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!

  • Step by Step Process of forming a liaison office in Bangladesh

“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

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

Wildlife Laws In Bangladesh

Wildlife laws in Bangladesh

Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

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 BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

Admiralty Law in Bangladesh | Everything you need to know in 2023

Admiralty Law in Bangladesh and Ship Arrest in Bangladesh in 202324 Jan 2022Barrister Tahmidur RahmanDirector, The Law Firm in BangladeshThis article will explain in details about admirlty law in Bangladesh and ship arrest procedure with details.Nature of...

Wildlife laws in Bangladesh

Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

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 2023Barrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Holding and Subsidiary Companies in Bangladesh and how can...

Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

Partnership business in Bangladesh in 2023- Everything you need to knowBarrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Partnership Business in Bangladesh and how can you start your business in...

Proprietorship Business in Bangladesh

Proprietorship business in Bangladesh in 2023- Everything you need to knowBarrister Remura MahbubDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Proprietorship Business in Bangladesh and how can you start your business in...

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

TR Law Firm in BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

Legal Translation In Bangladesh

Legal Translation & Notary Services in BangladeshBarrister Remura MahbubDirector, Tahmidur Remura TLS24 Jan 2022This article will explain in details about how we provide E-Notary and translation of high quality with utmost professionalism. We offer...

How to take Mortgage Loan in Bangladesh

How to take Mortgage loan in Bangladesh | Everything you need to know in 202211 Jan 2022Tahmidur Rahman, Director and Senior AssociateHere in this post Barrister Tahmidur Rahman will explain in details about the basics of mortgage loan procedures in Bangladesh- How to...

What to do when someone or a neighbour builds property on my land | Land Trespassing in Bangladesh

Land Trespassing in Bangladesh & what to do when someone or a neighbour builds property on my land  Barrister Tahmidur Rahman Senior Associate, The Law Firm in Bangladesh24 Jan 2022 What to do in case somebody illegally encroaches upon property?In this article we...

বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন 2022 এ | Effective way of Registering Land

বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন ২০২২ এতাহমিদুর রহমান, Director and Senior Associate বাংলাদেশে অনেক মানুষই ভূমি আইন সম্পর্কে খুব বেশি জানেন না। ফলে তারা জমি নিয়ে নানা ধরনের প্রতারণা ও হয়রানির শিকার হন। জমি রেজিস্ট্রেশন করা খুবই জরুরি।...

Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

Partnership business in Bangladesh in 2023- Everything you need to know

Barrister Tahmidur Rahman
Director, The Law Firm in Bangladesh

24 Jan 2022

This article will explain in details about Partnership Business 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 five types of business entities can be found in Bangladesh. Around 65 percent of businesses are run on a sole proprietorship basis. 

In simplest way: How you can incorporate a Partnership in Bangladesh

PARTNERSHIP BUSINESS IN BANGLADESH

A partnership is a type of business structure where two or more partners start an entity to do business. For a partnership to exist, there must always be two or more partners.

A Partnership is defined by the Partnership Act, 1932, (the “Partnership Act”) as ‘the relation between persons who have agreed to share profits of the business carried on by all or any of them acting for all’. This definition gives three minimum requirements to constitute a partnership:

The individuals who wish to form a partnership must enter into a verbal or written agreement.

The purpose of the agreement must be to divide the profits from the business that will be conducted by the partnership, and

The business must be operated by all of the partners or by one of them acting on their behalf.

The Partnership Act does not define the term “person.”

There are no penalties for failing to register your partnership, so registration is not required. However, it is recommended as the following rights are denied to unregistered businesses:

The Partnership Act prohibits a partner from bringing a lawsuit against the firm or other partners to enforce any contractual or statutory right.

A contractual right cannot be enforced in court by or on behalf of your company against a third party.

In addition, neither the firm nor any of its partners may assert a set-off (i.e., the mutual adjustment of debts owed by disputing parties to one another) or other proceedings in a dispute with a third party.

PARTNERSHIP BUSINESS IN BANGLADESH QUICK FACTS

In Bangladesh, a registered partnership is the only way to establish a separate legal identity (i.e. separate from its owners) for liability purposes.

All partners of a partnership are jointly and severally liable for the partnership’s liability.

In Bangladesh, the concept of Limited Liability Partnership does not exist.

TAXATION in Partnership Business in Bangladesh: 

Tax-wise, partnership business in Bangladesh are not taxed at the entity level; rather, profits are treated as part of each partner’s personal income and taxed at rates applicable to personal income.

MEMBERS & MANAGEMENT in Partnership Business in Bangladesh:

There must be at least two and no more than twenty partners in partnership business in Bangladesh.

The partners can be individuals or corporations.

In Bangladesh, unlike private or public limited companies, partnerships do not have directors, shareholders, or secretaries; instead, the partners own and operate the business.

PARTNERSHIP DOCUMENTS REQUIRED:

For a partnership to be registered in Bangladesh, the following information/documents are required:

  • Proposed business name;
  • Contract of partnership duly notarized;
  • Form I;
  • Details about the partners;
  • Addresses of the partners’ homes;
  • Details of the partnership’s registered address; and
  • Percentage of each partner’s share of the profit.

 

PARTNERSHIP REGISTRATION PROCEDURE in Bangladesh:

The Registrar of Joint Stock Companies and Firms of Bangladesh (“RJSC”) can register a partnership.

 

The registration process for a partnership business in Bangladesh consists of two steps: name reservation and entity registration. Typically, registration of a partnership can be completed within one or two days.

 

STEP 1- CHOOSING THE PARTNERSHIP NAME:

The partners may choose any name for their partnership business in Bangladesh , subject to the following restrictions:

The names must not be too similar to or identical with the name of an existing business engaged in a similar line of work. The reason for this rule is that a company’s reputation or goodwill may be damaged if a new company adopts an allied name.

The name cannot contain certain words that express or imply the sanction, approval, or sponsorship of the government.

After selecting a name, you must submit an application for name clearance via the RJSC website.

STEP 2 – PREPARE A PARTNERSHIP DEED:

You must create a partnership agreement for your partnership business in Bangladesh. Typically, a partnership agreement will include the following clauses:

  • Name and address of the company, as well as the names of all partners;
  • Nature of the enterprise to be conducted;
  • Date of Business Commencement;
  • Whether the duration of the partnership is fixed or indefinite;
  • Contribution of capital by each partner;
  • ratio of profit-sharing among partners;
  • Rules for retirement, death, and admission of a partner; and
  • The aforementioned are the minimum requirements for all partnership agreements. Additionally, the parties may include any additional clauses.

The Partnership Deed must be printed on stamp paper in accordance with the Stamp Act, and all partners must sign it. It should then be notarized.

STEP 3- REGISTER PARTNERSHIP DEED WITH RJSC:

The partnership deed and its completion Form I must be submitted to RJSC. These documents will be reviewed by RJSC representatives. When officials are satisfied with the points stated in the partnership agreement, he shall record an entry of the statement in the Register of Firms and issue a Certificate of Registration.

There are numerous types of businesses in Bangladesh. One is a Partnership Firm, while the others are Sole Proprietorship and Limited Liability Company. The Partnership Act of 1932 governs the formation of a Partnership Firm. In Bangladesh, only RJSC (The Registrar of Joint Stock Companies and Firms) has the authority to register Partnership Firms. For Partnership Registration in Bangladesh, the steps outlined at the end of this article must be followed.

 

Proprietorship Business In Bangladesh_Best Law Firm In Dhaka

Liability of a Proprietorship Business in Bangladesh:

A sole proprietorship is not a separate legal entity. The owner is responsible for all business outcomes.

Taxation in Proprietorship Business in Bangladesh:

The proprietor will be required to pay the tax on his personal income from the business.

Maintenance & Operation in Proprietorship Business in Bangladesh:

  • The running expenses of a proprietorship are quite cheap.
  • Annual preparation of a profit & loss statement and audit report is not necessary.
  • The only individual who makes business decisions is the owner.

Additional necessary approvals and documents for Proprietorship Business in Bangladesh:

After obtaining a Trade License for a sole proprietorship, a Taxpayer Identification Number (TIN) certificate is required to create a bank account (business account) in order to conduct commercial transactions.

Currently, most businesses incorporate VAT (Value Added Tax). To deduct VAT, a VAT Registration Certificate must be collected. To operate a business and deduct AIT (Advance Income Tax) at the source, a TIN is required.

If a proprietor desires to engage in international or multinational company, he or she must possess an Export Registration Certificate or an Import Registration Certificate. Bangladesh is now one of the world’s largest exporters of ready-made clothes, jute, frozen foods, leather goods, and potatoes.

In Bangladesh, a significant number of proprietorships, partnerships, and limited liability companies are interested in engaging in international commerce or export and import operations. In Bangladesh, when two or more entrepreneurs wish to start a firm, they must either form a Limited Company or a Partnership Firm.

Partnership Business In Bangladesh
Proprietorship Business In Bangladesh_Top Law Firm In Dhaka_Tahmidur Rahman Remura

When two or more people with a similar mindset or similar professional backgrounds start a business and create a voluntary agreement with the intention of making and sharing profits, this is referred to as a Partnership Business. Minimum of two and maximum of twenty individuals can form a business partnership.

In order to open a bank account for a partnership business, registration with the RJSC is now required. For this reason, many unregistered Partnership Business proprietors will register their Partnership Business with RJSC. To obtain legal privileges, however, Partnership Business Registration with RJSC is required.

The partnership agreement is commonly referred to as the partnership deed. Typically, the following provisions are included in a Partnership Deed:

  • Partner’s Name, Current Address, and Permanent Address.
  • Firm’s name as a partnership
  • Business Description Business Address
  • Duration of the Relationship
  • Profit participation for each Partner
  • Capital contributions made by each partner
  • Conditions of Retiring
  • Mode of Administration
  • Interest on Lending
  • Breakup of a Partnership

Steps in Bangladesh Partnership Registration:

 

A partnership can be registered either at the time of formation or later. An application must be submitted to the RJSC with the following information:

  • Initial Clearance Declaration of Partnership Firm
  • Date of Incorporation of the Partnership
  • Duration of the Business Partnership
  • Principal place of business with Complete Address Date of
  • Partnership Formation
  • Partners’ Particulars
  • Business Information The application must be submitted on the prescribed Form- I.

We recommend that you immediately register your existing Partnership Firm to avoid unforeseen circumstances. Also, if you establish a new partnership in Bangladesh, you must register with the RJSC. Please review the specifics of additional RJSC.

Benefits of Partnership Business in Bangladesh:

Due to the nature of business start-up capital funds provided by the partners, the greater the number of partners, the more capital they can invest in their business, allowing for greater adaptability and advancement potential.

Generally speaking, a partnership is simpler to register, operate, and manage. Partnerships are subject to less stringent rules and regulations than corporations. As long as all partners are in agreement, they are free to run their business as they see fit.

Every business partner contributes new ideas and abilities. It is easier to make a decision to solve a problem when there are more minds to consider it. Each partner can share in the business’s duties and responsibilities.

After completing Partnership Registration in Bangladesh, the following documents are required to commence business operations:

Certificate of Trade License for your newly registered Partnership.
Certificate of VAT Registration for a Bank Account
Import Registration Certificate (In case of Import Business)
Certificate of Registration for Export (In case of Export Business)

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!

  • Step by Step Process of forming a liaison office in Bangladesh

“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.

 

How To Register A Private Limited Company In Bangladesh Infographics Remura: Tls: Tls 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: 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

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

Wildlife Laws In Bangladesh

Wildlife laws in Bangladesh

Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

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 BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

Admiralty Law in Bangladesh | Everything you need to know in 2023

Admiralty Law in Bangladesh and Ship Arrest in Bangladesh in 202324 Jan 2022Barrister Tahmidur RahmanDirector, The Law Firm in BangladeshThis article will explain in details about admirlty law in Bangladesh and ship arrest procedure with details.Nature of...

Wildlife laws in Bangladesh

Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

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 2023Barrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Holding and Subsidiary Companies in Bangladesh and how can...

Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

Partnership business in Bangladesh in 2023- Everything you need to knowBarrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Partnership Business in Bangladesh and how can you start your business in...

Proprietorship Business in Bangladesh

Proprietorship business in Bangladesh in 2023- Everything you need to knowBarrister Remura MahbubDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Proprietorship Business in Bangladesh and how can you start your business in...

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

TR Law Firm in BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

Legal Translation In Bangladesh

Legal Translation & Notary Services in BangladeshBarrister Remura MahbubDirector, Tahmidur Remura TLS24 Jan 2022This article will explain in details about how we provide E-Notary and translation of high quality with utmost professionalism. We offer...

How to take Mortgage Loan in Bangladesh

How to take Mortgage loan in Bangladesh | Everything you need to know in 202211 Jan 2022Tahmidur Rahman, Director and Senior AssociateHere in this post Barrister Tahmidur Rahman will explain in details about the basics of mortgage loan procedures in Bangladesh- How to...

What to do when someone or a neighbour builds property on my land | Land Trespassing in Bangladesh

Land Trespassing in Bangladesh & what to do when someone or a neighbour builds property on my land  Barrister Tahmidur Rahman Senior Associate, The Law Firm in Bangladesh24 Jan 2022 What to do in case somebody illegally encroaches upon property?In this article we...

বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন 2022 এ | Effective way of Registering Land

বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন ২০২২ এতাহমিদুর রহমান, Director and Senior Associate বাংলাদেশে অনেক মানুষই ভূমি আইন সম্পর্কে খুব বেশি জানেন না। ফলে তারা জমি নিয়ে নানা ধরনের প্রতারণা ও হয়রানির শিকার হন। জমি রেজিস্ট্রেশন করা খুবই জরুরি।...
Proprietorship Business in Bangladesh

Proprietorship Business in Bangladesh

Proprietorship business in Bangladesh in 2023- Everything you need to know

Barrister Remura Mahbub
Director, The Law Firm in Bangladesh

24 Jan 2022

This article will explain in details about Proprietorship Business in Bangladesh and how can you start your business in Bangladesh.

 

Types of Companies in Bangladesh

There are five ways of doing business in Bangladesh:

In general, these five types of business entities can be found in Bangladesh. Around 65 percent of businesses are run on a sole proprietorship basis. A proprietorship business can be started by a single entrepreneur. Small and medium-sized businesses typically opt for sole proprietorship.

    In simplest way: How you can incorporate a Proprietorship in Bangladesh

    In short for you: The following steps outline how to start a sole proprietorship business:

    1. First, you have to select a name for Your Business in Bangladesh
    2. You have to rent a commercial space to begin your business.
    3. Fill out an application for a trade license from your local city corporation/union, etc.
    4. Apply for and obtain a business license
    5. Complete an application for an e-tin certificate
    6. Open a bank account in the company’s name.

    That’s all you need! Once you are done with these simple formalities, you will have a legal Proprietorship business under your ownership.

    You can still stick around here for more information on this matter! We are glad you are doing so!

    Now some key facts about Sole Proprietorship

     

    • In Bangladesh, a sole proprietorship does not constitute a separate legal entity and thus is not distinct from the owner/ proprietor.
    • The owner of the business is personally liable for all liabilities incurred during the course of the business.
    • A sole proprietorship is open to any Bangladeshi citizen over the age of 18.
    • As the sole proprietorship’s business address, a local commercial address must be provided.
    • Profits from a sole proprietorship are treated as income of the individual who owns the entity, and thus are taxed at the same rate as personal income.
    • Because a sole proprietorship in Bangladesh is not a legal entity, it cannot register another business firm.
    • Sole proprietorships are exempt from auditing their accounts because any profits are taxed as personal income.
    • The most basic requirement for a proprietorship is a trade license.
      The Trade License must be renewed annually.

     

    Proprietorship Business In Bangladesh_Best Law Firm In Bangladesh_Tahmidur Rahman Best Law Firm In Dhaka

    CONSIDERATIONS FOR FOREIGNERS in regards to

    Proprietorship Business in Bangladesh:

    Practically speaking, a sole proprietorship is unavailable to foreigners. Foreign business professionals should instead create a limited liability firm. Consult the company registration in Bangladesh guide for more information on limited liability firms.

    Sole Proprietorship Business in Bangladesh

    If you are thinking of having a proprietorship business in Bangladesh, you are not the only one.

    The easiest and quickest way to start a one-owner firm is through a sole proprietorship. When you begin performing business, sole proprietorship commences.

    It does not need the filing of government or state forms and imposes little regulatory requirements, making it a perfect starting point for self-employed individuals.

    The absence of a separate legal entity distinguishes a sole proprietorship from a company, be it public or private. The owner of a sole proprietorship is therefore not free from liabilities incurred by the business.

    For instance, the debts of a sole proprietorship are also the owner’s debts. However, the gains of a sole proprietorship are also the owner’s profits, as all profits pass directly to the sole proprietor.

    Approximately 65 percent of enterprises are operated as sole proprietorships. A sole owner can establish a sole proprietorship. Small and medium-sized businesses typically operate as sole proprietorships.

    First get a trade license to start your proprietorship Business

    A Trades License must be obtained from the local authority, which could be the City Corporation Office, Municipality Office, Upozila council and Union Council, or the respective Govt. authority, if a proprietorship business is to be established.

    To receive a Trade License, one must choose a suitable name for their Proprietorship business, submit the required paperwork, and pay the applicable government fees (for the type of business) to the Trade License granting authorities.

    A Trade License is issued by the authority following a review of all applicable documentation and a mandatory field inquiry.

    Following issues are considered by the authority:

    • The proprietorship’s name – Name of the proprietor
    • Such enterprises like Export, Import, Supplier, etc.
    • Business Address
    • Address, Date of Birth, and Name of Parents
    • Owner’s Identification Cards copy
    • Photograph of the owner Registered business address VAT chalan copy of the company license Office rental deed
    • Fill up Trade license form with the Owner’s signature

     

    Proprietorship Business In Bangladesh_Best Law Firm In Dhaka

    Liability of a Proprietorship Business in Bangladesh:

    A sole proprietorship is not a separate legal entity. The owner is responsible for all business outcomes.

    Taxation in Proprietorship Business in Bangladesh:

    The proprietor will be required to pay the tax on his personal income from the business.

    Maintenance & Operation in Proprietorship Business in Bangladesh:

    • The running expenses of a proprietorship are quite cheap.
    • Annual preparation of a profit & loss statement and audit report is not necessary.
    • The only individual who makes business decisions is the owner.

    Additional necessary approvals and documents for Proprietorship Business in Bangladesh:

    After obtaining a Trade License for a sole proprietorship, a Taxpayer Identification Number (TIN) certificate is required to create a bank account (business account) in order to conduct commercial transactions.

    Currently, most businesses incorporate VAT (Value Added Tax). To deduct VAT, a VAT Registration Certificate must be collected. To operate a business and deduct AIT (Advance Income Tax) at the source, a TIN is required.

    If a proprietor desires to engage in international or multinational company, he or she must possess an Export Registration Certificate or an Import Registration Certificate. Bangladesh is now one of the world’s largest exporters of ready-made clothes, jute, frozen foods, leather goods, and potatoes.

    In Bangladesh, a significant number of proprietorships, partnerships, and limited liability companies are interested in engaging in international commerce or export and import operations. In Bangladesh, when two or more entrepreneurs wish to start a firm, they must either form a Limited Company or a Partnership Firm.

    Proprietorship Business In Bangladesh_Top Law Firm In Dhaka_Tahmidur Rahman Remura

    Proprietorship Business in Bangladesh and its benefits:

    • It is the most convenient and inexpensive business structure to establish.
    • As a sole owner, you have complete authority over all aspects of the firm, including decision-making.
    • There is no profit sharing: All income earned by the business is accounted for.
    • The termination of a single proprietorship is simpler, quicker, and less expensive than that of other company structures.
    • Least compliance requirements: You are exempt from filing annual tax returns and are simply required to renew your membership annually.

    SOLE PROPRIETORSHIP BUSINESS IN BANGLADESH’s DISADVANTAGES:

    • No independent legal entity: You cannot exist without your business. This renders you financially and legally accountable for all corporate obligations and legal proceedings.
    • Creditors may sue you for debts committed and may also get a court order to seize your personal assets, such as your property.
    • No tax benefits or incentives for corporations: Taxes are assessed based on your personal income tax rate, and you do not receive the particular tax benefits provided to a limited liability business.
    • Your personal finances and the business’s income are the only sources of capital.
    • Thus, corporate expansion is restricted and challenging.
    • There is no perpetual succession, as you and your business are one and the same. However, after the death of the proprietor, the successor is permitted to continue the firm under the same name.
    • Nobody would be prepared to lend you huge sums of money due to this entity’s poor public impression, which makes it the least desirable for serious businesses.
    • It is also challenging to attract high-caliber staff or senior-level executives, who typically want a more advanced business structure, such as a limited liability corporation.
    • Sale or transfer of all or part of a business: You can only transfer a business by selling its assets.
    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!

    • Step by Step Process of forming a liaison office in Bangladesh

    “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.

     

    How To Register A Private Limited Company In Bangladesh Infographics Remura: Tls: Tls 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: 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

    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

    Wildlife Laws In Bangladesh

    Wildlife laws in Bangladesh

    Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

    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 BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

    Admiralty Law in Bangladesh | Everything you need to know in 2023

    Admiralty Law in Bangladesh and Ship Arrest in Bangladesh in 202324 Jan 2022Barrister Tahmidur RahmanDirector, The Law Firm in BangladeshThis article will explain in details about admirlty law in Bangladesh and ship arrest procedure with details.Nature of...

    Wildlife laws in Bangladesh

    Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

    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 2023Barrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Holding and Subsidiary Companies in Bangladesh and how can...

    Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

    Partnership business in Bangladesh in 2023- Everything you need to knowBarrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Partnership Business in Bangladesh and how can you start your business in...

    Proprietorship Business in Bangladesh

    Proprietorship business in Bangladesh in 2023- Everything you need to knowBarrister Remura MahbubDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Proprietorship Business in Bangladesh and how can you start your business in...

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

    TR Law Firm in BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

    Legal Translation In Bangladesh

    Legal Translation & Notary Services in BangladeshBarrister Remura MahbubDirector, Tahmidur Remura TLS24 Jan 2022This article will explain in details about how we provide E-Notary and translation of high quality with utmost professionalism. We offer...

    How to take Mortgage Loan in Bangladesh

    How to take Mortgage loan in Bangladesh | Everything you need to know in 202211 Jan 2022Tahmidur Rahman, Director and Senior AssociateHere in this post Barrister Tahmidur Rahman will explain in details about the basics of mortgage loan procedures in Bangladesh- How to...

    What to do when someone or a neighbour builds property on my land | Land Trespassing in Bangladesh

    Land Trespassing in Bangladesh & what to do when someone or a neighbour builds property on my land  Barrister Tahmidur Rahman Senior Associate, The Law Firm in Bangladesh24 Jan 2022 What to do in case somebody illegally encroaches upon property?In this article we...

    বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন 2022 এ | Effective way of Registering Land

    বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন ২০২২ এতাহমিদুর রহমান, Director and Senior Associate বাংলাদেশে অনেক মানুষই ভূমি আইন সম্পর্কে খুব বেশি জানেন না। ফলে তারা জমি নিয়ে নানা ধরনের প্রতারণা ও হয়রানির শিকার হন। জমি রেজিস্ট্রেশন করা খুবই জরুরি।...
    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!

      • Step by Step Process of forming a liaison office in Bangladesh

      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.

       

      Corporate Associates

      Dedication

      Commercial Clients

      Partners

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

      “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.

       

      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

      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]

      Or call — +8801847220062

      Wildlife Laws In Bangladesh

      Wildlife laws in Bangladesh

      Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

      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 BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

      Admiralty Law in Bangladesh | Everything you need to know in 2023

      Admiralty Law in Bangladesh and Ship Arrest in Bangladesh in 202324 Jan 2022Barrister Tahmidur RahmanDirector, The Law Firm in BangladeshThis article will explain in details about admirlty law in Bangladesh and ship arrest procedure with details.Nature of...

      Wildlife laws in Bangladesh

      Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

      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 2023Barrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Holding and Subsidiary Companies in Bangladesh and how can...

      Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

      Partnership business in Bangladesh in 2023- Everything you need to knowBarrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Partnership Business in Bangladesh and how can you start your business in...

      Proprietorship Business in Bangladesh

      Proprietorship business in Bangladesh in 2023- Everything you need to knowBarrister Remura MahbubDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Proprietorship Business in Bangladesh and how can you start your business in...

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

      TR Law Firm in BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

      Legal Translation In Bangladesh

      Legal Translation & Notary Services in BangladeshBarrister Remura MahbubDirector, Tahmidur Remura TLS24 Jan 2022This article will explain in details about how we provide E-Notary and translation of high quality with utmost professionalism. We offer...

      How to take Mortgage Loan in Bangladesh

      How to take Mortgage loan in Bangladesh | Everything you need to know in 202211 Jan 2022Tahmidur Rahman, Director and Senior AssociateHere in this post Barrister Tahmidur Rahman will explain in details about the basics of mortgage loan procedures in Bangladesh- How to...

      What to do when someone or a neighbour builds property on my land | Land Trespassing in Bangladesh

      Land Trespassing in Bangladesh & what to do when someone or a neighbour builds property on my land  Barrister Tahmidur Rahman Senior Associate, The Law Firm in Bangladesh24 Jan 2022 What to do in case somebody illegally encroaches upon property?In this article we...

      বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন 2022 এ | Effective way of Registering Land

      বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন ২০২২ এতাহমিদুর রহমান, Director and Senior Associate বাংলাদেশে অনেক মানুষই ভূমি আইন সম্পর্কে খুব বেশি জানেন না। ফলে তারা জমি নিয়ে নানা ধরনের প্রতারণা ও হয়রানির শিকার হন। জমি রেজিস্ট্রেশন করা খুবই জরুরি।...
      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.

         

         

        Best Law Firm In Dhaka

         

        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.

         

        Best Corporate Law Firm In Dhaka

        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!

        • Step by Step Process of forming a liaison office in Bangladesh

        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”

        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.

         

        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

        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

        Wildlife Laws In Bangladesh

        Wildlife laws in Bangladesh

        Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

        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 BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

        Admiralty Law in Bangladesh | Everything you need to know in 2023

        Admiralty Law in Bangladesh and Ship Arrest in Bangladesh in 202324 Jan 2022Barrister Tahmidur RahmanDirector, The Law Firm in BangladeshThis article will explain in details about admirlty law in Bangladesh and ship arrest procedure with details.Nature of...

        Wildlife laws in Bangladesh

        Wildlife laws in Bangladesh - Everything you need to know in 2022Barrister Tahmidur RahmanDirector, Tahmidur Rahman Remura Law Firm in Bangladesh24 Jan 2022This article will explain in details about Wildlife laws in Bangladesh and how you can deal with any...

        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 2023Barrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Holding and Subsidiary Companies in Bangladesh and how can...

        Partnership Business in Bangladesh | Fastest and Effective Process of starting your business

        Partnership business in Bangladesh in 2023- Everything you need to knowBarrister Tahmidur RahmanDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Partnership Business in Bangladesh and how can you start your business in...

        Proprietorship Business in Bangladesh

        Proprietorship business in Bangladesh in 2023- Everything you need to knowBarrister Remura MahbubDirector, The Law Firm in Bangladesh24 Jan 2022This article will explain in details about Proprietorship Business in Bangladesh and how can you start your business in...

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

        TR Law Firm in BangladeshCompany Share in Bangladesh24 Jan 2022This 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...

        Legal Translation In Bangladesh

        Legal Translation & Notary Services in BangladeshBarrister Remura MahbubDirector, Tahmidur Remura TLS24 Jan 2022This article will explain in details about how we provide E-Notary and translation of high quality with utmost professionalism. We offer...

        How to take Mortgage Loan in Bangladesh

        How to take Mortgage loan in Bangladesh | Everything you need to know in 202211 Jan 2022Tahmidur Rahman, Director and Senior AssociateHere in this post Barrister Tahmidur Rahman will explain in details about the basics of mortgage loan procedures in Bangladesh- How to...

        What to do when someone or a neighbour builds property on my land | Land Trespassing in Bangladesh

        Land Trespassing in Bangladesh & what to do when someone or a neighbour builds property on my land  Barrister Tahmidur Rahman Senior Associate, The Law Firm in Bangladesh24 Jan 2022 What to do in case somebody illegally encroaches upon property?In this article we...

        বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন 2022 এ | Effective way of Registering Land

        বাংলাদেশে জমি রেজিস্ট্রেশন আইন এবং কিভাবে জমি রেজিস্ট্রেশন করবেন ২০২২ এতাহমিদুর রহমান, Director and Senior Associate বাংলাদেশে অনেক মানুষই ভূমি আইন সম্পর্কে খুব বেশি জানেন না। ফলে তারা জমি নিয়ে নানা ধরনের প্রতারণা ও হয়রানির শিকার হন। জমি রেজিস্ট্রেশন করা খুবই জরুরি।...

        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!

        • Step by Step Process of Registering a Company in Bangladesh

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

        Carpe Noctem Bangladesh

        Step Four: Registering the Liaision office with the RJSC 

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

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

        What is the scope of a Liaison office in Bangladesh

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

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

        Liaison Office In Bangladesh_Top Law Firm In South Asia

        Limitations of a Liaison office in Bangladesh

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

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

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

        Tahmidur Rahman_ Liaison Office In Bangladesh_Best Law Firm In Bangladesh

        Frequently Asked Questions about Liaison office in bangladesh

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

        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

        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
        How To Form A Private Limited Company In Bangladesh_Best Corporate Law Firm In Bangladesh
        Video Tutorial
        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

        Have a Different Question?

        Email us anytime : [email protected]

        Or call — +8801847220062

        Call Now

        /* home and contact page javasccript */ /* our-firm page javasccript */ /* articles page javasccript */