Leather Business Registration in Bangladesh

REGISTRATION AND LICENSE PROCESS 

Historically, exports were mostly dependent on wet blue leather. By removing the fur from the skin and preserving it with salt, wet blue leather is produced. However, if raw leather can be further processed to produce completed items, it can increase the value of leather products by up to 90 percent. In 1990, the government of Bangladesh prohibited the export of blue leather in an effort to boost manufacturing of leather goods with more added value.

Consequently, the entrepreneurs modernized their operations further, which contributed to the expansion of the sector. The country’s manufacturing of crust and finished leather commenced at that point. The Leathergoods And Footwear Manufacturers & Exporters Association of Bangladesh (LTahmidur Rahman RemuraEAB) was established in 2003 for the purpose of fostering a business climate through fostering links between local producers and exporters and international customers. 

According to a report published in August 2019 by EBL Securities LTD, Bangladesh produces 350 million square feet of leather annually, of which only 20 to 25 percent is used domestically and the remainder is exported. The leather business is currently segmented into various sub-sectors, one of which is “Tanning & Finishing.” Multiple tanneries in this industry produce crust leather, completed leather, and blue wet leather.

Apart from satisfying worldwide demand, there is also a potential to increase Bangladesh’s leather industry’s home market. According to an ADB analysis issued in 2018, the demand for footwear in Bangladesh’s domestic market is over 30 million pairs of shoes, which is constantly increasing along with the expansion of the middle-class population. In addition, the demand for other leather items is expanding.

 According to LTahmidur Rahman RemuraEAB, Bangladesh currently has 200 tanneries and 3,500 MSMEs. With 2500 footwear units and 90 big enterprises, the footwear & footwear components manufacturing sector contributes significantly to the leather industry. According to the Dhaka Tribune, the local footwear market in Bangladesh was valued at approximately BDT 17,000 billion in 2020. Bangladesh produces 378 million pairs of shoes per year, although the local footwear market requires 200 to 250 million pairs per year.

Benefit of Leather Business Registration in Bangladesh:

Investors in this area benefit from the following advantages:

• Abundant and inexpensive labor Is perfect for labor-intensive industries.
• A local supply of high-quality raw materials derived from the vast livestock sector.
• The government supports the export-oriented leather market via tax breaks, duty-free imports of raw materials, export incentives, and machinery.
• Huge domestic and international untapped market
• Increasing global demand for differentiated, value-added products
• The potential for establishing backward linking businesses
• Significant value-added potential
• International fashion and sourcing firms in Bangladesh are interested in RMG’s products

There are numerous opportunities for investment in the Leather sector, including: Sole proprietorship, partnership, and limited liability corporation. The first two options are unavailable to foreign investors, and only the branch office option is available to them.

SOLE PROPRIETARY RIGHTS- Leather Business Registration in Bangladesh

In Bangladesh, a Sole Proprietorship is not a separate legal entity, hence it is not distinct from its owner/ proprietor. In the event that any liability occurs during the course of business, the owner will be held personally liable. Any Bangladeshi citizen at least 18 years old may establish a sole proprietorship.

Method of Leather Business Registration in Bangladesh

To establish a single proprietorship in Bangladesh, the following actions must be taken:

Step 1: Proposed Bangla business name 

Step 2: Obtaining a Business License 

General Licenses for Leather Business Registration in Bangladesh:

Trade License – This is the fundamental need for business ownership. This can be obtained by submitting an application to the appropriate City Corporation or local government together with the office lease or rental agreement. 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.

TIN Certificate:

The application must be submitted through the National Board of Revenue’s online portal (NBR).

VAT certificate:

The application must be submitted using the National Board of Revenue’s online portal (NBR).

Leather Business Registration in Bangladesh steps:

The Registrar of Joint Stock Companies and Firms of Bangladesh (“RJSC”) must register a Leather Business to initiate the incorporation.

STEP 1- CHOOSING THE PARTNERSHIP NAME

The Registrar of Joint Stock Companies And Firms must grant a Name Clearance for the proposed name of the Partnership Business (RJSC).

STEP 2 – PREPARE A PARTNERSHIP DEED

In compliance with the Stamp Act, the Partnership Deed must be prepared on stamp paper, and all partners must sign it before having it notarized.

STEP 3- REGISTER PARTNERSHIP DEED WITH RJSC

The partnership agreement and a completed Form I must be submitted to RJSC. The RJSC officials will analyze the submitted documents and issue a Certificate of Registration.

Timeline for incorporation-

It takes approximately two weeks to get the Certificate of Registration from RJSC after submitting the required papers in accordance with STEP 3.

General Licenses for Leather Business in Bangladesh

TIN Certificate:

The application must be submitted through the National Board of Revenue’s online portal (NBR).

Trade License –

The application, along with the applicable government fees, must be submitted to the relevant municipal corporation office/local government office, along with the business paperwork and the lease/rent deed of the Business’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.

VAT certificate —

The application must be submitted using the National Board of Revenue‘s online portal (NBR).

PRIVATE LIMITED COMPANY for Leather Business:

Method for Leather Business company formation in Bangladesh:

The steps involved in establishing a company are as follows:

Organizational Formation:

First step:

A Name Clearance must be obtained from RJSC for the proposed name of the company.

The second step:

Second step is to draft and sign the following:

• The company’s Memorandum and Articles of Incorporation;

• Form IX: Consent of director to act has been completed;

• Form XII: Particulars of the directors, manager, and managing agents has been completed.

STEP 3 –

Opening a bank account for the Bangladeshi company and transferring the foreign owners’ share capital (not required for local shareholders)

The bank must give an encashment certificate for the international transfer (not required for local shareholders)

The documents specified in step 2 must be signed and submitted to the RJSC along with the encashment certificate and the incorporation fees.

Step 4:

The RJSC will conduct a document verification and give the certified incorporation paperwork.

Step 5 :

Timeline – It typically takes three to four weeks for RJSC to issue the certifications following the submission of the required documents.

General Licenses for Leather Business:

TIN certificate:

After the company has been properly created, an online application must be submitted to get the certificate. In addition, the application requires a local phone number and a registered office address.

Trade License:

The application must be submitted to the relevant city corporation office, together with the applicable government fees, corporate paperwork, and the lease/rent deed of 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 for Leather Business

Import Registration Certificate (IRC) & Export Registration Certificate (ERC) –

Entities importing and/or exporting products and/or services must get IRC and/or ERC, accordingly. IRC is a crucial certificate for investors who wish to import leather, leather products, or leather machinery. After receiving ERC, an exporter can export any quantity of Leather and Leather goods from Bangladesh at any price.

Applications for IRC and/or ERC must be submitted to the Office of the Chief Controller of Imports and Exports along with the entity’s incorporation paperwork, TIN certificate, trade license, bank solvency certificate, chamber of commerce membership certificate, and applicable government fees. Both credentials must be renewed each year.

Registration and Factory Plan Approval for Leather Business

The entity must receive approval of its factory plan and register it with the Department of Inspection for Factories and Establishment in order to establish a factory for the manufacture of leather and leather products in Bangladesh. This should be renewed each year.

The following documents are necessary for the issuance of approval and registration certificates for Leather Business:

1. Land document;

2. Construction Plan

3. Master plan, site plan, or layout;

4. Machine layout;

5. diagram of the manufacturing process flow;

6. Note on electricity demand

7. Trade license;

8. Fee payment slip;

9. Organizational formation and related documentation

Environment Clearance Certificate for Leather Business –

The Bangladesh Environment Conservation Act (ECA) 1995 and Bangladesh Environment Conservation (Amendment) Act require that all industries and projects get Environmental Clearance (ECAA). Bangladesh’s Department of Environment (DOE) is responsible for issuing Environmental Clearance Certificates. Environmental Clearance Certificate can be divided into the following four categories:

• Green

• Orange-A

• Orange-B

• Red

Environmental Clearance Certificates shall be given for all existing industrial units and projects, as well as prospective industrial units and projects, that fit under the Green Category. For industrial units and projects falling in the Orange-A, Orange-B categories, initially a Location Clearance Certificate, then Environment Impact Assessment (EIA) approval, and finally an Environmental Clearance Certificate shall be issued. For Red category industries, initially a Location Clearance Certificate, then Environment Impact Assessment (EIA) approval, and finally an Environmental Clearance Certificate shall be issued.

General Environmental Clearance Procedures for Leather Business:

Step 1: First step is to submit the application with the required documentation.

Step 2: Department of Energy verification of application and accompanying documents

Step 3: The authorized officer conducts an inspection after verifying all reports and documentation.

[Thereafter, make a determination on clearance (Only Green and Orange-A)]

Step 4: Environmental Clearance Committee Meeting (for Orange-B and Red Category)

Timeline and documentation details:

Fee Schedule

Additional pertinent information (where applicable) for Leather Business or Tannery Industry in Bangladesh:

Fire License – Buildings and commercial organizations are required to obtain a fire license in consideration of the environment and to protect the safety of the firm and its employees. The Bangladeshi Fire Service and Civil Defense (FSCD) authority under the Ministry of Home Affairs issues fire licenses for Leather Business in Bangladesh.

The following documentation must be provided in order to receive a fire license: –

1. Form prescribed for applications;

2. Deed of agreement;

3. Annual appraisal certificates;

4. Design of the structure;

5. Constitution and Articles of Incorporation;

6. Document of Incorporation;

7. Trade license;

8. Certificate of no objections from the local government;

9. Certificate of clearance from the FSCD office;

10. Treasury deposit slip/challan.

BIDA Membership (Local and Foreign Investment Projects)

If it is a manufacturing firm, it must be registered with the BIDA in order to receive numerous monetary and non-monetary incentives from the Bangladeshi government.

The documentation required for Leather Business in Bangladesh project registration with BIDA are: –

1. Form prescribed for applications;

History of directors and partners;

2. Deed of prospective property;

3. Project profile;

4. Constitution and Articles of Incorporation;

5. Document of incorporation;

6. Bank draft or pay order for the registration fee;

7. Trade License;

9. TIN Certificate.

The documentation required for foreign investment project registration with BIDA are: –

1. Form prescribed for applications;

2. Deed of prospective property;

3. Project profile;

4. List of investors and directors;

5. List of equipment;

6. Constitution and Articles of Incorporation;

7. Joint Venture Agreement;

8. Cashable Certificate

9. Document of incorporation;

10. Bank draft or pay order for the registration fee;

11. Trade License;

12. TIN Certificate.

The goods and Footwear Manufacturers and Exporters Association of Bangladesh (LTahmidur Rahman RemuraEAB) Membership Certificate for Leather Business in Bangladesh——

The products and Footwear Manufacturers and Exporters Association of Bangladesh represents the majority of the leading export-oriented manufacturers and exporters of goods and footwear in Bangladesh (LTahmidur Rahman RemuraEAB).

Procedure for getting (LTahmidur Rahman RemuraEAB) Membership Certificate:

To obtain provisional membership in the LTahmidur Rahman RemuraEAB, the following actions must be taken:

• A corporation must have goods or footwear makers, or both. In addition, the company’s export orientation must be at least 80 percent.

• To meet these requirements, a business must submit the legal documents specified below, along with 45,000 BDT (for a sole proprietorship) or 60,000 BDT (for a limited liability company) and a letter of application on company letterhead.

• Following the submission of all required documentation, the compliance team evaluates the factory. If everything meets LTahmidur Rahman RemuraEAB requirements, the factory is eligible for provisional membership.

• Following the submission of a membership application, LTahmidur Rahman RemuraEAB will conduct a survey and analysis of the applicant company to determine whether or not it fits all LTahmidur Rahman RemuraEAB standards.

• If, after inspection, the organization is satisfied that the company meets the conditions, membership will be granted.

Timeline – The provisional membership certification will be issued 20 days after the legal paperwork is submitted by checklist.

Documents Required for Provisional Membership:

1. Request on Letterhead Pad.

2. Form properly filled out and signed.

3. Memorandum of the Corporation. (For Limited Partnership)

4. Articles of Incorporation (For Limited Partnership)

5. Document of Incorporation (COI). (For Limited Partnership)

6. Copy of Registration from the Bangladesh Investment Development Authority (BIDA)

7. Current Trade License.

8. Modernized Tin Certificate

9. List of Machineries.

10. Fire Service License.

11. Production License. (If accessible)

12. Plan for a factory’s layout that has been authorized by the relevant authority and is exhaustive. (If accessible)

13. Approved Factory Structure Layout / Building Design Document by Competent Authority.

14. Group Insurance Copy in accordance with the Bangladesh Labour Act of 2006. (If relevant)

15. Environmental Clearance Certificate (ECC) from the Department of Energy (DOE) / No Objection Certificate (NOC)

Certificate of Objection) from Local Authority.

16. Two (2) copies of passport-sized photos of the Managing Director/Owner/Owner.

17. Manufacturing Profile.

18. Generator Certificate. (If accessible)

19. ERC and IRC. (If any)

20. Custom Bond Permit. (If accessible)

21. Membership Fee: BDT 60,000 for Limited Companies (Renewal Fee BDT 23,000)

For Ownership: 450,000 BDT (Renewal Fee BDT 20,000)

22. The KRC membership fee is 8,000 BDT.

23. From the date of receipt, Provisional Membership Certification will take One (01) Month.

Bangladesh Certification From Bureau Veritas for Leather Business in Bangladesh:

Bureau Veritas aids businesses in meeting the increasing demands of quality, safety, social responsibility, and sustainability. The business requires a certificate from Bureau Veritas for its products. This certificate is globally recognized, enabling the business to operate internationally. Three steps are followed by the organization: testing, inspection, and certification.

TESTING

The testing phase determines whether the products are safe, of the proper quality, and compliant with applicable specifications and laws.

INSPECTION for Leather Business in Bangladesh

In this phase, the conformance of a product, asset, or system to a set of criteria is verified.

Inspection encompasses services designed to enhance performance, reduce risk, confirm quantity control and quality, and meet additional regulatory requirements. Also included are the verification of documents, visual inspection, manufacturing supervision, and electronic and mechanical testing.

CERTIFICATION for Leather Business in Bangladesh

Customized, independent certification serves as a source of assurance.

A certificate is a third-party stamp of approval indicating that a product, service, or system conforms to a specified standard. This certification service encompasses individuals, goods, and systems.

Bangladesh Tanners Association membership (BTA) for leather business:

BTA is a non-profit industry association in Bangladesh that plays an important role in a number of areas, including the issuance of export certificates, the implementation of an EU-funded project titled “Implementation of Environmental Management Systems and eco-labeling schemes in the SMEs of the Sector in Bangladesh (ECOLEBAN),” and liaison with the government. Departments in relation to sector development. BTA works for the welfare of all Bangladeshi tanneries.

Download a membership application from the Bangladesh Tanners Association website in order to become a valuable BTA member. The form should be submitted to tanners@net2bd.com. 

The Bangladesh Tanners Association offers two types of membership: 1) General Membership and 2) Associate Membership.

Documents required for General Membership for Leather Business in Bangladesh are as follows:

1. Land title documentation or lease deed

2. Design or arrangement of a tannery factory

3. Tannery factory liquidation (if applicable)

4. The information must be written on the organization’s notepad.

5. Copy of Commercial license (updated)

6. National Identity Card Copy

7. 2(two) copies for the owner/chairman/management director/director/managing partner (photo with the name written on the back)

8. The applicant’s photograph must be attested by the applicant’s proposer or supporter.

9. Bank Solvency Certificate Copy

10. E-TIN/TIN Certificate Copy

11. E-BIN/BIN Certificate Copy

12. Each owner, chairman, managing director, director, and managing partner must complete the required form.

13. The association’s current and qualified members must be advocates and backers. Proponent or supporter. The Association’s General Membership is open to everyone.

14. The machinery utilized by tanning factories. [If any]

15. Copy of the Memorandum and Articles of Incorporation / Partnership Agreement. [if relevant]

16. Admission fee…………………………………………… The cost and amount of the annual subscription………………. Funds that are required at the time an application is submitted.

17. The association must be informed in writing if the organization’s address changes.

18. Copy of the most recent business license and payment of the annual membership fee are required to obtain a membership certificate. subject to application in writing The certificate is subject to a two-day processing period.

19. On behalf of the approved Associate Member, Member Cards, Voter ID Cards, and Correspondence will be issued, and the Associate Member will be contacted as needed. In the case of the nomination of a representative, an ordinary person will be nominated in accordance with the rules.

Following are the required documents for Associate Membership for Leather Business in Bangladesh:

1. Land title documentation or lease deed

2. Copy of National Identification Card

3. Copy of Deed/Rent Agreement

4. 2(two) copies for the owner/chairman/management director/director/managing partner (photo with the name written on the back)

5. The photo of the applicant must be attested by the proposer or supporter.

6. Copy of the ERC

7. Bank Solvency Certificate Copy

8. E-TIN/TIN Certificate Copy

9. E-BIN/BIN Certificate Copy

10. Each owner, chairman, managing director, director, and managing partner must complete the required form.

11. The association’s current and qualified members must be advocates and backers. Advocate or supporter. The Association’s General Membership is open to everyone.

12. The machinery utilized by tanning factories. [If any]

13. Copy of the Memorandum and Articles of Incorporation / Partnership Agreement. [if relevant]

14. Admission fee…………………………………………… Funds and annual subscription fee……….. ………………… Funds that must be included with the application submission.

15. The association must be informed in writing if the organization’s address changes.

16. Copy of the most recent business license and payment of the annual membership fee are required to obtain a membership certificate. subject to application in writing The certificate is subject to a two-day processing period.

17. On behalf of the approved Associate Member, Member Cards, Voter ID Cards, and Correspondence will be issued, and the Associate Member will be contacted as needed. In the case of the nomination of a representative, an ordinary person will be nominated in accordance with the rules.

Bond License for Leather Business in Bangladesh:

To use the Bonded Warehousing facility, interested businesses must obtain a Bond License from the Customs Bond Commissionerate. Licenses are issued and maintained in accordance with the 2008 Bonded Warehouse Licensing Rules. After obtaining Bond Licenses, licensee industries will be able to clear their inputs/raw materials or packaging materials imported under Back-to-Back Letter of Credit without paying any import duty or other taxes. However, the volume of these inputs and packaging materials must remain within the limitations of their Bond Licenses’ entitlements. Any quantity of inputs/raw materials that exceeds the entitlements specified in the Licenses will be subject to full duty and taxes.

To obtain a bonded warehouse license, applicants must complete a bond license application form and submit it, along with the required documents and application fee, to the respective Bond Commissionerate or any Customs, Excise, or VAT Commissionerate authorized by the NBR to issue bonded warehouse licenses.

LEGAL ISSUES relating Leather Business in Bangladesh:

Annual General Compliances of Business Entities – 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 the annual filings at the RJSC for limited liability companies, and renewing branch office permission at BIDA when it expires.

Implications of Contract Law in regards to Leather Business in Bangladesh:

The entities’ relationship with dealers/vendors who provide products or services to the business is an integral component. When selling products to dealers or receiving goods and/or services from vendors, there should be a dealership/vendor agreement in place. Vendor Agreements can cover a wide range of services, including software, professional services, office supplies, technology services, event planning, marketing, and consultants. In the event of a dispute, the agreement, in addition to the applicable laws, plays a crucial role in resolving the dispute; therefore, it is crucial to protect one’s interests when drafting agreements.

The franchise agreement is also an important aspect of this industry, as numerous entities bring the products of international bands to market as franchisees. It is essential that this agreement be drafted with all legal aspects clarified, particularly in accordance with Bangladesh Bank’s foreign exchange guidelines. This will be useful when remitting royalties to the franchisor via banking channels. Foreign shareholders may also remit the dividend after deducting the applicable taxes, in addition to the royalty payment.

Labour laws and Leather Business in Bangladesh:

The entities must ensure that their relations with their employees comply with Bangladesh’s labour laws. Employees must have a letter of appointment that specifies their job title, job description, salary, benefits and welfare, applicable working hours and leaves, etc. It should be noted that an employer cannot, by contract or appointment letter, provide less than what the labor laws require. It is also the responsibility of the employer to provide a safe and healthy work environment. According to Bangladesh’s labour laws, a number of additional provisions must be made for factory workers. Such as: Health and Safety Concerns

1. The emergency exit must be on the opposite side of the main exit (that must be in outward direction).

2. The facility or factory must have an emergency exit stair with a handle if it is located in a multi-story building.

3. Also necessary is an emergency assembly point in front of the structure.

Foreign Exchange Regulations for Leather Business in Bangladesh or for Tannery Industry:

– Entities having foreign investors must ensure that the first investment is made through the appropriate banking channels, e.g., wire transfer. Foreign investors should transfer the share capital amount from their foreign bank account to the business’s bank account with the notation “investment in the share capital of (Company Name)” at the time of company incorporation or share purchase. 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.

 Tahmidur Rahman Remura Wahid TRW AND ITS SERVICES relating Leather Business in Bangladesh:

 Tahmidur Rahman Remura Wahid TRW Associates, being a full-service law practice, offers all forms of legal and financial services through its experienced and talented employees.

 Tahmidur Rahman Remura Wahid TRWAssociates provides services for establishing entities, such as sole proprietorships, partnerships, and/or limited liability companies, in Bangladesh and getting the necessary permits from the applicable government authorities. 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 and vetting agreements for Leather Industry:

As stated previously, the entities require 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 for Leather Industry:

Tahmidur Rahman Remura Wahid gives legal opinion to clients in regards to the implication of laws and its impact on a variety of matters, allowing them to make informed business decisions by considering the legal aspect.

In addition,  Tahmidur Rahman Remura Wahid TRW offers interested customers with a due diligence report for their entities that highlights all the legal criteria that must be met and any non-compliances that must be addressed.

 Tahmidur Rahman Remura Wahid offers a formidable litigation team that assists and represents clients in defending/filing disputes before courts or tribunals for all sorts of litigation.

Taxation for Leather Business 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.  Tahmidur Rahman Remura Wahid TRW may provide guidance and assistance to ensure that all regulatory compliances are met, allowing the business to operate without difficulty.

The current global demand for leather products and footwear is over $215 billion, whereas Bangladesh exports only $1.08 billion. If more investors were to participate in the leather sector, we would have a fantastic opportunity to capture the market with our highest degree of efficiency and strategic planning. The demand for leather goods will only increase as individuals from all over the world flock to fashionable leather goods. Therefore, the industry will continue to strengthen its position within the corporate sector.

The Leather and Leather Goods Industry is the second largest industry in Bangladesh, behind the RMG sector. The availability of raw materials and low-cost labor are the primary factors contributing to the industry’s achievement of its intended level. In FY2018-19 (July-November), the leather and footwear industry’s total exports was 626.57 million USD.

As the global demand for leather items and shoes rises, the manufacturing industry has a tremendous deal of potential.

Bangladesh exports footwear duty-free, which encourages overseas buyers to invest in the country.

Investors may choose from Sole Proprietorship, Partnership Business, Branch Office, or Private Limited Company in order to participate in the Electrical business.

Investors have the option of forming a Sole Proprietorship, Partnership Business, or Private Limited Company in order to participate in the Leather sector. The Trade License and VAT Certificate are necessities for all three business kinds. To promote a business-friendly climate, BIDA has opened a one-stop services center for investors, where services ranging from entity incorporation to post-incorporation licenses are accessible.

 Tahmidur Rahman Remura Wahid TRW Associates is a full-service law firm that offers all types of legal and financial services, including entity registration, license acquisition, agreement and notice drafting, annual compliances, and litigation services.  Tahmidur Rahman Remura Wahid TRW Associates is comprised of competent Barristers and Advocates with knowledge in a variety of legal fields, allowing them to perform the required services at a high degree, and allowing customers to acquire all essential and supplementary legal services under one roof.

Are you intending to get into the Leather Business in Bangladesh?

Get your Leather Business Registration done in Bangladesh with the help of  Tahmidur Rahman Remura: TRW: The Law Firm in Bangladesh:

The legal team of Tahmidur Rahman, The Law Firm in Bangladesh: TRW, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to Leather Business Registration in Bangladesh. For queries or legal assistance, please reach us at:

E-mail: info@trfirm.com
Phone: +8801847220062 or +8801779127165 or +8801708080817

Address: House 410, Road 29, Mohakhali DOHS

Frequently Asked Questions about-

Leather Business Registration in Bangladesh

In regards to seeking a help from this specific subject, people also ask these questions frequently to our esteemed lawyers in Bangladesh, hence this FAQ content block is dedicated to answering your questions.

What are the Exports trend of Bangladesh leather industry in 2023?

Exports trend of Bangladesh leather industry
The domestic market for leather goods and footwear is estimated to be worth Tk 160 billion, but 40% of that demand is satisfied by imports, according to the Leather Goods and Footwear Manufacturers' and Exporters' Association of Bangladesh (LTahmidur Rahman RemuraEAB). 
The country's second-largest export-earning sector, the leather industry, is experiencing a consistent decline in export revenues. In the first five months of the fiscal year 2018–19, export sales of leather and leather products fell by 16.11% to US$434 million from US$518 million in the same period the previous year, according to data from the Export Promotion Bureau (EPB). 
Data from the EPB show that exports of leather, leather goods, and footwear totaled USD 1.08 billion in the fiscal year 2017–18. Bangladesh exported leather and leather goods for $1.23 billion in 2016–17, up from $1.16 billion the year before. The five months of the current fiscal year saw a 16.11% decline in leather and leather product export revenue. As a result, it demonstrates that the sector is not experiencing a robust or noteworthy growth. Fiscal Year Leather Export Earnings(in billion US$) 2013-2014 1.12 2014-2015 1.13 2015-2016 1.16 2016-2017 1.23 2017-2018 1.08

What are the Opportunities for the Leather Business Registration in Bangladesh?

Opportunities for the sector

The main benefit of the leather industry of Bangladesh is the ample supply of raw materials. The availability of raw materials is the biggest strength of the sector. As Bangladesh’s RMG is going ahead smoothly, so leather industries of Bangladesh will get a plus point in it. 

When RMG has brought up many leading brands in Bangladesh with their direct presence, they will be very happy to put their own orders of leather products in the same country Bangladesh from where they are sourcing apparels. So the growth of textile and RMG sector is actively helping the growth of leather and allied industries like footwear and other leather goods industry.

Some opportunities are highlighted here:

• Huge untapped international market, as well as the domestic market
• Increasing global demand for value-added, diversified products
• The scope of developing backward linkage business
• High-value addition potential
• Labor intensive; employment opportunities
• Local and Foreign Direct Investment opportunity in value-added leather products sector
• China is losing competitiveness
• Government policies toward leather exporters; GSP, Cash Incentive; etc.
• Increasing International and Local demands for value-added leather products
• International Fashion and sourcing houses in Bangladesh for RMG showing interest in leather products

What are the government initiatives in the leather sector of Bangladesh?

The Bangladeshi government has made numerous efforts to modernize the sector. If the current administration is re-elected in the upcoming election, two additional leather industrial parks will be established in Chattogram and Rajshahi, in addition to the modern leather industrial estate that has already been established by the government in Savar. 

Tanneries from the Hazaribagh region have been relocated to Savar's contemporary, environmentally friendly tannery estate. Tanners now have the option to construct their industrial facility using contemporary ideas. They can incorporate modern hydraulic and pneumatic equipment, use cutting-edge production techniques, and make use of technological advancements. After shifting, the leather industry has very low export earnings. 

The Savar tannery estate is home to about 155 tanneries. Forty or so small tanneries were unable to afford the relocation and ceased operations. However, large tanneries seized the chance to expand their businesses with greater production capabilities by integrating more equipment and technology. The cluster's installed capacity in Hazaribagh was close to 280 million square feet, but these tanneries have set a goal of 450 million square feet of annual production capacity in Savar.

What are the export destinations for the leather industry in Bangladesh?

About 85% of Bangladesh's leather and leather goods are exported to other countries, primarily in the form of crushed leather, blue wet leather, finished leather, leather apparel, and leather shoes. 
The EU, US, Australia, Japan, Singapore, South Korea, etc. are among the countries that import the majority of leather and leather goods. Leather and leather goods market for Bangladesh EU USA Japan Australia Singapore South Korea

Overview of 2nd largest export item in Bangladesh

Due to its comparative labor pool and domestic production of sustainable raw materials, the leather and leather products sector, which ranks second in terms of export earnings after RMG, has seen significant investment recently.  The leather industry in Bangladesh is well-established and comes in second in terms of export revenue. Leather is already a top priority sector due to its high value addition, rapid growth, and employment opportunities. Bangladesh holds a 3% market share for leather and leather-related goods worldwide. Exports account for nearly 60% of its total annual output. Over the past few decades, the export of leather and leather goods has multiplied. Bangladesh's production of finished leather as opposed to a variety of finished products has caused a structural change in the composition of leather and leather goods. From 36.64% of total sectorial export revenues in FY 2007–08 to 60.90% in FY 2017–18, the footwear industry has grown.  Finishing & Tanning  Shoes and Footwear Accessories  Accessory Leather  Bags, wallets, belts, accessories, and other items made of leather Overview As the local market for leather goods expands, the nation's economy is expanding steadily and the middle class is expanding. According to projections, 30 to 40 million people will enter the middle class by 2025, and another 30 million may join the aspirant or emerging middle class.  Particularly, the domestic footwear market has been expanding at a rate of 10–15% annually, with per-capita footwear consumption rising to 3 pairs from 1.7 pairs a few years ago. 

Following are the required documents for Associate Membership for Leather Business in Bangladesh:

1. Land title documentation or lease deed

2. Copy of National Identification Card

3. Copy of Deed/Rent Agreement

4. 2(two) copies for the owner/chairman/management director/director/managing partner (photo with the name written on the back)

5. The photo of the applicant must be attested by the proposer or supporter.

6. Copy of the ERC

7. Bank Solvency Certificate Copy

8. E-TIN/TIN Certificate Copy

9. E-BIN/BIN Certificate Copy

10. Each owner, chairman, managing director, director, and managing partner must complete the required form.

11. The association’s current and qualified members must be advocates and backers. Advocate or supporter. The Association’s General Membership is open to everyone.

12. The machinery utilized by tanning factories. [If any]

13. Copy of the Memorandum and Articles of Incorporation / Partnership Agreement. [if relevant]

14. Admission fee…………………………………………… Funds and annual subscription fee……….. ………………… Funds that must be included with the application submission.

15. The association must be informed in writing if the organization’s address changes.

16. Copy of the most recent business license and payment of the annual membership fee are required to obtain a membership certificate. subject to application in writing The certificate is subject to a two-day processing period.

17. On behalf of the approved Associate Member, Member Cards, Voter ID Cards, and Correspondence will be issued, and the Associate Member will be contacted as needed. In the case of the nomination of a representative, an ordinary person will be nominated in accordance with the rules.

Bond License for Leather Business in Bangladesh:

To use the Bonded Warehousing facility, interested businesses must obtain a Bond License from the Customs Bond Commissionerate. Licenses are issued and maintained in accordance with the 2008 Bonded Warehouse Licensing Rules. After obtaining Bond Licenses, licensee industries will be able to clear their inputs/raw materials or packaging materials imported under Back-to-Back Letter of Credit without paying any import duty or other taxes. However, the volume of these inputs and packaging materials must remain within the limitations of their Bond Licenses’ entitlements. Any quantity of inputs/raw materials that exceeds the entitlements specified in the Licenses will be subject to full duty and taxes.

To obtain a bonded warehouse license, applicants must complete a bond license application form and submit it, along with the required documents and application fee, to the respective Bond Commissionerate or any Customs, Excise, or VAT Commissionerate authorized by the NBR to issue bonded warehouse licenses.

LEGAL ISSUES relating Leather Business in Bangladesh:

Annual General Compliances of Business Entities – 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 the annual filings at the RJSC for limited liability companies, and renewing branch office permission at BIDA when it expires.

Implications of Contract Law in regards to Leather Business in Bangladesh:

The entities’ relationship with dealers/vendors who provide products or services to the business is an integral component. When selling products to dealers or receiving goods and/or services from vendors, there should be a dealership/vendor agreement in place. Vendor Agreements can cover a wide range of services, including software, professional services, office supplies, technology services, event planning, marketing, and consultants. In the event of a dispute, the agreement, in addition to the applicable laws, plays a crucial role in resolving the dispute; therefore, it is crucial to protect one’s interests when drafting agreements.

The franchise agreement is also an important aspect of this industry, as numerous entities bring the products of international bands to market as franchisees. It is essential that this agreement be drafted with all legal aspects clarified, particularly in accordance with Bangladesh Bank’s foreign exchange guidelines. This will be useful when remitting royalties to the franchisor via banking channels. Foreign shareholders may also remit the dividend after deducting the applicable taxes, in addition to the royalty payment.

Labour laws and Leather Business in Bangladesh:

The entities must ensure that their relations with their employees comply with Bangladesh’s labour laws. Employees must have a letter of appointment that specifies their job title, job description, salary, benefits and welfare, applicable working hours and leaves, etc. It should be noted that an employer cannot, by contract or appointment letter, provide less than what the labor laws require. It is also the responsibility of the employer to provide a safe and healthy work environment. According to Bangladesh’s labour laws, a number of additional provisions must be made for factory workers. Such as: Health and Safety Concerns

1. The emergency exit must be on the opposite side of the main exit (that must be in outward direction).

2. The facility or factory must have an emergency exit stair with a handle if it is located in a multi-story building.

3. Also necessary is an emergency assembly point in front of the structure.

Foreign Exchange Regulations for Leather Business in Bangladesh or for Tannery Industry:

– Entities having foreign investors must ensure that the first investment is made through the appropriate banking channels, e.g., wire transfer. Foreign investors should transfer the share capital amount from their foreign bank account to the business’s bank account with the notation “investment in the share capital of (Company Name)” at the time of company incorporation or share purchase. 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.

 Tahmidur Rahman Remura Wahid TRW AND ITS SERVICES relating Leather Business in Bangladesh:

 Tahmidur Rahman Remura Wahid TRW Associates, being a full-service law practice, offers all forms of legal and financial services through its experienced and talented employees.

 Tahmidur Rahman Remura Wahid TRWAssociates provides services for establishing entities, such as sole proprietorships, partnerships, and/or limited liability companies, in Bangladesh and getting the necessary permits from the applicable government authorities. 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 and vetting agreements for Leather Industry:

As stated previously, the entities require 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 for Leather Industry:

Tahmidur Rahman Remura Wahid gives legal opinion to clients in regards to the implication of laws and its impact on a variety of matters, allowing them to make informed business decisions by considering the legal aspect.

In addition,  Tahmidur Rahman Remura Wahid TRW offers interested customers with a due diligence report for their entities that highlights all the legal criteria that must be met and any non-compliances that must be addressed.

 Tahmidur Rahman Remura Wahid offers a formidable litigation team that assists and represents clients in defending/filing disputes before courts or tribunals for all sorts of litigation.

Taxation for Leather Business 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.  Tahmidur Rahman Remura Wahid TRW may provide guidance and assistance to ensure that all regulatory compliances are met, allowing the business to operate without difficulty.

The current global demand for leather products and footwear is over $215 billion, whereas Bangladesh exports only $1.08 billion. If more investors were to participate in the leather sector, we would have a fantastic opportunity to capture the market with our highest degree of efficiency and strategic planning. The demand for leather goods will only increase as individuals from all over the world flock to fashionable leather goods. Therefore, the industry will continue to strengthen its position within the corporate sector.

The Leather and Leather Goods Industry is the second largest industry in Bangladesh, behind the RMG sector. The availability of raw materials and low-cost labor are the primary factors contributing to the industry’s achievement of its intended level. In FY2018-19 (July-November), the leather and footwear industry’s total exports was 626.57 million USD.

As the global demand for leather items and shoes rises, the manufacturing industry has a tremendous deal of potential.

Bangladesh exports footwear duty-free, which encourages overseas buyers to invest in the country.

Investors may choose from Sole Proprietorship, Partnership Business, Branch Office, or Private Limited Company in order to participate in the Electrical business.

Investors have the option of forming a Sole Proprietorship, Partnership Business, or Private Limited Company in order to participate in the Leather sector. The Trade License and VAT Certificate are necessities for all three business kinds. To promote a business-friendly climate, BIDA has opened a one-stop services center for investors, where services ranging from entity incorporation to post-incorporation licenses are accessible.

 Tahmidur Rahman Remura Wahid TRW Associates is a full-service law firm that offers all types of legal and financial services, including entity registration, license acquisition, agreement and notice drafting, annual compliances, and litigation services.  Tahmidur Rahman Remura Wahid TRW Associates is comprised of competent Barristers and Advocates with knowledge in a variety of legal fields, allowing them to perform the required services at a high degree, and allowing customers to acquire all essential and supplementary legal services under one roof.

Are you intending to get into the Leather Business in Bangladesh?

Get your Leather Business Registration done in Bangladesh with the help of  Tahmidur Rahman Remura: TRW: The Law Firm in Bangladesh:

The legal team of Tahmidur Rahman, The Law Firm in Bangladesh: TRW, The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to Leather Business Registration in Bangladesh. For queries or legal assistance, please reach us at:

E-mail: info@trfirm.com
Phone: +8801847220062 or +8801779127165 or +8801708080817

Address: House 410, Road 29, Mohakhali DOHS

Frequently Asked Questions about-

Leather Business Registration in Bangladesh

In regards to seeking a help from this specific subject, people also ask these questions frequently to our esteemed lawyers in Bangladesh, hence this FAQ content block is dedicated to answering your questions.

What are the Exports trend of Bangladesh leather industry in 2023?

Exports trend of Bangladesh leather industry
The domestic market for leather goods and footwear is estimated to be worth Tk 160 billion, but 40% of that demand is satisfied by imports, according to the Leather Goods and Footwear Manufacturers' and Exporters' Association of Bangladesh (LTahmidur Rahman RemuraEAB). 
The country's second-largest export-earning sector, the leather industry, is experiencing a consistent decline in export revenues. In the first five months of the fiscal year 2018–19, export sales of leather and leather products fell by 16.11% to US$434 million from US$518 million in the same period the previous year, according to data from the Export Promotion Bureau (EPB). 
Data from the EPB show that exports of leather, leather goods, and footwear totaled USD 1.08 billion in the fiscal year 2017–18. Bangladesh exported leather and leather goods for $1.23 billion in 2016–17, up from $1.16 billion the year before. The five months of the current fiscal year saw a 16.11% decline in leather and leather product export revenue. As a result, it demonstrates that the sector is not experiencing a robust or noteworthy growth. Fiscal Year Leather Export Earnings(in billion US$) 2013-2014 1.12 2014-2015 1.13 2015-2016 1.16 2016-2017 1.23 2017-2018 1.08

What are the Opportunities for the Leather Business Registration in Bangladesh?

Opportunities for the sector

The main benefit of the leather industry of Bangladesh is the ample supply of raw materials. The availability of raw materials is the biggest strength of the sector. As Bangladesh’s RMG is going ahead smoothly, so leather industries of Bangladesh will get a plus point in it. 

When RMG has brought up many leading brands in Bangladesh with their direct presence, they will be very happy to put their own orders of leather products in the same country Bangladesh from where they are sourcing apparels. So the growth of textile and RMG sector is actively helping the growth of leather and allied industries like footwear and other leather goods industry.

Some opportunities are highlighted here:

• Huge untapped international market, as well as the domestic market
• Increasing global demand for value-added, diversified products
• The scope of developing backward linkage business
• High-value addition potential
• Labor intensive; employment opportunities
• Local and Foreign Direct Investment opportunity in value-added leather products sector
• China is losing competitiveness
• Government policies toward leather exporters; GSP, Cash Incentive; etc.
• Increasing International and Local demands for value-added leather products
• International Fashion and sourcing houses in Bangladesh for RMG showing interest in leather products

What are the government initiatives in the leather sector of Bangladesh?

The Bangladeshi government has made numerous efforts to modernize the sector. If the current administration is re-elected in the upcoming election, two additional leather industrial parks will be established in Chattogram and Rajshahi, in addition to the modern leather industrial estate that has already been established by the government in Savar. 

Tanneries from the Hazaribagh region have been relocated to Savar's contemporary, environmentally friendly tannery estate. Tanners now have the option to construct their industrial facility using contemporary ideas. They can incorporate modern hydraulic and pneumatic equipment, use cutting-edge production techniques, and make use of technological advancements. After shifting, the leather industry has very low export earnings. 

The Savar tannery estate is home to about 155 tanneries. Forty or so small tanneries were unable to afford the relocation and ceased operations. However, large tanneries seized the chance to expand their businesses with greater production capabilities by integrating more equipment and technology. The cluster's installed capacity in Hazaribagh was close to 280 million square feet, but these tanneries have set a goal of 450 million square feet of annual production capacity in Savar.

What are the export destinations for the leather industry in Bangladesh?

About 85% of Bangladesh's leather and leather goods are exported to other countries, primarily in the form of crushed leather, blue wet leather, finished leather, leather apparel, and leather shoes. 
The EU, US, Australia, Japan, Singapore, South Korea, etc. are among the countries that import the majority of leather and leather goods. Leather and leather goods market for Bangladesh EU USA Japan Australia Singapore South Korea

Overview of 2nd largest export item in Bangladesh

Due to its comparative labor pool and domestic production of sustainable raw materials, the leather and leather products sector, which ranks second in terms of export earnings after RMG, has seen significant investment recently.  The leather industry in Bangladesh is well-established and comes in second in terms of export revenue. Leather is already a top priority sector due to its high value addition, rapid growth, and employment opportunities. Bangladesh holds a 3% market share for leather and leather-related goods worldwide. Exports account for nearly 60% of its total annual output. Over the past few decades, the export of leather and leather goods has multiplied. Bangladesh's production of finished leather as opposed to a variety of finished products has caused a structural change in the composition of leather and leather goods. From 36.64% of total sectorial export revenues in FY 2007–08 to 60.90% in FY 2017–18, the footwear industry has grown.  Finishing & Tanning  Shoes and Footwear Accessories  Accessory Leather  Bags, wallets, belts, accessories, and other items made of leather Overview As the local market for leather goods expands, the nation's economy is expanding steadily and the middle class is expanding. According to projections, 30 to 40 million people will enter the middle class by 2025, and another 30 million may join the aspirant or emerging middle class.  Particularly, the domestic footwear market has been expanding at a rate of 10–15% annually, with per-capita footwear consumption rising to 3 pairs from 1.7 pairs a few years ago.