A comprehensive guide for local entrepreneurs and foreign investors
This comprehensive guide will walk you through the process of forming a private limited company in Bangladesh, covering all aspects from legal requirements to post-registration compliance.
Whether you're a local entrepreneur or a foreign investor, this guide provides detailed information on company registration procedures, documentation requirements, capital structure, taxation, and special considerations for foreign investors.
Bangladesh offers a growing economy with strategic advantages for business formation. By following this guide, you'll be well-equipped to navigate the company formation process efficiently.
The formation and operation of companies in Bangladesh are governed by the Companies Act 1994. This section outlines the legal framework for company formation in Bangladesh.
The Companies Act 1994 is the primary legislation governing the incorporation, regulation, and dissolution of companies in Bangladesh. According to this Act, any person (foreign or local) above the age of 18 can register a company in Bangladesh.
The Act provides for different types of companies that can be registered in Bangladesh, with private limited companies being the most common form of business entity.
Most businesses in Bangladesh are registered as Private Limited Liability Companies, commonly known as Private Limited Companies.
The process of registering a private limited company in Bangladesh involves several steps. This section provides a detailed guide to the registration process.
The Registrar of Joint Stock Companies and Firms (RJSC) is the regulatory body responsible for incorporating companies in Bangladesh. The RJSC facilitates the formation of companies and keeps track of all ownership-related issues as prescribed by the laws in Bangladesh.
The first step is to obtain a name clearance for the proposed company. Visit www.roc.gov.bd, create a username, and apply for name clearance. Pay Tk. 600 to the designated bank and obtain the name clearance certificate.
Draft the Memorandum and Articles of Association, which serve as the constitution of the company. The Memorandum should state the business objectives, capital structure, and shareholder details.
For companies with foreign shareholding, open a temporary bank account in the proposed company name with any scheduled bank in Bangladesh. Submit name clearance documents and draft Memorandum and Articles of Association.
Foreign investors must remit the desired paid-up capital to the bank account. For certain advantages, including appointing foreign employees, a minimum of USD 100,000 is recommended. Obtain an Encashment Certificate from the bank.
Upload digital copies of the Memorandum & Articles, Directors' Consent Forms, and other required documents to the RJSC server. An Electronic Payment Slip will be generated for payment of government fees.
Submit physical documents with non-judicial stamps to RJSC, including the Memorandum and Articles of Association, Directors' Consent Forms, Encashment Certificate, and payment slip.
Within 3-4 working days, the company will receive the Certificate of Incorporation, Digital Certified Copy of the Memorandum & Articles, and List of Directors (Form XII).
Proper documentation is crucial for the successful registration of a company in Bangladesh. This section outlines the essential documents required for company registration.
The Memorandum of Association is a fundamental document that defines the company's constitution and its relationship with the outside world. It must include:
The Articles of Association contain the rules and regulations for the internal management of the company. Key elements include:
Each director must provide a consent form (Form IX) agreeing to act as a director of the company. The form requires:
Understanding the capital requirements and shareholding structure is essential for company formation in Bangladesh. This section provides detailed information on these aspects.
When forming a private limited company in Bangladesh, you need to consider two types of capital:
For foreign investors seeking advantages like bringing in foreign expatriates, a minimum investment of USD 100,000 is recommended.
After incorporation, companies in Bangladesh must comply with various tax and regulatory requirements. This section outlines the key post-registration obligations.
Every company must register for taxes at the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the National Board of Revenue (NBR). Obtaining a TIN certificate is free of cost and can be done electronically through the NBR server.
Companies must register with the Customs, Excise, and VAT Commission under the National Board of Revenue. VAT registration is overseen by the Customs, VAT, and Excise Department based on the company's operational location. Registration typically takes 5-7 working days to complete.
Companies must obtain a trade license from local governmental authorities. In Dhaka, this is obtained from the respective City Corporation. The application must be filed manually at the nearest city corporation office. The cost is approximately USD 200, renewable yearly, with a processing time of 3-4 working days.
Foreign investors looking to establish a company in Bangladesh have special considerations to keep in mind. This section provides guidance specifically for foreign investors.
Bangladesh allows the incorporation of a company with 100% foreign shareholding, and no local joint venture is required. This provides foreign investors with complete control over their business operations in Bangladesh.
While the minimum paid-up capital for a foreign-owned company is USD 50,000, it is recommended to invest at least USD 100,000 to obtain certain advantages, including:
Foreign investors with industrial projects are strongly advised to register with BIDA upon incorporation of their limited company. BIDA's responsibilities include:
For commercial or trading companies, BIDA registration is not required. The typical timeframe for obtaining BIDA registration is about 30 working days.
Foreign investors can remotely incorporate a company in Bangladesh through authorized lawyers or agents. The entire registration process, including bank account opening, can be completed without the investor visiting Bangladesh in person.
Foreign investors can repatriate their profits, dividends, and capital gains to their home country, subject to certain regulations and tax considerations. Proper documentation and compliance with Bangladesh Bank guidelines are essential for smooth repatriation.