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DHAKA: House 410, ROAD 29, Mohakhali DOHS
DUBAI: Rolex Building, L-12 Sheikh Zayed Road
LONDON: 1156, St Giles Avenue, Dagenham

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How to Apply for an Import of Pesticide License in Bangladesh

How to Apply for an Import of Pesticide License in Bangladesh

A Comprehensive Guide: How to Apply for an Import of Pesticide License

Importing pesticides is a regulated activity that requires careful adherence to governmental guidelines and procedures to ensure the safety of the environment, human health, and agricultural practices. If you are considering importing pesticides for commercial or personal use, obtaining an import of pesticide license is a crucial step in the process.

This article will provide you with a step-by-step guide on how to apply for an import of pesticide license, covering all the necessary details to make the application process smooth and successful.

Understanding the Importance of an Import of Pesticide License

Importing pesticides involves dealing with substances that can have a significant impact on ecosystems, crops, and human health.

As a result, governments implement stringent regulations to ensure that the import and use of pesticides are carried out responsibly and safely. An import of pesticide license is a legal requirement that demonstrates your commitment to complying with these regulations, safeguarding the environment, and protecting consumers.

Step-by-Step Guide: How to Apply for an Import of Pesticide License

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How To Apply For An Import Of Pesticide License In Bangladesh 4

Step 1: Gather Required Documents

Before initiating the application process, ensure you have all the necessary documents ready. These documents are essential for verifying your eligibility and the safety of the pesticides you intend to import. The required documents include:

  1. Completed Application Form: Obtain the application form from the Ministry of Agriculture, Department of Agricultural Extension. Fill in all the necessary details accurately and legibly. Incomplete applications are likely to be rejected.
  2. Registration Number of Importing Pesticide: Before applying for an import of pesticide license, ensure that you are registered as an importer. This registration is a prerequisite for obtaining the license.
  3. Brand and Descriptive Names of Pesticide List: Provide a comprehensive list of the brand names and descriptive names of the pesticides you intend to import. This information helps authorities verify the substances you plan to bring into the country.
  4. Ingredients List: Furnish the names of all ingredients present in the pesticides you wish to import. This list is crucial for evaluating the safety and potential impact of the pesticides.
  5. Ingredient Quantity List Document: Detail the quantity of each ingredient contained in the pesticides. This data is essential for assessing the potential risk associated with the imported substances.
  6. Treasury Challan: Pay the prescribed fee as requested by the relevant authority. The treasury challan serves as proof of payment and is required to proceed with your application.

Step 2: Apply In-Person

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How To Apply For An Import Of Pesticide License In Bangladesh 5

To initiate the application process, you need to visit the Ministry of Agriculture, Department of Agricultural Extension in person. This step ensures that your application is submitted accurately and allows you to seek clarifications or address any queries in real-time.

  1. Approach the concerned officer at the Ministry of Agriculture, Department of Agricultural Extension. They will provide you with the necessary application form and guide you through the process.
  2. Fill in all the required details in the application form. Ensure that the information provided is accurate and complete.
  3. Attach photocopies of all the required documents mentioned in the “Required Documents” section to your application form.
  4. Submit the completed application form and attached documents to the concerned officer. At this stage, ensure that you have included all the necessary documents to avoid delays in processing.

Step 3: Application Review and Processing

Once you have submitted your application, the concerned authority will review the submitted documents and application form. This review is conducted to ensure that all necessary information and documentation are provided correctly.

  1. The authority will assess the completeness of your application. If any documents are missing or incomplete, your application may be rejected or delayed. Therefore, double-check your application before submission.
  2. If your application is complete and in order, you will receive an acknowledgment receipt. Keep this receipt safe, as it serves as evidence that your application has been received.
  3. The application will then undergo further processing. Updates regarding the status of your application will be communicated to you via SMS on the mobile number you provided in the application form.

Step 4: Application Approval and License Issuance

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After the thorough processing of your application, including the evaluation of the pesticides you intend to import, you will be informed of the approval status.

  1. If your application is approved, you will receive a notification. The authority will contact you via phone to provide instructions on the next steps.
  2. Upon notification of approval, you will be required to visit the Ministry of Agriculture, Department of Agricultural Extension office once again.
  3. During your visit, you will be issued the import of pesticide license. This license authorizes you to import the specified pesticides in compliance with the regulations and guidelines set forth by the government.

Step 5: Completion of the Process

The entire process, from submitting the application to receiving the import of pesticide license, can typically be completed within 15 to 20 days, or as per the timeline advised by the respective department authority.

Obtaining an import of pesticide license is a crucial step in ensuring the responsible and safe import of pesticides. This process involves submitting a comprehensive application along with necessary documents and undergoing a thorough evaluation by the relevant authority.

By following the step-by-step guide provided in this article, you can navigate the application process smoothly and contribute to the sustainable and ethical use of pesticides in agriculture and other sectors. Always remember that adherence to regulations and guidelines not only benefits your business but also safeguards the environment and human health for generations to come.

Contact us to get an Import of Pesticide License in Bangladesh:

DHAKA: House 410, ROAD 29, Mohakhali DOHS
DUBAI: Rolex Building, L-12 Sheikh Zayed Road
LONDON: 1156, St Giles Avenue, Dagenham

Email Addresses:
[email protected]
[email protected]
[email protected]

24/7 Contact Numbers, Even During Holidays:


Difference between Promissory Note and Bill of Exchange

Difference between Promissory Note and Bill of Exchange

Promissory Note and Bill of Exchange

Bills of exchange and promissory notes are written pledges between two parties that confirm the completion of a financial transaction. Bills of exchange are more commonly employed in foreign trade than promissory notes are in domestic trade.

A negotiable instrument is a written commercial document that contains an order for money to be paid on demand or after a particular period of time. Bills of exchange, promissory notes, and cheques are the three sorts. In some cases, the bill of exchange is used in conjunction with a promissory note. The primary distinction between a Bill of Exchange and a Promissory Note is that the former bears a command to pay money, whilst the latter bears a promise to pay money.

Acceptance is a key distinction between the two business instruments; bills of exchange must be accepted in order to be effective. A promissory note, on the other hand, does not require any type of acceptance. So, when working with these two, one should be aware of their significance and characteristics.

What exactly is a Promissory Note?

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Difference Between Promissory Note And Bill Of Exchange 10

A promissory note is a form of negotiable instrument that contains a written promise to pay in full. These are duly signed and stamped by their drawers, stating that they will pay a particular sum of money to the holder on a specific day or on demand. Promissory notes, which are used by debtors to borrow from creditors, may not be accepted by a creditor after they have been drawn.

Hence, they have the following characteristics.

  • Written promises to repay a debt.
  • The drawer or promisor must sign.
  • The payment date is set in stone.
  • Both the promisor and the promisee agree on a sum of money to be paid.

For settlement, the legal currency of the relevant country is used.
It involves the two parties listed below:


The debtor who promises to pay a certain amount to its creditor.


A creditor who has been promised a certain amount of money on a specific day.

What exactly is a Bill of Exchange?

A bill of exchange, which is a written note legally bonded and duly stamped and signed by its drawer, is also a negotiable tool. It directs that a certain sum of money be paid to the holder of this instrument on demand or within a specified time limit. These are usually payments for products and services that must be accepted by a debtor in order to be valid. It has the features listed below.

  • It must be properly dated.
  • Contains a payment order.
  • The drawer/maker’s signature is required.
  • A drawee must accept the bill.
  • The payment order and amount should be specified.
  • It has to be delivered to the appropriate payee.

It involves the three parties listed below:

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Difference Between Promissory Note And Bill Of Exchange 11


The person who receives payment from the issuer of this instrument.


A person who must pay the applicable sum.

Payee: This is the person who gets payment and, in most cases, is the same as the drawer.
What is the difference between Promissory Notes and Bills of Exchange?
While promissory notes, bills of exchange, and cheques have some similarities, they are separate from one another. Despite the fact that they are financial instruments with a documented pledge to pay.

Comparison Chart

MeaningBill of Exchange is an instrument in writing showing the indebtedness of a buyer towards the seller of goods.A promissory note is a written promise made by the debtor to pay a certain sum of money to the creditor at a future specified date.
Defined inSection 5 of Negotiable Instrument Act, 1881.Section 4 of Negotiable Instrument Act, 1881.
PartiesThree parties, i.e. drawer, drawee and payee.Two parties, i.e. drawer and payee.
Drawn byCreditorDebtor
Liability of MakerSecondary and conditionalPrimary and absolute
Can maker and payee be the same person?YesNo
CopiesBill can be drawn in copies.Promissory Note cannot be drawn in copies.
DishonorNotice is necessary to be given to all the parties involved.Notice is not necessary to be given to the maker.

There are significant distinctions between bills of exchange and promissory notes, as you are now aware. Here are some of the most noticeable differences:

  • A bill of exchange is a negotiable instrument produced when the debtor is directed to pay the creditor the outstanding amount within a particular time frame. A promissory note, on the other hand, is a written agreement between the drawer and the drawee in which the drawer pledges to pay a certain amount within a certain time frame.
  • A Bill of Exchange involves three parties: the drawer, the drawee, and the payee. A promissory note involves two parties: the drawer and the payee/drawee.
  • A bill of exchange must be accepted by the debtor in order to be considered valid. In the case of a promissory note, the drawee’s acceptance is not required.
  • If the Bill of Exchange is not followed, a notice is given to all parties involved. In the case of a promissory note, no notice of dishonor is issued to the “maker.”
  • In the event of a bill of exchange, no asset is kept as security. An asset can be used as collateral for a loan in specific cases, such as with promissory notes.

Bills of exchange and promissory notes are equally as important in business as cheques. These notions, which are critical for commercial transactions and financing, are, nevertheless, rarely emphasized. Bills of exchange are one of the most crucial negotiable documents when a debtor obtains products on credit.

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Difference Between Promissory Note And Bill Of Exchange 12

The creditor sends the debtor a bill of exchange, asking him to pay the amount within the time range indicated.
The promissory note is similar, but it is issued by the debtor and specifies that the required amount will be paid within a specified time frame. These ideas will help you understand business in a practical way, and you will be able to apply them in your own business or at work.

Bill of ExchangePromissory Note
A negotiable instrument issued to order the debtor to pay the creditor a certain sum of money within a specific date or on demand.A negotiable instrument issued by the debtor with a written promise to pay the creditor a certain amount within a specific date or on demand.
Mentioned in Section 5 of the Negotiable Instruments Act, 1881Mentioned in Section 4 of the Negotiable Instruments Act, 1881
Issued By
Parties Involved
Three parties involved i.e a drawer, the drawee and a payee.Two parties involved i.e a drawer/maker and the payee
Drawee needs to accept the bill of exchange before payment.No acceptance required from the drawee.
Liability of drawer is secondary and conditional.Liability of drawer is primary and absolute.
Dishonouring of instrument
Notice served to all the concerned parties involved in the transaction on dishonouring the instrument.No notice served to the drawer in case of dishonouring the instrument.
Bill of exchange can have copies.The promissory note allows no copies.
Is it Payable to drawer/maker
Yes, the same person can be drawer and payee.The same person cannot be drawer and payee.

ব্যারিস্টার তাহমিদুর রহমান রিমুরা কর্তৃক চেক ডিসঅনার মামলা সম্পর্কিত আইনী সেবা:

ব্যারিস্টার তাহমিদুর রহমান: সিএলপি একটি সনামধন্য ‘ল’ চেম্বার যেখানে ব্যারিস্টারস এবং আইনজীবীদের মাধ্যমে চেক ডিসঅনারের মামলা সম্পর্কিত সকল প্রকার আইনগত সহায়তা, পরামর্শ প্রদান করে থাকে। কোন প্রশ্ন বা আইনী সহায়তার জন্য আমাদের সাথে যোগাযোগ করুনঃ-

ই-মেইল: [email protected] 

ফোন: +8801847220062 or +8801779127165 ,

ঠিকানা: রোড ২৯, হাউজঃ ৪১০, মহাখালী ডি ও এইচ এস, ঢাকা। 

Company Registration in Bangladesh

Company Registration in Bangladesh

Company Registration in Bangladesh: A Comprehensive Guide

By Tahmidur Rahman Remura Wahid Law Firm


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.

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Company Registration In Bangladesh 23

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:

  1. Company Name Clearance: The proposed company name must be approved (cleared) before incorporation.
  2. 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.
  3. Shareholders: A private limited company can have a minimum of 2 and a maximum of 50 shareholders. Shareholders can be individuals or legal entities.
  4. Authorized Capital: The maximum share capital the company is authorized to issue must be stated in the Memorandum of Association and Articles of Association.
  5. Paid-up Capital: The minimum paid-up capital for registration is Taka 1, but it can be increased after incorporation.
  6. Registered Address: A local address must be provided as the registered address, which must be a physical address and not a P.O. Box.
  7. 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:

  1. 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).
  2. Remote Incorporation: All incorporation formalities can be handled remotely through authorized lawyers/agents in Bangladesh.
  3. 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.
  4. Work Permit: If foreign investors plan to operate the company from Bangladesh, they must obtain a work permit.

Required Documents

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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:

  1. Company Name Clearance Certificate
  2. Memorandum of Association and Articles of Association
  3. Shareholders’ particulars (National ID for Bangladeshi shareholders)
  4. Directors’ particulars (including Tax Identification Number)
  5. Registered Address
  6. Signed Form IX and Subscriber Page
  7. For foreigners: Copy of passport of shareholders and directors.

Procedure for Company Registration in Bangladesh

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Company Registration In Bangladesh 25

The company registration process in Bangladesh involves the following steps:

Step 1: Name Clearance

  1. Select a desired company name and apply for name clearance on the Registrar of Joint Stock Companies and Firms (RJSC) website.
  2. Pay the prescribed fee for name clearance.
  3. 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.

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Company Registration In Bangladesh 26
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Company Registration In Bangladesh 27

Step 3: Bank Account Opening and Paid-up Capital

  1. Open a temporary bank account in the company’s name with a scheduled bank in Bangladesh.
  2. 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

  1. Upload digital copies of the MoA, AoA, and other required documents on the RJSC website.
  2. Obtain the Electronic Payment Slip for registration fees and stamp duty.

Step 5: Submission of Physical Documents and required fee

  1. Affix non-judicial stamps on the MoA and AoA.
  2. 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

  1. RJSC officials will review the submitted documents.
  2. If satisfied, RJSC will issue the Certificate of Incorporation, Digital Certified Copy of MoA and AoA, and List of Directors (Form XII).
  3. Present the Incorporation Certificate to the bank to convert the temporary account to a regular account.

Post-Registration Formalities

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Company Registration In Bangladesh 28

After company registration, the following post-registration formalities need to be completed:

  1. 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.
  2. 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.
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Company Registration In Bangladesh 29

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 ProcessAnnual Income Tax Return Deadline
File income tax return annuallyUsually 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.

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FAQ about Company Registration in Bangladesh:

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.

License / ApprovalParticularsDuration
Incorporation CertificateMoA, AoA, and Forms7 Days
Trade LicenseTrade License copy with Photo2-3 Days
TAX Identification Number (TIN)TIN is a must for all companies1 Day
VATVAT is a must for all companies7-10 Days
Membership from the chamber of commerceAll Export and Import companies 5-30 Days 
Import and Export License (IRC, ERC)Only for Export and Import Company7-15 Days
Fire LicenseFor all Factory and corporate7-15 Days
Factory LicenseManpower Approval3-10 Days
BostroFor cloth factory business7-10 Days
Branch OfficeBranch permission for 2-5 years30 Days
BEPZA / BIDABranch open permission for 3-5 years30 Days

Expected licensing fee In Bangladesh 

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:

CategoryNature of BusinessExpected Cost (Taka)
AService and General Trading CompanyLess than 60000
BRelating to Export and Import CompanyLess than 120000
CRelating to Export, import and ManufactureLess than 400000
DBranch and Representative OfficeLess than 60000
EEmployment and Investor VisaLess than 50000

Summary for Company Registration in Bangladesh and FAQ:

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Company Registration In Bangladesh 31
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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:

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

Address: House 410, Road 29, Mohakhali DOHS

Industrial Project Finance in Bangladesh

Industrial Project Finance in Bangladesh

Industrial Project Finance in Bangladesh: A Comprehensive Guide

Industrial project finance is a vital component driving economic development and infrastructure growth in Bangladesh.

This financing mechanism plays a crucial role in funding industrial and infrastructure projects, fostering economic growth, and enhancing the country’s competitiveness.

In this comprehensive guide presented on behalf of the Tahmidur Rahman Remura law firm, we will delve deeper into the intricacies of industrial project finance in Bangladesh, including the types of projects financed, regulatory framework, approval requirements, material laws, international treaties, and structuring the financing.

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Types of Projects Finance in Bangladesh:

Industrial and infrastructure projects are the primary beneficiaries of project finance in Bangladesh. Industrial projects, predominantly concentrated in the private sector, encompass diverse sectors such as manufacturing, textiles, garments, pharmaceuticals, and more.

These projects fuel the industrial growth of the nation, creating job opportunities and contributing to the overall economic landscape.

On the other hand, infrastructure projects are often undertaken either by the government of Bangladesh itself or through public-private partnership (PPP) models.

These essential projects include toll roads, ports, metro rail systems, liquified natural gas (LNG) terminals, power generation facilities, and energy initiatives.

They address critical infrastructure needs, facilitating efficient transportation, energy distribution, and enhancing the overall quality of life for citizens.

Additionally, project finance is extended to service sectors, such as education, healthcare, telecommunications, and other emerging industries that contribute significantly to the country’s progress.

Regulatory Framework for Project Finance in Bangladesh:

The regulatory framework for industrial project finance in Bangladesh is a crucial aspect that ensures transparency, compliance, and accountability throughout the financing process. Key regulatory authorities involved in project finance approvals include:

  1. Bangladesh Bank:

    As the central bank and the supreme regulatory authority for financial matters, Bangladesh Bank plays a pivotal role in approving project finance applications. It sets guidelines and regulations for both local and foreign currency borrowing and oversees the smooth functioning of the financial sector.
  2. Bangladesh Investment Development Authority (BIDA):

    BIDA is the government authority responsible for processing loan applications authorized by Bangladesh Bank. It evaluates and approves project proposals based on their economic viability, financial feasibility, and adherence to regulatory guidelines.
  3. Executive Committee of the National Economic Council (ECNEC):

    ECNEC, comprising all members of the Cabinet, approves major development projects, including infrastructure initiatives. It plays a critical role in shaping the nation’s long-term economic development policies and priorities.
  4. Economic Relations Division (ERD):

    ERD, under the Ministry of Finance, mobilizes external resources for socio-economic development. It approves sovereign guarantees or framework agreements with foreign lenders or governments, ensuring adherence to international norms and regulations.
  5. Bangladesh Securities and Exchange Commission (BSEC):

    BSEC is responsible for approving issues of bonds by private entities and overseeing large-scale share offerings. It ensures compliance with securities laws and regulations, safeguarding the interests of investors and stakeholders.

Regulatory Considerations and Approval Requirements

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To facilitate industrial project finance, Bangladesh has established specific regulatory considerations and approval requirements for both local and foreign currency borrowing.

  1. Local Currency Borrowing:

    Local banks and financial institutions can extend loans to local companies in Bangladeshi Taka (BDT). Approved forms of local currency lending include continuous loans (cash credit, overdrafts, etc.), demand loans (e.g., loans against imported merchandise), and fixed-term loans.

    The Bangladesh Bank sets a limit on the interest rate spread between deposits and lending (currently around 9%). Lenders must maintain risk-based capital adequacy and adhere to single borrower exposure limits to mitigate risks.

    Additionally, lenders must verify borrowers’ credit information from the Credit Information Bureau before authorizing, renewing, or rescheduling loans, ensuring that credit facilities are not provided to defaulters. Credit risk grading is adopted for large loans to assess credit risk effectively.
  2. Foreign Currency Borrowing:

    Public sector companies must obtain authorization from ECNEC and approval from ERD for foreign loans.

    Any sovereign guarantee or framework agreement with foreign lenders or governments must also be approved by ERD. Under local foreign exchange regulations, public sector companies require permission from the Hard Term Loan Sanction Department of Bangladesh Bank to receive hard term offshore loans. Generally, any interest rate of 4% or more is considered a hard term loan.

For private sector companies, the Bangladesh Bank requires borrowers to obtain permission from BIDA for foreign borrowing. Foreign loans can be raised from internationally recognized sources such as international banks, international capital markets, multilateral financial institutions, export credit agencies, and suppliers of equipment.

However, foreign borrowing is allowed for project financing purposes only and cannot be utilized as working capital. During the approval process, BIDA considers the borrower’s past conduct and the financial viability and profitability of the project.

Specific conditions applicable to foreign borrowing include a maximum 70:30 debt-to-equity ratio, with some sectors like power having an allowance of up to 80:20. The standard interest ratio is up to LIBOR +4%, with an all-in cost ceiling that considers interest and other annualized fees and expenses.

  1. Shareholder Loans and Bonds:

    Generally, shareholder loans for project financing are not allowed, except for short-term bridging purposes. Private sector entities can raise funds through bonds with the prospectus approved by BSEC and underwritten by a merchant bank.
  2. Filing and Registration:

    Local borrowing does not require registration. However, for foreign borrowing, the industrial or infrastructure project must be registered with BIDA before submitting the foreign borrowing application. All securities over immovable properties require registration with the office of the sub-registrar in the relevant geographic area.

    In addition, securities over any asset of a company must be perfected with the Registrar of Joint Stock Companies (RJSC) within 21 days of the date of creation of the security. Certain conditions may also be imposed under concession agreements.

Material Laws and International Treaties

The legal landscape surrounding industrial project finance in Bangladesh is governed by various material laws and international treaties. Key material laws include:

  1. Foreign Exchange Regulation Act 1947:

    This Act regulates foreign exchange transactions, including foreign borrowing, and sets guidelines for conducting such transactions in compliance with international norms.
  2. Guidelines to Foreign Exchange Transactions:

    These are rules formulated by the Bangladesh Bank, outlining the guidelines for foreign exchange transactions and ensuring proper adherence to regulations.
  3. Companies Act 1994:

    The Companies Act governs several aspects relevant to project finance, including the perfection of charges on a company’s assets, debt and equity conversions, and procedural compliances related to borrowing and security interest creation.
  4. Transfer of Property Act 1882:

    This Act governs the creation and procedures for the enforceability of security over immovable property.
  5. Registration Act 1908:

    This Act provides for registration requirements for securities and other rights over movable and immovable properties.
  6. Bankruptcy Act 1997:

    This law sets out Bangladesh’s insolvency and bankruptcy legislation that covers companies, partnerships, as well as individuals.
  7. Money Loan Court Act 2003:

    This Act provides summary procedures to enforce securities and loan agreements by local financial institutions and some foreign creditors such as the International Finance Corporation, Islamic Development Bank, World Bank, etc.
  8. Code of Civil Procedure 1908 (CPC):

    The CPC governs the procedure for civil court proceedings and is used by creditors for recovery proceedings and enforcement of security.
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In addition to material laws, several international treaties to which Bangladesh is a party can affect cross-border transactions, including investment-related disputes, recognition, and enforcement of foreign arbitral awards, free trade agreements, comprehensive economic partnership agreements, and preferential trade agreements.

Structuring the Financing in Bangladesh

The successful structuring of industrial project finance in Bangladesh requires careful consideration and coordination among various parties involved in the transaction. Each party plays a distinct role in ensuring the smooth execution of the project and mitigating risks. Below are the main parties involved in an industrial project finance transaction:

  1. Sponsors:

    The sponsors are the owners or ultimate beneficiaries of the project. They initiate the project, bear the initial costs, and assume the risks associated with the venture. Sponsors are often responsible for bringing together the various stakeholders and securing financing for the project.
  2. Project Company/Borrower:

    The project company, also known as the borrower, is the entity responsible for implementing the project. It is typically a special-purpose vehicle (SPV) incorporated by the sponsors solely for the purpose of undertaking the project. The SPV isolates the project’s assets and liabilities from the sponsors’ other business activities, minimizing their exposure to potential risks.
  3. Lender:

    The lender, often a financial institution or consortium of lenders, provides the funds necessary for financing the project. Lenders assess the project’s feasibility, creditworthiness of the sponsors, and the anticipated cash flow from the project to ensure the repayment of the loan.
  4. Off-taker:

    The off-taker is the party, usually a government authority or state-owned enterprise, that enters into a long-term agreement with the project company to purchase the output or services generated by the project. For infrastructure projects, the off-taker is often the government agency responsible for that particular sector, such as the Bangladesh Power Development Board for power generation projects.
  5. Third-Party Guarantors:

    Third-party guarantors are entities other than the sponsors who provide guarantees to lenders for the repayment of the loan or fulfillment of the project’s obligations. These guarantees enhance the project’s creditworthiness and reduce the lender’s risk exposure.
  6. Bank Guarantors:

    Bank guarantors are financial institutions that issue performance or payment guarantees on behalf of the project company to support the project’s contractual obligations and mitigate potential risks.
  7. Export Credit Agencies:

    For projects involving the import of equipment and technology, export credit agencies (ECAs) can provide financing or insurance to exporters and lenders to facilitate cross-border transactions and mitigate commercial and political risks.
  8. Security Trustee:

    The security trustee is a resident entity appointed by the lenders to hold the project’s security interests on their behalf. The security trustee ensures that the lenders’ rights and interests are adequately protected and enforced in case of default.
  9. Account Bank:

    The account bank is the financial institution where the project company maintains an account to receive loan proceeds and accumulate funds for debt servicing and other project-related expenses.
  10. Inter-Creditor Agent:

    In syndicated financing, where multiple lenders are involved, an inter-creditor agent represents the lenders’ interests and facilitates coordination among them. The agent ensures that all lenders are treated fairly and that the syndication process runs smoothly.
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Industrial project finance is a crucial driver of economic development and infrastructure growth in Bangladesh. The regulatory framework, supported by various authorities, ensures transparency, compliance, and accountability throughout the project financing process.

Through a comprehensive approach that involves multiple stakeholders, including sponsors, lenders, off-takers, and guarantors, projects are financed, implemented, and managed efficiently, contributing to the country’s sustainable economic progress.

As Bangladesh continues to prioritize its industrial and infrastructure development, industrial project finance will remain a key mechanism for mobilizing domestic and foreign investments.

The collaboration between the public and private sectors, underpinned by sound legal and regulatory principles, will shape Bangladesh’s economic landscape and lead the nation toward prosperity and development.

Additional securities such as sponsor support and guarantee:

In Bangladesh, project financing is primarily conducted on either a non-recourse or limited recourse basis. Non-recourse financings are typically secured by collateral, while limited recourse financing involves additional securities such as sponsor support and guarantees. The following sources of funding are typically available for projects in Bangladesh:

a. State-owned commercial banks:

Bangladesh has six state-owned banks that actively participate in project financing.

b. Specialized banks:

These state-owned banks focus on specific sectors and areas, contributing to project funding.

c. Private commercial banks:

There are 40 local licensed banks and nine licensed branches of foreign banks operating in Bangladesh, providing financing options for various projects.

d. Non-bank financial institutions:

Currently, 34 non-banking financial institutions operate in Bangladesh, offering project financing solutions.

e. Foreign multilaterals and development finance institutions:

These institutions are permitted to finance local projects.

f. Foreign banks/financial institutions:

Foreign entities are allowed to finance projects within Bangladesh.

g. Government funds:

The government provides funds to support Public-Private Partnership (PPP) projects facing short-term economic challenges, including Viability Gap Financing (VGF) and the Bangladesh Infrastructure Finance Fund (BIFF).

Major Types of Financings in Bangladesh:

Several types of financing are commonly adopted in local projects in Bangladesh, including:

a. Buyers’ credit:

Project infrastructure buyers can directly obtain loans from lenders to finance their purchases.

b. Suppliers’ credit:

Suppliers either arrange a loan to finance their credit sales or extend credit to the buyers themselves, with agreed-upon mark-ups.

c. Lease finance:

This option is widely used in the local market, wherein a leasing company leases equipment under financial or operational leases.

Cross-border lease finance is structured as a supplier credit. d. Islamic finance: Islamic financing is gaining popularity in Bangladesh, especially for acquiring high-cost equipment and machinery. Common arrangements include sale and leasebacks (Ijarah), musharaka leasing, one-step murabaha, two-step murabaha, and commodity murabaha.

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Advantages and Disadvantages of Project Financing:

Project financing offers several advantages for sponsors and lenders:


a. Risk-sharing: Project financing enables sponsors to share project risks with other stakeholders through security arrangements and contractual agreements.

b. Cash flow management: Lenders can manage free cash flow after operational expenses and statutory payments, leading to a lower cost of capital compared to equity.

c. Lower cost of capital: In the long term, the cost of capital is generally lower compared to the cost of equity.

d. Limited liabilities: A special project vehicle helps sponsors limit their liabilities in project financing.


a. Complexity:

Project financing deals are complex due to the need to structure multiple contracts negotiated by all parties involved.

b. Higher transaction costs:

The complexity of project financing leads to higher transaction costs, including legal expenses, tax, and preparation of ownership and loan documentation.

Corporate Vehicles for Project Financing:

In Bangladesh, limited liability companies are typically used for project financing due to various reasons:

a. Foreign companies:

Foreign companies can implement industrial/infrastructure projects in Bangladesh as sponsors through a limited liability company.

b. Local entrepreneurs:

Limited liability companies are preferred by local entrepreneurs for their limited liability. c. Appropriate for non-recourse or limited-recourse financing.

Typical Documents in a Project Financing Transaction:

Several essential documents are involved in a project finance transaction in Bangladesh, including:

a. Termsheet:

A summary of the key terms and conditions of the financing arrangement.

b. Facility agreements: Agreements defining the terms of the financing provided by lenders.

c. Security agreements: Contracts outlining the forms of security granted to lenders.

d. Inter-creditor agreements: Agreements among multiple creditors defining their respective rights and priorities.

e. Account bank/escrow agreements: Agreements governing the use of accounts or escrows for fund management.

f. Cost over-run/sponsor support agreements: Agreements where sponsors pledge to support the project financially in case of cost overruns.

g. Guarantees: Agreements providing additional financial support and protection to lenders.

h. Direct agreements: Agreements between lenders and project parties, ensuring lenders’ direct access to project cash flows and collateral.

Forms of Security in Project Financing:

The main forms of security used in project financing in Bangladesh include:

a. Mortgages: Commonly used for immovable assets such as land and buildings.

b. Fixed and floating charges: Fixed charges grant control over assets, while floating charges allow the chargee to deal with charged assets until crystallization.

c. Pledge of shares: Shareholders can pledge company shares in favor of lenders.

d. Corporate guarantees: Shareholders and third parties can provide guarantees for loans.

e. Bank guarantees: Separate approval from the Bangladesh Bank is required for bank guarantees.

f. Liens: Strictly defined and governed by relevant statutes and conventions.

g. Assignment of receivables: Common for taking security over contractual rights.

Insurance Arrangements for Projects in Bangladesh:

Insurance is a crucial aspect of project financing in Bangladesh, providing protection against various risks that projects may encounter. Common insurance arrangements for projects in the country include:

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a. All-risk insurance for construction:

This insurance covers the engineering, procurement, and construction (EPC) contract during the construction phase, protecting against various risks during the project’s implementation.

b. Burglary, natural disaster, and fire insurance:

These insurances protect against losses caused by burglary, natural disasters, and fire incidents, providing additional security to project assets and infrastructure.

c. Third-party liability insurance:

Projects often carry third-party liability insurance to protect against claims from third parties in case of property damage, bodily injury, or other liabilities arising from the project’s activities.

d. Employer’s liability insurance:

This insurance covers liabilities arising from workplace-related injuries or accidents, ensuring protection for employees and laborers involved in the project.

Lenders’ Protection Concerning Project Insurance:

In project financing, lenders have a vested interest in ensuring adequate insurance coverage for the project’s various elements. To protect their interests regarding project insurance, lenders typically adopt the following measures:

a. Beneficiary of project insurance:

Lenders often nominate themselves as the principal beneficiary of the project insurance policies. This allows them to have direct access to insurance proceeds in case of any covered incidents.

b. Compliance monitoring:

Lenders may require borrowers to provide regular updates on insurance coverage and policy renewals to ensure continuous protection throughout the project’s duration.

c. Escrow arrangements:

In some cases, lenders may set up escrow accounts to hold insurance proceeds. This ensures that the funds are available for necessary project repairs or replacements in case of an insured event.

d. Verification of coverage:

Lenders may conduct periodic checks to ensure that the insurance policies meet the required coverage levels and address potential risks adequately.

e. Review of policy terms:

Lenders carefully assess insurance policies to ensure that the coverage aligns with the project’s specific risks and liabilities.

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Mechanisms to Protect Security Interests:

Security interests must be perfected within the prescribed period with the relevant authorities. Subsequent interest acquirers are deemed to have notice of the security from the date of its perfection.

Subsequent mortgages or charges require approval from the prior chargee or mortgagee, but subordinated or pari-passu charges can be created with prior approval.

Public Private Partnerships (PPPs) in Bangladesh:

Until 2010, Bangladesh lacked a specific PPP framework. However, in 2010, the government introduced the Policy and Strategy for Public-Private Partnership to promote private sector participation in infrastructure development. This move aimed to address the challenges of funding and executing large-scale projects while leveraging private sector expertise and efficiency.

To support the PPP process and infrastructure development in Bangladesh, the government enacted several regulations and guidelines:

  1. Procurement Guideline for PPP Projects 2016:

    The Procurement Guideline provides a framework for transparent and competitive procurement processes for PPP projects. It ensures that project contracts are awarded through fair and open procedures, promoting accountability and reducing the risk of corruption.
  2. Guidelines for Unsolicited Proposals 2016:

    The Guidelines for Unsolicited Proposals allow private sector entities to submit project proposals to the government for consideration. These proposals are evaluated based on their feasibility, economic and social benefits, and alignment with national development priorities. Successful proposals may lead to PPP project development.
  3. Guideline for Viability Gap Financing for PPP Projects 2012:

    The Guideline for Viability Gap Financing outlines the mechanism through which the government provides financial support to PPP projects that have high economic and social viability but lack complete financial viability. Viability Gap Financing can be in the form of a capital grant or annuity payment.
  4. Guideline for PPP Technical Assistance Financing 2012 & Scheme for PPP Technical Assistance Financing 2012:

    The government offers technical assistance financing to support the preparation and development of PPP projects. These guidelines and schemes aim to strengthen project preparation and enhance the overall viability of projects.
  5. PPP Screening Manual:

    The PPP Screening Manual provides guidance on project screening and selection criteria for potential PPP projects. This process helps prioritize projects with significant development impact and ensures that viable projects receive attention.
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Financing PPP Projects in Bangladesh:

PPPs in Bangladesh are typically financed through a combination of funding sources, including multilateral institutions, development finance institutions, and private commercial banks. While the government may not provide payment guarantees for PPP projects, it does play a role in supporting financing through various mechanisms:

  1. Viability Gap Financing (VGF):

    As mentioned earlier, VGF is provided to projects with high economic and social viability but uncertain financial viability. The government’s financial support enhances the feasibility of these projects and encourages private sector participation.
  2. Infrastructure Financing:

    Specialized financial institutions like the Bangladesh Infrastructure Finance Fund (BIFF) and Infrastructure Development Company Limited (IDCOL) provide financing facilities for PPP projects in the form of debt or equity. The government may participate in such financing arrangements through budget provisions.
  3. Financing against Linked Components:

    The government may consider financing and implementing linked activities, such as land acquisition, rehabilitation, provision of utility services, and construction of approach roads. These complementary activities contribute to the overall success of the main PPP project.

Security and Guarantees in PPP Projects:

In PPP projects, concessionaires (private entities) may be allowed to give security to lenders over their interests in the project company, subject to approval from the grantor (government). This security allows lenders to have recourse to the assets of the project company in case of default, providing them with an additional layer of protection.

Social, Ethical, and Environmental Issues:

Social and ethical issues play a significant role in project financing in Bangladesh. The country has ratified the UN Convention against Corruption and has enacted specific laws to address corrupt practices, money laundering, and human rights abuses. Fair practices across all spheres of social, economic, and political activities are ensured through various laws, including the Prevention of Corruption Act, Money Laundering Prevention Act, and Right to Information Act.

Additionally, environmental concerns are addressed through adherence to the Environmental Policy and Bangladesh Environment Conservation Act. Compliance with international guidelines like the IFC Performance Standards and Equator Principles is also required to meet environmental and social requirements.

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Tax Holidays and Incentives for Foreign Investment in Projects:

Foreign investment plays a crucial role in the development of infrastructure projects in Bangladesh. To attract foreign investors, the government offers various tax holidays and incentives. Let’s explore some of these incentives and how they encourage foreign investment in the country:

  1. Tax Holidays for Thrust Sectors and Infrastructure Projects:

    The government provides tax holidays for industrial undertakings and physical infrastructure facilities established in thrust sectors. Thrust sectors refer to industries that have significantly contributed to the country’s industrialization. Additionally, industries set up in Export Processing Zones (EPZs) are also eligible for tax holidays. The duration and extent of the tax holidays vary based on the location of the project and the type of industry.
  2. Accelerated Depreciation:

    Industrial undertakings not benefiting from tax holidays can take advantage of accelerated depreciation allowances. This allows them to claim higher depreciation in the early years of the project, reducing their taxable income and, consequently, their tax liability.
  3. Concessionary Duty on Imported Capital Machinery:

    Industries with an annual turnover below a certain threshold may benefit from a concessionary import duty rate of 3% on capital machinery and spares. This measure reduces the cost of setting up the project and enhances the attractiveness of foreign investment.
  4. Incentives for Export-Oriented Industries:

    Export-oriented industries enjoy a range of incentives to boost their competitiveness in the global market. These incentives include duty-free import of capital machinery and spares, bonded warehousing, access to loans and funds for export promotion, cash incentives and export subsidies, and more.
  5. Double Tax Avoidance Agreements (DTAs) and Bilateral Investment Treaties (BITs):

    Bangladesh has entered into DTAs with several countries and BITs with various other nations to avoid double taxation of income and protect foreign investments. These agreements provide certainty and predictability to foreign investors, assuring them of fair treatment and non-discrimination.
  6. Power and Energy Fast Supply Enhancement (Special Provision) Act 2010 (PEFSE):

    The PEFSE Act empowers the government to quickly deal with and accept solicited or unsolicited proposals in the power and energy sectors on an emergency basis. It allows the government to enter into arrangements with companies bypassing the usual procurement processes. Moreover, it indemnifies the government against any legal proceedings relating to the award of contracts under the PEFSE.

Foreign Currency Accounts:

While opening and operating onshore and offshore foreign currency accounts are generally prohibited without approval from the Bangladesh Bank, there are exceptions for specific projects. For instance, under the private power generation policy, private power generation companies have been granted the right to open and maintain onshore foreign currency accounts.

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Dividend Repatriation and Shareholder Loans:

There are no restrictions on the payment of dividends or repayment of shareholder loans to a foreign parent company. However, for the repayment of shareholder loans, prior approval from the Bangladesh Bank is required.

Choice of Law and Jurisdiction

Foreign Law: When parties enter into a project contract or financing agreement, they have the option to choose foreign law as the governing law for the contract. The Bangladesh courts will uphold such a choice of foreign law, provided the intention to do so is clearly expressed in the contract. This decision was reinforced by the precedent set in PLD 1964 Dacca 637, which establishes that the expressed intention of the contractual parties regarding the law governing the contract overrides any other presumption.

Jurisdiction: If a project contract or financing agreement designates a foreign court as having exclusive or non-exclusive jurisdiction, the Bangladesh courts will respect this choice. In such cases, the Bangladesh courts will not exercise jurisdiction over contractual disputes unless all parties involved in the dispute agree to submit to the jurisdiction of the Bangladesh courts. However, it’s worth noting that the Bangladesh courts may assume jurisdiction in specific cases where they have exclusive jurisdiction, such as labor disputes.

Enforceability of Waivers of Immunity

In the context of international contracts that do not contravene local policy and are otherwise valid and binding, Bangladesh courts recognize waivers of sovereign immunity. Additionally, for disputes arising out of commercial contracts, the Bangladesh courts accept the common law doctrine of restrictive immunity, which has been adopted by the English courts.

Recognition of Foreign Arbitral Awards and Court Judgments

Foreign Money Judgment: Under the Code of Civil Procedure 1908, a foreign money judgment can be enforced in Bangladesh within six years from the date of the judgment, subject to court approval for longer durations. To be enforceable, the foreign judgment must fulfill several requirements, including being conclusive and given on the merits of the case, pronounced by a court of competent jurisdiction, and capable of enforcement in the original court.

It must not have been obtained through fraud, be contrary to public policy or applicable laws of Bangladesh, or sustain a claim based on a breach of a law in force in Bangladesh. Furthermore, there should be no pending or possible appeal against the judgment in the original court.

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Foreign Arbitral Award: The recognition and enforcement of foreign arbitral awards are subject to certain grounds in Bangladesh. The courts may decline to enforce a foreign arbitral award if a party to the arbitration agreement was under some incapacity, if the arbitration agreement is not valid under the agreed law, or if the party against whom the award is invoked was not given proper notice or an opportunity to present their case.

The award may also be denied enforcement if it contains decisions on matters beyond the scope of the submission to arbitration, except for the part related to the submitted matters. Moreover, the composition of the arbitral tribunal or the arbitral procedure should be in accordance with the parties’ agreement and the law of the country where the arbitration took place.

Enforcement can also be denied if the award is not yet binding on the parties, has been set aside or suspended by the competent authority in the country where it was made, or if the subject matter of the dispute is not capable of settlement by arbitration under the law of Bangladesh, or if the recognition and enforcement would be contrary to public policy.

Recent Legal Developments in Project Finance

As of now, there are no current proposed legal reforms impacting project finance in Bangladesh. However, the landscape of local project financing has seen a new addition in the form of Export Credit Agency (ECA) backed finances. The Bangladesh Investment Development Authority evaluates projects based on its prior payment requirements for the ECA premium, leading to two primary disbursement methods: direct disbursement and reimbursement.

Hire the best law firm for Project finance in Bangladesh

Navigating international projects and finance in Bangladesh requires a keen understanding of the country’s legal framework. Parties can choose foreign law as the governing law for contracts, and the courts respect such choices.

Additionally, waivers of immunity are enforceable in specific circumstances, and the recognition of foreign arbitral awards and court judgments follows set criteria. Staying up-to-date with legal developments is essential, particularly in project finance, where ECA-backed finances are becoming an important consideration. As Bangladesh continues to engage in global business ventures, consulting with legal experts is vital to ensure compliance and successful outcomes in cross-border transactions.

Tahmidur Rahman Remura Wahid Associates represents a variety of high-profile clients operating in Bangladesh to carry out specific projects such as power plants, roads and motorways, and so on. They frequently require financing from many financial institutions, and our lawyers assist clients in creating the relevant documentation as well as advising them on any legal difficulties that may develop as a result of such transactions. Tahmidur Rahman Remura Wahid Associates Associates also aids clients by supplying them with lawyers who negotiate with financial institutions on their behalf.

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External Commercial Borrowing in Bangladesh

External Commercial Borrowing in Bangladesh

External Commercial Borrowing

External Commercial Borrowing (ECB) is the borrowing of funds from international lenders by a country’s business sector. In Bangladesh, the ability of private firms to access foreign currency loans from outside financial institutions or corporations has aided industrial growth, particularly in the context of new projects, expansion, and capital goods imports.

The Bangladesh Investment Development Authority (BIDA) oversees and regulates this borrowing process, ensuring that it is consistent with the country’s economic priorities and financial stability.

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The architecture and effectiveness of foreign commercial borrowing in Bangladesh are examined in this essay, with an emphasis on private sector external debt. It examines the approval procedure, the sorts of projects sponsored, and the economic consequences of such borrowing.

The Eligibility and Approval Process

Private enterprises registered with the Board of Investment (BOI) and incorporated under the Companies Act of 1994 are eligible to apply for external commercial financing. These borrowers can look to organizations or individuals in other countries for commercial loans, financial loans, bank loans, buyer’s credit, or supplier’s credit. However, it is vital to highlight that foreign loans cannot be utilized for working capital or capital market investment.

Companies must receive approval from the Scrutiny Committee of the Board of Investment, which is chaired by the Governor of the Bangladesh Bank (BB), in order to acquire foreign loans.

The application process requires the submission of the required documents, which include the Certificate of Incorporation, Memorandum and Articles of Association, Term-sheet or Loan Agreement, feasibility report, financial analysis, equity forms, and other appropriate credentials. The Scrutiny Committee assesses these applications based on business viability, borrower creditworthiness, repayment length, and debt-equity ratio, among other factors.

Foreign-owned (100%) investment projects in Export Processing Zones (EPZ) are exempt from obtaining prior clearance from BIDA or BB for foreign currency loans from overseas financial institutions or corporations.

The Power Sector and Other Requirements

The Power Sector has unique requirements for external commercial borrowing in addition to the standard requirements. For this sector, the Letter of Intent, Implementation Agreement, and Power Purchase Agreement are required papers.

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External Borrowing Trends in the Private Sector

An examination of private sector external borrowing in Bangladesh from 2011 to 2013 indicated a considerable increase in sanctioned loans. In 2011, about 20 private firms were approved for loans totaling USD 936.30 million. In 2012, this value climbed to USD 1579.57 million among 81 firms, while in 2013, it increased to USD 1555.33 million among 116 enterprises. During this time, around 55 enterprises gained clearance for loans worth USD 1357.06 million on an annual basis.

However, in comparison to the permitted loans, the disbursement of external debt was comparatively modest, creating concerns that require additional study.

Debt Sustainability Analysis

In November 2013, the International Monetary Fund (IMF) and the International Development Association (IDA) conducted a Debt Sustainability Analysis (DSA), which found that Bangladesh was unlikely to encounter severe debt-related stress in the next two decades. The DSA took into account both domestic and external debt numbers and predicted various debt indicators up to 2034 under various scenarios.

The DSA results demonstrated Bangladesh’s resilience to debt-related shocks, particularly external debt, making a solid case for permitting additional private external loans into the economy.

Bangladesh’s External Commercial Borrowing Effectiveness

A survey of thirteen private enterprises from various industries, including RMG, footwear, telecommunications, power generation, and pharmaceuticals, revealed information about the effectiveness of external commercial borrowing in Bangladesh. Between 2007 and 2013, these corporations borrowed a total of USD 894.24 million.

According to the poll, the key reasons for borrowing from foreign sources were lower interest rates compared to domestic possibilities and the inability of local banks to provide large financing due to insufficient capital bases. The majority of the borrowed funds were used to import capital machinery for new projects or expansion of existing ones, demonstrating that the loans were put to good use.

External commercial borrowing has been critical in propelling Bangladesh’s industrial growth and development. Foreign currency loans have helped private sector businesses fund new initiatives and grow existing operations. BIDA and the Scrutiny Committee manage the clearance procedure, which guarantees that the borrowing is consistent with the country’s economic priorities and financial stability.

Despite the efficiency of external commercial borrowing, the low proportion of disbursements relative to approved loans warrants more investigation. The Debt Sustainability Analysis, on the other hand, reassures that Bangladesh is well-equipped to deal with debt-related difficulties, particularly external debt concerns.

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External commercial borrowing has aided Bangladesh’s economic development by providing private firms with critical resources for growth and development. As long as the borrowing is consistent with the country’s economic goals and regulatory safeguards are in place, it can serve as a catalyst for long-term development and prosperity.

External Commercial Borrowing (ECB) in Bangladesh

What is External Commercial Borrowing (ECB)?External Commercial Borrowing (ECB) refers to the borrowing of funds by private sector enterprises in Bangladesh from foreign lenders in foreign currency.

It includes commercial loans, buyer’s and supplier’s credit, etc., primarily used for importing capital goods, financing new projects, or expanding existing production facilities.
Which entities are eligible for ECB in Bangladesh?Private enterprises incorporated under the Companies Act 1994 and registered with the Board of Investment (BOI) are eligible to apply for External Commercial Borrowing (ECB) in Bangladesh.
What are the main purposes for obtaining ECB?The main purposes for obtaining ECB in Bangladesh include financing new projects, importing capital machinery, and expanding existing production facilities. It is not permitted to use foreign loans for working capital purposes or investment in the capital market.
What is the role of Bangladesh Investment Development Authority (BIDA)?BIDA plays a vital role in the ECB process. It scrutinizes and approves applications for foreign loans, ensuring that they align with the country’s economic priorities and financial stability. The applications are then submitted to the Scrutiny Committee headed by the Governor of Bangladesh Bank (BB) for final approval.
Are foreign-owned investment projects exempt from approval?Yes, foreign-owned (100%) investment projects located in Export Processing Zones (EPZ) may obtain foreign currency loans from overseas financial institutions or entities without prior approval from BIDA or BB.
What documents are required for ECB approval?The application for ECB approval must be submitted with several supporting documents:

including the Certificate of Incorporation, Memorandum and Articles of Association of the company, Term-sheet or Loan Agreement with repayment details, financial analysis, board resolution related to the proposed borrowing, feasibility report of the investment project, relevant equity forms, bank certificate on creditworthiness, and track record of foreign borrowing.

Additional documents may be required for specific sectors like the Power Sector.
How are ECB applications processed?After submission, ECB applications are duly scrutinized by BIDA. Upon satisfactory evaluation, they are forwarded to the Scrutiny Committee, which includes the Governor of Bangladesh Bank (BB), for final approval. The process has been streamlined through BIDA’s online OSS platform.
What is the trend of private sector external borrowing in Bangladesh?The trend of private sector external borrowing in Bangladesh has shown significant growth in approved loans over the years. Between 2011 and 2013, around 81 enterprises were approved for loans totaling USD 1579.57 million, increasing from USD 936.30 million among 20 enterprises in 2011.

However, there has been a relatively low proportion of disbursement compared to approved loans, warranting further investigation.
What does the Debt Sustainability Analysis (DSA) indicate?The Debt Sustainability Analysis (DSA) jointly conducted by the International Monetary Fund (IMF) and the International Development Association (IDA) suggests that Bangladesh is highly unlikely to face significant debt-related stress within the next two decades.

The analysis considers both domestic and external debt and projects various debt indicators up to 2034, demonstrating the nation’s resilience to shocks related to debt conditions, particularly external debt.
How have private companies used external loans?A survey of selected private companies between 2007 and 2013 revealed that the borrowed funds were primarily used for importing capital machinery to expand existing projects or establish new ones.

The loans were found to be utilized productively, with most companies benefiting from lower interest rates and the availability of substantial financing for their projects.

Company Law practice in TRW law firm in Bangladesh 

The Barristers, Advocates, and lawyers at TRW Law chamber in Mohakhali DOHS, Dhaka, Bangladesh are highly experienced at assisting clients in dealing with and registering branch offices in Bangladesh.   For queries or legal assistance to set up a branch office in Bangladesh, please reach us at:

E-mail: [email protected]
Phone: +8801847220062 or +8801779127165 or +8801708080817
House 410 Road 29 Mohakhali DOHS

How to get PSO License in Bangladesh and PSP License

How to get PSO License in Bangladesh and PSP License

PSO License in Bangladesh

Payment systems act as a catalyst to promote financial stability and financial inclusion. The safety and security of these systems is a primary goal of BANGLADESH BANK. As digital payment mechanisms become more popular, it is critical to ensure that payment system infrastructures are not only efficient and effective, but also resilient to traditional and emerging threats, particularly those related to cyber security.

BANGLADESH BANK has specified the essential security measures for banks and credit card issuing NBFIs’ digital payment goods and services.

It is proposed that similar guidelines be issued for Payment System Operators (PSOs), covering a robust governance mechanism for identifying, assessing, monitoring, and managing cybersecurity risks, including information security risks and vulnerabilities, as well as specifying baseline security measures to ensure safe and secure digital payment transactions. The instructions will be released soon.”

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A payment system operator is a legal body in charge of running a payment system. The PSO provides services based on certain models. They outsource the majority of their payment and settlement-related tasks to numerous other organizations. PSOs include Google Pay, Amazon Pay, NPCI, Paytm, and others.

Central Bank Guidelines for PSO License

Last year, the Bangladesh Central Bank (BANGLADESH BANK) issued detailed guidelines to strengthen Bangladesh’s digital payments architecture and improve security, control, and compliance among banks, gateways, wallets, and other non-banking entities that are at the forefront of assisting the government in its goal of a ‘less-cash’ economy.

These laws apply directly to scheduled commercial banks, minor financing banks, payment banks, and NBFIs that issue credit cards.

The standards are technology and platform agnostic, with the goal of creating a better and more enabling environment for customers to utilize digital payment products in a safer and more secure manner.

Bangladesh Bank’s Board of Directors established the Bangladesh Payment and Settlement Systems Regulations-2014 (BPSSR 2014) with the goal of promoting, regulating, and maintaining secure and efficient payment systems in Bangladesh.

This ‘Approval Procedure of Payment System Operator (PSO)/Payment Service Provider (PSP)’ has been released in line with paragraphs 2 and 3 of section 5.3 of the Bangladesh Payment and Settlement Systems Regulations-2014.

Payment System Operator (PSO): According to the BPSSR 2014, a ‘Payment System Operator (PSO) refers to an entity licensed by the Bangladesh Bank for operating a settlement system for payment activities between/among participants, the principal participant of which must be a scheduled bank maintaining accounts with the Bangladesh Bank for meeting Cash Reserve Requirements.’

A PSO must have the following properties, according to the definition:

a) PSOs must be licensed by Bangladesh Bank;
b) PSOs must provide the payment services specified in their license; and
c) PSOs must not issue e-money or payment instruments in any form.
d) Transactions must be settled through a scheduled commercial bank.

PSO Qualification

  1. PSO must be registered under the Companies Act of 1994;
  2. The company’s paid-up capital cannot be less than BDT. 5,000,000/- (Five Million). However, Bangladesh Bank may adjust the minimum paid-up capital based on services and business exposure; 3. Key staff of the company must have at least three years of experience/exposure in the relevant industry.
  3. Application Procedure Interested institutions should submit an application to Bangladesh Bank in the specified format (Annexure-A) together with the relevant papers (a list of which is provided in Annexure-B). As application fee, a non-refundable demand draft in the amount of Tk. 25,000.00 (Twenty Five Thousand) shall be made payable to the General Manager, Payment Systems Department.

Approval Process

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The approval procedure will be divided into two stages. PSD shall give a ‘No Objection Certificate (NOC)’ in the first phase, and in the second phase, PSD may provide final approval to the qualifying organization based on the following method.
PSD will conduct a preliminary review of the materials in Phase 1.

Phase 1:

a). Following preliminary review:

i) Bangladesh Bank may request updated or additional document(s).
ii) If the documents and/or plan are inconsistent with the requested services, Bangladesh Bank may reject the application with a written notification.
iii) If the documents are judged to be satisfactory, they will be forwarded to the evaluation committee(s).

b) The documents will be evaluated and a report will be submitted by the evaluation committee(s).

c) Bangladesh Bank will decide whether to issue or not issue NOC based on the score of the evaluation report(s). This decision will be communicated to the applicant.

Phase 2:

a) The applicant who has received NOC for deploying the system must submit a declaration in prescribed format (Annexure-C) within the stipulated period regarding the readiness of the proposed infrastructure. To conduct the onsite inspection, an onsite inspection team will be constituted.

b) Approval may be granted based on an acceptable inspection report and compliance with all NOC requirements.
Fees and Payment Options

Application Fee:

  • A non-refundable pay order/demand draft in the amount of Tk. 25,000.00 (Twenty Five Thousand only) must be submitted with the application.
  • A non-refundable pay order/demand draft in the amount of Tk. 1,00,000.00 (One Lac only) would be required to be submitted upon final approval.
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a) Legal and Regulatory Role:

To enable the seamless operation of the payment and settlement system, a proper legal and regulatory framework is required. The Bangladesh Bank Order 1972 provides the legal foundation for Bangladesh Bank to develop a safe and secure payment system.

The Payment Systems Department establishes regulations and publishes system rules, which specify, among other things, the roles and responsibilities of payment system participants. A proposed Payment and Settlement Systems Act prepared by Bangladesh Bank is now being reviewed by the Ministry of Finance.

Bangladesh Payment And Settlement Systems Regulations (BPSSR), 2014 Electronic Fund Transfer Regulations, 2014

b) MFS (Mobile Financial Services):

Bangladesh Bank launched efficient off-branch Mobile Financial Services (MFS) in 2011 in response to the country’s omnipresent mobile phone network, big number of mobile phone users, and enhanced IT infrastructure. Within ten years, this rapidly expanding Bank-Led MFS model has grown to become the world’s largest MFS market.

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Domestically, Bangladesh Bank allows cash in, cash out, person-to-person (P2P), person-to-business (P2B), business-to-person (B2P), person-to-government (P2G), and government-to-person (G2P) payment services via MFS. This service does not permit cross-border money transfers.

Local disbursement of inward foreign remittances received through banking channels, on the other hand, is permissible. With a photo and legal documentation, any adult can open an MFS account with any provider at an agent point or bank branch. In this instance, having multiple MFS accounts with the same supplier is not permissible.

  • Bangladesh Mobile Financial Services (MFS) Regulations, 2022 Transaction Trend List Of MFS Providers Access To MFS For Women In Bangladesh Comprehensive Study Of Bangladesh’s Female MFS Market
  • Toolkit for Women Agent Acquisition
  • Manual for Women Agent Recruitment
  • Tool for Choosing Female Agents
  • Women Agent Training Manual
  • Women’s Agent Training Guide

c) Payment System Operator (PSO) and Payment Service Provider (PSP):

Payment Systems Department (PSD) awards licenses in two major categories, according to the “Bangladesh Payment and Settlement Systems Regulation-2014 (BPSSR-2014)”: Payment Service Provider (PSP) and Payment System Operator (PSO).

It grants a PSP license to a company that facilitates payment(s) or payment processes directly to clients and settles their transactions through a designated bank or financial institution, such as an E-wallet or a Mobile Wallet.

Furthermore, PSD grants a PSO license to a company that manages a settlement system for payment activities between/among participants, the primary participant of which must be a scheduled bank or financial institution, such as a payment gateway or payment aggregator.

PSD examines market demand, business rationale, regulatory requirements, risk management systems, settlement systems, eligibility criteria, and other factors in accordance with BPSSR-2014 before granting a PSP or PSO license.

  • PSO and PSP Authorized List:
  • IT Consultants Ltd (PSO)
  • Software Shop Limited (PSO)
  • Portonics Limited (PSO) ShurjoMukhi Ltd (PSO)
  • Soft Tech Innovation Limited (PSO) Walletmix Limited (PSO)
  • Optimum Solution & Services Limited (PSO)
  • Service Hub Limited (PSO)
  • ABG Technologies Limited (PSP)
  • Digital Payments Limited (PSP)
  • Fingerprint Information Technology Limited (PSO)

d) Office of Regulatory FinTech Facilitation (RFFO):

With technological improvements touching every aspect of life, technical and digital breakthroughs have also influenced financial services. Disruptive revolutionary technology is having a huge impact on finance and the way we do business. With the introduction of new technological and financial solutions designed/offered by a variety of financial entities and technology enterprises, financial sectors are taking on a new dimension.

FinTech, or digital innovations, have proven to be a disruptive force in financial markets. FinTech improves efficiency, reduces risk, and expands financial inclusion. It is critical to grasp the granular components of FinTech and its ramifications in order to assess and reorient the regulatory framework effectively and respond to the dynamics of the quickly growing FinTech scenario.

In light of these considerations, a Regulatory FinTech Facilitation Office (RFFO) was established in October of 2019. This might be regarded as a key first step toward allowing additional financial sector innovators to enter the market in order to offer financial services to the general public at a reasonable cost.


Payment Methods Oversight is a specific sort of oversight of existing and planned payment systems that is one of the most important tasks of all central banks worldwide. It enhances payment system safety, efficiency, and soundness by effectively monitoring and assessing payment systems and then advocating policy adjustments.

With the mandate of the Bangladesh Bank Order 1972, Bangladesh Bank established a number of new and digitalized payment systems and services that have become an essential part of the country’s financial infrastructure.

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Effective oversight is the means of stabilizing financial infrastructure by recognizing and controlling the risks associated with payment systems. As a result, Payment Systems Oversight concentrates on the following activities:

  • For monitoring, collects onsite and off-site data from systems and participants on day-to-day operations, financial flow and transaction patterns, risk exposures, risk management methods and practices, backup and business continuity plan, disruptions and disputes, and so on.
  • Checks system and participant compliance with applicable laws and regulations, identifies gaps, and makes recommendations with time to follow up.
  • Analyzes the flaws of systems, participants, or schemes and highlights areas that require improvement or BB intervention.
  • Performs trend analysis on data from systems and participants, calculating market share for each to prioritize the segment for monitoring.
  • Performs and facilitates’Self-Assessment’ of systems and participants in accordance with regulatory requirements and International Standards.
Here’s a comprehensive table summarising the Approval Procedure of Payment System Operator (PSO)/Payment Service Provider (PSP) in Bangladesh:
ObjectivesThis procedure aims to:
– Define the process and required documents for PSO/PSP license application.
– Establish eligibility criteria for obtaining PSO/PSP license.
– Outline the approval process for PSO/PSP.
Payment System Operator (PSO)According to BPSSR 2014, a PSO is:
– An entity licensed by Bangladesh Bank to operate a settlement system for payment
activities between/among participants, with the principal participant being a
scheduled bank maintaining accounts with Bangladesh Bank for meeting Cash Reserve
Characteristics of a PSO:
– Licensed by Bangladesh Bank.
– Provides approved payment services.
– Does not issue e-money or payment instruments.
– Settlement of transactions done through scheduled commercial bank.
Payment Service Provider (PSP)According to BPSSR 2014, a PSP is:
– An entity licensed and approved by Bangladesh Bank that provides payment service(s)
to its participants or to a payment system for facilitating payment(s) or payment
processes and settling their transactions through a scheduled bank maintaining
accounts with Bangladesh Bank for meeting Cash Reserve Requirements.
Characteristics of a PSP:
– Licensed by Bangladesh Bank.
– Provides approved payment services.
– May issue e-money or payment instrument under terms and conditions of its license and
subsequent rules and regulations of Bangladesh Bank.
– Maintains a ‘Trust Cum Settlement Account’ with a scheduled commercial bank.
EligibilityEligibility criteria for PSO:
– Must be a company incorporated under the Companies Act of 1994.
– The paid-up capital of the company shall not be less than BDT 5,000,000/- (Five Million). However, Bangladesh Bank may refix the minimum paid-up capital based on services and business exposure.
– Key personnel of the company shall have a minimum of 3 years experience/exposure in
the relevant field.
Eligibility criteria for PSP:
– Must be a company incorporated under the Companies Act of 1994.
– The paid-up capital of the company shall not be less than BDT 200,000,000/- (Two Hundred Million). However, Bangladesh Bank may refix the minimum paid-up capital based on services and business exposure.
– Key personnel of the company shall have a minimum of 3 years experience/exposure in
the relevant field.
– Appropriate technology infrastructure shall be maintained within Bangladesh.
Application ProcedureInterested institutions should:
– Apply in the prescribed format (Annexure-A) to Bangladesh Bank.
– Submit required documents (List given in Annexure-B).
– Pay a non-refundable application fee of Tk. 25,000.00 (Twenty Five Thousand) in favor
of General Manager, Payment Systems Department.
Approval ProcedureThe approval process is conducted in two phases:
Phase 1 – Preliminary Scrutiny:
– PSD conducts a preliminary scrutiny of the documents.
– Bangladesh Bank may ask for revised or additional document(s) if necessary.
– Bangladesh Bank may reject the application with a written notice if documents and/or
proposal are not consistent with proposed services.
– If the documents are found satisfactory, they are forwarded to evaluation committee(s).
– The evaluation committee(s) evaluate the documents and submit reports.
– Bangladesh Bank takes a decision on issuing/not issuing the NOC based on the evaluation
report(s) and communicates it to the applicant.
Phase 2 – Final Approval:
– The applicant with NOC for deploying the system submits a declaration in the prescribed
format (Annexure-C) within the stipulated period, indicating the readiness of the
proposed infrastructure.
– An onsite inspection team conducts an onsite inspection.
– Approval may be granted based on a satisfactory inspection report and if all the
requirements of the NOC are met properly.
Fees and Payment MethodApplication Fee: A non-refundable pay order/demand draft of Tk. 25,000.00 (Twenty Five
Thousand only) should be submitted with the application.
License Fee: A non-refundable pay order/demand draft of Tk. 1,00,000.00 (One Lac only)
should be submitted during the final approval.

Are you planning to do PSO, PSP based company or NBFI in Bangladesh?

PSO,PSP, NBFI formation in Bangladesh with Tahmidur Rahman Remura: TRW: The Law Firm in Bangladesh:

The legal team of Tahmidur Rahman Remura Wahid, The Law Firm in Bangladesh: TRW, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and incorporating a NBFI formation in Bangladesh. For queries or legal assistance, please reach us at:

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

Address: House 410, Road 29, Mohakhali DOHS

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