Branch office registration in Bangladesh | Step by step process of setting up a branch company

This post in will explain in details about Branch office registration in Bangladesh – This article will explain the step by step process for setting up a branch office in Bangladesh.  In addition, people want to know the required cost and documents for a branch office registration in Bangladesh. This article will explain everything you need to know about branch office with directions and infographics.

How to open a branch office in Bangladesh?

Allowed activities of a Branch office in Bangladesh

Step two- Opening Bank Account to set up branch office

Following approval from BIDA, the next move is to open a Bangladesh Bank Account. It is because while no minimum paid-up capital is needed for the establishment of a branch office, a remittance of US$ 50,000 must be deposited within 2 ( two) months from the date of issuance of the BIDA letter of authorisation. (Branch office Registration in Bangladesh ) 

a) Documents

The documents required for opening bank account are:

1. BIDA permission letter
2. Draft Article and Memorandum of Association
3. in addition, Passport of the bank account signatory (if foreign nationals) and
4. lastly, NID (if Bangladeshi national)

Step 3- Bangladesh Bank approval

Also in regards to Branch office registration in Bangladesh, Parliament of Bangladesh revised the 1947 Foreign Exchange Regulatory Act. Now, however, Bangladesh Bank’s criteria for 18B approval has been withdrawn. In addition, according to the amendment, the branch office will report to the Bangladesh Central Bank after receiving approval from BIDA. Such a report with 30 ( thirty) days to approve should be made.

Step 4- Registration with RJSC for Branch office

After obtaining approval from both Bangladesh Bank and BIDA, registration with the RJSC is required. The following documents will be required for this purpose (for Branch office registration in Bangladesh):

 a) Documents:

• BIDA and Bangladesh Bank approval letter
• Certified copies of the Memorandum of Association and Articles of Association
• Full address of the registered or principal office of the company
• List of the directors and secretary (if any) of the company
• in addition, the name and address of a Bangladeshi who may represent the company in processing and accepting documents and
• The full address of the office of the company in Bangladesh

Step five: Obtaining Trade License from the Local City Corporation

In order to get trade license an application need to be made to the concerned city corporation. Along with the application, the following information and documents need to be submitted:

a) Documents

• Photocopy of AOA and MOA
• Photo of Managing Director or Chairman
• TIN of the branch office
• in addition, Rental agreement of the office and
• lastly, Nature of business

b) Time

It usually takes 3 to 4 working days to get a trade license. In order to know more about how to get trade license in Bangladesh.

c) Cost

The government for trade license is USD 100 (hundred dollar).

Step six: Income Tax Registration & VAT Registration for the branch office in Bangladesh

After setting up the branch office, it is important that the branch office has a unique Business Identification Number (BIN) to carry out normal business operations in Bangladesh. Therefore a VAT registration certificate must be obtained from the Department of the National Revenue Board (NBR) to obtain a business identification number. It’s free to register for the VAT registration.

a) Documents 

• TIN Certificate
• Trade License
• Import / export Registration certificate
• Furthermore, Passport sized photos
• Deed of Agreement
• Bank solvency certificate
• in addition, BOI registration and
• lastly, Memorandum and Articles of Association

In order to carry out normal business operations in Bangladesh after setting up the branch office, it is essential that the branch office has a unique Business Identification Number (BIN). Therefore, to get a Business Identification Number, a VAT registration certificate need to be obtained from the Department of the National Board of Revenue (NBR).

Can a foreign employee be employed in Branch office?

Validity Period of Approval of Branch office registration in Bangladesh

The approval is usually provided to establish a branch for a period of three years and it has to be extended/ renewed. You have to apply for renewal or extension at least 2 (two) months  before the expiry of the current term.

Capital requirement for branch office registration in Bangladesh

There is not minimum capital requirement in Bangladesh for branch office. However, there is a requirement for a minimum of US$ 50,000 inward remittance for registration of branches offices in Bangladesh as this inward remittance should cover the cost of initial establishment and six months’ expenses for operation.

Time period to set up or a  branch office registration in Bangladesh

To set up a branch office in Bangladesh, conventionally it takes from 60 days (sixty) to 90 days (ninety) in total.  Other formalities are consequential and will take about 2 weeks.

Business activities of a Branch office in Bangladesh

Branch office does not have its own independent legal body. This is because it functions as an extension of its parent company. Hence the parent company is entirely responsible for its branch office ‘s operations, debts and responsibilities.

Unlike liaison office, a branch office can engage in commercial activities. However, in order to do so, prior approval from the Bangladesh Investment Development Authority (BIDA) is required.

Activities that a Branch office can engage in are:

1. Payment collection on behalf of the parent company
2. Local sources of income for the branch office
3. in addition, Make outward payment from Bangladesh (with approval from BIDA)

Compliances to maintain as a branch office in Bangladesh

In the approval letter issued by BIDA, the activities of a Branch office shall remain confined to the areas and for the time specified and authorized. Unless the organization wishes to extend its Office past the approval period, they will have to apply for the required renewal / extension in the specified form with correct documentation at least 2 ( two) months prior to the expiry of the current term. In addition to that the Branch office should also maintain the following compliances:

How to take the profit/dividend out from Bangladesh to the parent company?

At the end of the fiscal year, you can declare the company’s dividend and transfer the money to the account of the parent company.

Foreign capital invested in Bangladesh for industrial projects with government approval is permitted to be repatriated from Bangladesh, along with any capital appreciation, provided Bangladesh Bank approval is first obtained.

Remittance of dividends and profits is now permitted with fewer restrictions. Before profits from foreign subsidiaries can be transferred back to the parent company, Bangladesh Bank approval is required. First, taxes must be paid. Profit remittance requests must be submitted to the Bangladesh Bank via the applicant’s bank.

Repatriation of investments made in Bangladesh with the approval of the government of Bangladesh / Bangladesh Bank is permitted (except in cases where the investment was permitted on the specific condition that it would not be eligible for repatriation), provided the disinvestment was also made with approval.

Actual remittances will be permitted subject to the satisfaction of such conditions as to repatriation amount and installments, etc., as may be applicable from time to time.

With prior permission from Bangladesh Bank, foreign nationals temporarily residing in Bangladesh may transfer to their home countries current assets such as salary, dividend, etc. savings.

There are currently no restrictions on the receipt of remittances through proper banking channels from any foreign nation in Bangladesh. Additionally, there are no restrictions on the importation of foreign currency checks. Drafts in any foreign currency may be freely converted by authorized dealers.

Traveler’s checks and foreign currency notes / coins may be exchanged for taka at money-changers authorized by the Bangladesh Bank to conduct such transactions.

Agreements for the remittance of fees for the purposes of royalties, technical know-how, and technical assistance do not require the prior approval of the BIDA if the total fees and other expenses associated with technology transfer (service fee, marketing commission, etc.) fall within the following limits.

Such fees and other expenses should not exceed six percent of the commercial value of imported machinery for new projects.

Recurring annual fees for royalties and other expenses, such as fees for technical know-how, technical assistance, operational services, marketing of products, etc., should not exceed a limit of 6 percent of the previous year’s sales reported on the tax return of the company.

Once the above-mentioned technical transfer agreements have been signed, they must be submitted to the BIDA for registration.

Proposals that fall within the prescribed limits will require the BIDA’s prior approval, for which an application must be submitted along with the required documentation and a copy of the relevant draft agreement.

Company Law practice in TR Barristers in Bangladesh 

The Barristers, Advocates, and lawyers at TRW Law chamber in Gulshan, Dhaka, Bangladesh are highly experienced at assisting clients in dealing with and registering branch offices in Bangladesh.   For queries or legal assistance to set up a branch office in Bangladesh, please reach us at:

E-mail: info@trfirm.com
Phone: +8801847220062 or +8801779127165
House 410, Road 29, Mohakhali DOHS