Latest Guide to Company Registration in Bangladesh
Bangladesh is an emerging market with a rapidly growing economy and attractive investment opportunities. Registering a company in Bangladesh is a straightforward process that has been streamlined over the years. Whether you are a local entrepreneur or a foreign investor, understanding the procedural requirements, legal framework, and associated costs is essential for seamless incorporation.
This guide provides an in-depth overview of the company registration process, including the types of companies, registration steps, post-registration obligations, and advantages of operating in Bangladesh.
Types of Companies in Bangladesh
Under the Companies Act, 1994, the following types of companies can be registered:
Private Limited Company
- Minimum of 2 shareholders.
- Maximum of 50 shareholders.
- Limited by shares, restricting the public from owning shares.
Public Limited Company
- Minimum of 7 shareholders.
- Can offer shares to the public.
- Requires registration with the Securities and Exchange Commission (SEC).
One-Person Company (OPC)
- A single individual acts as both the shareholder and director.
Companies Limited by Guarantee
- Often non-profits or charitable organizations.
Companies with Unlimited Liabilities
- Shareholders have unlimited liability for the company’s debts.
Advantages of Company Registration in Bangladesh
- Rapid Economic Growth: Bangladesh has one of the fastest-growing economies globally, creating lucrative opportunities.
- Strategic Location: Proximity to major Asian markets like India and China.
- Young and Adequate Workforce: A large pool of skilled and affordable labor.
- Trade Agreements: Membership in various trade agreements, ensuring access to regional and global markets.
- Government Incentives: Tax holidays, duty exemptions, and financial benefits in Special Economic Zones (SEZs).
Step-by-Step Guide to Registering a Company in Bangladesh
1. Regulatory Authority
The Registrar of Joint Stock Companies and Firms (RJSC) oversees company registration under the Companies Act, 1994.
2. Choosing a Business Name
- Name Clearance: Obtain name clearance from the RJSC.
- Pay requisite fees and submit an online application for the desired company name.
3. Drafting the Memorandum and Articles of Association (MoA & AoA)
- Memorandum of Association (MoA): Defines the business objectives, authorized capital, and shareholder details.
- Articles of Association (AoA): Outlines operational rules, director powers, and meeting procedures.
4. Opening a Temporary Bank Account
- A temporary bank account is required for foreign shareholders to deposit paid-up capital.
- A minimum paid-up capital of USD 100,000 is suggested for specific advantages like hiring foreign employees.
5. Submitting Digital Documents
Upload digitally signed copies of:
- MoA & AoA.
- Directors’ Consent Forms.
- Name Clearance Certificate.
6. Submission of Physical Documents
Submit the following documents physically to the RJSC:
- Non-judicial stamp-affixed MoA & AoA.
- Directors’ Consent Form (Form IX).
- Encashment Certificate from the bank.
- Name Clearance Certificate.
7. Receiving the Incorporation Certificate
Upon approval, receive:
- Incorporation Certificate.
- Digital copies of MoA & AoA.
- Directors’ List (Form XII).
8. Post-Incorporation Requirements
- Convert the temporary bank account into a regular account.
- Obtain a Tax Identification Number (TIN).
- Acquire a Trade License from the local authority.
- Register for VAT and Fire Safety Certificates, if applicable.
9. Bangladesh Investment Development Authority (BIDA) Registration
- Mandatory for industrial projects and foreign investors.
- Facilitates work permits, visas, and foreign loans.
Post-Registration Obligations
- Tax Registration:
- Obtain a TIN from the National Board of Revenue (NBR).
- File annual tax returns.
- Trade License:
- Renew annually with the local city corporation.
- VAT Registration:
- Register with the Customs, Excise, and VAT Department.
- Ensure compliance with VAT regulations.
- Other Licenses:
- Obtain environmental and fire safety certificates if required by your business type.
Key Notes for Foreign Investors
- Full Foreign Ownership: Bangladesh allows 100% foreign ownership in most sectors.
- Profit Repatriation: Profits can be fully repatriated.
- Employment Ratio: Foreign nationals can be employed at a 20:1 (local: expat) ratio.
- Corporate Tax Rates: Vary between 22.5%–45% depending on the sector, with tax holidays available for select industries.
Cost and Timeframe for Company Registration
| Activity | Cost | Timeframe |
|---|---|---|
| Name Clearance | USD 10–50 | 1–2 working days |
| Drafting MoA & AoA | Varies (depends on legal fees) | 2–3 working days |
| RJSC Registration Fees | USD 500 (approx.) | 3–4 working days |
| Trade License | USD 200 (approx.) | 3–4 working days |
| BIDA Registration | USD 300 (approx.) | 30 working days |
FAQs
- Can a foreign investor fully own a company in Bangladesh?
Yes, 100% foreign ownership is allowed in most sectors. - What is the minimum number of shareholders required?
- Private Limited Company: 2 shareholders.
- Public Limited Company: 7 shareholders.
- How many directors are needed for incorporation?
- Private Limited Company: 2 directors.
- Public Limited Company: 3 directors.
- Is a local director mandatory?
No, directors can be foreign nationals. - How long does the registration process take?
Typically, 30 working days, depending on document readiness and regulatory approvals. - What is the corporate income tax rate in Bangladesh?
Varies between 22.5%–45%, depending on the business sector. - Are there any restrictions on foreign ownership?
No restrictions in most sectors, except for a few sensitive industries.
Here’s the table summarizing key information from the company registration guide for Bangladesh:
| Category | Details |
|---|---|
| Types of Companies | – Private Limited Company – Public Limited Company – One-Person Company – Companies Limited by Guarantee – Companies with Unlimited Liabilities |
| Regulatory Authority | Registrar of Joint Stock Companies and Firms (RJSC) |
| Key Registration Steps | 1. Obtain Name Clearance 2. Draft MoA & AoA 3. Open Temporary Bank Account 4. Submit Digital Documents 5. Submit Physical Documents 6. Obtain Incorporation Certificate |
| Post-Registration Requirements | – Obtain TIN (Tax Identification Number) – Acquire Trade License – Register for VAT – Apply for Fire Safety and Environmental Clearance (if needed) |
| Timeframe | – Name Clearance: 1–2 working days – RJSC Registration: 3–4 working days – Total Process: ~30 working days |
| Cost Estimates | – Name Clearance: USD 10–50 – RJSC Fees: ~USD 500 – Trade License: ~USD 200 – Total Cost: ~USD 1,500 for USD 100,000 capital |
| Advantages for Foreign Investors | – 100% Foreign Ownership Allowed – Full Profit Repatriation – Tax Holidays (5–7 years in select sectors) – Incentives for Special Economic Zones (SEZs) |
| Key Notes | – Minimum Paid-Up Capital: None legally required but USD 100,000 suggested – Minimum Shareholders: 2 for private companies, 7 for public companies – Directors: 2 for private companies, 3 for public companies – Directors can be foreign nationals |
Registering a company in Bangladesh provides numerous advantages, from access to a dynamic market to government incentives. With a clear understanding of the process and the assistance of legal professionals, businesses can navigate the registration requirements efficiently and establish a successful presence in the country.
Whether you are a local entrepreneur or an international investor, TRW Bangladesh offers expert guidance to simplify the company incorporation process and ensure compliance with all regulatory requirements. For any queries or customized support, reach out to TRW Bangladesh.
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