How to open a Liaison office in Bangladesh – Liaison office formation in 2020

How to open a Liaison office in Bangladesh – Liaison office formation in 2020

How to open a Liaison office in Bangladesh –Registration and Incorporation Procedure of Liaison office in Bangladesh

Tahmidur Rahman, Senior Associate, Counsels Law Partners

2 Feb 2020

This post in details will explain in details about the process of opening a liaison office in Bangladesh, the process of getting permission from BIDA, time period of the validity of the license, Bank Account opening, Bangladesh bank approval and everything in regards to registering a Liaison office in Bangladesh with infographics and diagrams.

 

 Liaison Office registration in Bangladesh

Businesses wishing to develop a presence in Bangladesh without carrying out operations within the country immediately are called liaison offices or representative offices.

A liaison office must take approval from the Bangladesh Investment Development Authority (BIDA) for the establishment of the Bangladesh Liaison Office.

Liaison office and Branch office are almost similar. But a liaison office in Bangladesh can not perform any business or income-earning activities.

But a Branch Office can do so with proper authorization. If you would like to know how to set up a branch please click here. On the other hand, in Bangladesh, a limited company or a subsidiary can do full-fledged business through proper incorporation.

 

Liaison office in Bangladesh

If you want to know everything about Branch office registration in Bangladesh!

Basic requirement of registering a Liaison office in Bangladesh?

Companies wishing to set up a Liaison Office must fulfill the following basic requirements:

  • It’s a foreign company registered outside Bangladesh that wants to set up Liaison Office.
  •  The name of the Liaison Office shall correspond to the name of the international company.
  • Shareholders, the structure of the corporation and its operations shall be regulated by the Memorandum and Articles of Association of the international company. For the Liaison Office, there is no separate Agreement and Articles of Association.
  • The Liaison Office must have an email address in Bangladesh.
  •  The Liaison Office would not have a local source of income in Bangladesh.
  • Establishment and maintenance expenses shall be met by the parent company abroad.
  • The bank account
  • USD 50,000 or equivalent as projected initial establishment costs and 6(six) months operating costs of the Liaison Office shall be charged as inward remittances to Bangladesh within 02(two) months from the date of issuance of the BIDA permission letter.
  •  Other business licenses such as industrial license, tax registration (ETIN) and so on.
  • The registration fee for BDT 25.000.
  •  Registration with the Board of Joint Stocks in Bangladesh.
  •  Job visas for foreign workers.
  • Branch which carries out commercial activities shall pay corporate income tax and comply with sales VAT.
  • Other tax and VAT (GST) laws, such as withholding like tax & VAT, return submission etc., must be complied with, irrespective of the activities of the Branch.
Best company formation in Bangladesh_Liaison office in Bangladesh

How to register a Liaison Office in Bangladesh – Step by Step process

On the basis of funding, we can further extend the scope of NGOs, such as locally sponsored, government-funded, foreign The information provided below offers a comprehensive step-by – step method for setting up a branch or liaison office in Bangladesh.

In the meantime, it is important to notice that the approval of the Bangladesh Investment Development Authority (BIDA) is the primary prerequisite for the establishment of a branch or liaison office in Bangladesh.

Step one: Obtaining Permission from BIDA for setting up a Liaison office in Bangladesh

Permission from the Bangladesh Investment Development Authority (BIDA) is required to set up a Liaison Office. Now, what needs to be done to get permission from BIDA?

The foreign investor will be expected to submit an application in the specified form along with the documents mentioned below. It should be noted that the documents must be accredited by the Bangladesh Embassy / High Commission of the country of origin or the Top Chamber of Commerce of the country of origin.

Required Documents for the permission from BIDA

  1. Application in prescribed form signed by the authorized person for establishment of branch/liaison/ representative office – 4 copies. 
  2. Memorandum of Association and Articles of Association of the principal Company;
  3. Incorporation Certificate of the principal Company;
  4. Nationalities and name of the directors/promoters of the principal Company;
  5. A board resolution for opening a Liaison office in Bangladesh;
  6. Last financial year’s audited accounts of the principal company;
  7. Projected organogram of the office viewing the posts to be occupied by local personnel as well as expatriates;
  8. List of activities on the Company letterhead of the proposed Liaison office in Bangladesh.

Government Cost for Permission

A fee of BDT 25,000 (Twenty-five thousand) is expected to be paid by bank payment order and the original copy of the payment order must be sent to BIDA to get the permission for opening the Liaison office in Bangladesh.

Registration procedure and approval timeline for the Liaison office

All records should be sent to BIDA on a physical basis. You can also apply online via the BIDA website. After careful examination of all records, the BIDA officials shall send the application and records to the Inter-Ministerial Committee.

The Committee may review the documentation and can request further documentation or a physical presentation. If the committee is pleased, the approval will be given for the Liaison office in Bangladesh. The Inter-Ministerial Committee normally sits twice a month. Usually the duration is one month or less.

Usually, permission is given to the opening of a branch or liaison office initially for a term of 3 ( three) years, which can be extended later.

Liaison office in Bangladesh_Best law firm in Bangladesh_Tahmidur Rahman

Step two: Opening a Bank account for the liaison office in Bangladesh

In regards to opening a Liaison office in Bangladesh, A bank account must be opened at any bank in Bangladesh after obtaining the approval from BIDA.

The bank account is required at this stage because a sum of foreign exchange equal to US$ 50,000 (fifty thousand dollars or more) must be transferred to Bangladesh as an inward remittance. This must be achieved within 2 ( two) months from the date of the issuing of the BIDA authorization.

Step three: Obtaining the approval from the Bangladesh Bank (Central Bank)

The Foreign Exchange Regulations Act 1947 has recently been (2015) amended by the Bangladesh parliament. Bangladesh Bank’s criteria for 18B Approval was withdrawn.

Under the amendment, within 30(thirty) days of receiving permission from the Bangladesh Investment Development Authority, the Branch Office or Liaison Office or Representative Office will have to report to the Bangladesh Bank. We will update this section once any notification to that effect is released by Bangladesh Bank in regards to Liaison office in Bangladesh.

In addition to that since the amendment, the government or the Bangladesh Bank will be able to request that any individual residing in Bangladesh return their holdings of foreign exchange, foreign securities, any immovable property or industrial or commercial undertaking or company held, operated, founded or managed by that individual outside Bangladesh.

If you want to know how to open a company in Bangladesh or about company formation click here!

  • Step by Step Process of Registering a Company in Bangladesh

“Tahmidur Rahman – Counsels Law Parnters is Considered as one of the leading firms in NGO and Non-profit Law in Dhaka, Bangladesh”

Carpe Noctem Bangladesh

Step Four: Registering the Liaision office with the RJSC 

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

  1. BIDA Letter of Approval.
  2. Bank of Bangladesh letter of approval.
  3. Certified copy of the company memorandum and articles of associations, or other statutory records.
  4. Complete address of the company’s registered office or principal office.
  5. A list of the company’s directors, and secretary, if any.
  6. The name and address or the names and addresses of one or more persons residing in Bangladesh, allowed to accept company service of process on behalf of the company and any notices or other documents necessary to be served on the company.
  7. The full address of the company’s office, which is to be considered as the main place of its business in Bangladesh.

What is the scope of a Liaison office in Bangladesh

A Liaison Office in Bangladesh would only be allowed a very small operation to be carried out, as the Liaison Office it will have the right to carry out feasibility studies, market analysis to determine the quality of the targeted product , customer service and to supervise the activities of local agents. They may also provide customer service and supervise the activities of local officers.

In most situations, the Liaison Office serves as a liaison between the main office and any other company located in Bangladesh that it plans to negotiate with when the time comes.

Liaison office in Bangladesh_Top law firm in South Asia

Limitations of a Liaison office in Bangladesh

Since a Liaison Office in Bangladesh is not legally a corporate organization, it is not authorized to carry out any profit-making operations. Examples of such activities include entering into a strictly binding contract, leasing space for other businesses , providing technical services, issuing receipts, and even ship / store goods without a local agent in Bangladesh.

No outward remittances of any kind from Bangladesh sources shall be permitted except for the unexpended amount brought from the parent company abroad.

“In most situations, the Liaison Office serves as a liaison between the main office and any other company located in Bangladesh that it plans to negotiate with when the time comes.” 

Tahmidur Rahman_ Liaison office in Bangladesh_Best law firm in Bangladesh

Frequently Asked Questions about Liaison office in bangladesh

In regards to Liaison in bangladesh people also ask these questions frequently, hence this FAQ content block is dedicated to answering your questions.

General Questions about Liaison office in bangladesh

What is a liaison office in Bangladesh?

The liaison office of a foreign company is permitted to function in Bangladesh only on a limited basis, provided that none of the operations is profit-making. In other words, a liaison office will perform market analysis and representation activities only. Click to see the List of Approved Activities for the Bangladesh Branch Office.

What are the permitted activities for a Liaison office in Bangladesh of a foreign entity?

The liaison office of a foreign company is permitted to function in Bangladesh only on a limited basis, provided that none of the operations is profit-making. In other words, a liaison office will perform market analysis and representation activities only. Click to see the List of Approved Activities for the Bangladesh Branch Office.

What is Income Tax rate for a Liaison office of a Foreign Company?

The Liaison Office of a foreign parent company shall not be regarded as a separate and independent body in Bangladesh and, for all tax purposes, the Government of Bangladesh shall tax the income of such entities at higher rates. 

What are the conditions of opening a Liaison office in Bangladesh?

Liaison or representative office of a foreign company can be opened if the applicant foreign corporation has had a record of profit generation for the past 3 years and is financially sound. When we say that a foreign company is financially sound in the sense of a representative or liaison office in Bangladesh, we mean a net worth of USD 50,000 or its equivalent. The financial statement properly certified by the statutory auditor of the parent company is required.

What are the additional incorporation requirements for opening a Liaison office in Bangladesh?
  • A certified copy of the charter,
  • laws or memorandum and articles of the corporation or other instrument constituting or specifying the company’s constitution and,
  • if the instrument is not in the English language, a certified translation thereof into the English language;
  • the full address of the company’s registered office or head office;
  • the list of directors and secretary of the company’s contents; 
  • The full address of the company’s office in Bangladesh, which is considered to be its principal place of business in Bangladesh;
  • Specifics of opening and closing a business premises in India on earlier occasions or occasions;
  • a declaration that none of the company’s directors or the approved representative in Bangladesh has ever been convicted or removed from the creation of companies and management 
  • and any other information as may be prescribed.
Can a liaison office or a branch office be considered a legal entity?

The Branch or Liaison Office is a legal body that has been registered with the BIDA in Bangladesh. It is called a multinational business extension, and not a separate legal entity. Unlike a subsidiary of Bangladesh, the parent company of the Branch or Liaison Office is indirectly responsible for all debts and liabilities of the Branch or Liaison Office.

Can foreigners set up a Liaison or branch office in Bangladesh?

There are no restrictions on foreign nationals being a Bangladeshi company director, shareholder, or a secretary. You even do not have to live in the Bangladesh.

Who bears the operating expense of a Liaison office in Bangladesh?

All expenses for setting up a Liaison Office and operating it are basically borne by the parent company which is established abroad.

Does the Liaison office needs an office address in Bangladesh?

The general requirement is that, a Branch or a Liaison Office must have an office address located in Bangladesh.

What are the five steps of a Liaison Office Registration in Bangladesh?

1. Apply to BIDA for authorization to open the Liaison Office.
2. Receive the permission.
3. Open a corporate bank account.
4. Bring   USD 50,000 for starting-up the liaison office and running costs for at least six ( 6 )months.
5. Apply to the RJSC to register.

What is the timeline of a Liaison office approval in Bangladesh?
  • 30-45 days need from application date
  • As one meeting hold once in month, sometimes 2 meeting holds when more applications are submitted
  • Additional time or second meeting might need if application is rejected for lack of papers

NGO and INGO registration at Tahmidur Rahman CLP:

The legal team of Tahmidur Rahman, Counsels Law Partners CLP are highly experienced at dealing with company matters along Liaison office set up process, and branch office registration in Bangladesh . For queries or legal assistance, please reach us at:

E-mail: tahmidur@counselslaw.com
Phone: +8801727983838

Address: House 39, Road 126 (3rd Floor) Islam Mansion, Gulshan 1, Dhaka

 

Have a Different Question?

Email us anytime : tahmidur@counselslaw.com

Or call — +8801727983838

Tahmidur Rahman | Law Firm in Dhaka

Affiliated with Counsels Law Partners, A full service multi-directional law firm in Dhaka.

© 2018-2020 Tahmidur Rahman Matte IT Ltd.

NEED HELP?

Privacy Policy
Disclaimer
Client Login
Sitemap

Foreign Investment in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know in 21st century

Foreign Investment in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know in 21st century

How to invest in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know about Foreign Investment in 21st century Bangladesh

Tahmidur Rahman
 Director and Senior Associate, Counsels Law Partners

17 Jan 2020

Leading up to initiating a major investment , investors needs to navigate the basic legal policies on investment law in Bangladesh. Bangladesh is one of the easiest countries in the world to do business with straightforward regulation, a well-respected legal system and low entry barriers. Entrepreneurship is also massively respected and encouraged in the country. Despite this welcoming atmosphere and a lack of red tape, difficult choices and decisions need to be taken at an early stage, and this article describes everything you need to know about investing in Bangladesh.

Foreign Investment Policy in Bangladesh

 

The Government of Bangladesh has put in place a wide range of policies aimed at bringing substantial socio-economic changes to the citizens of Bangladesh and, eventually, self-reliance to the country. In recognition of the capacity of the private sector to contribute to the achievement of these objectives, the government has recently initiated a number of major policy reforms, which are planned to create a more transparent and competitive environment for foreign investment in Bangladesh.

In order to achieve the goal of accelerating industrial growth and increasing the share of industry in the Gross Domestic Product ( GDP) and to make industrial policy sensitive to changes in the global economy, the current government announced an Industrial Policy in 1999.

The core characteristics of the 1999 industrial strategy are as follows:

  • To draw foreign direct investment in Bangladesh,  both export and domestic market-oriented industries to compensate for the lack of domestic investment opportunities and to acquire emerging technology and to gain access to export markets.
  • To ensure the sustainable growth of industrial jobs by promoting investment in labour-intensive manufacturing sectors, including investment in productive small and cottage sectors.
  • Diversifying and increasingly increasing the production of manufacturing.
  • Coordinate economic and fiscal policies to inspire a growth in foreign investment in Bangladesh.
  • Promote the competitive strength of import substituting industries for catering to a rising domestic market.
  • To increase the production base of the economy by increasing the pace of industrial investment.
  • Promote the private sector to drive the development of industrial production and investment.
  • Emphasis on the role of the government as a facilitator in creating an enabling environment for the expansion of private investment
Foreign Investment in Bangladesh_How foreign Investment works in Bangladesh

Investment Structures in Bangladesh

Bangladesh offers generous opportunities for investment under its relaxed Industrial Policy and export-oriented, private sector-led growth strategy. Except for the previously stated reserved sectors, foreign investors are free to make investments in Bangladesh in industrial enterprises. Foreign companies wishing to do business or establish a presence in Bangladesh have a number of options.

1.  Foreign Direct Investment

FDI (foreign direct investment in Bangladesh) in industrial or construction projects must be registered with the Bangladesh Investment Development Authority (BIDA). BIDA, formerly known as the Investment Board, was formed by the Bangladesh Investment Development Authority Act 2016 to deal with issues related to FDI and to promote investment in Bangladesh. The foreign direct investment (FDI) inflow at the end of June 2018 amounted to USD 2.58 billion (foreign investment in Bangladesh stats, Bangladesh bank).

The Bangladesh Investment Development Authority (BIDA) announced an impressive 13.34% rise in FDI in the third quarter of 2018, receiving proposals worth USD 3.23 billion over the same period, suggesting strong interest on the part of foreign investors.

The key objective of BIDA is to encourage domestic and foreign investment as well as improve Bangladesh’s international competitiveness. BIDA also provides the necessary facilities and assistance for the establishment of industries. Determining the route of investment usually depends on the specific sector and the policy of the FDI adopted by the Government in regards to foreign investment in Bangladesh.

2. Wholly owned subsidiaries in Bangladesh

Foreign companies are allowed to create wholly-owned subsidiaries in Bangladesh. Such companies may be known as private limited or public limited companies. Foreign equity ownership can be up to 100% in most sectors, including construction, information technology and production.

Foreign entities can acquire an existing Bangladeshi company or incorporate a new company that complies with the requirements of the Registrar of Joint Stock Companies and Firms (RJSC). Subsidiaries are entitled to remit dividends reported on income after tax.

3. Joint Ventures in Bangladesh

As with wholly-owned subsidiaries, international companies can have joint venture companies with Bangladeshi partners. The equity ownership of a foreign corporation would depend on the sector in which it is invested.

 

If you want to know everything about Branch office registration in Bangladesh!

4. Branch or Liasion offices in Bangladesh

International companies can also create a presence in Bangladesh through a representative office, liaison office or branch office for the purpose of foreign investment in Bangladesh. Typically foreign companies that do not have local earnings in Bangladesh may choose to set up representative offices, liaison offices or branches.

The operations of these organizations are limited to those set out in their BIDA approvals and are subject to strict compliance with the foreign exchange regulations. Generally, no outward remittance of any kind from Bangladesh is allowed unless expressly approved by the Foreign Exchange Regulations or the Bangladesh Bank.

fSuch offices are expected to pay inward remittances of at least USD 50,000 within two months from the date of establishment as a cost of establishment. One of the requisite approvals for the establishment is that security clearance must be obtained from the Ministry of Home Affairs of the Government of Bangladesh. (foreign investment in Bangladesh)

5. Option of Participating in an existing Bangladeshi company by purchasing shares

In regards to foreign investment in Bangladesh, Foreign investors are free to invest in local companies in Bangladesh unless expressly prohibited (as stated above). Shares can also be given to foreign investors against capital machinery brought by them to Bangladesh (subject to confirmation by the Customs and Excise Office of the import documents).

If you want to know how to open a company in Bangladesh or about company formation click here!

  • Step by Step Process of Registering a Company in Bangladesh
Foreign Investment in Bangladesh_How to invest in Bangladesh

Right to Issue and Transfer Shares in Bangladesh

 

There is no need for permission from the Bank of Bangladesh to set up such ventures if the entrepreneurs use their own funds. Prior approval of the Central Bank is not necessary for the issuance of shares in favor of non-residents against foreign investment in BD.

 

Shares may be issues relating to freely convertible foreign exchange brought in from abroad via the banking channel or to the importation of capital machinery or the combination of both.

 

Foreign exchange thus entered must be paid out in taka before the issuance of shares, except in the case of Type A (full foreign owned) and Type B (joint venture) units of EPZ and EZ, where FC ‘s foreign bright equity of be held in the FC accounts of the units concerned.

 

Transferring shares and securities in Bangladesh from one shareholder to another shareholder regardless of their nationality / residence does not require approval from Bangladesh Bank.

 

In the event of a transfer of private / public (non-listed) shares between resident-non-residents or vice versa, a general intimation to Bangladesh Bank is required by the Approved Bank within 14 days of such a transaction.

 

As there is no established marketplace for such investment in Bangladesh, Bangladesh Bank will accept fair value of the shares as on the date of sale based on a reasonable combination of three valuation approaches (NAV; FMV and DCF), depending on the nature of the company in regards to foreign investment in Bangladesh.

 

If you want to know everything about Share Transfer process in Bangladesh!

Foreign Investment in Bangladesh_Best law firm for angel investment

Full Repatriation of Dividend, Investment and Income

It will enable complete repatriation of the capital invested from free sources in regards to foreign investment in Bangladesh. Profits and dividends accruing to foreign investment can likewise be transferred in full. Those would be considered as new investment if foreign investors reinvest their reparable dividends and/or retained earnings. Foreigners living in Bangladesh have the right to remit up to 50 percent of their income and can enjoy facilities for complete repatriation of their savings and pension benefits. (foreign investment in Bangladesh.)

 

Laws for the Protection of Foreign Investment in Bangladesh

The government guarantees immunity from nationalization and expropriation through the 1980 Foreign Private Investment Act that involves repatriation of capital and dividend for foreign investors. In addition, Bangladesh has made ample legal provisions to secure intellectual property rights. In addition to the 1980 Foreign Private Investment Act , the government has developed an FDI Policy (Foreign Direct Investment Policy), which supports easy but efficient investment mechanisms in Bangladesh.

The policy encourages the establishment of enterprises by simplifying the leasing and purchasing process of private property, forming an agency, enabling corporate tax holidays for 7 years (15 years in the power sector) and in some respects introducing an exemption of foreign employees’ income tax for up to 3 years.

 

Foreign Investment in bangladesh_trends in foreign investment in bangladesh

Disputes Settlement in regards to Foreign Investment in Bangladesh

In dispute cases alternative conflict settlement is possible under the 2001 Arbitration Act. The Bangladesh International Convention on the Recognition and Compliance of Foreign Arbitral Awards was signed. Bangladesh is also a member of International Centre for Investment Dispute Settlement (ICSID).

The new law also provides for the implementation without much hindrance of international arbitral awards. Although venturing in a company may be overwhelming, Bangladesh offers investors a safe and resourceful environment suitable for establishing or expanding any company, and it can be said that Bangladesh is in fact a “dream investment destination,” after much consideration.

 

Visa, Work Permit, Citizenship in Bangladesh

For periods ranging from one month to five years prospective foreign investors may apply for visas. Foreign workers must get BIDA / BEZA / BEPZA work permit.

In an industrial organization the number of expatriate workers can not exceed the ratio of 1:20 (foreign: local) for industrial settings and 1:5 (foreign: local) for commercial establishments. Citizenship in a scheduled bank may be subject to investment of USD 1 million or a fixed deposit of USD 2 million. Investors can also get ‘NO Visa Requirement’ exemption for investment of more than USD 10 million.

 

If you want to know more in details about Visa obtaining process in Bangladesh

“Counsels Law Parnters is Considered as one of the leading Investment Law Firms in Dhaka, Bangladesh”

Carpe Noctem Bangladesh

Incentives offered to Foreign Investors in Bangladesh

Bangladesh is keen to boost the economy in a short time and turn the poverty-stricken economy into a developed one. Government investment strategy provides competitive stimulus packages to attract foreign investment. These incentives are updated annually and new incentives are announced, too. These installations are subject to certain conditions and are issued by the BIDA. Moreover, Bangladesh gives international investors citizenship, permanent residency and multiple entry visas for their ease of business.

 

Investing in the Stock market in Bangladesh

International investors are eligible to engage in Initial Public Offerings ( IPOs) without regulatory restrictions. In addition , capital gains from listed securities are tax-exempt for private investors and lower tax rates apply to corporations and other organizations.

 

Import Duty exemption in Bangladesh

No import duties are applicable for export-oriented sectors. There are duty exemptions also for some preferred sectors. General exemption of import duties is also available in respect of import of specific Plant & Machinery and spares.

 

If you want to know everything about Immigration and Citizenship in Bangladesh read this articl

Foreign Investment in bangladesh_Entering the Bangladshi market

Allowance of Capital repatriation in Bangladesh

Full repatriation of invested capital, profits and dividends is allowed, subject to applicable taxes.

 

Tax holiday facility in Bangladesh (THF)

Tax holidays are granted to industries subject to the relevant rules and procedures laid down by the National Revenue Board of Bangladesh (NBR). This may vary from 3 to 7 years depending on the location of the establishment. For example, industries located in the Dhaka and Chittagong Divisions (excluding three Hill Tract districts of the Chittagong Division) are exempted for a period of five years.

This tax holiday scheme, which was scheduled to end in 2015, was extended until June 2019 to create an investor-friendly atmosphere in Bangladesh. Tax holiday facilities are also available to manufacturing units and economic zone developers for a period of 10 years and 12 years respectively.

 

Special Tax Exemption for the foreign investors in Bangladesh

Tax exemptions are commonly permitted in the following cases:

  • There will be scope of tax exemption on royalties, technical know-how fees earned by any international partner, business, company and expert;
  • Reasonable income tax-upto-threeyearsforeign technicians working in industries as defined in the respective schedule of income tax regulations;
  • Relevant revenue of a private corporation conducting public infrastructure projects;
  • In regards to capital gains from the sale of shares of limited public company listed on the stock exchange;
  • NGO reported with the NGO Affairs Bureau;
  • Reasonable profits of companies and other sectors defined in the income tax Ordinance

Depreciation allowance in regards to Tax

Depreciation allowance shall be allowed in respect of any house, equipment, factory, furniture, bridge, road or overhead used in any company or industrial undertaking in the measurement of income or gains. The third schedule of the Income Tax Ordinance 1984 sets out a list of various types of properties and their corresponding depreciation allowance rates, which usually range from 10 % to 30% of costs. The plan also sets out the overview of the usual rate of depreciation allowance, the original rate of depreciation allowance and the accelerated rate of depreciation allowance for various asset groups.

 

If you want to know more in details about tax submission in Bangladesh click here!

Avoidance of Double Taxation for Foreign Investors

Double taxation for international investors can be avoided on the basis of the Bilateral Double Taxation Avoidance Treaties (DTTs). NBR is responsible for negotiating Double Taxation Agreements (DTAs) with foreign countries to facilitate FDI in Bangladesh. The DTA is an arrangement between two countries that aims to prevent double taxation by specifying the taxing rights of each country with respect to cross-border income flows and providing for tax credits or exemptions to remove double taxation. It also allows for the exchange of information between treaty partners on tax evasion. For instance, Bangladesh has double taxation treaties with  Denmark, France, Germany, Belgium, Canada, China, India, Italy, Japan, Poland, Romania, Singapore, South Korea, Sri Lanka, Sweden, Thailand, The Netherlands, The United Kingdom and other countries.

Foreign Investment in Bangladesh_Top law firm in Bangladesh

Remittance of profits for foreign investors in Bangladesh

Remittance of income of subsidiaries of foreign companies / companies, dividends / capital gains, wages and savings of expatriates, royalties and technical fees, training and consulting fees, receivables obtained by shipping companies and airlines for freight and transit can be made by approved dealers without the prior approval of the Bangladesh Bank. Global entrepreneurs are also entitled to the same facilities as domestic entrepreneurs with regard to tax holidays, dividends, technological know-how fees, etc.

Business profits and tax exemption for foreign investors in Bangladesh

The income of an enterprise of a Contracting State shall be taxable only in that State unless the enterprise carries on business in the other Contracting State through a permanent establishment situated therein. If the enterprise carries on business as mentioned above, the benefit of the enterprise may be taxed in the other Contracting State, but only in so many cases as is due to that permanent establishment. (Article 7 of the Double Taxation Agreement).

Dividends and tax exemption for foreign investors in Bangladesh

Dividends paid by a company resident in a Contracting State to a resident in the other Contracting State may be taxed in the other State. However, such dividends may also be taxed in the Contracting State in which the corporation paying the dividends is resident and in compliance with the laws of that State, but where the beneficiary is the beneficial owner of the dividend, the tax paid shall not exceed 10% of the gross sum of such dividends (Article 10 of the Double Taxation Agreement).

Interest arising from contract state for investors

Interest occurring in a Contracting State and charged to a citizen of the other Contracting State may be taxed in another State. However, such interest may also be taxed in the Contracting State in which it exists and in compliance with the laws of that State, however if the beneficiary is the beneficial owner of the interest, the tax so paid shall not exceed 10% of the gross sum of the interest.(Article 11 of the Double Taxation Agreement).

Capital gain derived by a foregin resident

Gains obtained by a resident of a Contracting State from the alienation of immovable property referred to in Article 6 and situated in the other Contracting State may be taxed in that other Contracting State. (Article 13 to prevent a double taxation agreement)

Foreign Investment in bangladesh-Formal sectors in Bangladesh

Repatriation of investment in Bangladesh

Full restitution of the capital accumulated from foreign sources is permitted. Likewise, the gains and dividends accrued on foreign investment can be transferred in full. If foreign investors reinvest their repatriable dividends and/or retained profits, they will be considered as new assets. Foreigners living in Bangladesh are required to pay up to 75% of their wages and will benefit from complete repatriation of their savings and retirement benefits. In order to allow full repatriation of the capital invested, benefit and dividend, foreign investors will have to apply for repatriation approval from the Bangladesh Bank through an approved bank. 

Foreign Private Investment (Promotion and Protection) Act, 1980, section 8 also states:

(1)  In respect of foreign private investment, the transfer of capital and the returns from it and, in the event of liquidation of industrial undertaking having such investment, of the proceeds from such liquidation is guaranteed.

(2)  The guarantee under sub-section (1) shall be subject to the right which, in circumstances of exceptional financial and economic difficulties, the Government may exercise in accordance with the applicable laws and regulations in such circumstances.

Foreign Investment in Bangladesh_Best law firm for FDI and VISA_Tahmidur rahman

 

List of online portals for potential investors in Bangladesh

Foreign direct investment (FDI)

 

www.bida.gov.bd

BIDA
Investing in economic zones www.beza.gov.bd  BEZA
Trade-related Information https://www.bangladeshtradeportal.gov.bd/ Bangladesh Government
Company name Clearance

http://app.roc.gov.bd:7781/psp/nc_ search?p_user_id=

 

Office of the Registrar of Joint Stock Companies and Farm (RJSC)

 

Registration of Company http://www.roc.gov.bd/

Office of the Registrar of Joint Stock Companies and Farm (RJSC)

 

VAT Registration http://www.nbr.gov.bd/

National Board of Revenue

 

Issuance of Certificate for using standard mark

http://www.bsti.gov.bd/Form_Online.html

Bangladesh Standards and Testing Institution (BSTI)

 

If you want to know how to Obtain a Trade License in Bangladesh click here!

Foreign Investment in bangladesh_All the priority sectors for foreign investment in bangladesh

Elimination of Taxation treaty in Bangladesh

In double taxation the following shall be eliminated:

(a) If a resident of China receives income from Bangladesh, the amount of tax on that income payable in Bangladesh in compliance with the terms of this Agreement may be credited against the Chinese tax levied on that resident. However, the amount of the credit shall not exceed the amount of Chinese tax on that income determined in accordance with China’s tax laws and regulations.

B) where the revenue received from Bangladesh is a dividend paid by a company resident in Bangladesh to a company resident in China and holding not less than 10 per cent of the shares of the company paying the dividend, the credit shall take into account the tax paid to Bangladesh by the company paying the dividend for its revenue.

Bilateral Investment treaties in Bangladesh

Bangladesh has with many nations, including China, signed Bilateral Investment Treaties (BIT) and Trade Agreements (TA). Typical provisions contained in BITs are clauses on foreign investment protection and treatment standards which usually address issues such as fair and equal treatment, full protection and security.

Provisions on reimbursement for damages suffered by foreign investors as a result of expropriation or as a result of war and dispute are typically a central part of such agreements as well. Most IIAs also control the moving of funds across borders in connection with foreign investment. 

The BITs also contain a clause on dispute resolution between investor and state. Usually this allows investors the right to bring a lawsuit to an international arbitral tribunal if a dispute occurs with the host country.

The International Center for Settlement of Investment Disputes (ICSID), the United Nations Commission on International Trade Law ( UNCITRAL) and the International Chamber of Commerce (ICC) are common places in which arbitration is sought.

Foreign Investment in Bangladesh_best law firm for investment tahmidur rahman

Funding options for foreign investors in Bangladesh

Foreign entities can conveniently access funding for short- and long-term investments from local financial institutions, including working capital loans, syndication, and trade finance. In addition, some of the Foreign Institutions (FIs) at home and abroad have access to on-shore and off-shore funding.

There are currently 58 planned commercial banks in the financial sector, as well as a host of Non-Bank Financial Institutions (NBFIs) and specialized financial institutions.
In addition to raising debt-based funding, investors may also consider securing equity-based capital-market financing from the country.

Raising Capital from the Equity market in Bangladesh

International companies can start raising capital from the stock market, subject to fulfillment of certain terms and conditions. The government is keen to increase the number of companies listed on the local stock exchange, and offers regulatory incentives to attract profitable businesses.

Listed firms pay 25 per cent corporate taxes on non-listed entities, excluding those markets, compared with 35 per cent tax limit.
Formal approval from the Bangladesh Securities and Exchange Commission (BSEC) is required for the fundraising process. Companies may use either the fixed price, or the option of constructing books.

The appointed merchant bank and auditor help prepare a prospectus under the fixed-price process, valuing the business based on current assets and prospects for future growth. The indicative stock price is determined and has to be certified by the regulator.

The method of book building involves a designated merchant bank to prepare an indicatively priced prospectus. The contending business then holds a series of road shows in which institutional investors are invited to bid on their stocks. IPO share price is dependent on input from other institutional investors and their interests. 

The DSEX listing process has the mandatory requirement that an Issue Manager be employed or named (approved by the DSEX). The way IPOs are determined needs support from the approved Issue Manager.

The draft prospectus shall be prepared in compliance with the Regulations of an Issue Manager and the Securities and Exchange Commission (Public Issue), 2015. IPOs can be issued by either book building or fixed-price system.

Debt capital from local commercial Banks in Bangladesh

International investors have access to financing for the local debt. Trade finance, term loans, and working capital are readily accessible to large foreign investors, in particular.

Interest rates are low for such loans and between 9-16 per cent. Bangladesh has a very large number of  State and commercial banks (as stated in the preceding section), and bank loans can be obtained against collateral secured.

Private Foreign Commercial borrowing in Bangladesh

To secure long-term foreign currency loans, a request must be sent to BIDA, which will then be forwarded to the Central Bank for further review.
To secure the loans, a business case supporting the loan condition must be included in the application. The proposal, along with the business case, is submitted for evaluation and decision by a committee chaired by the Bangladesh Bank Governor including members from BIDA, PMO Ministry of Finance.

Foreign Investment in Bangladesh_Tahmidur rahman _best law firm in dhaka

Regulatory institutions facilitating investment in Bangladesh

The investment route depends on the business sector and on the FDI policy introduced by the Government of Bangladesh. The following government and trade agencies would oversee and encourage investment in most sectors;

The Bangladesh Investment Development Authority (BIDA), Formerly known as the Investment Board (BOI), has been set up to deal with local and foreign investment issues. All incoming investments must be pre-approved by BIDA. The regulatory body aims to encourage domestic and foreign investment by simplifying the bureaucratic complexities of entering the Bangladesh market. 

Bangladesh Bank ( BB) is the central bank of the country. The central bank must be officially informed of any foreign transactions, including equity investments made on the stock market. All incoming investments shall be reported to BB via commercial banks.

Relevant trade bodies and chambers in Bangladesh

The Dhaka Chamber of Commerce and Industry (DCCI) is a non-profit, service-oriented chamber serving as the first point of contact for small and medium-sized enterprises. DCCI offers market-oriented inputs to imports , exports and investments throughout the government’s policy formulation period.

The Chamber periodically publishes guidebooks to promote trade and investment. DCCI also has its own training facility to facilitate the growth of capability of professionals associated with member organizations.

The International Investment Chamber of Commerce and Industries (FICCI), founded in 1963, is made up of 188 members across the mining, service and manufacturing sectors. Classified as Class ‘A’ Chamber of Commerce, FCCI is affiliated with the FBCCI, the International Trade Center (Geneva) and the World Trade Organization (Paris).

The Metropolitan Chamber of Commerce and Industry (MCCI) is a leading chamber body made up of representatives of major local and multinational corporations. The MCCI maintains frequent ties with major international trade organizations and global private sector organizations. (foreign investment in Bangladesh)

Exit policy for foreign investors in Bangladesh

An investor can terminate an investment either by a decision of an annual or an extraordinary general meeting. Once a foreign investor has completed the formalities to leave the country, he or she can repatriate the net proceeds after obtaining proper authorisation from the central bank (Bangladesh Bank).

Foreign Investment in Bangladesh_Tahmidur rahman_top law firm in Bangladesh

Frequently Asked Questions about Foreign Investment in Bangladesh

In regards to Foreign Investment in bangladesh people also ask these questions frequently, hence this FAQ content block is dedicated to answering your questions.

General Questions about Foreign Investment in bangladesh

Which Countries invest the most in Bangladesh?

The country’s major investors are China, South Korea , India, Egypt, the United Kingdom , the United Arab Emirates and Malaysia. According to the most recent data available from Bangladesh Bank, FDI flows increased by 5.36% to USD 1.65 billion in July-October 2019 per year.

How is the Investment Scenario in Bangladesh in 2020?

Bangladesh is already recognized as a thriving investment hub, reflected in influxes of foreign direct investment ( FDI) from the region. Bangladesh ‘s FDI amounted to USD 2.58 billion at the end of June 2018.

According to the Bangladesh Investment Development Authority (BIDA), there was a 13.34% rise in FDI in the third quarter of 2018, with proposals worth USD 3.23 billion in the basket. Mega-projects by the government is seen as the primary explanation for significant FDI investments in  Transportation, transportation , and communications. Exports from the country are also growing amid domestic consumption.

What is an example of Foreign Direct Investment in Bangladesh?

Examples of foreign direct investment in Bangladesh include, but are not limited to, mergers, acquisitions, retail, utilities, logistics, and development. Foreign direct investment and the laws that regulate it can be critical to the growth strategy of a business.

What are the types of foreign Investment?

Examples of foreign direct investment in Bangladesh include, but are not limited to, mergers, acquisitions, retail, utilities, logistics, and development. Foreign direct investment and the laws that regulate it can be critical to the growth strategy of a business.

What is the current trend of foreign investment in Bangladesh?

35.4 per cent of the FDI came from the manufacturing industry in 2016-17. The country witnessed phenomenal Y-o – Y growth of 11 per cent 2017 In this area. Experts in industry are optimistic this development will be maintained in the years to come. The sectors of transport , storage and communications ranked second with FDI inflows of 25 per cent.

This may be due to the mega projects being initiated and executed by the government at the present time. Over the time, electricity, accompanied by gas and petroleum, attracted FDI of 19 per cent. Over the years, the power sector has steadily drawn foreign investments due to the Government ‘s attractive tax incentives.

How Foreign investors can enter into Bangladeshi Market?

Foreign investors may either form a wholly / partially owned subsidiary, or set up a branch or liaison office for Bangladesh operations. The type of organization that was created will rely on the medium- and long-term strategy of the investor for market penetration. Hence the three conventional ways of entering the Market in Bangladesh:

  • Wholly owned subsidiaries
  • Limited liability by purchasing shares in an existing Bangladeshi company
  • Joint ventures
How to get work permit and visa as a foreign investor in Bangladesh?

For investors planning to become resident in Bangladesh by taking a full-time position or for the company’s expatriate employee, branch office, liaison office, work permit is required.

Upon arrival in Bangladesh for a short period of time under two types of visa, the person is required to apply for a work permit with BIDA and an extension from the Passport and Visa Department, subject to effective completion of the security clearance.

If not treated skillfully, the process can be very hectic, and time consuming. We help our customer make it easy and hassle-free. We also help our client locate commercial addresses needed for trade license and clearance of protection.

How to open a Liaison or Branch office in Bangladesh?

Opening Liaison office requires some critical preparatory work and documentation work which requires experience. We have significant experience of getting BIDA  registration for both liaison and branch office for several foreign principals.

Legal documentation involves authentication of parent company’s Memorandum and Articles of Association, list of directors etc. Often the authentication process is cumbersome.

We try our best to make the process smooth and hustle free. In recent time we have opened several branch and liaison offices for construction and engineering companies whose principal is located in Italy, UK, China, Singapore and other neighboring countries.

What is SEZ or Special Economic Zone in Bangladesh?

In Bangladesh, economic zone is a relatively new term. The government intended to establish 100 economic zones in various geographical locations.

However, as the land is still under development process, only a handful of economic zones are currently allocating property, or will do so in the near future. Mirsarai Economic Zone for example.

Our customer can take our service from the Bangladesh Economic Zones Authority (BEZA) to conduct due diligence on land in the economic zone. We also provide legal due diligence services for lands adjacent to the Mirsarai Economic Zone which is ready for immediate investment

How to get permits and consents as a foreign investor in Bangladesh?

Often the client carries out due diligence on the number of permits and approval necessary and the time period. The type of permits and consent required depends largely on the type of industry, the business venture, its location and the planned Bangladesh activity.

The Chambers offers all basic licensing services such as business registration, liaison office approval, branch office approval, trade authorization, export and import permit, chamber and trade membership, work permit, bank account opening, IRC, ERC, ad hoc IRC, BIDA registration, BIDA recommendation, etc.

We can help with other licenses or permits. We either do it ourselves or outsource it from our established service providers and vendors

What is EPZ or Export Processing Zone in Bangladesh?

Export Processing Zone is ideal for wholly owned export-oriented companies, if it is a Joint Venture, etc. 08 (eight) EPZs are geographically diversified in various locations within Bangladesh.

Depending on the nature of the company, availability of utilities, rental rates, transportation, availability of qualified man power, etc. Customer may choose acceptable EPZ to invest.

Interested customers can take advantage of our services to locate, lease, or move existing land leases from Bangladesh Export Processing Zone Authority (BEPZA).

How to do share acquisitions as a foreign investor in Bangladesh?

Share acquisition requires many paperwork works in an unlisted private and public corporation, e.g. signing Form 117, affidavits etc. In addition, in conjunction with the Memorandum and Articles of Association, several resolutions are required along with the drafting of the Share Purchase Agreements.

For the whole process, we counsel clients so that the transition is done smoothly. We also recommended buyer as well as seller to take over some businesses. We have also advised individual shareholder in the purchasing and sale of shares. Our service involves not only supporting documentation work, but also helping to actually record and receive a certified copy from RJSC

Foreign Direct Investment in Bangladesh at CLP:

The Barristers, Advocates, and lawyers at CLP in Gulshan, Dhaka, Bangladesh are highly experienced at dealing with foregin direct investment, where we assist clients in setting up of the complete business irrespective of whether it is within a specialized zone or any other part of Bangladesh. In Counsels Law Partners, 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, please reach us at:

 E-mail:tahmidur@counselslaw.com
Phone:+8801727983838

Address: House 39, Road 126 (3rd Floor) Islam Mansion, Gulshan 1, Dhaka.

 

Have a Different Question?

Email us anytime : tahmidur@counselslaw.com

Or call — +8801727983838

Tahmidur Rahman | Law Firm in Dhaka

Affiliated with Counsels Law Partners, A full service multi-directional law firm in Dhaka.

© 2018-2020 Tahmidur Rahman Matte IT Ltd.

NEED HELP?

Privacy Policy
Disclaimer
Client Login
Sitemap

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

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

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

Tahmidur Rahman, Director and Senior Associate

11 Nov 2019

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?

A branch serves as an extension of its parent company, meaning, there will be no separate legal entity established. Its parent company is liable for the branch office’s debts or any other obligations and activities.

No operation in Bangladesh that is not expressly authorized by BIDA can be conducted by a Branch Office. A Branch Office is also expected to register with the Joint Stock Companies and Company Registrar and to comply with other legal formalities prescribed by the Companies Act 1994.

A Branch Office offers the advantages of ease of service and uncomplicated closing. Nevertheless, as the operations are strictly controlled by the guidelines for exchange control, a Branch May may not provide the best framework for its expansion / diversification plans to a foreign firm.A foreign company’s branch office can engage in commercial activities with prior BIDA approval. A branch office may have a local source of revenue from the approved business sector in Bangladesh and with the prior approval of the Inter-Ministerial Committee and sufficient justification and supporting documentation.

 

Allowed activities of a Branch office in Bangladesh

One of the major differences between a branch and a liaison / representative office is that a branch may engage in commercial activities with a prior approval from the Bangladesh Investment Development Authority (BIDA). The branch office, for example, can:

 

  • collect payments on behalf of the parent company
  • have local sources of income
  • make outward payments from Bangladesh with a prior approval from the BIDA

 

Documents to submit in BIDA for a Branch office in Bangladesh

A Branch or Liaison Office is a proper legal body in Bangladesh once it is registered with the BIDA. It is called a multinational company extension, and not a separate legal entity. Unlike a Bangladeshi subsidiary, a Branch or Liaison Office parent company is indirectly responsible for all branch or liaison office debts and liabilities.

As per the guideline of BIDA, following papers/documents are required for application for opening of branch office. (4 copies of all documents).

1. Application in prescribed form signed by the authorized person for establishment of Branch office registration in Bangladesh.

2. Memorandum and Articles of Association and Certificate of Incorporation of the principal/ parent company. (Attested by the concern Bangladesh Embassy)

3. Name and nationality of the directors/promoters of the principal company. (Attested by the concern Bangladesh Embassy)

4. Audited Accounts of last financial year of the principal company. (Attested by the concern Bangladesh Embassy)

 5. Company’s board of director’s resolution regarding opening of office in Bangladesh. (Attested by the concern Bangladesh Embassy)

6. Proposed organogram of the office showing the posts to be occupied by both expatriates and local personnel.

7. Furthermore, Details of activities to be performed through the proposed branch/liaison/representative office in Bangladesh.

8. Finally, Any other documents BIDA, may ask for after primary reviewing

In addition, you must translate any documents that are not stated in English before submission. (Branch office registration in Bangladesh)

Inspection of the Documents by the BIDA

When the documents are issued, they will be thoroughly reviewed by the BIDA Inter-Ministerial Committee. When the committee is content with the verification then they may give the approval or can obtain additional documentation. Hence it is important to carefully prepare the papers.

 

Time and governments cost for approval

The average time needed for submission and getting the approval is one month. However, BIDA may seek physical representation of the documents as such this may make the process lengthier. (Branch office registration in Bangladesh.)

 The government cost for getting the approval from BIDA is USD 300 (three hundred dollar)

Branch office Registration in Bangladesh_best law firm in Dhaka tahmidur rahman

“Counsels Law is Considered as one of the leading firms in Company Law in Dhaka, Bangladesh”

Bdlawfirms & Carpe Noctem 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.

How to get a Trade License in Bangladesh?

Click here and go to the post, Tahmidur Rahman speaks in details about Trade License in Bangladesh | Fees, Processing and Renewal!

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).

Branch office Registration in Bangladesh_Tahmidur rahman_ best company law firm in Dhaka

Can a foreign employee be employed in Branch office?

 

Sponsors may apply for Private Investors Visa. Foreign employees can appointment. Appointment can be made by foreign employees.  International workers need to get a work permit to be able to operate in Bangladesh.  This is a multiple entry visa and it is only valid for 3 months but can be extended later.

A branch manager may be a foreigner but he / she should be a Bangladesh citizen.  Remember also that a cap of 5 percent (five percent)  of foreign employees in a branch is restricted by Bangladeshi law. In addition, it should be noted that as per the Bangladesh Investment Development Authority Handbook 2011, the
current maximum ratio of foreign to local employees is 1:5 for commercial offices and 1:20 for industrial enterprises. (Branch office Registration in Bangladesh)

 

Mergers and Acquisitions in Bangladesh _Top law firm in Bangladesh

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.

“Sponsors may apply for Private Investors Visa. Foreign employees can appointment. Appointment can be made by foreign employees.  International workers need to get a work permit to be able to operate in Bangladesh.  This is a multiple entry visa and it is only valid for 3 months but can be extended later.”

 

If you want to know how to open a company in Bangladesh or about company formation click here!

  • Step by Step Process of Registering a Company in Bangladesh

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:

  • Quarterly return of incomes and expenditures out of remittances received from abroad shall have to be submitted to the BIDA, concerned Bank, National Board of Revenue and Bangladesh Bank with documentary evidences under circular No 01/2009 amended circular No 03/2009 of 30th July, 2009.

     

  • Any change(s) of present address shall be intimated to the BIDA for necessary action and approval before the proposed change is carried out.

  • The permitted Office shall have to obtain clearances/ licenses from the concerned government agencies, as and where required, under the existing rules of the country.

     

  • The permitted Office shall have to pay duty/income tax/VAT/revenues and other taxes payable to the government under the existing laws of Bangladesh.

 

Company Law practice in Counsels Law Partners 

The Barristers, Advocates, and lawyers at CLP 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: tahmidur@counselslaw.com
Phone: +8801727983838
Address: House 39, Road 126 (3rd Floor) Islam Mansion, Gulshan 1, Dhaka.

 

Branch office Registration in Bangladesh_Tahmidur Rahman_corporate branch office registration in Bangladesh

Want new articles before they get published?
Subscribe to our Awesome Newsletter.

How to open a Liaison office in Bangladesh – Liaison office formation in 2020

How to open a Liaison office in Bangladesh -Registration and Incorporation Procedure of Liaison office in BangladeshTahmidur Rahman, Senior Associate, Counsels Law Partners2 Feb 2020This post in details will explain in details about the process of opening a liaison...

Foreign Investment in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know in 21st century

How to invest in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know about Foreign Investment in 21st century BangladeshTahmidur Rahman Director and Senior Associate, Counsels Law Partners17 Jan 2020Leading up to initiating a major investment ,...

Mergers and Acquisitions process | A complete overview with 14 simple steps

Mergers and Acquisitions in Bangladesh: A Complete guide with 14 stepsTahmidur Rahman Director and Senior Associate, Counsels Law Partners27 Dec 2019Our clients profit from a leading global M&A practice that has worked on more M&A transactions than any other...

NGO and INGO Registration Procedure in Bangladesh

NGO registration in Bangladesh- A complete guide in 2020- Everything you need to knowTahmidur Rahman, Senior Associate, Counsels Law Partners2 Jan 2020This post in details will explain in details about NGO and INGO registration in Bangladesh, the timeline, the...

Charter Party shipping contract in Bangladesh at 2020: Complete guide

Charter Party shipping contract in Bangladesh at 2020: A Complete guideTahmidur Rahman, Senior Associate, Counsels Law Partners2 Jan 2020This post in details will explain in details about charter party shipping contract in Bangladesh. The Charter Party Shipping...

Liquidation or Winding up a company in Bangladesh | Everything you need to know

Liquidation or Winding up a company in Bangladesh | Solvency declarance, Board meeting, declaration filings| Everything you need to know.Tahmidur Rahman, Director and Senior Associate12 Nov 2019This post in will explain in details about the process of Liquidation or...

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

Branch office registration in Bangladesh | Step by step process of setting up a branch company in BangladeshTahmidur Rahman, Director and Senior Associate11 Nov 2019This post in will explain in details about Branch office registration in Bangladesh - This article will...

Immigration and Citizenship laws of Bangladesh | Work permit and All visas

Immigration and Citizenship in Bangladesh| All types of visas, work permits and everything  you need to know.Tahmidur Rahman, Director and Senior Associate20 Oct 2019Immigration and Citizenship in Bangladesh- This post in will explain in details the  Immigration Law...

Defamation law in Bangladesh| Offence and Remedies

Defamation Law in Bangladesh and regarding its offences and remedies| Everything you need to knowTahmidur Rahman, Director and Senior Associate20 Oct 2019This post in will explain in details the Defamation Law in Bangladesh - offences and remedies, everything about...

E-Commerce Company Formation in Bangladesh

E-Commerce Company Formation in Bangladesh| Complete Overview of Starting an E-commerce Business.Tahmidur Rahman, Director and Senior Associate25 November 2019 E-commerce business formation in Bangladesh: E-commerce is actually one of Bangladesh's fastest growing...
Foreign Investment in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know in 21st century

Foreign Investment in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know in 21st century

How to invest in Bangladesh | Direct, Angel, Rules, Policy- Everything you need to know about Foreign Investment in 21st century BangladeshTahmidur Rahman Director and Senior Associate, Counsels Law Partners17 Jan 2020Leading up to initiating a major investment ,...

Call Now