Company Registration in Bangladesh: A Comprehensive Guide
By Tahmidur Rahman Remura Wahid Law Firm
Introduction
Registering a company in Bangladesh is a crucial step for investors looking to start a business or expand their operations in the country. Bangladesh offers a favorable environment for company registration procedure in bangladesh, and most businesses prefer to be registered as private limited liability companies due to the legal protection and limited liability they offer.
In Bangladesh you can do proprietorship company registration in bangladesh, private limited company or if you are a foreign entity then you can incorporate your fully owned subsidiary, branch or liaison office in Bangladesh by hiring suitable company registration consultants in bangladesh.
Company Registration In Bangladesh 11
This article from our esteem partners aims to provide a detailed overview of the company registration process in Bangladesh, requirements, and post-registration formalities in Bangladesh for private limited company incorporation in Bangladesh.
Pre-Registration – What You Need to Know
Before diving into the company registration process, it’s essential to understand key facts about company formation in Bangladesh:
Company Name Clearance: The proposed company name must be approved (cleared) before incorporation.
Directors: A minimum of two directors are mandatory, who can be either local or foreign. Directors must be at least 18 years old, not bankrupt, and not convicted of malpractice in the past. They must own qualification shares as stated in the Articles of Association.
Shareholders: A private limited company can have a minimum of 2 and a maximum of 50 shareholders. Shareholders can be individuals or legal entities.
Authorized Capital: The maximum share capital the company is authorized to issue must be stated in the Memorandum of Association and Articles of Association.
Paid-up Capital: The minimum paid-up capital for registration is Taka 1, but it can be increased after incorporation.
Registered Address: A local address must be provided as the registered address, which must be a physical address and not a P.O. Box.
Memorandum and Articles of Association: The company must prepare these two documents detailing the business objectives, shareholder information, and company regulations.
Considerations for Foreigners
Foreign investors planning to register a company in Bangladesh i.e a foreign company registration in bangladesh, should take note of the following points:
Bank Account Opening: A bank account must be opened in the name of the proposed company with the name clearance obtained from the Registrar of Joint Stock Companies and Firms (RJSC).
Remote Incorporation: All incorporation formalities can be handled remotely through authorized lawyers/agents in Bangladesh.
Foreign Directors and Shareholders: All directors and shareholders can be foreigners, and there is no requirement for any special visa if they do not plan to relocate to Bangladesh.
Work Permit: If foreign investors plan to operate the company from Bangladesh, they must obtain a work permit.
Required Documents
Company Registration In Bangladesh 12
At first, before we get into the process of company registration in bangladesh, for company incorporation in Bangladesh, the following documents are required by the company registrar:
Company Name Clearance Certificate
Memorandum of Association and Articles of Association
Shareholders’ particulars (National ID for Bangladeshi shareholders)
For foreigners: Copy of passport of shareholders and directors.
Procedure for Company Registration in Bangladesh
Company Registration In Bangladesh 13
The company registration process in Bangladesh involves the following steps:
Step 1: Name Clearance
Select a desired company name and apply for name clearance on the Registrar of Joint Stock Companies and Firms (RJSC) website.
Pay the prescribed fee for name clearance.
After verification, RJSC will issue a name clearance certificate, which is valid for six months and can be extended if necessary.
Step 2: Drafting AoA & MoA for company registration in bangladesh
Drafting Memorandum of Association:
A limited company’s Memorandum of Association (MOA) is an essential aspect of the company registration process. A company’s objectives are included in a MOA. In the MOA, you can include as many objectives as you wish.
Drafting Article of Association:
The company’s constitution is its Articles of Association (AOA). As a result, the AOA contains all of the regulations governing how a limited company will operate, as well as who will serve as the firm’s Managing Director, Chairman, and Directors.
Company Registration In Bangladesh 14Company Registration In Bangladesh 15
Step 3: Bank Account Opening and Paid-up Capital
Open a temporary bank account in the company’s name with a scheduled bank in Bangladesh.
Remit the paid-up capital (if foreign shareholding) to the bank account, and obtain an Encashment Certificate from the bank.
Deposit of share capital:
Following the opening of the provisional bank account, for completing company registration in bangladesh, a share money deposit will be paid from the foreign shareholder’s nation to the provisional account. As a result, the funds must be transferred from the shareholder’s person or entity account. After receiving payment, the Bangladeshi bank will provide an encashment certificate.
Step 4: Submit Company Information to RJSC
Upload digital copies of the MoA, AoA, and other required documents on the RJSC website.
Step 5: Submission of Physical Documents and required fee
Affix non-judicial stamps on the MoA and AoA.
Submit physical copies of the MoA, AoA, and other documents, along with the Encashment Certificate, to RJSC.
The government registration fee is determined by the company’s authorized capital. For example, if the allowed capital is 50 lakh, the government charge will be BDT 13570 (USD 160) plus 15% VAT. The government fee for company registration in Bangladesh can be found here.
Step 6: Obtain Incorporation Certificate
RJSC officials will review the submitted documents.
If satisfied, RJSC will issue the Certificate of Incorporation, Digital Certified Copy of MoA and AoA, and List of Directors (Form XII).
Present the Incorporation Certificate to the bank to convert the temporary account to a regular account.
Post-Registration Formalities
Company Registration In Bangladesh 16
After company registration, the following post-registration formalities need to be completed:
Obtain Trade License, Tax Identification Number, and Other Licenses: Apply for a trade license and obtain a Tax Identification Number (TIN). Depending on the business activities, additional licenses may be required.
Return Filing Requirements:
Annual Return:
Hold an Annual General Meeting (AGM) within 18 months of incorporation, and no more than 15 months between subsequent AGMs.
Regular Return:
File relevant returns for any changes in the board of directors, shareholding structure, or other significant changes.
Company Registration In Bangladesh 17
Taxation and Company Registration in Bangladesh:
Corporate Tax Rate
Applicable Companies
25%
Publicly traded companies (listed companies on the stock market)
30%
Non-publicly traded companies (private companies limited by shares)
37.5%
Publicly traded banks, insurance, and financial institutions other than merchant banks
40%
Non-publicly traded banks, insurance, and financial institutions
40%
Publicly traded mobile network operators
45%
Non-publicly traded mobile network operators
45%
Publicly traded cigarette manufacturers
45%
Non-publicly traded cigarette manufacturers
25%
One Person Company (OPC)
Taxation Process
Annual Income Tax Return Deadline
File income tax return annually
Usually on 15th January of the next year following financial closing (usually July-June).
Additional Tax Information
What is the Corporate Tax on profit?
Corporate tax on its profit Minimum tax usually @ 0.06% of gross revenue to be paid
How to Inject paid-up capital to the company’s bank account?
By cheques or any other instrument
Are there any transparency requirement?
The company should adequately explain debit-credit in the bank statements
Please note that besides the corporate tax rates mentioned above, there are several tax exemption facilities available for companies based on the nature of their business and location. Additionally, one-person company registration in Bangladesh has been officially launched, allowing individuals to incorporate a company on their own.
Company Registration In Bangladesh 18
FAQ about Company Registration in Bangladesh:
FAQ
Answer
What is a Private Limited Company?
A Private Limited Company is a type of company that restricts the right of share transfer, limits the number of members to fifty, and prohibits public invitation to subscribe to shares or debentures.
How to incorporate a private limited company?
The process of company registration in bangladesh involves obtaining name clearance, drafting required documents, opening a temporary bank account, submitting documents to RJSC, and obtaining the incorporation certificate.
Are there any minimum shareholders required to form a company?
Yes, a minimum of two shareholders is required to form a private limited company.
Are there any minimum directors required to form a company?
Yes, a minimum of two directors is required to form a private limited company.
Is there any requirement of a resident/local director to operate a foreign company in Bangladesh?
Generally, there is no requirement for a resident/local director, but one director must be physically present to open a bank account.
Is there any minimum amount for the authorized and paid-up capital to be prescribed?
There is no specific limit on authorized or paid-up capital, but it is suggested to have a minimum authorized capital equivalent to USD 50,000 for legal purposes and adequate paid-up capital for business operation.
Are there any guidelines on reflecting company activities in the name?
There are no strict guidelines, but it is suggested to reflect the company’s activities in the name.
Is it mandatory to have a registered local address for the company?
Yes, a registered local address is mandatory for the company.
Do you provide office address?
Yes, office address services are available for company registration.
What documents are required for company formation?
Required documents include Memorandum of Articles and Articles of Association, directors’ resolution, consent forms, and various registration forms.
Whether prior permission of regulatory authority is needed for making investment?
For investment in kind, the concerned company needs to be registered with RJSC, and relevant forms and agreements must be filed with RJSC for record-keeping.
What is the difference between authorized capital & paid-up capital?
Authorized capital is the maximum share capital the company can issue, while paid-up capital is the amount actually paid by shareholders.
Whether directors need to obtain any registration before becoming directors of the company?
Directors do not need any specific registration before becoming directors.
Is it mandatory to appoint a company secretary?
There is no mandatory requirement for a company secretary in private limited companies.
What is the timeline for company formation?
The timeline for company formation may vary, but it usually takes a few weeks to complete the entire process.
What are the post-company formation required licenses and approvals?
Post-formation, licenses such as Tax Identification Number (TIN), Trade License, and VAT Registration Certificate need to be obtained.
When will a company be fully ready to operate legally in Bangladesh?
A company can start operating legally in Bangladesh after completing the registration process and obtaining necessary licenses and approvals.
Are there any restrictions/guidelines for altering company operation & management in the future?
Yes, any changes in company operation or management must be reported to the Company House.
What documents are required for bank account opening?
Documents such as the Certificate of Incorporation, Memorandum and Articles of Association, and identification documents are required for bank account opening.
Can a company own several businesses under different names?
Yes, a company can own multiple businesses under different names, as long as it complies with its Memorandum of Association and obtains necessary permissions if required.
Can a company change its business category not mentioned in its memorandum?
To carry out a different business not mentioned in the memorandum, the company needs to apply to the High Court to add that category.
Registering a company in Bangladesh is a streamlined process that can be handled remotely through authorized agents. Foreign investors have the flexibility to operate their businesses from overseas or relocate to Bangladesh with appropriate work permits. With its investor-friendly policies and favorable business environment, Bangladesh presents attractive opportunities for both local and foreign entrepreneurs.
If you are considering company registration in Bangladesh, it is advisable to seek professional legal assistance to navigate the registration process efficiently and ensure compliance with all regulatory requirements.
Time Requirement For A Company Formation
We want to finish the registration procedure as soon as possible. Preparing papers, RJSC online filing, payment, and a physical encounter with RJSC might also affect the timeline.
The fees and costs of company registration in Bangladesh will be determined by the nature of your firm. The following table shows the projected cost of forming a company:
Category
Nature of Business
Expected Cost (Taka)
A
Service and General Trading Company
Less than 60000
B
Relating to Export and Import Company
Less than 120000
C
Relating to Export, import and Manufacture
Less than 400000
D
Branch and Representative Office
Less than 60000
E
Employment and Investor Visa
Less than 50000
Summary for Company Registration in Bangladesh and FAQ:
Company Registration In Bangladesh 19Company Registration In Bangladesh 20
How can I register my company in Bangladesh?
In Bangladesh, the average projected time for full registration is 45- 60 days.
Step 1: Clearance of names:
To begin, you must obtain clearance from The Registrar of Joint Stock Companies and Firms (RJSC) for the name of your company.
Step 2: Draft the necessary documents.
Second, write the Articles of Association (AoA) and the Memorandum of Association (MoA). You must draft it along with other forms as required for RSJC compliance while preparing those.
Step 3: Create a bank account
Third, if you intend to hire foreign personnel, you must open a bank account in the planned company’s name and submit an inward remittance of at least US$ 50,000. Emerhub can assist you in opening a bank account.
Step 4: Submit paperwork to the RSJC
In this phase, you must submit all essential documents to the RJSC as well as pay the registration fees. During the regular process time, you can also look into RSJC for the incorporation certificate.
Step 5: Post-registration conformity You now have a freshly formed company in Bangladesh, as well as the certificate of incorporation, Articles of Association (AoA), and Memorandum of Association (MoA).
You must additionally obtain the following permits and registrations: Tax Identification Number (TIN) for a Trade License Fire Certificate Environmental Clearance Certificate (if required) VAT Registration Certificate
How much is company registration fee in Bangladesh?
The registration fee varies and mainly depend on the selected Authorised Capital by the company in its AoA and MoA.
Can a foreigner own a company in Bangladesh?
Of course. Foreign investors can establish a wholly owned subsidiary or a jointly owned company in Bangladesh. Public and private limited companies are the most popular types of incorporation. Incorporated companies must adhere to the Companies Act of 1994 and can conduct any legally acceptable activity and establish operations in any location in Bangladesh. Company formation in Bangladesh entails the following steps: Step 1: Obtaining RJSC&F name clearance. Step 2: Open a temporary bank account to deposit capital. According to Circular No. 11 of the Foreign Exchange Policy Department of Bangladesh Bank, issued on May 17, 2021, investors can open temporary accounts through online arrangements for FDI in Bangladesh. Step 3: Prepare Articles of Association and Memorandum of Association, and submit application for incorporation with RSJC&F. The above processes normally take five weeks to complete.
How can I verify the status of a company's registration?
Anyone can check the ROC GOV BD website, but registered users can readily verify in detail after logging in.
To check, go to App Roc Gov Bd, app.roc.gov.bd. Also, keep an eye on your registered email for updates if anything changes.
What is the registration number of the company?
As the firm's identity, each incorporated company receives a registration number from the RJSC office. This identifying number is only available in the copy of the Incorporation Certificate.
What are the fundamental documents needed to register a company?
The basic documentation of a firm are: a) the shareholders' passports 2) Parent's address, email, phone number, and name 3. Signing the RJSC forms
What exactly is an encashment letter?
A letter is issued by a local bank in response to foreign shareholders purchasing stock (TT). Depositing cash in a bank to receive an encashment or remittance letter is completely prohibited.
What does RJSC stand for?
RJSC stands for Registered Joint Stock Companies and Firm, which is a government organ. All firms are registered with RJSC, and all enterprises are required by law to file annual returns to RJSC.
If the company's shares are increased, sold, or otherwise changed, the RJSC office must be notified.
What is Bangladesh's most profitable and quickly growing business?
The most profitable and rapidly increasing businesses in Bangladesh are RMG, sea fish, clothes, leather, poultry, and food.
Which foreign countries have the most investments in Bangladesh?
According to the 2019 FDI report, China appears to be Bangladesh's largest investment partner, followed by South Korea, India, the United Kingdom, the United Arab Emirates, Malaysia, and others.
How do expatriates send money out of Bangladesh?
It is restricted unless permission is obtained from BIDA, the Income Tax Department, and the Bangladesh Bank.
How much does the business tax cost?
It is a clean 30% as per FDI law, with an additional VAT of 5 as per NBR policy. Visit this site to learn more about Income Tax in Bangladesh.
How can I get a PI and an E visa?
We have previously covered them above, and you are encouraged to read them. You must obtain permission from BIDA/BEPZA and invest $50,000 in accordance with their guidelines.
Visit to learn more about the PI and E Visa application processes.
Are you planning to do your company registration in Bangladesh?
Company formation and registration at Tahmidur Rahman Remura Wahid: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman Remura Wahid Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering all sorts of companies in Bangladesh . For queries or legal assistance, please reach us at:
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.
(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.
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
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.
If you want to open a liaison office in Bangladesh or about branch formation click here!
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.
WithBangladesh 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.
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.
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 Remura: TRW: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: TRW, 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:
How much money is required for company registration in Bangladesh?
The governmental fees for registering a company are determined by the amount of authorized capital. Government fees for the issuance of an Incorporation Certificate shall be BDT 1000.
How long does it take to register a company in Bangladesh?
Once the aforementioned formalities have been completed, RJSC will usually issue the certificate of incorporation (Company registration certificate) within 6-8 working days.
It usually takes 2-3 weeks from the date of submission of all documents to RJSC to register a company.
What is BIDA?
Bangladesh Investment Development Authority (BIDA) is in charge of facilitating foreign investments in the country.
BIDA's responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approving remittance of royalties and technical fees, assisting in the acquisition of industrial plots, facilitating utility connections, approving foreign loans, suppliers credit, and providing assistance and advice on a variety of investment-related issues.
Foreign investors with industrial projects are strongly advised to register with BIDA after forming their limited company. However, there is no requirement for a commercial or trading company to register with BIDA. The average time frame for obtaining registration is 7-10 working days.
What documents are needed to set up a private limited company in Bangladesh?
1. Memorandum of Association 2. Article of Association 3. Certificate of Incorporation 4. Trade License 5. TIN 6. VAT Registration Certificate 7. Name Clearance 8. Environmental Clearance Certificate 9. Fire Certificate
What is the minimum capital required for a private limited company in Bangladesh?
In Bangladesh, there is no minimum or maximum authorised capital for a local company.
However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50,000/- must be invested in the Company.
Can a single person start a company in Bangladesh?
Bangladesh does not allow a single person to open a private limited company or One Person Company (OPC).
A private limited company must have at least two shareholders. In the case of a public limited company, however, the total number of shareholders required is seven.
Can a private limited company have one director in Bangladesh?
A private limited company must have at least two directors. Local or foreign nationals may serve as directors.
Directors must be at least 18 years old and have never been bankrupt or convicted of a crime. A director is required by law to own the qualification shares specified in the Articles of Association.
What is the difference between authorised capital and paid-up capital?
- Authorised capital: The amount of authorised capital must be specified in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that a company may allocate to shareholders.
In Bangladesh, there is no minimum or maximum authorised capital for a local company. However, for practical reasons and to obtain complete flexibility in terms of expatriation and bringing in foreign expatriates, a minimum of USD 50000/- must be invested in the Company.
-Paid-Up Capital : The minimum paid-up capital for registering a Bangladeshi company is Taka 1 (for local companies) and USD 50000 (for foreign companies).
Infographics
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Author’s Bio
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura 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
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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
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.
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.
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.
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)
If you want to open a liaison office in Bangladesh or about branch formation click here!
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.
WithBangladesh 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.
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.
“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 Remura: TRW: The Law Firm in Bangladesh:
The legal team of Tahmidur Rahman, The Law Firm in Bangladesh Remura: TRW, 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:
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
Video Tutorial
Author’s Bio
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura 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
Emissions Linked Trading in the US and EU: A Comprehensive Overview Emission-linked trading has emerged as a pivotal tool in the global fight against climate change. Both the United States and the European Union (EU) have made significant strides in developing...
Foreign Currency Account in Bangladesh The Bangladesh Bank has authorized the institutions to maintain multiple types of foreign currency and convertible taka accounts. Bangladesh Bank's rules for opening and maintaining these accounts. Moreover, persons ordinarily...
Unlocking Investment Potential in Bangladesh: Navigating IRR within Legal Frameworks of Bangladesh In the realm of financial analysis and investment evaluation in Bangladesh, the Internal Rate of Return (IRR) stands as a fundamental metric that helps investors and...
Real Estate Private Equity What Is Private Equity Real Estate? Private equity real estate is an alternative asset class that consists of professionally managed pooled private and public real estate investments. Investing in private equity real estate entails...
Foreign Currency Account in Bangladesh The Bangladesh Bank has authorized the institutions to maintain multiple types of foreign currency and convertible taka accounts. Bangladesh Bank's rules for opening and maintaining these accounts. Moreover, persons ordinarily...
Procedures To Get Tax Exemption Certificate in Bangladesh A tax exemption is the reduction or elimination of a person's obligation to pay a tax that would otherwise be imposed. The tax-exempt status may provide total tax exemption, a reduction in tax rates, or impose...
Mutation khatian in Bangladesh In Bangladesh, mutation is a significant role in land ownership. When you acquire ownership of land or property, you must execute the mutation. It is a crucial piece of evidence supporting the land's title. If your name is not on the...
Khatian correction Suit in Bangladesh Land ownership and property rights hold immense significance in any society, providing stability and security to individuals and communities. In Bangladesh, where land is a precious resource and a crucial element of livelihoods,...
Boiler Registration Certificate for BEZA in Bangladesh In order to install and use a boiler with a volumetric capacity greater than 25 liters for their manufacturing or production unit, an EZ Unit Investor must first obtain a No Objection Certificate (NOC) from the...
BIDA Registration for Foreign Investment Project in 2023 According to the BIDA Act of 2016, all industrial investors (those outside the jurisdiction of BEZA, BEPZA, BHTPA, and BSCIC) are required to register their investments with BIDA. Registration with BIDA is not...
Power of attorney guidelines for non-Bangladesh nationals The purpose of this article is to provide a comprehensive overview of the laws pertaining to Power of Attorney in Bangladesh and to outline the key considerations when drafting a Power of Attorney. Definition:...
Labour Rules Amendment 2015: The government revised the Bangladesh Labour Rules for 2015 in 2015. The government issued a revised gazette of the Labour Rules on September 1, 2022, modifying 99 rules and eliminating two. By means of this newsletter, we hope to shed...
VAT Deductible at Source in Bangladesh: A Guide by Tahmidur Rahman Remura Law Firm In Bangladesh, the Value Added Tax (VAT) Act of 2012 introduced provisions for VAT Deductible at Source (VDS). These regulations outline the circumstances under which VAT should be...
Declaratory Suit in Bangladesh: Clearing Legal Confusion and Establishing Rights In the realm of legal disputes concerning property rights or legal character, a declaratory suit can serve as a powerful tool for seeking clarification and resolution. Under Section 42 of...
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.
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.
Fill up Trade license form with the Owner’s signature
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 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.
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.
If you want to open a liaison office in Bangladesh or about branch formation click here!
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.
WithBangladesh 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.
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.
“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?
The legal team of Tahmidur Rahman, The Legal Source Remura: TRW The Legal Source 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:
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
Video Tutorial
Author’s Bio
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura 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
Emissions Linked Trading in the US and EU: A Comprehensive Overview Emission-linked trading has emerged as a pivotal tool in the global fight against climate change. Both the United States and the European Union (EU) have made significant strides in developing...
Foreign Currency Account in Bangladesh The Bangladesh Bank has authorized the institutions to maintain multiple types of foreign currency and convertible taka accounts. Bangladesh Bank's rules for opening and maintaining these accounts. Moreover, persons ordinarily...
Unlocking Investment Potential in Bangladesh: Navigating IRR within Legal Frameworks of Bangladesh In the realm of financial analysis and investment evaluation in Bangladesh, the Internal Rate of Return (IRR) stands as a fundamental metric that helps investors and...
Real Estate Private Equity What Is Private Equity Real Estate? Private equity real estate is an alternative asset class that consists of professionally managed pooled private and public real estate investments. Investing in private equity real estate entails...
Foreign Currency Account in Bangladesh The Bangladesh Bank has authorized the institutions to maintain multiple types of foreign currency and convertible taka accounts. Bangladesh Bank's rules for opening and maintaining these accounts. Moreover, persons ordinarily...
Procedures To Get Tax Exemption Certificate in Bangladesh A tax exemption is the reduction or elimination of a person's obligation to pay a tax that would otherwise be imposed. The tax-exempt status may provide total tax exemption, a reduction in tax rates, or impose...
Mutation khatian in Bangladesh In Bangladesh, mutation is a significant role in land ownership. When you acquire ownership of land or property, you must execute the mutation. It is a crucial piece of evidence supporting the land's title. If your name is not on the...
Khatian correction Suit in Bangladesh Land ownership and property rights hold immense significance in any society, providing stability and security to individuals and communities. In Bangladesh, where land is a precious resource and a crucial element of livelihoods,...
Boiler Registration Certificate for BEZA in Bangladesh In order to install and use a boiler with a volumetric capacity greater than 25 liters for their manufacturing or production unit, an EZ Unit Investor must first obtain a No Objection Certificate (NOC) from the...
BIDA Registration for Foreign Investment Project in 2023 According to the BIDA Act of 2016, all industrial investors (those outside the jurisdiction of BEZA, BEPZA, BHTPA, and BSCIC) are required to register their investments with BIDA. Registration with BIDA is not...
Power of attorney guidelines for non-Bangladesh nationals The purpose of this article is to provide a comprehensive overview of the laws pertaining to Power of Attorney in Bangladesh and to outline the key considerations when drafting a Power of Attorney. Definition:...
Labour Rules Amendment 2015: The government revised the Bangladesh Labour Rules for 2015 in 2015. The government issued a revised gazette of the Labour Rules on September 1, 2022, modifying 99 rules and eliminating two. By means of this newsletter, we hope to shed...
VAT Deductible at Source in Bangladesh: A Guide by Tahmidur Rahman Remura Law Firm In Bangladesh, the Value Added Tax (VAT) Act of 2012 introduced provisions for VAT Deductible at Source (VDS). These regulations outline the circumstances under which VAT should be...
Declaratory Suit in Bangladesh: Clearing Legal Confusion and Establishing Rights In the realm of legal disputes concerning property rights or legal character, a declaratory suit can serve as a powerful tool for seeking clarification and resolution. Under Section 42 of...
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:
And except for Proprietorship, in all other ways, Shares play an instrumental role. Sections 30-76 of the Companies Act 1994 deal with shares, transfer of shares and rights
of shareholders. Sections 152-156 deal with issue of shares at a discount, redeemable preference shares and issue of further shares.
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 Bangladeshis 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 remainliable 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.
If you want to know about Share Transfer Process 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 issuedand 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 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.
If you want to open a liaison office in Bangladesh or about branch formation click here!
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.
WithBangladesh 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.
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.
The legal team of Tahmidur Rahman, The Legal Source TRW 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:
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
Video Tutorial
Author’s Bio
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura 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
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Registration of a Private Limited Company in Bangladesh in 2023
Barrister Remura Mahbub Senior Associate, The Law Firm in Bangladesh
24 Jan 2023
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.
Companies Act 1994 Private Limited Company has the following characteristics:
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.
We will explain the whole thing in this article, but here is a table outlining the steps involved in forming a company in Bangladesh:
Step
Description
1
Choose a business name and register it with the Registrar of Joint Stock Companies and Firms (RJSC).
2
Obtain any necessary licenses or permits for your business.
3
Draft the memorandum and articles of association for your company.
4
Hold a meeting with the directors to adopt the memorandum and articles of association.
5
Submit the memorandum and articles of association, along with other required documents, to the RJSC for registration.
6
Pay the registration fees and obtain a certificate of incorporation from the RJSC.
7
Obtain a tax identification number (TIN) from the National Board of Revenue (NBR).
8
Register for any necessary taxes with the NBR.
9
Obtain any necessary approvals or permits from relevant government agencies.
10
Start operating your business.
Please note that this is a general overview of the process and may vary depending on the specific type of company you are forming and the nature of your business. It is advisable to seek legal and professional guidance to ensure that all necessary steps are taken and all necessary documents are properly completed and filed. Now let’s get into details!
Procedure for Registration of a Private Limited Company in Bangladesh
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.
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.
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.
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
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.
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.
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.
If you want to open a liaison office in Bangladesh or about branch formation click here!
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.
WithBangladesh 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.
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.
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 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:
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
Video Tutorial
Author’s Bio
About Barrister Remura Mahbub | One of the most innovative young lawyers in Bangladesh
Barrister Remura 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
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Unlocking Investment Potential in Bangladesh: Navigating IRR within Legal Frameworks of Bangladesh In the realm of financial analysis and investment evaluation in Bangladesh, the Internal Rate of Return (IRR) stands as a fundamental metric that helps investors and...
Real Estate Private Equity What Is Private Equity Real Estate? Private equity real estate is an alternative asset class that consists of professionally managed pooled private and public real estate investments. Investing in private equity real estate entails...
Foreign Currency Account in Bangladesh The Bangladesh Bank has authorized the institutions to maintain multiple types of foreign currency and convertible taka accounts. Bangladesh Bank's rules for opening and maintaining these accounts. Moreover, persons ordinarily...
Procedures To Get Tax Exemption Certificate in Bangladesh A tax exemption is the reduction or elimination of a person's obligation to pay a tax that would otherwise be imposed. The tax-exempt status may provide total tax exemption, a reduction in tax rates, or impose...
Mutation khatian in Bangladesh In Bangladesh, mutation is a significant role in land ownership. When you acquire ownership of land or property, you must execute the mutation. It is a crucial piece of evidence supporting the land's title. If your name is not on the...
Khatian correction Suit in Bangladesh Land ownership and property rights hold immense significance in any society, providing stability and security to individuals and communities. In Bangladesh, where land is a precious resource and a crucial element of livelihoods,...
Boiler Registration Certificate for BEZA in Bangladesh In order to install and use a boiler with a volumetric capacity greater than 25 liters for their manufacturing or production unit, an EZ Unit Investor must first obtain a No Objection Certificate (NOC) from the...
BIDA Registration for Foreign Investment Project in 2023 According to the BIDA Act of 2016, all industrial investors (those outside the jurisdiction of BEZA, BEPZA, BHTPA, and BSCIC) are required to register their investments with BIDA. Registration with BIDA is not...
Power of attorney guidelines for non-Bangladesh nationals The purpose of this article is to provide a comprehensive overview of the laws pertaining to Power of Attorney in Bangladesh and to outline the key considerations when drafting a Power of Attorney. Definition:...
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