that their businesses are properly set up for success.
Consider the seed funding stage to be analogous to planting a tree. The initial funding is ideally the “seed” that allows any startup to thrive. When you provide appropriate water i.e. a successful business strategy, alongside the dedication of the entrepreneur, the startup will eventually grow into a “tree”.
Because investors are taking a significant risk by investing in the business, startups must provide equity in exchange for seed funding. The stakes are even higher because startups cannot guarantee a successful business model at this stage.
Seed funding enables a startup to fund product launch costs, gain early traction through marketing, initiate critical hiring, and conduct additional market research to develop product-market fit.
Many startups believe that the seed funding round is all that is required to get their startup off the ground.
Potential Seed Stage Investors:
The following are the most common types of investors who participate in seed funding:
Angel Investors
from friends and family
Crowdfunding Startup Valuation & Fundraising in the Seed Stage
Early Stage Venture Funds (Micro VCs)
Startups that qualify for seed funding have a business worth between $3 million and $6 million. A promising startup will be able to obtain funding ranging from $50,000 to $3 million during the seed funding stage.
The first round of venture capital financing is referred to as a stage. By this point, the startup should have a working product and a customer base with consistent revenue flow. It is now time for them to pursue series A funding and optimize their value propositions. This is an excellent opportunity for startups to expand across multiple markets.
It is critical to have a long-term profit plan in place during the Series A funding round. Many startups have great ideas that can generate a large number of enthusiastic users, but they don’t know how to monetize them in the long run.
The series A funding stage is an important milestone for startups in Bangladesh, as it marks the transition from the early stages of development to a more established and mature business. At this stage, startups typically have a functional product or service and are looking to scale their operations and enter new markets.
To secure series A funding in Bangladesh, startups will need to present a strong business case to investors, including a detailed plan for how they will use the funds to achieve their goals. Startups will also need to demonstrate a track record of success and have a clear path to profitability.
This is the stage at which you should begin learning about fundraising and making early connections with angel investors and venture capitalists. You must identify investors who want to invest in your startup using the 30-10-2 rule.
This rule states that you must find 30 investors willing to invest in your business. Ten of those thirty investors may be interested in your proposal, with two of them actually passing on funds to you.
Angel investors and traditional venture capital firms provide the majority of Series A funding. They are not looking for startups with “great ideas,” but rather for startups with a solid business strategy that can turn their great idea into a successful, money-making organization, allowing the investors to profit from their investment.
A single investor can act as a “anchor,” but once a startup has secured its first investor, attracting additional investors becomes easier. Although angel investors prefer to invest during this stage, they have far less influence than VC firms.
Investors interested in Series A
Accelerators
Super Angel Investors Venture Capitalists Company Valuation & Series A Fundraising
During the Series A funding stage, startups with a good business plan and a valuation of up to $10 million to $30 million can raise approximately $15 million.
Startups that have already gone through the previous startup funding stages (seed funding and Series A) have a sizable user base and a steady stream of revenue. They have demonstrated to their investors that they are capable of achieving success on a larger scale.
Investors help startups by funding market reach activities, increasing market share, and forming operational teams such as marketing, business development, and customer success. The series B funding stage allows startups to grow so that they can meet the various demands of their customers while also competing in competitive markets.
In terms of processes and key players, the Series B funding stage may appear to be similar to the previous funding stage; however, Series B funding is frequently led by the same characters, including a key anchor investor who helps you attract other investors.
The main difference is the addition of a new wave of VCs who specialize in investing in well-established startups in order for them to exceed expectations even further.
“The dilemma is that while your Series A investors were extremely important to you during that round, they may not be the investors you need going forward. If you’re in a position where going public is a real possibility, you’ll need crossover investors who will be there for you both now and when you go public,” says Praveen Tipirneni, MD & CEO of Morphic Therapeutic Inc.
Potential Series B Investors
Venture Capitalists
Late stage VCs
Company Valuation & Fundraising in Series B Startups with a revenue-generating model and a valuation of up to $30 million to $60 million can raise up to $30 million during the Series B funding stage.
Startups that reach the series C funding stage should be well on their way to success. These startups seek additional funding to help them develop new products, enter new markets, and even acquire other underperforming startups in the same industry.
Investors happily fund successful startups in the series C funding stage. They are hoping to make a profit that exceeds their investment. The Series C funding stage focuses on rapidly scaling the startup.
With Series C funding, you can significantly scale your startup by acquiring other startups. Your startup operations are now less risky, and more investors are joining the fray. During the Series C stage, many hedge funds, investment banks, and private equity firms will gladly invest in your startup.
The reason for this is that the startup has already proven to be a commercial success. New investors enter the game by investing large sums of money in thriving startups in order to establish themselves as leading investors.
Remember that startups that receive Series C funding are well-established, have a strong customer base, have stable revenue streams as well as proven growth histories, and want to expand their operations on a global scale. If you haven’t completed any of the above, you aren’t ready for Series C funding.
Potential Investors for Series C
Late stage VCs
Private Equity Firms
Hedge Funds
Banks
Company Valuation & Fundraising in Series C
Startups with a good business growth valuing up to $100 million to $120 million are able to raise approximately $50 million during the Series C funding stage.
6. Series D Funding Stage and Beyond
This stage is not required by many startups. The Series D funding stage enables entrepreneurs to raise funds for a one-time event. For example, a merger, or if it has not yet met its growth target.
If a startup has not yet gone public but is considering a merger with a competitor on agreeable terms, it may consider series D funding. Series D funding provides startups with the most viable solutions, allowing them to confront problems head on by merging with another startup.
Furthermore, if a startup is unable to achieve its growth milestone with series C funds, it will require additional funds through series D funding to stay afloat.
Potential Investors for Series D
Late stage VCs
Private Equity Firms
Hedge Funds
Banks
Company Valuation & Fundraising in Series D
Startups in this stage may value around $150 million to $300 million are able to raise approximately $100 million during this startup funding stage.
The process of initial public offering (IPO) in Bangladesh involves offering corporate shares to the general public for the first time. Startups that need funding and established organizations looking to allow startup owners to exit some or all of their ownership may use this process to generate funds by selling shares to the general public.
The startup will also need to compile information about its financial performance and expected future operations, and have its financial statements audited to generate an opinion about its public offering. The startup will then file its prospectus with the BSEC and determine a specific date for going public.
There are several benefits to IPO for startups in Bangladesh, including the ability to raise funds, access to additional funds through secondary offerings, the ability to compensate executives through stock, and the ability to recruit better talent. Public organizations may also find it easier to pursue mergers, as they can use their public shares to acquire other startups.
When a startup decides to go public, a specific set of events occur during the IPO process. They include:
Formation of an external public offering team comprising of underwriters, lawyers, certified public accountants, and SEC experts.
Compilation of the startup’s Information including its financial performance as well as its expected future operations.
Audit of the startup’s financial statements takes place which generates an opinion about its public offering.
The startup files its prospectus with the SEC and determines a specific date for going public.
Benefits of IPO
Raising funds for the startup is not the only benefit that entrepreneurs enjoy in case of a public offering. Some other advantages are:
A public organization is able to generate additional funds through secondary offerings as it already has access to public markets.
Many public organizations compensate executives through stock. The stocks of a public organization are more attractive to employees as the stocks can be sold easily. Also, being public allows an organization to recruit better talent as well.
Mergers are easier for a public organization as it can utilize its public shares to acquire another startup.
Meet The Most Active Startup Investors Of 2023 in Bangladesh:
LetsVenture
LetsVenture, founded in 2013 by Shanti Mohan and Sanjay Jha, is a startup investment marketplace that allows investors to discover and invest in startups through its proprietary technology platform.
LetsVenture completed 360 transactions in 2023 . Among its notable investments this year was its participation in the Series A funding round of Burger Singh, a homegrown quick service restaurant chain. It also invested in Sanfe, a feminine hygiene startup, and Evenflow, an ecommerce rollup startup.
LetsVenture will also collaborate with the Ministry of Electronics and Information Technology in 2023 to invest in early-stage startups through the government’s SAMRIDH startup accelerator program.
AngelList India
AngelList, founded in 2009 by Naval Ravikant, allows investors to invest as little as $1,000 alongside accredited backers via investment syndicates. In 2019, it launched an India-focused venture and angel fund.
In 2023 , AngelList India participated in 285 funding transactions. During the year, it invested in B2B manufacturing and supply chain enablement startup Magma, content sharing startup SuperShare, and coliving marketplace Crib, among others.
Venture Catalysts
Dr. Apporva Ranjan Sharma and Anuj Golecha founded the Mumbai-based integrated incubator, which typically invests $200K to $2 Mn in early-stage startups. The investments are syndicated, with HNIs, family offices, and CXOs participating.
In 2023 , Venture Catalysts partnered with the Confederation of Real Estate Developers’ Associations of India (CREDAI) to establish a $100 million proptech fund to invest in early-stage and growth-stage startups in a variety of real estate sub-sectors.
In 2023 , Venture Catalysts invested in 207 deals, including investment tech startup AlgoBulls, spacetech startup Agnikul, and intercity mobility startup Zingbus, among others.
Sequoia Capital
The US-based venture capital (VC) firm launched a $2 billion early stage venture and growth fund for India in 2023 . The fund’s closure was announced in June 2023 .
In 2023 , Sequoia Capital completed 86 investment deals in India and backed startups such as SaaS unicorn Chargebee, B2B SaaS platform CleverTap, and Scaler Academy.
2023 was a difficult year for the VC firm’s India arm as its portfolio startups like BharatPe, Zilingo, and Trell were embroiled in controversies, raising questions about the corporate governance at its companies. Following this, Sequoia India released a blog post outlining how it looks at the corporate governance issues and “a set of proactive steps” to counter misconduct.
Better Capital
Founded in 2018 and run by Silicon Valley entrepreneur Vaibhav Domkundwar, Better Capital is backed by founders, operators and investors from across the world. Former and current leaders at Meta, Google, Uber, LinkedIn, Tiger Global, TPG, and the World Bank are among its backers.
In 2023 , Better Capital participated in 75 funding deals in the Indian startup ecosystem, including those of fintech startups Gullak and M2P Fintech and creator-owned marketplace startup HYPD.
We Founder Circle
Founded in 2023 by Gaurav Sanghavi, Neeraj Tyagi, Bhawna Bhatnagar, Deo Saurabh and Vikas Aggarwal, We Founder Circle has backed over 70 homegrown startups till now. It has a wide network of 6,500 investors across 40 countries.
In December 2023 , the investment firm launched two angel funds – $24 Mn angel fund ‘Invstt Trust’ and $30 Mn cross-border angel fund ‘We Founder Circle Global Angels Fund’.
In 2023 , it participated in 71 funding deals of startups. It led seed funding round of smart parking solutions platform ParkMate and pre-seed funding round of Uma Robotics. Besides, it also invested in foodtech startup Anveshan.
Stride Ventures
Founded in 2019 by Ishpreet Gandhi, the Delhi-based venture debt firm invests in startups working in diverse sectors such as fintech, agritech, B2B commerce, healthtech, B2B SaaS, mobility and energy solutions.
In August 2023 , Stride Ventures closed its second fund, Stride Ventures India Fund II, with a corpus of $200 Mn to write cheques between $4 Mn–$5 Mn to 60-70 startups over a period of four years.
It participated in 55 funding rounds in 2023 , including that of agritech startup WayCool, EV-ride hailing platform BluSmart, and EV battery swapping network Battery Smart.
Here are some usual documents that you need from us for your startup in Bangladesh:
DocumentPurposeAdditional InformationFounders AgreementOutlines the rights and responsibilities of the company’s foundersTypically includes information such as equity ownership, decision-making authority, and exit strategyPartnership AgreementsDefines the terms of a partnership between two or more partiesTypically includes information such as profit sharing, decision-making authority, and dispute resolutionInvestment Term SheetOutlines the terms of an investment in the companyTypically includes information such as investment amount, ownership percentage, and rights of the investorsShareholders’ Agreement (SHA)Outlines the rights and responsibilities of the company’s shareholdersTypically includes information such as voting rights, buy-sell provisions, and restrictions on transferring sharesShare Transfer/Purchase Agreement (SPA)Details the terms of a share transfer or purchaseTypically includes information such as purchase price, payment terms, and representations and warranties of the partiesDue Diligence ReportAssesses the potential risks and opportunities of a proposed investment or transactionTypically includes information such as financial performance, legal compliance, and market analysisFlat/Rent Lease AgreementOutlines the terms of a lease for a flat or commercial spaceTypically includes information such as rental amount, lease term, and responsibilities of the landlord and tenantNon-Disclosure Agreement (NDA)Protects confidential information shared between partiesTypically include information such as scope of the confidential information, duration and territory of the agreement, and exclusions of protectionNon-Compete AgreementPrevents an individual from competing against their employer or disclosing confidential informationTypically includes information such as the scope of the non-compete, time period of the agreement, and exclusions of protectionIndependent Contractor AgreementOutlines the terms of a contractor-client relationshipTypically includes information such as scope of work, payment terms, and termination rightsLetter of IntentExpresses an intent to move forward with a proposed transaction or investmentTypically includes information such as key terms and conditions of the transaction, and exclusions of liabilityDemand LetterRequests payment or action in a disputeTypically includes information such as a summary of the dispute, the demanded amount or action, and a deadline for complianceMemorandum of Understanding (MOU)Outlines the general terms of an understanding or agreement between partiesTypically includes information such as scope of the agreement, key terms, and exclusions of liabilityCollaboration AgreementOutlines the terms of a collaboration between two or more partiesTypically includes information such as scope of the collaboration, ownership of intellectual property, and dispute resolutionJoint Venture Agreement (JVA)Outlines the terms of a joint venture between two or more partiesTypically includes information such as scope of the joint venture, ownership of intellectual property, and dispute resolutionOrganization Meeting MinutesRecords the decisions made during an organizational meeting of a companyTypically includes information such as the date and time of the meeting, attendees, and actions takenGeneral Corporate ResolutionRecords a decision made by a corporation’s board of directors or shareholdersTypically includes information such as the date of the resolution, attendees, and actions takenService AgreementOutlines the terms of a service provided by one party to anotherTypically includes information such as scope of the service, payment terms, and termination rights
Here is a table with frequently asked questions about startup law in Bangladesh:
FAQ
Answer
1. What are the common legal structures for startups in Bangladesh?
The most common legal structures for startups in Bangladesh are sole proprietorship, partnership, and private limited company.
2. How do I register my startup in Bangladesh?
The process for registering a startup in Bangladesh varies depending on the legal structure chosen, but generally involves submitting an application and paying a fee to the relevant authorities.
5. Can I raise funds for my startup in Bangladesh?
Yes, there are several options for raising funds for a startup in Bangladesh, including grants, angel investors, and venture capital firms.
6. What are the tax obligations for startups in Bangladesh?
Startups in Bangladesh are required to register for taxes and comply with relevant tax laws. This includes paying corporate income tax, value-added tax, and other applicable taxes.
7. How do I protect my intellectual property in Bangladesh?
Startups in Bangladesh can protect their intellectual property by registering patents, trademarks, and copyrights with the relevant authorities. It is also important to have robust confidentiality and non-disclosure agreements in place to protect proprietary information.
8. Can I hire foreign employees in Bangladesh?
Yes, startups in Bangladesh can hire foreign employees, but they will need to obtain work visas and comply with relevant immigration laws.
9. How do I register a trademark in Bangladesh?
To register a trademark in Bangladesh, you will need to file an application with the Trademarks, Designs and Geographical Indications Office and pay a fee. The application process can take several months to complete.
10. Can I sell shares of my startup in Bangladesh?
Yes, startups in Bangladesh can sell shares to raise funds, but they will need to comply with relevant securities laws and disclose information about the company to potential investors.
11. How do I register a patent in Bangladesh?
To register a patent in Bangladesh, you will need to file an application with the Intellectual Property Office and pay a fee. The application process can take several months to complete.
Start-up department in Tahmidur Rahman Remura Wahid Law firm in Bangladesh:
In TR Barristers in Bangladesh, our experience helps us to efficiently execute local and cross-border global transactions while helping you at all stages of the process and offering you cost-effective, realistic business solutions.
In addition to handling various issues related to domestic clients on a regular basis, it also has experience in consulting and assisting numerous international clients with utmost care and attention throughout their legal exploration in Bangladesh. For queries or legal assistance in regards to the Procedure of foreign investment in Bangladesh, please reach us at:
E-mail:info@trfirm.com Phone:+8801847220062 or +8801779127165
