Holding and Subsidiary Companies in Bangladesh in 2023 – Everything you need to know

Holding and Subsidiary Companies in Bangladesh in 2023 – Everything you need to know

Holding and Subsidiary Companies in Bangladesh – Everything you need to know in 2023

Barrister Tahmidur Rahman
Director, The Law Firm in Bangladesh

24 Jan 2022

This article will explain in details about Holding and Subsidiary Companies in Bangladesh and how can you start your business in Bangladesh.

 

Types of Companies in Bangladesh

There are six ways of doing business in Bangladesh:

In general, these are the six types of business entities can be found in Bangladesh

In simplest way: How you can incorporate Holding and Subsidiary Companies in Bangladesh

Holding and Subsidiary Companies in Bangladesh

When a company has control over another company and it holds the majority of the shares of another company, it is known as a holding company. And the company which is controlled by the first mentioned the company is known as a subsidiary company. Under the provision of Companies Act, 1994,

“a company shall be deemed to be the holding company of another if and only if that other is its subsidiary.”

So, the following characteristics of a holding company may be found-

  • It has the controlling power over another company;
  • It holds more than 50% shares of that other company;
  • It has more than 50% voting power;
  • The holding company is directly of indirectly empowered to
  • appoint directors of that other company.

Subsidiary company:

On satisfying any or more of the following conditions, a company shall be deemed to be a subsidiary company:

(1) Controlling the composition of board of directors:

If the composition of board of directors of a company is controlled byanother company, then the company whose board of directors is controlledshall be deemed to be a subsidiary company. [sec. 2 (2) (a)]

The composition of board of directors is said to be controlled when any director of the subsidiary company is removed or appointed by the parent company without the consent of any other person of the said subsidiary Company.

Holding And Subsidiary Companies In Bangladesh_Best Law Firm In Bangladesh

(2) Controlling voting securities:

A company shall be a subsidiary of another company if more than 50% of the voting securities are directly or in directly controlled, held or owned or managed in any other ways by another (holding) company.

(3) Subsidiary of another subsidiary company:

A company shall also be deemed to be a subsidiary of another company if it is a subsidiary of any company which is that other company’s subsidiary.

For Example: Company B is a subsidiary of company A, and company C is a subsidiary of company B. So, company C is a subsidiary of company ‘A’ also. If company ‘D’ is a subsidiary, then ‘D’ will be regarded as subsidiary of company ‘B’ also, and consequently of company ‘A’ also.

Other Companies alongside Holding and Subsidiary Companies in Bangladesh in Bangladesh:

(a) Existing Company:

Existing company indicates the company formed and registered at or before the commencement of the Companies Act, 1994. Before passing this Act, the companies were regulated under the Companies Act, 1913 .

However, under the provision of present Companies Act, 1994 “Existing Company” means a company formed and registered under any law relating to companies in force at any time before the commencement of this Act, and is in operation after commencement of this Act. 

(b) Foreign Company:

Generally, a foreign company is a company which is incorporated outside Bangladesh. But under section 378, a foreign company may include company incorporated outside Bangladesh, but has an established place of business in Bangladesh.

Holding And Subsidiary Companies In Bangladesh_Best Law Firm In Bd

Setting up a Subsidiary Company in Bangladesh

 

In the event that you go it alone and establish a Bangladesh subsidiary, you’ll need to think carefully about the best organizational structure and geographical location for your business. Private Limited Company is the most common business structure because it shields the parent company from legal responsibility for the actions of its subsidiaries.

Once a building type has been selected, a site must be selected. Countries, states, or even counties can have their own sets of rules and norms by which they conduct business. Consider these criteria as you make your final decision on a suitable location for your company.

The following are the stages of establishing a Holding and Subsidiary Companies in Bangladesh:

  • The Registrar of Joint Stock Companies and Firms website allows you to check your name and print a clearance certificate.
  • Getting Your Company’s Articles of Incorporation and Memorandum of Incorporation
  • To obtain encashment certificates and finalize your registration, you must first open a bank account in Bangladesh.
  • Since the banking system in Bangladesh wasn’t built to handle international business transactions, companies there often face difficulties when trying to do business there. Acquiring encashment certificates is a necessary step in the registration process because they serve as evidence that foreign currency was converted to Bangladeshi Taka. In a stroke of good fortune for expanding businesses, Bangladesh is currently modernizing its banking systems.
Partnership Business In Bangladesh_Best Law Firm In Bangladesh_Barrister Tahmidur Rahman

If you want to open a liaison office in Bangladesh or about branch formation click here!

“Tahmidur Rahman – The Law Firm in Bangladesh is considered as one of the leading corporate firms in Dhaka, Bangladesh”

BDLaw Firms Bangladesh

What are some alternative ways to set up a company in Bangladesh?

Branch Office:

A branch  is not a separate incorporated entity, but rather an extension of its parent company. In other words, the parent company is liable for the liabilities of its branches. 

With Bangladesh Investment Development Authority’s (BIDA) approval, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, strictly monitor its operation.
In Bangladesh, the average time to open a branch officis 45- 60 days.

Liason Office:

A liaison, also known as a representative office, is subject to BIDA approval  similarly as a branch.

It must have an overseas parent company, and its activities are limited because it only serves as a communication or coordination instrument for Bangladesh’s business resources.

Also, keep in mind that a liaison office in Bangladesh cannot earn any local income. Through remittance, the parent company bears all of its expenses and operational cost. It also adheres to the general business registration procedure in Bangladesh.

 

Foreign Investment In Bangladedsh

“To start a private limited company in Bangladesh, you will need to open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh.

 This stage is solely applicable if the proposed company has foreign shareholding.”

 -Meheruba Mahbub

Are you planning to register a private limited company in Bangladesh?

Company formation and registration at Tahmidur Rahman Remura: TLS: The Law Firm in Bangladesh:

The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: TLS, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165

Address: House 410, Road 29, Mohakhali DOHS

 

FAQ

How much money is required for company registration in Bangladesh?

The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.

How long does it take to register a company in Bangladesh?

Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.

It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.

What is BIDA?

Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.

BIDA's responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.

Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.

What documents are needed to set up a private limited company in Bangladesh?

1. Memorandum of Association
2. Article of Association
3. Certificate of Incorporation
4. Trade License
5. TIN
6. VAT Registration Certificate
7. Name Clearance
8. Environmental Clearance Certificate
9. Fire Certificate

What is the minimum capital required for a private limited company in Bangladesh?

In Bangladesh, there is no minimum or maximum authorised capital for a local company.

However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.

Can a single person start a company in Bangladesh?

 Bangladesh does not allow a single person to open a private limited company or One Person Company (OPC).

A private limited company must have at least two shareholders. In the case of a public limited company, however, the total number of shareholders required is seven.

Can a private limited company have one director in Bangladesh?

A private limited company must have at least two directors. Local or foreign nationals may serve as directors.

Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.

What is the difference between authorised capital and paid-up capital?

- Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocate to shareholders.  

In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.

-Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).

Infographics
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Video Tutorial
Author’s Bio
About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
Work highlights

Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

Email: [email protected]

Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

Gender: Female

Job Title: Barrister and Senior Associate

Have a Different Question?

Email us anytime : [email protected]

Or call — +8801847220062 or +8801779127165

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Company Share in Bangladesh- Everything you need to know in 2023

Company Share in Bangladesh- Everything you need to know in 2023

TR Law Firm in Bangladesh

Company Share in Bangladesh

Barrister Tahmidur Rahman Lawfirm

24 Jan 2022

This article will explain in details about company shares in Bangladesh, Share capital, Share issued in discount and everything you need to know about shares of a comapny in Bangladesh.

Shares of Company in Bangladesh

Before we talk about shares of a company in Bangladesh. There are five ways of doing business in Bangladesh:

 

A company share in Bangladesh is a movable property transferable as per provisions of the articles. There is no exhaustive definition of a share in the Act.’ A share is the interest of a shareholder in the company measured by a sum of money, for the purpose of liability in the first place, and of interest in the second, but also consisting of a series of mutual covenants entered into by all the shareholders inter se in accordance with section.

 

A company share in Bangladesh is a type of contractual claim against a company. It is an example of intangible property called a ‘chose in action’ or “Thing in action’. Professor R Pennington discusses the difficulty of defining shares and concludes that they are a species of intangible movable property which comprises a collection of rights and obligations relating to an interest in a company of an economic and proprietary character, but not constituting a debt.

    Legal and Equitable Actions in company share in Bangladesh

    In English law there are two kinds of chose in action; (i) legal choses in action (being claims enforceable at common law) and (ii) equitable choses in action (Being claims enforceable in equity). Because a company share in Bangladesh is a creature of statute, it is a legal rather than an equitable chose in action.  In that respect it differs from a share in a partnership, which is an equitable chose in action because, historically, the interest of a partner has been enforceable in equity and not at law.

     

    A share in a company also differs from a share in a partnership in terms of transferability of membership. In companies listed on the Stock Exchange a share can be freely sold and transferred. In unlisted companies there can be restrictions on transfer. The transferee becomes a member of the company in substitution of the transferor. A person who buys the share of a partner, however, acquires an interest but does not become a partner; the vendor becomes a trustee for him of the interest agreed to be sold.

     

    A transfer of a share as a legal chose in action differs from transfer of a debt as a legal chose in action. A creditor can transfer the legal ownership of a debt by a two sided written assignment between a transferor and transferee with written notice to the debtor, but without needing his consent. Of course, the debtor cannot transfer the liability without the consent of the creditor. 

    But to transfer the legal ownership of a company share in Bangladesh, a change in the company’s share register is needed. That means there is a three-sided novation (the substitution of a new contract in place of an old one) rather than a two-sided assignment. Hence, liability attached to a partly paid-up share can be transferred although the transferor can remain liable if the company commences to wind up within one year from the transfer.

     

    The rights making up a share are not separate pieces of property. If a company share in Bangladesh had carried only financial rights it might have been considered divisible; but a share carries rights of membership and the whole scheme of the company law does not admit of membership referable to a fraction of a share. Hence, a company cannot allot fractional shares.

     

    Nor can a shareholder divide an allotted share so as to assign only some of the set of rights, such as the right to be paid dividends. If a member wishes to dispose of only part of the benefits of a share, that can be done behind the screen of a trust.

     

    The member could create a trust of the share so that the trustee would be bound to account to one beneficiary for, say, dividends only and to account to another beneficiary for other benefits. A share as an item of property differs from physical subjects of ownership such as land in that its characteristics are fixed, not by nature, but by whatever is put into the contract between company and shareholder.

     

    In a company, the rights attached to company share in Bangladesh may be so framed that the shareholder is restricted (for example, as to transfer of the shares) and those restrictions will apply to anybody who becomes owner of the shares. In other words, in a share the restrictions can go to defining the property itself instead of being something external that is imposed in respect of a pre-existing item of property.

    Company Share In Bangladesh_ Top Law Firm In Bangladesh_Barrister Tahmidur Rahman Remura 2022

    If you want to know about Share Transfer Process in Bangladesh

    • Step by Step Process of transferring shar in Bangladesh

    Share Capital or Authorised Capital in Bangladesh

    The word “capital” used in connection with a company has several different meanings. It may mean the nominal or authorised share capital, the issued share capital, or the paid-up share capital of the company.

     

    The nominal or authorised capital is merely the amount of share capital which the company is authorised to issue. In the case of a limited company the amount of potential share capital with which it proposes to be registered, and the division thereof into shares of a fixed amount, must be set out in the memorandum of association. This as well as the paid-up amount may be increased or reduced.

     

    The amount of the company’s nominal capital depends on its business requirements, actual or potential. At the time of registration of the company the promoters will have to pay fees and stamp based on the amount of the nominal capital.

     

    The issued or allotted capital is that part of the company’s nominal capital which has been issued to the shareholders. The company is not bound to issue all its capital at once.

    Further issues of capital are made as they are needed (please find the details in section 155 of the Act).

    The paid-up capital is that part of the issued capital which has been paid-up by the shareholders. The company may, for example, have a nominal capital of Tk 500,000 divided into 500,000 shares of Tk One each, of which Tk 400,000 is issued, i.e., 400,000 of the shares have been issued and only Tk 100,000 is paid-up, i.e., the company has so far required only 25p. to be paid-up on each share. The uncalled capital is the remainder of the issued capital and can be called up at any time by the company from the shareholders in accordance with the provisions of the articles.  

    The paid-up capital of the company includes the value of the shares paid-up and any premium on such shares although the share premium will be shown as share premium account in the balance sheet.

    The Securities and Exchange Commission has to be satisfied before company share in Bangladesh can be issued at a premium as to the justification for it.

    Company Share In Bangladesh_ Best Corporate Law Firm In Bangladesh_Barrister Tahmidur Rahman Remura 2022

    Shared Issued at discount in Bangladesh

    The issued share capital of a company is the fund to which creditors of the company can look for payment of their debts, and so, to protect the creditors, shares can be treated as paid-up only to the extent of the amount actually received by the company. Section 152 and 153 of the Company Act impose restrictions on issue of shares and debentures at a commission or discount.

    A commission may be paid only if its payment and rate are approved by the articles and is mentioned in the prospectus where such a prospectus is issued and, in a statement, in lieu of prospectus where such a prospectus is not issued. 

    Shares may be issued at a discount if such issue is authorised by resolution of the company in general meeting and sanctioned by the Court.

    The resolution must specify the maximum rate of discount not exceeding ten percent at which shares are to be issued and not less than one year has elapsed since the date on which the company was entitled to commence business and the shares to be issued at discount are done so within six months after the date on which the company was entitled to commence business.

    Every prospectus and balance sheet issued after the company share  discount must contain particulars of the discount allowed on the issue of shares.

    Redeemable Preference Shares in Bangladeshi Companies (company share in Bangladesh)

    Redeemable Preference Shares can be issued if so authorised by the articles. Section 154 of the Companies Act however provides that no such share shall be redeemed except out of profits of the company which would be otherwise available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption or out of sale proceeds of any of the profits of the company.

    No such share shall be redeemed unless they are fully paid-up and where any such shares are redeemed otherwise, than out of the proceeds of a fresh issue, there shall out of profits which would otherwise have been available for dividend, be transferred to a reserve fund to be called the capital reserve fund.

    A sum equal to the amount applied in redeeming the shares, and the provisions of the Act relating to the reduction of the share capital of a company shall apply as if the capital redemption reserve fund were paid-up share capital of the company.  

    Where any such shares are redeemed out of the fresh issue, the premium, if any, payable on redemption must have been provided for out of the profits of the company before the shares are redeemed.

    There shall be included in every balance sheet of a company which has issued redeemable preference shares a statement specifying what part of the issued capital of the company consists of such shares and the date when the shares are liable to be redeemed and where no such date is fixed the period of notice that is to be given for redemption.

    Company Share In Bangladesh_ Best Commercial Law Firm In Bangladesh_Barrister Tahmidur Rahman Remura 2022

    If you want to open a liaison office in Bangladesh or about branch formation click here!

    Essential Information for Foreign Investors

    Foreign investors need to keep the following things in mind when they plan to form a private limited company in Bangladesh:

    • The costs of registering a company are primarily determined by the company’s authorized capital. The average cost is between USD 1800.
    • Shelf companies are not permitted and must have a physical place of business in Bangladesh.
    • Bangladesh Forex Regulations allow for the full repatriation of profits and investments.
    • Foreign nationals may be employed at a 20:1 (local: expat) ratio, subject to obtaining the necessary work permit.
    • Except in a few restricted areas, 100 percent FDI investment is permitted.
    • Directors can be either foreign or domestic nationals.
    • The typical corporate income tax rate ranges from 25% to 45 percent, depending on the sector and nature of the company.

      However, tax exemptions are available for selected sectors and areas for 5-7 years.

    • There are also additional tax exemptions  for investing in Special Economic Zones.

     

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    Team up with the best law firm in Bangladesh to help you through the process.

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    What are some alternative ways to set up a company in Bangladesh?

    Branch Office:

    A branch  is not a separate incorporated entity, but rather an extension of its parent company. In other words, the parent company is liable for the liabilities of its branches. 

    With Bangladesh Investment Development Authority’s (BIDA) approval, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, strictly monitor its operation.
    In Bangladesh, the average time to open a branch officis 45- 60 days.

    Liason Office:

    A liaison, also known as a representative office, is subject to BIDA approval  similarly as a branch.

    It must have an overseas parent company, and its activities are limited because it only serves as a communication or coordination instrument for Bangladesh’s business resources.

    Also, keep in mind that a liaison office in Bangladesh cannot earn any local income. Through remittance, the parent company bears all of its expenses and operational cost. It also adheres to the general business registration procedure in Bangladesh.

     

    How To Register A Private Limited Company In Bangladesh Infographics Remura Mahbub

    “To start a private limited company in Bangladesh, you will need to open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh.

     This stage is solely applicable if the proposed company has foreign shareholding.”

    – Barrister Remura Mahbub

    Are you planning to register a private limited company in Bangladesh?

    Company formation and registration at Tahmidur Rahman TLS:

    The legal team of Tahmidur Rahman, The Law Firm in Bangladesh TLS are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company, Branch office Registration, Share Transfer Process in Bangladesh . For queries or legal assistance, please reach us at:

    E-mail: [email protected]
    Phone: +8801847220062 or +8801779127165

    Address: House 410, Road 29, Mohakhali DOHS, Dhaka 1212

     

    FAQ

    What is the basic of issuing Shares of a company in Bangladesh?

    The procedure through which companies distribute additional shares to shareholders is known as an issue of shares. There are two types of shareholders: individuals and corporations. When issuing shares, the corporation complies with the regulations set forth under the Companies Act of 1994.

    What are the nature and classes of shares in Bangladesh?

    One of the components into which a company's capital is divided is a share. Therefore, if a firm has BDT 5 lakh in total capital and divides that capital into 5000 units of BDT 100 each, each unit of BDT 100 is equivalent to one share of the company.

    As a result, ownership of the company is based on shares. A shareholder is a person who owns such shares and is hence a member of the business.

    The fundamental information about shares and share capital, such as the kinds of shares that must be mandated, will now be found in the articles of association. According to the Companies Act of 1994, a corporation may only issue two different kinds of shares. They differ in nature and in their rights and responsibilities. 

    What is the preference share of a company?

    A share that has two exclusive preferential rights over the other form of shares, namely equity shares, is referred to as a preference share. These two preference share specific requirements are

    a preferred position in relation to a company's declared dividends. They may get such dividends at a predetermined rate based on the nominal value of the shares they own. Preference shareholders receive the dividend before equity stockholders as a result.
    preferential treatment when it comes to capital repayment in the event of a corporate liquidation. This indicates that preference shareholders receive their payouts before equity shareholders do.
    Preference shares are comparable to equity shares aside from these two rights. Preference share holders have the opportunity to vote on any issues that directly affect their rights or duties.

    Actually, there are numerous forms of preference shares. They may be exchangeable or not. They can either participate (share in additional income after a dividend is paid out) or not. Additionally, they could be non-cumulative or cumulative (demand arrears will accumulate).

    What is the Equity Share of a company in Bangladesh?

    A share that isn't a preference share is an equity share. Shares without any preferential rights are therefore considered equity shares. They are only given equity, or ownership, in the business.

    Dividends paid to equity stockholders are not set in stone. Depending on the company's financial performance, the Board of Directors makes the decision. Additionally, the stockholders forfeit the dividend for that year if it cannot be declared; the dividend does not accumulate in such cases.

    Additionally, equity shareholders have proportional voting rights based on the company's paid-up capital. In essence, it is a system of "one share, one vote." A business cannot publish non-voting

    What is the procedure of Issuing Shares in Bangladesh?

    1] Issue of Prospectus
    The prospectus is released first, then the shares. The prospectus functions as a kind of solicitation to the general public to subscribe for company shares. A prospectus includes all of the company's information, including its financial breakdown, profit and loss accounts from the prior year, and balance sheets.

    Additionally, it describes how the funds raised will be used. A corporation must publish a prospectus or a document in its place when soliciting deposits from the general public.

    2) Receiving Applications
    Prospective investors may now submit applications for shares after the prospectus is released. The prospectus specifies the schedule bank where the required application funds must be deposited along with the completed application. The duration of the application period is 120 days at most. If the required minimum subscription amount is not met in these 120 days, the share issuance will be canceled. Within 130 days of the prospectus's release, the application funds must be returned to the investors.

    3] Share Allocation
    The shares may be distributed after the required minimum subscription amount has been met. Shares are typically oversubscribed, hence the allocation is made on a pro rata basis. Those whose shares have been allocated get Letters of Allotment in the mail. As a result, a legal contract is formed between the applicant and the business, who is now a shareholder.

    Letters of regret are provided to the applicants in the event that their application was refused. Following the allotment, the firm is free to pay the share capital in full or in installments as it pleases.

    What is a minimum subscription of share in Bangladesh?

    When the shares are made available to the general public as part of the share issuance, this is the minimum amount that must be raised. The Board of Directors typically determines this minimum subscription, however it cannot be less than 90% of the issued capital. As a result, for the offer to be considered successful, at least 90% of the issued capital must be subscribed for. In this scenario, the application money that has already been received must be refunded within the established time frame.

    What are the shares Issued at Par - Share Capital Account?

    Share allocation is not assured by applying for shares. A few applications will be turned down. In this case, we do not credit the share capital account when the application money is received. We create a new account—a sharing application account—for convenience's sake.

    According to the Companies Act, the funds obtained from the application must be placed in the bank account at a Schedule Bank. This account has been set up specifically to handle the application fee. The following is the journal record for this transaction in the business's books:

    What are the Shares issued at premium?

    We refer to shares issued at a premium as when the corporation chooses to issue shares at a price greater than the nominal value or face value. It is a fairly typical practice, particularly when the business has a solid track record, strong financial results, and a solid reputation. Let's say a share has a face value of BDT. 100 and is issued by the corporation at BDT. 110. It is said that the share was issued at a 10% premium. The premium will be shown in a separate account called the Securities Premium Account rather than becoming a part of the Share Capital account. The corporation can now call up this premium amount whenever it wants, i.e. with any call. The premium is often collected using allocation or application money, and rarely with call money. The Securities Premium Account has been credited with the premium sum that we previously specified. On the liabilities side of the balance sheet, under the heading Reserves and Surplus, is where you'll find this account.

    Infographics
    How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Bangladesh
    Video Tutorial
    Author’s Bio
    About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

    Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

    Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
    Work highlights

    Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

    ⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

    ⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

    ⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

    ⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

    ⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

    Email: [email protected]

    Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

    Gender: Female

    Job Title: Barrister and Senior Associate

    Have a Different Question?

    Email us anytime : [email protected]irm.com

    Or call — +8801847220062 or +8801779127165

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    Registration of a Private Limited Company in Bangladesh in 2022 | 5 Simple Steps

    Registration of a Private Limited Company in Bangladesh in 2022 | 5 Simple Steps

    Registration of a Private Limited Company in Bangladesh in 2022

    Meheruba Mahbub

    Meheruba Mahbub
     Senior Associate, The Law Firm in Bangladesh

    24 Jan 2022

    This article will explain in details about formation and registration of a Private Limited Company in Bangladesh.

    It will focus on five easy steps: business name clearance, drafting required documents, opening a bank account, company registration with the RJSC, and post registration formalities.

    Moreover, it will outline essential points for foreign investors and alternative ways to set up a company in Bangladesh.

    , Private Limited Company in Bangladesh

    There are five ways of doing business in Bangladesh:

    • It restricts the ability to transfer shares [section 2(q)]
    • The minimum number of members is 2 (two) [s. 5]; the maximum number of members is 50 (fifty), excluding employees of the Company [s. 2(q)].
    • It must have at least two directors [s. 90 (2)]
    • It prohibits any public invitation to subscribe for the Company’s shares or debentures [s. 2(q)].

    After completion of Registration of a Private Limited Company in Bangladesh, it can begin operations as soon as it is registered with  The Registrar of Joint Stock Companies (RJSC), subject to obtaining the other licenses listed below in the post-registration section of this Report.

      Procedure for Registration of a Private Limited Company in Bangladesh

      The 5 steps listed below correctly outlines the procedure for the registration of a Private Limited Company in Bangladesh.

      Step 1: Business Name Clearance 

      The first step in forming a private limited company in Bangladesh is to fix a desired name for the company.  Following the selection of a name, the applicant must apply for name clearance in order to obtain the name approval certificate RJSC.

      The certificate is usually delivered within 1 to 2 days. Investors are required to pay RJSC the necessary fees for name clearance and verification.The government fee for name clearance is currently 230 BDT or  around 3 USD.

      Step 2: Drafting Required Documents

      In order to form a Private Limited company in Bangladesh, a Memorandum of Association (MoA) and Articles of association (AoA) must be prepared by the company.

      Drafting Memorandum of Association (MoA):

      A limited company’s Memorandum of Association (MOA) states the company’s objectives, company’s authorized capital, and list of the shareholders along with their respective shareholdings.

      However, it should be noted that in order to begin a banking, finance, school, or hospital business, prior approval from the relevant authority is required.

      Drafting Articles of Association (AoA):

      The AoA outlines all of the regulations that govern how a limited company operates. The AoA should include the number and list of directors, the board’s power, the Managing Director’s power, the meeting process, quorum, notice procedure, and the appointment of auditors.

      It also specifies how the company’s bank account will be managed.

       

       

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      Step 3: Opening a Bank Account

      To start a private limited company in Bangladesh, you will need to open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh.  

      This stage is solely applicable if the proposed company has foreign shareholding. The following documents need to be filed to the respective banks in order to open the bank account:

      • Name Clearance
      • Draft copy of your MoA and AoA
      • Board Resolutions of the foreign company
      • Passports copies of the representative shareholders
      • bank account opening forms.

      Foreign investors wanting to form a private limited company in Bangladesh must deposit the requisite paid-up capital into the company’s bank account.

      The remitted funds will be held by the bank. The bank will produce an Encashment Certificate, which will be required by RJSC in order for the company to be incorporated.

      This certificate states that the appropriate capital contribution has been duly deposited in the proposed company’s temporary bank account.

       

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      Step 4: Company Registration with the RJSC

      In order to register the private limited company in Bangladesh, all the required information and documents must be submitted to the RJSC. They are as follows:

      • Details of Directors (name, parents name, passport number, email ID, mobile number)
      • National Identification Number (if Bangladeshi national)
      • Tax Identification Number (if Bangladeshi national)
      • Limit of paid up capital and authorized capital
      • Photo of all shareholders (1 copy)
      • Address of the company
      • Signatories of the bank account

      The registration fee and stamp duty must be paid in the RJSC’s designated bank.
      The government fee will be calculated depending on the proposed company’s approved share capital.
      A certificate of incorporation must be obtained from the RJSC after all processes have been completed successfully in order to register a private limited company in Bangladesh.

      Step 5: Post-registration Formalities

      After successful company formation, the last step in order to form a private limited company in Bangladesh is to acquire the following certificates/licenses:

      (a) Trade License 

      The companies must obtain a trade license from the local authorities. The proposed Company must submit an application to the local City Corporation, together with all essential paperwork and payments.

      The cost of getting a trade license is around USD 200, and it can be renewed annually. Three to four working days are typically required to receive it.

      b) TIN (Tax Identification Number)

      A private limited company in Bangladesh must obtain an E-TIN from the National Board of Revenue‘s (NBR) website, which can be done free of cost.

      c) VAT Registration Certificate

      The newly formed company must also obtain a VAT registration Certificate from the National Board of Revenue. This should take about 5-7 working days.

      d) Fire Certificate

      Bangladesh Fire Service and Civil Defense Authority will need to issue a fire certificate to the private limited company.

      e) Environmental Clearance Certificate

      A private limited company in Bangladesh must collect an environment clearance certificate from the Department of Environment if it intends to be involved in industrial activity.

      Furthermore, each year, the company must submit to the RJSC the following documents:

      • Schedule X which is a list of shareholders and an annual summary of share capital.
      • Balance Sheet within 30 days of Annual General Meeting (AGM).
      • Profit and Loss Account within 30 days of AGM.
        Form 23B which is a letter of approval from the auditor that must be provided within 30 days of the appointment date.
      How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Dhaka

      If you want to open a liaison office in Bangladesh or about branch formation click here!

      Essential Information for Foreign Investors

      Foreign investors need to keep the following things in mind when they plan to form a private limited company in Bangladesh:

      • The costs of registering a company are primarily determined by the company’s authorized capital. The average cost is between USD 1800.
      • Shelf companies are not permitted and must have a physical place of business in Bangladesh.
      • Bangladesh Forex Regulations allow for the full repatriation of profits and investments.
      • Foreign nationals may be employed at a 20:1 (local: expat) ratio, subject to obtaining the necessary work permit.
      • Except in a few restricted areas, 100 percent FDI investment is permitted.
      • Directors can be either foreign or domestic nationals.
      • The typical corporate income tax rate ranges from 25% to 45 percent, depending on the sector and nature of the company.

        However, tax exemptions are available for selected sectors and areas for 5-7 years.

      • There are also additional tax exemptions  for investing in Special Economic Zones.

       

      “Tahmidur Rahman – The Law Firm in Bangladesh is considered as one of the leading corporate firms in Dhaka, Bangladesh”

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      What are some alternative ways to set up a company in Bangladesh?

      Branch Office:

      A branch  is not a separate incorporated entity, but rather an extension of its parent company. In other words, the parent company is liable for the liabilities of its branches. 

      With Bangladesh Investment Development Authority’s (BIDA) approval, a branch can engage in commercial activities. The Exchange Control Guidelines, on the other hand, strictly monitor its operation.
      In Bangladesh, the average time to open a branch officis 45- 60 days.

      Liason Office:

      A liaison, also known as a representative office, is subject to BIDA approval  similarly as a branch.

      It must have an overseas parent company, and its activities are limited because it only serves as a communication or coordination instrument for Bangladesh’s business resources.

      Also, keep in mind that a liaison office in Bangladesh cannot earn any local income. Through remittance, the parent company bears all of its expenses and operational cost. It also adheres to the general business registration procedure in Bangladesh.

       

      How To Register A Private Limited Company In Bangladesh Infographics Remura Mahbub

      “To start a private limited company in Bangladesh, you will need to open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh.

       This stage is solely applicable if the proposed company has foreign shareholding.”

       -Meheruba Mahbub

      Are you planning to register a private limited company in Bangladesh?

      Company formation and registration at Tahmidur Rahman Remura: The Law Firm in Bangladesh:

      The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:

      E-mail: [email protected]
      Phone: +8801847220062 or +8801779127165

      Address: House 410, Road 29, Mohakhali DOHS

       

      FAQ

      How much money is required for company registration in Bangladesh?

      The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.

      How long does it take to register a company in Bangladesh?

      Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.

      It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.

      What is BIDA?

      Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.

      BIDA's responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.

      Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.

      What documents are needed to set up a private limited company in Bangladesh?

      1. Memorandum of Association
      2. Article of Association
      3. Certificate of Incorporation
      4. Trade License
      5. TIN
      6. VAT Registration Certificate
      7. Name Clearance
      8. Environmental Clearance Certificate
      9. Fire Certificate

      What is the minimum capital required for a private limited company in Bangladesh?

      In Bangladesh, there is no minimum or maximum authorised capital for a local company.

      However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.

      Can a single person start a company in Bangladesh?

       Bangladesh does not allow a single person to open a private limited company or One Person Company (OPC).

      A private limited company must have at least two shareholders. In the case of a public limited company, however, the total number of shareholders required is seven.

      Can a private limited company have one director in Bangladesh?

      A private limited company must have at least two directors. Local or foreign nationals may serve as directors.

      Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.

      What is the difference between authorised capital and paid-up capital?

      - Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocate to shareholders.  

      In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.

      -Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).

      Infographics
      How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Bangladesh
      Video Tutorial
      Author’s Bio
      About Meheruba Mahbub | One of the most innovative young lawyers in Bangladesh

      Meheruba Mahbub is a finance partner and one of the Bangladesh's market leading international lawyers. She is head of the firm's Mergers and Acquisitions practice, which advises corporates and financial institutions on outbound and inbound investments, projects and financings.

      Meheruba has a diverse finance practice , representing large banks, financial sponsors, and corporations. She specializes in acquisition and structured financings, loan portfolio purchase and financing, real estate financings, and inbound and outbound transactions. She has extensive expertise in the energy and infrastructure industries.
      Work highlights

      Meheruba has acted on many high-profile Finance and Commercial deals in Bangladesh and India. These include advising:

      ⦾ Standard Chartered Bank on the sale of a portfolio of loans in Bangladesh, the first in a series of similar deals in Bangladesh as part of the government’s directive to banks to focus on the robustness of their balance sheets.

      ⦾ the lending and underwriting banks on the refinancing of US$6.9bn worth of debt uninsured by the Summit Group

      ⦾ Brookfield Property Partners on the acquisition and financing of Unitech’s real estate portfolio

      ⦾ Enron on the US$3bn Dhabol power project (since renamed Ratnagiri Gas and Power), the first ever inward investment into the power sector

      ⦾ the sponsor and borrowers on the Sakhalin LNG project, the world’s largest integrated oil and gas project and the largest LNG financing in Russia

      Email: [email protected]

      Address: 2 Turner Street, Canning Town, E16 1FH, United Kingdom

      Gender: Female

      Job Title: Barrister and Senior Associate

      Have a Different Question?

      Email us anytime : [email protected]

      Or call — +8801847220062 or +8801779127165

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      How To Form An Association In Bangladesh

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      How to take Foreign loans in Bangladesh in 2022| How to effectively process Overseas Financing for Bangladeshi Companies | Pioneering Bangladesh

      How to take Foreign loans in Bangladesh in 2022| How to effectively process Overseas Financing for Bangladeshi Companies | Pioneering Bangladesh

      How to take foreign loans in Bangladesh in 2022 | Step by step process of getting loan from foreign entities

      11 Jan 2022

      Best Advocate Lawyer Barrister In Bangladesh

      Tahmidur Rahman, Director and Senior Associate

      This post will explain in details about Overseas Financing & Foreign loans for Bangladeshi Companies- How to take foreign loans in Bangladesh in 2022. Here in this post we explain the Procedure & Guidelines for the required approval of foreign loans by Bangladeshi Companies.

      Table of Contents

      Find the subsections below, If you want to jump through specific sections instead of reading the whole article.

      Foreign Loans

      Overseas Financing by Bangladeshi Companies 

      Over the last decade, obtaining a foreign loan by Bangladeshi entities or companies, have increasingly become a routine occurrence. Bangladeshi companies choose international loans for a variety of reasons, including lower interest rates and the ability to borrow a big sum from a single lender.

      The Government of Bangladesh has been enabling foreign borrowing legally approved by the Scrutiny Committee in order to attract foreign investment in the private sector through simpler long-term financing of industrial projects at lower cost of funds and to relieve strain on foreign currency reserves.

      How To Take Foreign Loans In Bangladesh 2022 Overseas Financing For Bangladeshi Companies The Most Complete Guideline For Foreign Loans Best Banking Law Firm In Bangladesh

      Obtaining  foreign Loans in Bangladesh in 2022

      In 2022, Short-term loans from parent corporations and shareholders are now available to foreign-owned service companies as operating capital. Overseas-owned enterprises operating in Bangladesh now have more flexibility in receiving foreign loans according to the Bangladesh Bank.

      According to a notice released by the central bank’s Foreign Exchange Policy Department, foreign-owned service companies can now obtain short-term loans as working capital from their parent companies and shareholders for essential business needs (FEPD).

      Previously, such loans were exclusively available to foreign-owned industrial businesses that participated in manufacturing. Such loans were not available to service or trading enterprises. However, service businesses can now take out such loans as well.

      The central bank further stated that such a loan might be available in convertible foreign currencies for a maximum of six years from the start of manufacturing and/or service output operations, with the opportunity to renew or extend the term during that time. Borrowing businesses may pay interest at a maximum of 3% per year until additional instructions are issued, with all other relevant transaction directions remaining intact.

       What are the usual requirements to borrow?

      Though each foreign lender has its unique set of criteria, the following is a summary of some of the most frequent requirements that a company may be expected to meet before acquiring the foreign loan.

       

      • Borrower possesses the necessary licences and permits to operate its business.
      • The borrower’s business records are up to date.
      • Borrower is a firm that is conscious about the environment.
      • All industry standard certifications have been obtained by the borrower (e.g. ISO certification).
      • Borrower is a company that follows all labour laws.
      • The borrower or the project has proper insurance.
      How To Take Foreign Loans In Bangladesh 2022_ Overseas Financing For Bangladeshi Companies_ The Most Complete Guideline For Foreign Loans_ Best Corporate Law Firm In Dhaka

      Step by Step requirements and all the possible documents that you may need

      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.

       

      • The Company’s Board of Directors approval for the proposed foreign loan.
      • Copy of the most recent BIDA registration form, duly attested by a First Class Gazette officer;
      • Original copy of the parties’ Loan Agreement; (For the lender, a copy of the detailed repayment schedule; original copy of the grade period;)
      •  CIB Inquiry Forms 1&2 duly completed, as well as an undertaking from its Sponsors or Directors;
      • Sponsors’ or directors’ credentials;
      • The company’s and its sponsors’ CIB certificates;
      •  Record of previous foreign loans/deferred payments (if available);
      • Audited previous year’s balance sheet;
      • Utilization Certificate from nominated bank;
      • Latest company credit rating report;
      • Latest financial analysis 
      • Updated feasibility report of the proposed project in detail;
      • Form-X, Form-XII and Form-XV from RJSC&F;
      • Certificate of Incorporation of commencement;
      • Memorandum & Articles of Association;
      • Proforma Invoice or Price Quotation (where applicable);
      • Original copy of the Bank Solvency Certificate;
      • Descriptive statement of the use of the loan;
      How To Take Foreign Loans In Bangladesh 2022| Overseas Financing For Bangladeshi Companies| The Most Complete Guideline For Foreign Loans_Best Company Law Firm In Dhaka

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

      Bdlawfirms & Carpe Noctem Bangladesh

      Criteria for foreign borrowing

      Foreign lenders typically conduct extensive due diligence on the borrower. Financial due diligence is typically performed by the lender; however, for technical, environmental, and legal due diligence, the lender may hire external consultants. The borrower will be responsible for the costs of these consultants.

      The lender may require the borrower to appoint a process agent in the country of its choosing,  an auditor affiliated with an international auditing firm; and a compliance manager. The auditor and compliance manager may require a timely report to be submitted directly to the lender following disbursement.

      Other Relevant Criterias for Foreign Loans

      i. Debt-to-equity ratio: The debt-to-equity ratio based on anticipated borrowing should be kept to a bearable level. While relatively higher debt levels may be warranted for long gestation infrastructure projects, total debt including the proposed borrowing should not breach 70:30 debt equity ratio even for these projects;

      ii. Liabilities to the Government: There should be absolutely no liability to the government, either in Taka or in foreclosed property.

      iii. Status of implementation and utilization report of authorized foreign borrowing: On a semi-annual basis, the borrowing firm must submit to the BOI the status of implementation and utilization report of the approved loan in the specified format.

      iv) If capital machinery and equipment to be bought: Quality, price, and economic life; The capital machinery and equipment to be procured with the proposed borrowing should either be brand new or, if refurbished, have a sufficient useful life as specified by the Government’s Import Policy Order.

      v) Validity of the approval: The Scrutiny Committee’s approval of foreign borrowing is valid for 6 (six) months from the date of the BOI’s permission letter. 

      Vi) Common Terms:
      a) The borrowing firm must follow Bangladesh Bank’s laws and regulations on the use and repayment of the loan, as well as the interest thereon.

      Foreign Loans In Bangladesh

      What are the due dilligence you may expect from your foreign lenders?

      Foreign lenders typically conduct extensive due diligence on the borrower. Financial due diligence is typically performed by the lender; however, for technical, environmental, and legal due diligence, the lender may hire external consultants. The borrower will be responsible for the costs of these consultants.

      The lender may require the borrower to appoint a process agent in the country of its choosing,  an auditor affiliated with an international auditing firm; and a compliance manager. The auditor and compliance manager may require a timely report to be submitted directly to the lender following disbursement.

      How to get the BIDA Clearance for Foreign Loan in Bangladesh

      After obtaining the prescribed application from BIDA, the applicant must submit the aforementioned documents, along with the applicable licence fee, to the Security Committee of Bangladesh Bank for review. If the committee grants clearance after reviewing the submitted documents, BIDA will grant the loan in accordance with their recommendation.

      The official time limit for such a process will be entirely dependent on the Borrower for document collection and, to a lesser extent, on the Scrutiny Committee to conduct the meeting, and the fee schedule for approval will be tentatively between BDT 5k and BDT 100k depending on the amount of lending.

      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!

      Regulatory Permissions from Bangladesh Bank and Board of Investment (BOI).

       

      Foreign loans with a term of less than a year require Bangladesh Bank’s prior authorization. The Board of Investment must authorize all other foreign loans (including supplier credits, financial loans from institutions or individuals, and debt issuance in international capital markets) (BOI).

      Borrowers in special economic zones, such as the EPZs, are eligible for certain concessions (Export Processing Zone).

      It normally takes three to six months for the BOI to approve the application. The loan must be applied for using a stipulated application form, which, along with accompanying documentation, must clearly state the loan’s purpose and planned usage by the borrower, as well as the repayment schedule with dates and amounts, and interest payment dates and amounts.

      The following documents must be supplied with the application as supporting documentation:

      • The term sheet, facility agreement, and security documents are all part of the loan documentation. These may be submitted in draft form:
      • The borrower’s corporate documents, such as the memorandum and articles of association; resolutions of the borrower’s Board of Directors approving the foreign loan on the terms and conditions reflected in the loan documentation and the application;
      • If the loan is to be used to import any equipment, a pro-forma invoice for that equipment;
      • Report covering key financial and commercial matters in in respect of the loan and related project.

      Foreign loans from Multilateral Development Banks

      Each of the major Multilateral Development Banks, including the Asian Development Bank and the World Bank, has a Commercial Liaison Office run by the Commercial Service.

      These financial organizations lend billions of dollars to initiatives in developing nations like Bangladesh that aim to boost economic growth and social development by decreasing poverty and inequality, increasing health and education, and expanding infrastructure development.

      The Commercial Liaison Offices assist American firms in learning how to participate in bank-financed projects and lobby on their behalf.

      How To Take Foreign Loans In Bangladesh 2022| Overseas Financing For Bangladeshi Companies| The Most Complete Guideline For Foreign Loans_Best Transactioanl Law Firm In Bangladesh.

      General Questions that people ask about Foreign Loans in Bangladesh

       

      Is it possible to receive international venture capital funding to launch a business in Bangladesh?

      IFC and IDLC funding helped Chaldaal, a food e-commerce firm, raise US$ 5.5 million. This is a positive indicator since if the business thrives, additional financial institutions may be willing to invest in it. Sindabad, a B2B e-commerce, received US$ 4.2 million from Aavishkaar, an Indian Impact Fund. Handy Mama, C-work, Gaze, and Beatles are among the four start-ups that BD Venture has invested in. They joined other Angel Investors in a second round investment in Esoshikhi, an educational technology. The government has set aside Tk 1 billion in the budget for new business ventures. However, the specifics of how that cash will be used have yet to be determined. The cabinet recently approved the ICT Ministry's initiative to establish a venture capital business.

      Can I take loan from foreign bank in Bangladesh?

      A company can obtain a soft loan in one of two ways: automatically or through the government: The automatic method allows a borrower to get a loan from a foreign firm without first obtaining clearance from Bangladesh's Central Bank. The loan arrangement must, however, be recorded with the BIDA in this case.

      How to determine the existing indebtedness structure and creditworthiness of the borrowing company?

      (a) CIB report: A CIB report will be needed for all proposals to be processed. The CIB report will be collected by BOI from Bangladesh Bank.
      (a) Bank certificate: Existing indebtedness structure and creditworthiness of the sponsors involved, duly confirmed by their bankers, will be required for foreign borrowing permission. The chosen bank will submit to BOI the required inquiry papers as well as an undertaking from the borrowing company's Sponsor Directors.

      What are the funding programs for Bangladeshi Entrepreneurs?

      Robi, a mobile telecom business, has overhauled its Accelerator program. They broadened the scope by allowing applications from anybody in Robi payroll. They expanded its coverage to include all of Bangladesh. They got almost 2200 applications, of which 56 were chosen for pitching. Finally, eight funds and incubation facilities were given. These programs were aired on television in order to raise awareness and encourage people about the notion of entrepreneurship. Grameenphone has renamed its Accelerator program GP Accelerator 2.0, which is divided into two parts: Pre-Accelerator and Accelerator. Pre-Accelerator is an 8-week program that provides training and coaching to assist verify their concept and get it to market. The accelerator is a 4.5-month program for teams with a Minimum Viable Product (MVP).

      How to determine the Quality & Commercial viability of the project for Foreign Loan?

      The following financial analyses are necessary to verify the quality/commercial viability of the project feasibility study;

      a) The project's internal rate of return (IRR) b) The payback period c) The break-even point at what capacity and what time of year d) A sensitivity analysis in terms of IRR
      d) Ratio of Debt Service Coverage (DSCR)

      What are the challenges regarding overseas financing in Bangladesh?

      Globally, governments that backed startups saw an increase in their GDP. In the fourth industrial revolution period, creativity and technology assistance are critical for competing in global marketplaces. As a result, startups should be at the top of everyone's priority list. It is a priority for our government, but it should be represented at all levels of policy making. Our entrepreneurs have difficulties in obtaining trade licenses, intellectual property rights, and other business licenses and permissions. Foreign investors are hesitant to invest in a company that lacks all necessary legal documentation. Foreign investors are likewise unconvinced about the ease with which they might abandon their investments. Regional centers such as Singapore and China have vast amounts of money to invest, yet we are unable to entice them to engage in our enterprises.

      Can an individual from Bangladesh take loan in foreign currency?

      Provided, however, that for sufficient reasons, the Central Bank may permit a person resident in Bangladesh to borrow or lend in foreign exchange from or to a person resident in or outside Bangladesh, and/or permit a person resident in Bangladesh to borrow or lend in BDT from or to a person resident outside Bangladesh.

      Can a foreign director give loan to Bangladeshi company?

      Yes, it is permitted.  But bear in mind, a company cannot lend to a director without paying taxes, while a director can lend to a company.

      How do I record a loan repayment?

      When your company records a loan payment, you debit the loan account to remove the liability from your books and credit the cash account. Repayments on an amortized loan are made over time to meet interest expenditures and principle reduction.

      What are the 3 classification of loans in Bangladesh?

      A loan is a sum of money borrowed from a lender by an individual or a business. It is divided into three types: unsecured and secured loans, conventional loans, and open-end and closed-end loans. Before any money crosses hands, the beneficiary and the lender must agree on the conditions of the loan. In some situations, the lender may compel the borrower to put up an asset as collateral, which will be specified in the loan agreement. Individuals, businesses, and governments can all get loans. The major reason for taking one out is to obtain funds to increase one's total money supply. The lender earns money by charging interest and fees.

      Company Law practice in TR Barristers in Bangladesh 

      The Barristers, Advocates, and lawyers at TLS 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: [email protected]
      Phone: +8801847220062 or +8801779127165 or +8801708080817
      House 410 Road 29 Mohakhali DOHS

       

      How To Take Foreign Loans In Bangladesh 2022_ Overseas Financing For Bangladeshi Companies_ The Most Complete Guideline For Foreign Loans_Best Company Law Firm In Bangladesh

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      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

      Tahmidgoldenpicturebackground E1569742859700

      Tahmidur Rahman

      Senior Associate, TR Barristers in Bangladesh

      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!

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

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      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.

      NGO and INGO registration at Tahmidur Rahman TLS:

      The legal team of Tahmidur Rahman, TR Barristers in Bangladesh TLS 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: [email protected]
      Phone: +8801847220062 or +8801779127165

      Address:

       

      FAQ

      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 for the formation.

      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
      Infographics
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      Author’s Bio
      Tahmidur Rahman | Law Firm in Dhaka, Bangladesh

      Tahmidur Rahman is a trained Engineer and one of Bangladesh's most innovative young Barristers. He is regarded as one of the country's sharpest young legal experts.

      He is academically qualified Legal Professional (BA LLB) and CS Engineer (BSc CSE- concurrently pursued four different majors at two different universities) with experience structuring and negotiating complex business transactions such as company formations, registrations, mergers, acquisitions, leveraged buyouts, syndicated loans, and acquisition financings.

      For the past several years, I've been counseling corporations, investors, and banks on a wide range of capital markets products and financial restructurings, particularly in cross-border settings in rising South Asian markets. I like assisting clients in resolving complicated financial structure difficulties, dealing with difficult market conditions, and navigating Bangladeshi legislation, regulation, and disclosure requirements.

      As one of the the leading law firms in Bangladesh, Tahmidur Rahman Remura chamber aligns its way to consistently exceed the legal expectations from its revered local and International clients. Voted as the best Banking law firm in Bangladesh by ACQ, best Commercial law firm in Bangladesh by FT and best Company law firm in Bangladesh, in 2020 by several world class publications and databases, TLS law firm in Bangladesh is also considered as one of the best multi-disciplinary full service law firm in Dhaka, Bangladesh.

      The law chamber functions as a group of many leading practicing lawyers who work together to represent TLS's clients and have so far achieved an outstanding overall success rate in both litigation and commercial matters. The Lawyers and Barristers are working as partners, associates and paralegals of Tahmidur Rahman|TLS- Law Firm in Dhaka, Bangladesh.

      They are highly trained and exceptionally qualified with both local and international credentials and skills. The current Managing Partner, Barrister Abul Hashem has the experience of practicing in the Supreme court of Bangladesh for more than 15 years and was educated in England and was also called to the Bar of England & Wales as Barrister of the Honourable Lincoln's Inn Society. Partners and partners have extensive experience and skills in their respective fields of practice, ranging from Admiralty, Writ Matters, Business, Criminal and Private Law, Finance Law, Information Technology Law, Investment Law, Intellectual Property law, Divorce & Family Practice.

      The head office of the law firm is situated in the Gulshan 1 circle of Dhaka, which is considered to be the financial center of Bangladesh. The firm is strategically situated close to Gulshan 2 & Banani Commercial Areas and is easily accessible from Uttara, Dhanmondi, Bashundhara Residential Area and Badda. The firm works in compliance with strict ethical principles and maintains international standards in the handling of its business.

      Tahmidur also gained broad experiences in antitrust, consumer protection, and general litigation matters, with particular experience in FTC investigations, private antitrust litigation and class actions. Within short span of formation, Tahmidur also served several national and multinational corporations which includes Team Group Plc, Seecen International Ltd., Diplomate Resorts Plc, Cloudcone Technology PTE Ltd., Benaul the Piper etc.

      TLS as a firm also defends corporations in a wide variety of industries, including pharmaceutical and technology companies. Despite this exponential growth and proliferation of clients, the managing partner still constantly maintaining the firm’s grounded approach and making sure the members of ‘Tahmidur Rahman Remura’ maintain a contiguous and helping hand towards its clients of all norms.

      Email: [email protected]

      Address: Jamilla Villa (4th Floor Flat No-C2 House 4/A/1 Road no: 2, Gulshan 1, Dhaka, 1212, Gulshan, Dhaka, 1212, Bangladesh

      Gender: Male

      Job Title: Senior Associate and Director

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

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

      Procedure of Foreign Investment in Bangladesh 2020| Law, Policy, Direct, Angel, Rules, Policy- Everything you need to know about Foreign Investment in 21st century Bangladesh

      Tahmidgoldenpicturebackground E1569742859700

      Tahmidur Rahman
       Director and Senior Associate, TR Barristers in Bangladesh

      17 Jan 2020

      Procedure of foreign investment in Bangladesh: 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 the Procedure of foreign investment in Bangladesh.

      Foreign Investment Policy in Bangladesh & Procedure of foreign investment 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, which would in turn pave the way for seamless procedure of foreign investment in Bangladesh.

      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, so that the Procedure of foreign investment in Bangladesh bangladesh gets even easier.
      • 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 to ease the procedure of foreign investment in Bangladesh .
      • Promote the private sector to drive the development of industrial production and investment and making the Procedure of foreign investment in Bangladesh way easier.
      • Emphasis on the role of the government as a facilitator in creating an enabling environment for the expansion of private investment and the procedure of foreign investment in Bangladesh.

      Investment Structures in Bangladesh and Procedure of foreign investment 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.

      In regards to Procedure of foreign investment in Bangladesh, Foreign companies wishing to do business or establish a presence in Bangladesh have a number of options.

      1.  Foreign Direct Investment in Bangladesh

      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.

      In regards to the Procedure of foreign investment in Bangladesh, 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 (Foreign Investment 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.

      Procedure Of Foreign Investment In Bangladesh.

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

      4. Setting up a Branch or Liasion offices in Bangladesh for foreign investors

      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 (procedure of foreign investment in Bangladesh.)

      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, Procedure of foreign investment in Bangladesh).

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

      Procedure Of Foreign Investment In Bangladesh

      Right to Issue and Transfer Shares in Bangladesh – Procedure of foreign investment 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; Tahmidur Rahman RemuraV and DCF), depending on the nature of the company in regards to the Procedure of foreign investment in Bangladesh.

       

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

      Foreign Investment In Bangladesh

      Full Repatriation of Dividend, Investment and Income for foreign investors in Bangladesh.

      It will enable complete repatriation of the capital invested from free sources in regards to the Procedure of foreign investment in Bangladesh. Profits and dividends accruing to foreign investment can likewise be transferred in full (Procedure of foreign investment in Bangladesh).

      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. (Procedure of foreign investment in Bangladesh.) 

       

      Laws for the Protection of Foreign Investment in Bangladesh

       

      For a seamless procedure of foreign investment in Bangladesh, the government guarantees immunity from nationalisation and expropriation through the 1980 Foreign Private Investment Act that involves repatriation of capital and dividend for foreign investors.

      In addition, to facilitate the Procedure of foreign investment in Bangladesh, 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 for the Procedure of foreign investment in Bangladesh), 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 the procedure of 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 (Procedure of foreign investment 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

      “Tahmidur Rahman Remura 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 and ease of the Procedure of foreign investment in Bangladesh.

       

      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 (Procedure of foreign investment 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 to make the process seamless in regards to the Procedure of foreign investment in Bangladesh.

       

      Tax holiday facility in Bangladesh (THF) for seamless procedure of foreign investment in Bangladesh

      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, and once again it makes it more seamless, the procedure of foreign investment in Bangladesh.

       

      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 (Procedure of foreign investment in Bangladesh)

      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 for the ease of the Procedure of foreign investment in Bangladesh.

      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.

       

      Procedure Of Foreign Investment 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.

      In addition to that the Procedure of foreign investment in Bangladesh are placed in such a way that 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 in Bangladesh

      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, Procedure of foreign investment in Bangladesh)

      Foreign Investment In Bangladesh-Formal Sectors In Bangladesh

      Repatriation of investment in Bangladesh – Foreign Investment Law 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 Bangladedsh

       

      List of online portals for potential investors in Bangladesh (Procedure of foreign investment in Bangladesh)

      Foreign direct investment (FDI)

       

      www.bida.gov.bd

      BIDA
      Investing in economic zoneswww.beza.gov.bd BEZA
      Trade-related Informationhttps://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 Companyhttp://www.roc.gov.bd/

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

       

      VAT Registrationhttp://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)

       

      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 the Procedure of foreign investment in Bangladesh.

      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 (Procedure of foreign investment in Bangladesh).

      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 regards to the Procedure of foreign investment 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 and facilitate the Procedure of foreign investment in Bangladesh.

      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 for the Procedure of foreign investment in Bangladesh ), 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 in regards to the Procedure of foreign investment in Bangladesh.

      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.

      Procedure Of Foreign Investment In Bangladesh

      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 in regards to the Procedure of foreign investment in Bangladesh. 

      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 for the Procedure of foreign investment in Bangladesh.

      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. (procedure of 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, Procedure of foreign investment in Bangladesh).

      Procedure Of Foreign Investment 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.

      Foreign Direct Investment in Bangladesh at TLS:

      The Barristers, Advocates, and lawyers at TLS 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 TR Barristers in Bangladesh, our experience helps us to efficiently execute local and cross-border global transactions while helping you at all stages of the process and offering you cost-effective, realistic business solutions. In addition to handling various issues related to domestic clients on a regular basis, it also has experience in consulting and assisting numerous international clients with utmost care and attention throughout their legal exploration in Bangladesh. For queries or legal assistance in regards to the Procedure of foreign investment in Bangladesh, please reach us at:

       E-mail:[email protected]
      Phone:+8801847220062 or +8801779127165

      House 410, Road 29, Mohakhali DOHS

       

      FAQ

      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. -Procedure of foreign investment in Bangladesh

      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. (Procedure of foreign investment in Bangladesh)

      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.

      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.

      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.

      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.

      Have a Different Question?

      Email us anytime : [email protected]

      Or call — +8801847220062 or +8801779127165

      Tahmidur Rahman | Law Firm in Dhaka

      Affiliated with TR Barristers in Bangladesh, A full service multi-directional law firm in Dhaka.

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