Buying House Setup Process in Bangladesh and buying house registration fee
This post will go over the step-by-step procedure of setting up a buying house in Bangladesh. As a result, this article will assist you understand the cost, time, licenses, and documentation required to establish a Garments Buying House in Bangladesh.
Setting up a buying house in Bangladesh: the procedure and buying house registration fee
In short, there are three essential actions that must be completed to establish up a Buying House in Bangladesh:
- Establishing a business in Bangladesh (e.g., limited company, partnership, or proprietorship, branch office, or liaison office)
- Register with the Department of Textiles (DoT).
- Obtain the requisite license and membership.
Step-by-step instructions for establishing a Buying House
What are the steps in business setup?
Step One: Name Clearance
To start a private limited business, the Joint Stock Companies and Firms (RJSC) must first approve a unique picked name.
Time
It normally takes 1 to 2 days to receive the certificate.
Cost
Currently, the government fee for name approval is 230 BDT (3 USD including VAT).
Step 2: Drafting the Memorandum of Agreement (MOA) and the
A limited company’s Memorandum of Association (MOA) primarily states the company’s purpose. One can add as many objectives as they wish. In contrast, the Articles of Association (AOA) serve as the company’s constitution. An AOA comprises all of the regulations that govern the operation of a limited business, as well as the firm’s managing director, chairman, and so on.
a). Time.
It takes two days to draft the MOA and AOA.
Step 3: Open a bank account (for international nationals or corporations).
What stage of bank account opening will be different for foreign nationals/entities and Bangladeshi nationals?
Documents Required for Bank Accounts:
- Photocopy of the name clearance certificate.
- Draft AOA and MOA.
- Photocopy of passport (application for foreign nationals).
- After acquiring the aforementioned documents, the bank will open a provisional account in the company’s name.
Time
It takes one day to open a bank account in Bangladesh.
Step 4: Depositing Share Money (For Foreign Nationals or Entities)
After opening the provisional bank account, a share money deposit will be paid from the foreign shareholder’s home country to the provisional account. Then, the bank will provide an encashment certificate.
Step Five: Register with RJSC.
After receiving the encashment certificate, a few documents must be presented to the RJSC, including the AOA, MOA, and encashment certificate, as well as all other required information. After obtaining the required documents and information, RJSC will issue an invoice to be paid to the designated bank.
a) Documents Required:
AOA and MOA
Encashment certificate requires Directors’ personal information, including name, parents’ names, passport numbers, email addresses, and cellphone numbers.
Names of the Managing Director and Chairman
NID (If a Bangladeshi national)
TIN (if a Bangladeshi national)
Limit on paid-up capital
Limit of allowed capital
Photo of all stockholders (one copy)
Company address and bank account signatories
(b). Cost of filing paperwork with RJSC:
The registration filing fee is BDT 1200 (one thousand two hundred takas).
(c) The government charges for registration:
It relies on the company’s authorized capital. For example, if the allowed capital is 50 lakh, the government charge will be BDT 13570 (thirteen thousand five hundred and seventy takas), or USD 160 (one hundred and sixty takas), plus 15% VAT.
(d) Incorporation Certificate:
After receiving all of the aforementioned documents, RJSC will verify all of the information contained in the AOA and MOA, as well as the encashment certificate with the bank. When the RJSC is satisfied with all of the information, it will issue an incorporation certificate in the company’s name. The formation of a limited corporation is now complete. However, in order to conduct business in Bangladesh, a few more compliances must be met.
Step 6: Tax ID Number (TIN)
After getting your incorporation certificate, you must submit an application to the National Board of Revenue (NRB) for a tax identification number. After receiving the application, a tax certificate will be provided in the company’s name.
Step 7: Trade license.
To obtain a trade license, submit an application to the appropriate city corporation. This is essential for doing business in Bangladesh.
a) Documents.
Along with the application, the following information must be submitted.
Photocopy of the AOA and MOA.
Required documents: photo of Managing Director or Chairman, company TIN, and rental agreement.
Nature of business (b). Time
It typically takes 3 to 4 working days to obtain a trade license.
Step 8: Value-Added Tax (VAT) Certificate
In order to conduct typical commercial operations in Bangladesh after forming a private limited company, the company must have a unique commercial Identification Number (BIN). As a result, in order to obtain a Business Identification Number, businesses must have a VAT registration certificate. The National Board of Revenue (NBR) regulates VAT through its Customs, VAT, and Excise Department. Applying for VAT registration is free.
a) The documents
TIN Certificate Trade Licence Import/Export Registration Certificate
Passport-sized photographs
Deed of Agreement, bank solvency certificate, BOI registration, and Memorandum and Articles of Association
Every private limited firm must pay VAT on the fifteenth (fifteenth) of each succeeding month.
To learn how to open a branch office in Bangladesh, go here. To learn how to open a liaison office, click here.
Register with the Department of Textiles (DoT).
All buying houses in the country must be registered with the Department of Textiles. As a result, once a firm is founded, it must be registered with the Department of Transportation. The paperwork required for registration with the Department of Transportation are listed below.
a) Documents and Information:
Registration letter sent to the Director General of the Department of Transportation. Completed the registration form and provided an attested copy of the trade license.
Income Tax Certificate (Attested Copy)
Certificate of Incorporation, Memorandum of Agreement, and AoA
Estimated annual turnover
Membership certificate of appropriate commercial association (BGBA or BGME) (attested copy)
Bank draft pay order for registration cost.
Solvency certificate from the bank (b). Registration Fee:
The registration fee is BDT 20,000 (twenty thousand takas only), which must be deposited with the appropriate bank.
d) Application Form:
For your convenience, the registration application form with the Department of Transportation is attached.
d) Registration Procedure:
Temporary Registration Certificate: Once the primary and major documents are presented to the Department of Transportation, the authority can issue a temporary registration certificate. However, such a temporary certificate will be valid for 60 (sixty) days from the date of issue, after which it will automatically expire. As a result, all of the relevant documents listed above must be presented within the 60 (sixty) day timeframe. It should be remembered that a temporary registration certificate will only be provided once when purchasing a home.
Registration certificate: Once all of the requisite documents listed above have been presented to the authority within 60 days of the temporary registration certificate being issued, the authority will inspect the documents. The Authority will then issue the Registration Certificate within 60 (sixty) days of receiving all of the papers.
e). Validity of certificate
The registration certificate will be valid for three years.
f) Renewing the registration certificate
It should be mentioned that you must apply for the renewal of your registration certificate at least 60 (sixty) days before the expiration date. To apply for renewal, send an application in the appropriate form together with the required documentation to the Director General of the Department of Transportation.
The documents required for renewal are:
Trade license (attested copy).
Income Tax Certificate (Attested Copy)
Membership certificate of appropriate commercial association (BGBA or BGME) (attested copy)
Details about last year’s exports.
Bank draft pay order for renewal fees
Following the assessment of the aforementioned papers, the authority will issue a new registration certificate within 30 (thirty) days of receiving them. Such will again be good for three (three) years.
G) Renewal Fee buying house registration fee
The government charge for renewing the registration certificate is BDT 5,000 (five thousand takas only), which must be deposited with the proper bank.
Required Licences
The additional licenses required for incorporating a buying house are given below.
Export registration certificate (ERC).
Import Registration Certificates (IRC)
Membership in the Chamber of Commerce.
Membership of the BGMEA
TRW provides legal advice on setting up a Buying House in Bangladesh:
TRW’s Barristers, Advocates, and Lawyers in Gulshan, Dhaka, Bangladesh have extensive expertise guiding clients through the full procedure and legal aspects of establishing a private limited company and opening a buying house in Bangladesh.
For any questions or legal assistance, please contact us at: –
Contact numbers: +8801708000660, +8801847220062, +8801708080817. Email addresses: info@trfirm.com, info@trwbd.com, info@tahmidur.com.
Global law firm in Bangladesh with locations in Dhaka (House 410, Road 29, Mohakhali DOHS).
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