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How to open a Cement Company in Bangladesh in 2023 | Responsible way of doing cement industry in Bangladesh

How to open a Cement Company in Bangladesh:

As time passes, Bangladeshi alongside, the world experiences development in all sectors. Development leads to urbanization, reflecting economic growth, which brings upon infrastructure development and construction. Bangladesh’s economic growth is reflected by an acceleration in urban development, with the construction of houses, apartment blocks, mad infrastructures and public facilities. The country’s increasing urbanization has stimulated the building materials sector and has generated considerable needs for cement. Cement is a major component in this chain.

So, Cement industry in any country plays a major role in the growth of the nation and economy. Bangladesh is the 40th largest producer of cement. It is one of the fastest growing, intensely competitive sectors of economy in our country. Due to boost in various infrastructure projects, housing facilities and road networks, the cement industry in Bangladesh is currently growing at an enviable pace. By this way Cement industry is leading Bangladesh from the respect of infrastructure development.

Several multibillion dollar infrastructural development projects, such as Padma Bridge, Dohazari-Bazar Cox’s Gundum Rail Line, Rooppur Nuclear Power Plant, Matarbari Power Plant, Metro Rail and Payra sea port etc., are being undertaken by the government in Bangladesh, along with an increase in urbanization, real estate business, and other private construction. Bangladesh’s cement industry is currently the fortieth largest market in the world and is included among the government’s megaprojects. Bangladesh’s most important export item is now cement. Numerous cement businesses export their products internationally and have established a strong place in the global market competition.

Bangladesh’s cement industry has a promising future due to the rapid growth of its domestic market and its bright outlook on the international stage. The demand for cement has expanded significantly as a result of numerous government projects, urbanization, and private real estate development initiatives.

Since the 1980s and early 1990s, the country has witnessed the creation of private cement factories. Prior to that, about 95% of the country’s construction supplies, including cement, were imported. Beginning in the twenty-first century, there was a tremendous demand for construction materials, especially cement, throughout the nation. Bangladesh’s cement market has been ranked as the fortieth largest in the world. The cement industry contributes significantly to the economy of a country.
Cement as a business can be successful, as the threat of new entrants is significant due to the enormous investment required. Although the government is the primary purchaser of cement. Bangladesh’s cement sector can so develop further with government assistance and International Investors.

To establish a factory in this lucrative market i.e to open a Cement Company in Bangladesh, a number of procedures must be followed, including the formation of a legal entity i. e and the acquisition of general and special licenses and approvals, such as a TIN, VAT, Trade License, BSTI certification, IRC and ERC, and factory approval, among others. As the preeminent law company in Bangladesh, Tahmidur Rahman Remura Wahid Associates is able to assist its customer in launching a business in this industry as well as with legal matters.

The firm’s seasoned attorneys provide comprehensive legal services to its clients, beginning with entity registration and the acquisition of various licenses and approvals and extending to legal opinion, litigation, and other legal services as requested by the client.
Nonetheless, it is anticipated that once the epidemic begins to subside, business will return, and with the aid of the government’s stated financial package, this sector will continue its steady expansion within a short period of time.

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How To Open A Cement Company In Bangladesh In 2023 | Responsible Way Of Doing Cement Industry In Bangladesh 5

Registration and License process:

In Bangladesh, it is possible to establish a cement manufacturing factory through the formation of a limited liability corporation.


Method for company formation:

The steps involved in establishing a company are as follows:

Step 1: Name Clearance Certificate

Obtain the Name Clearance Certificate from the RJSC as the first step.

Step two: Drafting-

involves drafting and signing the necessary documents.

Step 3: Opening a Bank Account:

Open a bank account for the Bangladeshi company and transfer the foreign shareholders’ share capital to the local firm’s bank account (not required for local shareholders).

Step 4: Encashment Certificate from the Bank:

Receive an encashment certificate from the bank for the remittance of foreign shareholders to the company’s capital (not required for local shareholders).

Step 5: Government Costs Submission

Submit the needed paperwork as well as the encashment certificate (if required) and the government costs.

Step 6: RJSC certificate

The RJSC will evaluate the documents and issue the Certificate of Incorporation.

The following list of documents is required:

Copies of National Identity Card (NID) and Tax Identification Number (TIN) and Photos (Passport size) of all the directors and shareholders; in the case of international directors and shareholders, only copies of their Passport and Photos (Passport size) are required.

Bank Encashment Certificate for each foreign shareholder/shareholders.

Memorandum of Association and Articles of Association for the proposed business, both signed;

Forms IX and XII completed; General Licenses:
TIN certificate – After the company has been properly created, an online application must be submitted to get the certificate. Additionally, a local phone number and registered office address are required to complete the application. Trade License – The application must be submitted to the relevant city corporation office, along with the appropriate government fees, company documents, and the lease/rent deed for the company’s office space. Entities that will operate in the commercial sector must apply for a commercial trade license, while those that will operate in the industrial sector must apply for an industrial trade license.
The application for a VAT certificate must be submitted via an internet portal, together with company documentation.
Specific licenses/approvals

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How To Open A Cement Company In Bangladesh In 2023 | Responsible Way Of Doing Cement Industry In Bangladesh 6

Procedure for factory license and registration for a cement company in Bangladesh:

The Department of Inspection for Factories and Establishments (DIFE) is the single institution in Bangladesh responsible for approving and registering factories.
To obtain a license for a cement factory, one must complete the online application method for factory licenses. Prior to applying for a license, it is required to submit an application for Factory Layout Plan approval using the same site.
The list of required documents for the Factory Layout Plan application is as follows:

Trade license (where applies).

Lease agreement (where applies).

Copy of the owner/managing director/CEO/national manager’s ID card

Soil test report (where applies).

Design/drawing of the structure by a registered engineer or certified engineering firm (where applies).

Certificate of Load Bearing Capacity from a licensed engineer or certified engineering organization (where applies).

Certificate of building construction issued by a licensed engineer or an accredited engineering organization (where applies)
The copy of the Building Plan Approval issued by the local government.
The following documents are necessary for the factory license application:

Copy of Commercial License (where applies).

Lease agreement (where applies).

Copy of the owner/managing director/CEO/national manager’s ID card

Demand electricity bill (where applies).

Memorandum of article/partnership agreement (where applies).

Factory Layout Approval Copy (where applies).
The copy of the Building Plan Approval issued by the local government.
Principal copy of the Treasury Challan.
Copy of Primary License (where applies).
List of industrial or establishment’s laborers or employees (where applies).

Fire License for a Cement Company in Bangladesh:

Certificates of Export Registration (ERC) and Import Registration (IRC) (IRC)
It is necessary to acquire IRC Form from the Office of Chief Controller of Import and Export and submit the relevant papers to the Office of CCI&E in order to receive an IRC or ERC.

Trade License for Cement Company in Bangladesh
Membership Certificate from a recognized Chamber of Commerce/Trade Association; – Tax Identification Number; – Bank Certificate; – Memorandum and Articles of Association and Certificate of Incorporation (in case of Limited Company).

Fire License for cement company in Bangladesh :

A fire license is required for all commercial establishments. The Bangladeshi Fire Service and Civil Defense (FSCD) authority under the Ministry of Home Affairs issues the fire license.
The following documents must be provided in order to receive a fire license:
Deposit slip/treasury challan.

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How to open a company in Bangladesh


Annul General Compliances of the Organizations- Entities are required to comply with annual filing requirements, such as updating trade license at the respective city corporation, renewing chamber membership, renewing IRC & ERC, filing taxes, updating annual filings at the RJSC for limited liability companies, and renewing branch office permission at BIDA.

Consequences of Contract Law in Bangladesh

The businesses in this sector must maintain a large number of dealers in order to conduct business and advertise their products on the local market. They also require a large number of vendors that supply them with various goods and services, such as suppliers of raw materials and transport agencies. When selling items to dealers or receiving goods and/or services from vendors, there should be a dealership and vendor agreement in place. In the event of a dispute, the agreement, in addition to the applicable laws, plays a crucial part in resolving the dispute; therefore, it is crucial to protect one’s interests when drafting agreements.

Requirements Labour regulations – Entities must guarantee that their relationships with employees comply with Bangladesh’s labour laws. Employees must have a letter of appointment that specifies their job title, job description, remuneration, benefits and welfare, applicable working hours and leaves, etc. It should be highlighted that an employer cannot, via contract or appointment letter, supply less than what the labor laws require. It is also the responsibility of the employer to ensure a safe and healthy work environment.

Foreign Exchange regulations in regards of opening a Cement Company in Bangladesh–

Entities with foreign investors must ensure that the initial investment is made via proper banking channels, e.g. at the time of company incorporation or purchasing shares of an existing company, the foreign investors should be remitting the share capital amount from their foreign bank account Company’s bank account with a note reading “investment in the share capital of (Name of Company)”. This will demonstrate that the investment was made through the proper channels, and when remitting the profit, these initial investment paperwork and information will facilitate a smooth transfer in accordance with Bangladesh Bank regulations.
Environmental legislation
According to the Bangladesh Environment Conservation Act, 1995 (Amended 2010), all industries and projects must get an Environmental Clearance Certificate. Environmental Clearance Certificates fall into four distinct categories:

i. Green
ii. Orange-A
iii. Orange-B
iv. Red

Green category industries and projects receive environmental clearance through a relatively straightforward procedure. Orange-A, Orange-B, and Red Category industries and projects are required to obtain Site Clearance, then EIA permission, and ultimately Environmental Clearance.

After three (03) years for Green category and one (1) year for Orange-A, Orange-B, and Red category industries, the Environment Clearance must be renewed.
The procedure to receive the Environment Clearance Certificate is as follows:

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How To Open A Cement Company In Bangladesh In 2023 | Responsible Way Of Doing Cement Industry In Bangladesh 7

Step 1: Submit an application (Form-3) for the Cement Company in Bangladesh together with supporting documentation and costs.
Step 2: Department of Environment verification of application and accompanying materials.
After the verification of all reports and papers, the authorized officer will conduct a third inspection. [Thereafter, make a determination on clearance (Only Green and Orange-A)]
Step 4: Environmental Clearance Committee Meeting (for Orange-B and Red Category)
Step 5: Choice

Required documentation for Cement Company in Bangladesh:
Report on the industrial unit or project’s viability (applied only to proposed industrial units or projects);

  1. Report on the Initial Environmental Examination (IEE) pertaining to the industrial unit or project, as well as the terms of reference (ToR) for the Environmental Impact Assessment (EIA) of the industrial unit or project and its Process Flow Diagram; or Environmental Impact Assessment (EIA) report prepared on the basis of terms of reference previously approved by the Department of Environment, along with the Layout Plan (showing location of Effluent Treatment Plant), Process Flow Diagram, and Layout Plan (showing location of E
  2. Report on the Environmental Management Plan (EMP) for the industrial unit or project, as well as the Process Flow Diagram, Layout Plan (showing location of Effluent Treatment Plant), design, and information about the unit’s or project’s Effluent Treatment Plan’s effectiveness (applicable only to existing industrial units or projects);
    Certificate of no objection (Prescribed Form) from the local authority:
  3. Emergency plan pertaining to adverse environmental impact and plan for mitigating the effects of pollution; 6. Outline of relocation and rehabilitation plan (if relevant); 7. Other pertinent information (if applicable).
    If a request is made together with the required documentation, a Location Clearance Certificate will be provided to the Red Category industrial unit or project within 60 days of receipt of the application, or the application will be refused with suitable reasons for such rejection.

    Trademark laws in Bangladesh in cement industry:
    If necessary, the entities can register their trademarks to prevent others from utilizing same or similar marks. To register the trademark, the entity may submit an application to the Trademark Registry Wing of the Department of Patents, Designs, and Trademarks (DPDT).

    A trademark registration application must include the following elements:
    • the Brand/Logo
    • Nomenclature of the Applicant
    • The applicant’s complete address and nationality.
    • Status of the applicant, i.e., Merchandisers / Manufacturers / Service Providers • Classification and Specification of Goods
    • Date of use of the mark (whether the mark is in use or proposed to be used in Bangladesh).
    • A general or particular power of attorney may be necessary.
    • Fee for application

    Acceptance or Denial of the Trademark:

    Once the application has been filed for the opening of the Cement Company in Bangladesh, the documents have been examined and accepted by the Registrar, the application will be sent to the journal publication to determine whether there are any objections to the mark. In the event of an objection, the Registrar will decide the matter based on the documentation supplied by both parties.
    If there is no opposition, however, DPDT will notify the applicant to pay certification fees and then issue the trademark registration certificate. It typically takes between three and five years to receive the final certificate of trademark registration. In the interim, the entity is permitted to begin using the mark. A registered trademark is valid for an initial period of seven (7) years from the date of filing, with subsequent renewals for ten (10) years.

    Regulations of the Bangladesh Standards and Testing Institution (BSTI) :

    According to the 2018 BSTI Catalogue, cement is one of the 166 required products that require BSTI certification before being sold on the local market. In order to use the BSTI Standard Mark, one must get a Certification of Marks (CM) License. To open a Cement Company in Bangladesh, the following steps should be completed:

    Step 1: Submit a completed application form and the required documentation to the BSTI in order to receive a CM license.
    Step 2: The BSTI will inspect the application and all supporting documents.
    Step 3: If the inspection report is deemed satisfactory, then random samples are gathered and signed and sealed by the BSTI Officer and the producer.
    Step four: The obtained sample is analysed in the BSTI Laboratory or any other lab recognized by BSTI in accordance with the applicable Bangladesh Standard (BDS)
    Step 5: If the results of the test parameters are deemed to be in accordance with the applicable BDS, a license is issued for that article.
    Step 6: Typically, a license is granted for a term of three years, which is extended for a subsequent period of three years if the samples are deemed acceptable following the same approach outlined in steps (2) and (5).
    Step 7: A license is required to pay fees to the BSTI, known as the CM fee.
    Step 8: A license granted for any object may be cancelled, revoked, or withdrawn at any time if it is determined that the license has violated any of the requirements mentioned in the license and the BSTI Ordinance.

    INTRODUCTION OF Tahmidur Rahman Remura Wahid AND ITS SERVICES:
    As a full-service law practice, Tahmidur Rahman Remura Wahid Associates provides all forms of legal and financial services through its knowledgeable and competent employees.
    Registration and licensing of entities: Tahmidur Rahman Remura Wahid Associates provides services for establishing entities in Bangladesh, such as sole proprietorships, partnerships, and/or limited liability companies, as well as obtaining the necessary permits from the appropriate government agency. The services include drafting relevant documents, forms, and providing the required document list and procedure, as well as submitting the application with the relevant documents to the appropriate government office, liaising with them throughout the verification process, and obtaining the required certified documents.

    Drafting, vetting agreement: As stated previously, to Cement Company in Bangladesh, it requires the drafting of various types of agreements, such as vendor, employment, and franchises agreements, which are required to be drafted in accordance with the applicable laws of Bangladesh, while at the same time safeguarding their interests in order to use these agreements to their advantage in the event of future disputes.
    Legal Opinion and/or Due Diligence Report: Tahmidur Rahman Remura Wahid Associates gives legal opinion to clients in connection to the implication of laws and its impact on various matters, enabling them to make informed business decisions by taking the legal element into account.

    In addition, Tahmidur Rahman Remura Wahid TRW provides interested clients with a due diligence report for their entities that details all the legal requirements that must be met and any non-compliances that must be addressed.
    Litigation services: Tahmidur Rahman Remura Wahid Associates has a highly excellent litigation team that assists and represents clients in defending/filing disputes in court or before tribunals.
    Force Majeure Entities in the cement industry must determine if they are able to activate the force majeure clause in their various commercial contracts and defer the fulfilment of their contractual obligations without incurring a penalty. A force majeure event is an extraordinary event or circumstance beyond the control of the contracting parties, such as a pandemic. If a force majeure provision can be successfully used, the parties are often released from their respective contractual obligations and/or responsibilities. A force majeure clause does permit a party’s complete inability to execute, but only for the length of the force majeure occurrence. If properly prepared, the force majeure clause may indicate that if a force majeure event continues for longer than a specified period, either party may terminate the contract without incurring any financial liability.

    Parties may choose the Contract Act of 1872 if the contract does not contain a force majeure clause (the “Act of 1872”). The idea of frustration is codified in Section 56 of the Act of 1872, which states that a contract is null and void if its performance becomes impracticable or if, as a result of some occurrence, it becomes illegal after it has been entered into. Therefore, if the contract becomes difficult to perform due to Corona, it shall be considered null and void under Bangladeshi law, provided that the defaulting party did not know or could not have reasonably known that the contract would become impossible to perform. A null contract has the effect that it cannot be enforced by law and the parties are released from their respective duties.

    Taxation in Bangladesh:

    The current general tax rate in Bangladesh is 32.5 percent, as stipulated by its legislation. Opening a TIN, Monthly Tax deduction statement, Half Yearly Withholding Tax statement, Yearly statement related to tax return submission of its employees, Yearly statement related to salary disbursed from company to its employees, Quarterly Advance tax deposition, Annual Tax return submission, and attending appeal/hearing session on behalf of the company are among the nominal requirements for a limited company formed locally. Monthly VAT filings, etc. Tahmidur Rahman Remura Wahid is able to provide counsel and assistance to ensure that all regulatory compliances are met, so allowing the business to operate without difficulty.

    In recent years, the cement industry has grown steadily due to a surge in demand on both the domestic and foreign markets. Additionally, it has the ability to enhance its global market share.

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