Car Business registration in Bangladesh
Bangladesh With the growth of the nation, the automotive industry has been expanding significantly. Today, the automotive industry is recognized as one of Bangladesh’s most important industrial sectors. The industry contributes to the nation’s economy. With the rise in employment rate, population, industrialization, and businesses, the demand for transportation has increased rapidly. Individuals’ demand for automobiles, motorbikes, and other vehicles is on the rise as a result of economic progress and their improved financial capability.
How to Establish a Car Business in Bangladesh
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There are the following types of automotive firms in Bangladesh:
i. Importing vehicles of various brands (including reconditioned automobiles); ii. Producing bus, mini-bus, truck, and sedan; iii. Producing auto-rickshaws and scooters; iv. Producing motorcycles; v. Producing three-wheeler motor vehicles; vi. Assembling vehicles of various brands.
Bangladesh’s automotive industry is drawing both domestic and foreign investment due to the expansion of this sector.
The Bangladesh Automotive Industry is governed under section 84 of the 1983 Motor Vehicles Ordinance. The government may set regulations governing the construction, equipment, and maintenance of motor vehicles and trailers, as well as the establishment, registration, operation, and monitoring of motor vehicle repair shops.
1. LICENSE AND REGISTARTION PROCESS of Car Business registration in Bangladesh
(in details)
In Bangladesh, the automobile industry can be conducted through the formation of a company:
Company:
A company lawfully registered in Bangladesh may participate in any business activity permitted under its Object Clause, as stated in its Articles of Association. A firm in Bangladesh may be either public or private. For the formation of a public company, a minimum of seven shareholders are necessary. Alternatively, a minimum of two shareholders is required to incorporate a private corporation. A private corporation cannot invite the public to subscribe for its shares, but a public firm can offer its shares to the general public. In actuality, private companies are the most preferred business structure for both foreign and domestic entrepreneurs. There are no restrictions on foreign equity involvement for foreign direct investment, hence 100 percent foreign equity is permitted. Foreign investment gets the same level of protection and security as domestic investment in Bangladesh. The laws of Bangladesh guarantee non-discrimination between international and domestic investment, as well as the repatriation of share sales revenues and profits.
The following actions must be taken to establish a company:
1. The prospective company must get a Name Clearance from the Registrar of Joint Stock and Companies.
2. Drafting and signing the following documents: • Memorandum and Articles of Association of the company; • Form I: Declaration On Registration Of Company; • Form VI: Notice Of Situation Of Registered Office; • Form IX: Consent of director to act; • Form X: List of Individuals Consenting to be Directors; • Form XII: Particulars of the directors, manager, and managing agents.
3. Establishing a temporary bank account for the Proposed Company with any Bangladeshi bank on the list
4. Transfer the paid-up capital amount from each foreign shareholder’s account to the Bangladeshi bank account of the proposed company.
5. Obtain an encashment certificate from the Bank of the Proposed Company for each international transaction.
Submit the required documentation to the Company House.
7. Pay the Government Registration Fees
Obtain the certificate of registration from the Company House.
Required Documents for Car Business registration in Bangladesh:
a) A copy of the company’s Valid Name Clearance;
b) An executed copy of the company’s memorandum and articles of incorporation.
c) Copy of Form I: Declaration On Registration Of Company, duly signed;
d) Copy of Form VI: Notice Of Situation Of Registered Office, duly executed;
e) Copy of Form IX: Consent of director to act, duly executed;
f) Copy of the executed Form X: List of Individuals Consenting to Serve as Directors;
g) Copy of Form XII: Particulars of the directors, manager, and managing agents, duly signed and dated;
h) Copies of shareholder and director identification cards (for Bangladeshi nationals);
I Copies of Shareholder Identification Number (TIN) Certificates (for Bangladeshi Nationals);
j) Copies of shareholders’ and directors’ passports (for foreign nationals);
k) Photos of shareholders and directors in passport format;
l) Bank Encashment Certificate for each international shareholder;
m) Receipt of the government fees’ payment.
In addition to the above-mentioned formats, a firm with 100% foreign ownership may also register as a Branch Office to commence automobile business. However, a Branch office can only serve the job envisioned by the parent firm if Bangladesh Investment Development Authority has granted prior authorisation. Depending on the expansion/scope of the business, further licenses or approvals may be necessary following the formation of the specific firm.
Additional Permissions for Car Business registration in Bangladesh:
The following are the additional licenses required to create an automotive industry:
Trade License; TIN Certificate; VAT Registration Certificate; Registration of Industrial Investment Project; Factory Layout Approval; Factory License; Membership Certificate; Import Registration Certificate (applicable for Import Business); Export Registration Certificate (applicable for Export Business); Environment Clearance Certificate; Fire License; Trademark Registration.
The procedure for acquiring extra licenses is outlined below:
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Trade License for Car Business registration in Bangladesh:
The most crucial prerequisite for launching a business in Bangladesh is acquiring a trade license. Every business entity is required to get a Trade License from the appropriate local government body. To obtain a Trade License, a complete application must be submitted to the appropriate local governmental entity (i.e., City Corporation/Municipal Corporation/Union Parishad) along with the required documentation.
TIN Certificate:
To track tax payments, the government of Bangladesh issues TIN Certificates to individuals and businesses. The National Board of Revenue (NBR) is the only organization authorized to issue TIN Certificates. To receive the TIN Certificate, one must submit an online application to the NBR.
VAT Certificate:
Every business is needed to have a Taxpayer Identification Number in order to conduct business (BIN). A BIN can be obtained through the National Board of Revenue’s VAT registration process. Every business organization must get a certificate of VAT registration. To obtain the VAT Certificate, the NBR must receive an online application along with the required supporting documentation.
Registration of Project for Industrial Investment for Car Business registration in Bangladesh:
Local or foreign industrial businesses in Bangladesh must register with the Bangladesh Investment Development Authority (BIDA). To register an Industrial Investment Project with the BIDA, an application and the required documentation must be submitted.
Factory Layout Authorization:
The Department of Inspection for Factories and Establishments (DIFE) must grant written permission prior to the use, modification, or enlargement of any dwelling, building, or premises as a factory. The DIFE must receive an application accompanied by the required documentation in order to grant approval for the proposed layout.
Each factory owner or occupant must submit an application for registration and a factory license to the Department of Inspection for Factories and Establishments (DIFE) at least thirty (30) days prior to the commencement of factory operations.
Certificate of Membership: After establishing the related business, the entrepreneur must join a local Chamber of Commerce and Industry or pertinent Trade Association. The membership application is accessible at the office of the respective Chamber of Commerce or Trade Association.
Certificate of Import Registration and Certificate of Export Registration:
An importer who possesses an Import Registration Certificate (IRC) and an exporter who possesses an Export Registration Certificate (ERC) are able to import and export any permissible goods without any value or quantity restrictions or approval from any authority (including for the purposes of Car Business registration in Bangladesh). The Office of the Chief Controller of Imports and Exports (CCI&E) provides applicants with Import Registration Certificates and Export Registration Certificates. To obtain the IRC or ERC, an online application and supporting documentation must be submitted to CCI&E.
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Environmental Clearance Document
In Bangladesh, the Environment Clearance Certificate (ECC) is one of the essential permits required to launch an industrial unit or project. To get this Certificate, the owner of the industrial unit or project must submit an application to the Department of Environment along with the required documentation.
Fire License for Car Business registration in Bangladesh
Buildings and commercial organizations are required to obtain a fire license out of consideration for the environment and to safeguard the safety of the facility and its employees. It is issued by the Fire Service and Civil Defense (FSCD) body functioning under Bangladesh’s Ministry of Interior. To receive this license, the concerned entrepreneur of the industrial unit or project must submit a request to the FSCD along with the required documentation.
Registration of a Brand
After the registration of the entity, it may apply to the Department of Patents, Designs and Trademarks (DPDT), which is administered by the Ministry of Industries, for the registration of its trademarks and/or any other Intellectual Property. The Trademark Registry Wing of the DPDT must receive the required documentation for the registration of a trademark from a candidate.
Legal Issues:
Foreign Investment Legislation in regards to Car Business registration in Bangladesh:
The liberalized Industrial Policy and export-oriented, private sector-led economic strategy of Bangladesh offer substantial investment prospects to foreign businesses and individuals considering investing in Bangladesh including for Car Business registration in Bangladesh. Except for a few regulated industries, Bangladesh welcomes private investment in all areas. The automotive industry is completely open to international investment. The government’s objective is to facilitate the increase of domestic and international private investment by fostering an enabling environment. The policy framework for foreign investment in Bangladesh is based on the Foreign Private Investment (Promotion & Protection) Act of 1980, which provides legal protection against nationalization and expropriation for foreign investment in Bangladesh. This also provides a non-discriminatory handling of international and local investments, as well as the repatriation of capital gains and income.
The Foreign Exchange Regulations Act of 1947, the Bangladesh Export Processing Zones Authority Act of 1980, the Bangladesh Private Export Processing Zone Act of 1996, the Bangladesh Economic Zone Act of 2010 and the Bangladesh Investment Development Authority Act of 2016 also address foreign investment.
Employment Legislation:
The 2006 Labour Act governs the majority of Bangladesh’s employment law. In addition to this Statute, the Labour Rules 2015, the National Labour Policy 2012, the Bangladesh Labour Welfare Foundation Act 2006, the Bangladesh Labour Welfare Foundation Rules 2010, the National Occupational Health and Safety Policy 2013, the Domestic Workers Protection and Welfare Policy 2015, and the National Child Labour Elimination Policy 2010 all contain rules and regulations pertaining to this issue. The Labour Act of 2006 addresses employment of labor, employer-employee relations, payment of wages and compensation for injuries to workers, leaves, benefits, formation of trade unions, resolution of industrial disputes, welfare, health, safety, and working conditions in the establishment, amongst other matters. Additionally, maternity benefits are provided to female employees. Note that if the company is established within an EPZ, the Bangladesh EPZ Labour Act 2019 will apply.
Contract Legislation in regards to Car Business registration in Bangladesh:
A contractual agreement is the center of the business world. It specifies the obligations and responsibilities of the parties on the subject of the contract. A contract binds both parties to its agreed-upon and stipulated conditions, such as the party’s liability in the event of a breach of contract and the extent to which it would reimburse the other party’s damages. It is advisable to take the utmost care while drafting the contract’s terms and conditions so that they accurately reflect the parties’ intentions. The Contract Act of 1872 governs all contracts in Bangladesh.
A force majeure event is an extraordinary occurrence or scenario beyond the parties’ control, such as an act of God, war, or natural disaster. Generally, a successful use of the force majeure clause releases the parties from their respective contractual responsibilities and/or liability. A force majeure clause does not totally excuse a faction’s failure to comply, but merely suspends it for a period of time. Section 56 of the Contract Act of 1872 of Bangladesh outlines the notion of frustration. In accordance with this idea, a contract becomes void when its performance becomes impossible due to the occurrence of an event; it becomes void after it has been entered into.
Compliances of the business entities – The entities must comply with the annual filing requirements, such as updating trade license at the respective city corporation, renewal of chamber membership, renewal of IRC & ERC, filing taxes, updating the annual filings at the RJSC, reporting to Bangladesh Bank, NBR, etc.
Property Law: In order to finalize the registration of the lease or purchase of the land, property laws must also be applied. The Land Reform Act of 2014, the East Bengal Tenancy Rules of 1954, the Survey Act of 1875, the Non-Agricultural Tenancy Act of 1949, the Registration Act of 1908, and the Transfer of Property Act of 1882 are the major statutes in these sectors.
Description of the Tahmidur Rahman Remura Wahid TRW and its services
Tahmidur Rahman Remura Wahid TRW Associates (Tahmidur Rahman Remura Wahid TRW) is a full-service corporate law firm that attempts to provide customers with a wide range of legal services rather than specializing on a single field of law. It is one of the largest and most reputable law companies in Bangladesh, providing domestic and international customers with legal counsel that fulfills their needs and expectations. Tahmidur Rahman Remura Wahid TRW provides all services associated with Company Incorporation, Sole Proprietorship, Partnership, and Foreign Company Registration, among others. Tahmidur Rahman Remura Wahid TRW law office has legal professionals that can guarantee a smooth legal process and assist in getting Certificates or Licenses required for Company Incorporation, including VAT Certificate, IRC/ERC, Name Clearance, Factory/Fire/Environmental License, TIN, Trade License, and other certificates.
In order to establish an Automotive Business in Bangladesh, Tahmidur Rahman Remura Wahid TRW can give the following services:
Tahmidur Rahman Remura Wahid TRW has an exceptional and knowledgeable team that can set up an automotive business simply and effectively. Tahmidur Rahman Remura Wahid TRW’s legal counsel can assist clients through consultations and meetings and offer them with incorporation rules for any sort of business.
A number of deeds, agreements, and other documents must be created in order to incorporate any form of business. The legal staff at Tahmidur Rahman Remura Wahid TRW can assist customers with the preparation and drafting of these documents.
Prior to establishing a business, it is necessary to find an appropriate piece of land. Tahmidur Rahman Remura Wahid TRW can give a service to the client by searching for an ideal location for the client’s business establishment. In addition, Tahmidur Rahman Remura Wahid TRW can assist with the drafting of lease agreements, the inspection of land by the appropriate land registry office, and the preparation for the acquisition of land, including registration.
Tahmidur Rahman Remura Wahid TRW can also assist with making payments of government fees to the proper authorities, such as BIDA or RJSC, and liaising with them to get incorporation documentation. Tahmidur Rahman Remura Wahid TRW, legal professionals have excellent working relationships with government authorities, making it simpler to obtain any certificate or license.
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Trademark/Copyright/Patent registration for Car Business registration in Bangladesh:
For Car Business registration in Bangladesh, It is sometimes required to incorporate a business in order to obtain protection against infringement, to add value to the organization, and to increase legal protection. Tahmidur Rahman Remura Wahid TRW aids its clients in getting Trademark/Copyright/Patent registration from the Department of Patents, Designs, and Trademarks (DPDT), so ensuring the company’s legal protection.
Tahmidur Rahman Remura Wahid TRW also offers services for obtaining or renewing any form of license. Several licenses are required to operate an automotive business. The legal staff at Tahmidur Rahman Remura Wahid TRW can help obtain these licenses and, if necessary, renew them on time.
Tahmidur Rahman Remura Wahid TRW provides clients with labor-related services, such as preparing employment agreements, resolving labor-related issues, and rendering legal opinions on labor law.
Tahmidur Rahman Remura Wahid TRW can provide guidance and assistance to ensure that a company’s routine legal obligations are met, hence facilitating the company’s normal operations.
Taxation in regards to Car Business registration in Bangladesh
Currently, the automotive industry in Bangladesh is undergoing significant taxation adjustments. Foreign investors and domestic businesses play an equal role in this industry. Typically, industries must register a Limited Company in RJSC in order to operate as a Limited Company in Bangladesh. Currently, this industry’s tax rate is 32.5%. A lot of advantages are provided in the form of expedited depreciations, lower customs import duties for CKD/locally produced machines, etc. Locally formed limited liability companies are required to submit a number of reports to the National Board of Revenue (NBR), such as a Tax Identification Number (TIN) application, a monthly tax deduction statement, a half-yearly withholding tax statement, a yearly statement related to the tax return submission of its employees, and a yearly statement related to the salary paid by the company to its employees. Quarterly Advance tax deposit, Annual tax return submission, representing the company at appeal/hearing sessions, Monthly VAT return, etc. Tahmidur Rahman Remura Wahid TRW may provide guidance and assistance to ensure that all regulatory compliances are met, allowing the business to operate without difficulty.
Conclusion
The Automotive Industry is developing in Bangladesh. The sector has the potential to contribute to the economy of Bangladesh. The growing need for transportation and variety of automobiles in the country is luring substantial investment to the sector. The establishment of a vehicle manufacturing factory and other businesses, as well as the need for a range of registrations and permits, are described above for the Car Business registration in Bangladesh.
Car Business registration in Bangladesh and economy of Bangladesh:
The automotive industry is becoming Bangladesh’s next important economic sector. It is currently the third largest city in South Asia. Industrialization and the expansion of businesses are driving a rapid increase in the demand for automobiles. To start a factory after Car Business registration in Bangladesh, a number of procedures must be followed. As the premier corporate law firm in Bangladesh, Tahmidur Rahman Remura Wahid TRW Associates can undoubtedly assist its client in opening a business in this industry. The firm’s seasoned business attorneys provide comprehensive services to their clients. The service includes drafting the Memorandum of Association and Articles of Association for the proposed company; drafting Forms IX and XII; executing registration and obtaining TIN and VAT registration certificates; IRC & ERC, Trade License, Work Permit, Factory license, ECC, Fire license, Trade Mark, CM License etc. In addition, the services include the execution of various forms of contractual agreements (Agreement of Partnership, Lease Deed, etc.), as well as legal advice on a variety of matters (such as labour).
Are you planning to do Car Business registration in Bangladesh?
Car Business registration in Bangladeshat Tahmidur Rahman Remura: TRW: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman, The Law Firm in Bangladesh: TRW, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and incorporating a Car Business registration in Bangladesh. For queries or legal assistance, please reach us at:
E-mail: info@trfirm.com
Phone: +8801847220062 or +8801779127165
Address: House 410, Road 29, Mohakhali DOHS
