Pharmaceutical Company in Bangladesh

How to Establish a Pharmaceutical Company in Bangladesh:

Due to the fact that 98% of the country’s total medicine demand is satisfied by local institutions, the pharmaceutical business in Bangladesh has tremendous growth potential. In addition to serving domestic demand, the enterprises export pharmaceuticals to a number of international markets. During the fiscal year 2019-20, Bangladesh earned 136 million from the export of pharmaceuticals. Moreover, Bangladesh ranks 71st globally out of 134 nations in terms of pharmaceutical exports.

Bangladesh produces homeopathic, unani, and ayurveda medicines in addition to allopathic medications. Presently, there are over 257 pharmaceutical businesses in Bangladesh that produce approximately 80% of generic medications. Presently, indigenous businesses such as Square, Beximco, Reneta, and Opsonin dominate the Bangladeshi pharmaceutical sector.

Industry Analysis of Pharmaceutical Companies in Bangladesh

The pharmaceutical industry in Bangladesh was founded in the 1950s by multinational corporations and local businesses. The British Patents and Designs Act of 1911 exempted Bangladesh, as a least developed nation, from patents in the pharmaceutical business upon its independence in 1971. As a result, the nation’s output of generic drugs began to expand. However, the pharmaceutical sector began to expand in the 1980s. In 1981, Bangladesh had 166 licensed pharmaceutical firms.

However, eight international corporations such as Glaxo, Pfizer, and Hoechst dominated the country’s pharmaceutical production and supplied 75% of the country’s pharmaceuticals. At that time, 25 medium-sized local pharmaceutical companies produced 15% of the nation’s total pharmaceuticals, while 133 companies produced the remaining 10%. All of these enterprises used to produce pharmaceuticals locally using imported raw materials valued at BDT 60 billion annually. Despite having 16 domestic pharmaceutical businesses, 30 billion Bangladeshi Taka worth of pharmaceuticals were imported annually.

Bangladesh’s pharmaceutical value chain is mostly separated into two sections. The first is Active Pharmaceutical Ingredients, or API, and the second is Formulation Complete. API essentially refers to medications that include unique active components to treat certain ailments. On the other hand, Finished Formulation refers to the drug created by combining several substances with Active Ingredients.

In March of 1982, the government established a committee of experts to design a drug strategy. The group develops policies for both the formulations and API industries. However, the previous government only permitted the issuance of the Drugs (Control) Ordinance for the formulations sector, and in June, two other new regulations were established. The first was to restrict the manufacture, import, and sale of hazardous and unnecessary pharmaceuticals, and the second was to ban the products of multinational corporations that did not have their own manufacturing facilities in the country. According to Sudip Chaudhuri’s research, EVOLUTION OF THE PHARMACEUTICAL INDUSTRY IN BANGLADESH, Bangladesh did not remove any of the regulations despite pressure from the U.S. administration at the time.

Market cap-shares of Pharmaceutical Company in Bangladesh

In 2018, the local pharmaceutical market was worth 205.12 billion BDT. The market grew at a CAGR of 16.51 percent between 2014 and 2018. Five businesses control 46.66 percent of the market, according to Square Pharmaceuticals officials using IQVIA data.
Although Square Pharma’s annual sales in 2018 climbed to BDT 1.06 billion from BDT 33.70 billion in 2017, the company’s market share decreased by 0.52% points, from 17.47%.

Incepta’s annual sales are BDT 22.73 billion, Beximco’s are BDT 16.94 billion, Renata’s are BDT 10.66 billion, Health Care’s are BDT 10.61 billion, Opsonin’s are BDT 10.42 billion, ACI’s are BDT 8.99 billion, Eskayef’s are BDT 8.96 billion, Aristopharma’s are BDT 8.42 billion, and ACME’s are BDT 7.21 billion. Square has dominated the market for the past 32 years. The reasons are the doctor’s confidence and the customers’ and people’s trust due to the company’s commitment to ethics, transparency, and honesty.
In 2018, six of the top ten firms, including Square, Beximco, Opsonin, ACI, Aristopharma, and ACME, lost market share due to increased competition.

The research also revealed that the sales of eight companies climbed in 2018, while the revenues of only two companies, namely Opsonin and ACME, declined.

The top ten organizations are very likely to adopt current technology and retain manufacturing and marketing excellence. Consequently, over 70% of the market share is held by these companies. The nation’s leading pharmaceutical corporations are creating the infrastructures and procedures necessary to meet global quality standards.

According to IQVIA data from 2018, the antiulcerants class (acidity) had the largest sales (BDT 30,134.8 million) among the top 20 therapeutic drugs, followed by the cephalosporin class (antibiotic) with sales of BDT 16,876.1 million. The sales rise of antiulcerants was 6.55 percent last year.

Square Pharmaceuticals has sold the most medications in this class. The company manufactures and distributes Seclo medications. Healthcare and Incepta are the second and third best-selling subjects in this category, respectively. Companies sell assidy medications under the brand names Sergel and Pantonix. Human insulin accounted for BDT 7,021.9 million in annual sales, calcium for BDT 7,009.5 million, antirheumatic medications (non- steroid painkiller) for BDT 6,594.1 million, antiepileptic (nervous system drug) for BDT 6508.7 million, and non- narcotic analgesics (painkiller) for BDT 6434.7 million.

LICENSE AND REGISTRATION PROCESS for a Pharmaceutical Company in Bangladesh

In Bangladesh, the Pharmaceutical Company business can be conducted by founding a corporation:

Pharmaceutical Company Formation in Bangladesh:

A company lawfully registered in Bangladesh may participate in any business activity permitted under its Object Clause, as stated in its Articles of Association. A firm in Bangladesh may be either public or private. For the formation of a public company, a minimum of seven shareholders are necessary.

Alternatively, a minimum of two shareholders is required to incorporate a private corporation. A private corporation cannot invite the public to subscribe for its shares, but a public firm can offer its shares to the general public. In actuality, private companies are the most preferred business structure for both foreign and domestic entrepreneurs. There are no restrictions on foreign equity involvement for foreign direct investment, hence 100 percent foreign equity is permitted.

Foreign investment gets the same level of protection and security as domestic investment in Bangladesh. The laws of Bangladesh guarantee non-discrimination between international and domestic investment, as well as the repatriation of share sales revenues and profits.

The following actions must be taken to establish a company:

The prospective company must get a Name Clearance from the Registrar of Joint Stock and Companies.

2. Drafting and signing the following documents: • Memorandum and Articles of Association of the company; • Form I: Declaration On Registration Of Company; • Form VI: Notice Of Situation Of Registered Office; • Form IX: Consent of director to act; • Form X: List of Individuals Consenting to be Directors; • Form XII: Particulars of the directors, manager, and managing agents.
3. Establishing a temporary bank account for the Proposed Company with any Bangladeshi bank on the list
4. Transfer the paid-up capital amount from each foreign shareholder’s account to the Bangladeshi bank account of the proposed company.
5. Obtain an encashment certificate from the Bank of the Proposed Company for each international transaction.
6. Submit the required documentation to the Company House.
7. Pay the Government Registration Fees

Obtain the certificate of registration from the RJSC for a Pharmaceutical Company in Bangladesh:

Required Company Formation Documents:

a) A copy of the Valid Name Clearance for the proposed company; b) an executed copy of the company’s Memorandum and Articles of Association.
c) Executed copy of Form I: Declaration On Registration Of Company; d) Executed copy of Form VI: Notice Of Situation Of Registered Office; e) Executed copy of Form IX: Consent of director to act; f) Executed copy of Form X: List of Individuals Consenting to Be Directors; g) Executed copy of Form XII: Particulars of the directors, manager, and managing agents;
h) Copies of National ID of shareholders and directors (for Bangladeshi Nationals); I Copies of TIN Certificate of shareholders and directors (for Bangladeshi Nationals); j) Copies of passport of shareholders and directors (for Foreign Nationals); k) Passport size photographs of shareholders and directors; l) Bank Encashment Certificate for each foreign shareholder; m) Receipt of payment of the government fees.

In addition to the above-mentioned formats, a firm with 100% foreign ownership may also register as a Branch Office to commence Pharmaceutical Company business. However, a Branch office can only serve the job envisioned by the parent firm if Bangladesh Investment Development Authority has granted prior authorisation. Depending on the expansion/scope of the business, further licenses or approvals may be necessary following the formation of the specific firm.

Additional Permissions for Pharmaceutical Company in Bangladesh

The following are the additional licenses required to create a Pharmaceutical Company industry:
I.Trade License; II. TIN Certificate; III. VAT Registration Certificate; IV. Registration of Industrial Investment Project; V. Factory Layout Approval; VI. Factory License;VII. Membership Certificate; VIII. Import Registration Certificate (applicable for Import Business); IX. Export Registration Certificate (applicable for Export Business); X. Environment Clearance Certificate; XI. Fire License; XII. Registration of Trademark; XIII. Membership of Bangladish Chamber of Commerce and Industry

The procedure for acquiring extra licenses is outlined below:

Trade License Acquiring a trade license is the most crucial prerequisite for launching a business in Bangladesh. Every business entity is required to get a Trade License from the appropriate local government body. To obtain a Trade License, a complete application must be submitted to the appropriate local governmental entity (i.e., City Corporation/Municipal Corporation/Union Parishad) along with the required documentation.

TIN Certificate for a Pharmaceutical Company in Bangladesh:

The Government of Bangladesh issues a TIN Certificate to individuals and businesses in order to monitor tax payments. The National Board of Revenue (NBR) is the only organization authorized to issue TIN Certificates. To receive the TIN Certificate, one must submit an online application to the NBR.

VAT Certificate for a Pharmaceutical Company in Bangladesh:

Every business must have a Business Identification Number in order to function (BIN). A BIN can be obtained through the National Board of Revenue’s VAT registration process. Every business organization must get a certificate of VAT registration. To obtain the VAT Certificate, the NBR must receive an online application along with the required supporting documentation.

Registration of Industrial Investment Project: Local or foreign industrial businesses in Bangladesh must register with the Bangladesh Investment Development Authority (BIDA). To register an Industrial Investment Project with the BIDA, an application and the required documentation must be submitted.

Factory Layout Approval:

Prior to the use, modification, or enlargement of any dwelling, building, or premises as a factory, the Department of Inspection for Factories and Establishments (DIFE) must grant written approval. The DIFE must receive an application accompanied by the required documentation in order to grant approval for the proposed layout.

License of Factory: Each owner or occupier must submit an application for registration and license of factory to the Department of Inspection for Factories and Establishments (DIFE) within thirty (30) days prior to the start of work for factories.

After establishing the related business, the entrepreneur must become a member of a local Chamber of Commerce and Industry or pertinent Trade Association. The membership application is accessible at the office of the respective Chamber of Commerce or Trade Association.

Certificate of Import Registration and Certificate of Export Registration for Pharmaceutical Company in Bangladesh:

An importer who possesses an Import Registration Certificate (IRC) and an exporter who possesses an Export Registration Certificate (ERC) are able to import and export any permissible goods without any value or quantity restrictions or approval from any authority. The Office of the Chief Controller of Imports and Exports (CCI&E) provides applicants with Import Registration Certificates and Export Registration Certificates. To obtain the IRC or ERC, an online application and supporting documentation must be submitted to CCI&E.

Environmental Clearance for Pharmaceutical companies in Bangladesh

In Bangladesh, the Environment Clearance Certificate (ECC) is one of the essential permits required to launch an industrial unit or project. To get this Certificate, the owner of the industrial unit or project must submit an application to the Department of Environment along with the required documentation.

 Fire License for Pharmaceutical companies in Bangladesh

Buildings and commercial organizations are required to obtain a fire license out of consideration for the environment and to safeguard the safety of the facility and its employees. It is issued by the Fire Service and Civil Defense (FSCD) body functioning under Bangladesh’s Ministry of Interior. To receive this license, the concerned entrepreneur of the industrial unit or project must submit a request to the FSCD along with the required documentation for a Pharmaceutical Company in Bangladesh.

Application for Trademark Registration for a Pharmaceutical Company in Bangladesh:

After the registration of the entity, it may apply to the Department of Patents, Designs and Trademarks (DPDT), which is administered by the Ministry of Industries, for the registration of its trademarks and/or any other Intellectual Property. The Trademark Registry Wing of the DPDT must receive the required documentation for the registration of a trademark from a candidate.

In addition to the Membership Application Form, the following materials must be submitted:

1. Membership Application on Letterhead Pad.
2. Constitution and Articles of Incorporation
3. Incorporation Certificate.
4. Trade License Validity of the Company
5. BOI Registration Certificate
6. Certificate of Taxation for the Company
7. Company’s Certificate of VAT Registration
   Three (3) copies of the Representative’s latest passport-sized photograph and two (2) business cards.

BSTI Certification of Marks (CM) License for a Pharmaceutical Company in Bangladesh:

To use the BSTI Standard Mark, a Certification of Marks (CM) License is required. The following are the steps:

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.

If the inspection report is deemed satisfactory in Step 3, then random samples are gathered and signed and sealed by the BSTI Officer and the producer.

Step four: The obtained sample is analyzed 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).

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, withdrawn, or revoked at any time if it is determined that the license has violated any of the requirements outlined in the license and the BSTI Ordinance.

Legal Issues:

Foreign Investment Law in regards to Pharmaceutical companies in Bangladesh:

The liberalized Industrial Policy and export-oriented, private sector-led economic strategy of Bangladesh offer substantial investment prospects to foreign businesses and individuals considering investing in Bangladesh. Except for a few regulated industries, Bangladesh welcomes private investment in all areas. The Pharmaceutical Company industry is completely open to foreign investment.

The government’s objective is to facilitate the increase of domestic and international private investment by fostering an enabling environment. The policy framework for foreign investment in Bangladesh is based on the Foreign Private Investment (Promotion & Protection) Act of 1980, which provides legal protection against nationalization and expropriation for foreign investment in Bangladesh. This also provides a non-discriminatory handling of international and local investments, as well as the repatriation of capital gains and income.

The Foreign Exchange Regulations Act of 1947, the Bangladesh Export Processing Zones Authority Act of 1980, the Bangladesh Private Export Processing Zone Act of 1996, the Bangladesh Economic Zone Act of 2010 and the Bangladesh Investment Development Authority Act of 2016 also address foreign investment.

Employment Law in regards to Pharmaceutical Company in Bangladesh:

The Labour Act of 2006 primarily governs employment law in Bangladesh. In addition to this Statute, the Labour Rules 2015, the National Labour Policy 2012, the Bangladesh Labour Welfare Foundation Act 2006, the Bangladesh Labour Welfare Foundation Rules 2010, the National Occupational Health and Safety Policy 2013, the Domestic Workers Protection and Welfare Policy 2015, and the National Child Labour Elimination Policy 2010 all contain rules and regulations pertaining to this issue.

The Labour Act of 2006 addresses employment of labor, employer-employee relations, payment of wages and compensation for injuries to workers, leaves, benefits, formation of trade unions, resolution of industrial disputes, welfare, health, safety, and working conditions in the establishment, amongst other matters. Additionally, maternity benefits are provided to female employees. Note that if the company is established within an EPZ, the Bangladesh EPZ Labour Act 2019 will apply.

Contract Law: The center of the economic world is contractual agreement. It specifies the obligations and responsibilities of the parties on the subject of the contract. A contract binds both parties to its agreed-upon and stipulated conditions, such as the party’s liability in the event of a breach of contract and the extent to which it would reimburse the other party’s damages. It is advisable to take the utmost care while drafting the contract’s terms and conditions so that they accurately reflect the parties’ intentions. The Contract Act of 1872 governs all contracts in Bangladesh.

A force majeure event is an extraordinary occurrence or scenario beyond the parties’ control, such as an act of God, war, or natural disaster. Generally, a successful use of the force majeure clause releases the parties from their respective contractual responsibilities and/or liability.

A force majeure in Pharmaceutical Company clause does not totally excuse a faction’s failure to comply, but merely suspends it for a period of time. Section 56 of the Contract Act of 1872 of Bangladesh outlines the notion of frustration. According to this doctrine, a contract is null and void if its performance becomes impossible owing to the occurrence of an event or if it becomes unlawful after it has been entered into.

Compliances of the business entities – The entities must comply with the annual filing requirements, such as updating trade license at the respective city corporation, renewal of chamber membership, renewal of IRC & ERC, filing taxes, updating the annual filings at the RJSC, reporting to Bangladesh Bank, NBR, etc.

Property Law: In order to finalize the registration of the lease or purchase of the land, property laws must also be applied. The Land Reform Act of 2014, the East Bengal Tenancy Rules of 1954, the Survey Act of 1875, the Non-Agricultural Tenancy Act of 1949, the Registration Act of 1908, and the Transfer of Property Act of 1882 are the major statutes in these sectors.

Introduction to the services of Tahmidur Rahman Remura Wahid in regards to Pharmaceutical Company in Bangladesh:

Tahmidur Rahman Remura Wahid TRW Associates (TAHMIDUR RAHMAN REMURA) is a full-service corporate law practice that attempts to provide customers with a comprehensive spectrum of legal services as opposed to specializing on a single area of law. It is one of the largest and most reputable law companies in Bangladesh, providing domestic and international customers with legal counsel that fulfills their needs and expectations. Tahmidur Rahman Remura Wahid offers all services associated with Company Incorporation, Sole Proprietorship, Partnership, and Foreign Company Registration, among others.

The Tahmidur Rahman Remura Wahid Law firm has legal professionals who can guarantee a smooth legal process and assist in obtaining Certificates or Licenses required for Company Incorporation, such as VAT Certificate, IRC/ERC, Name Clearance, Factory/Fire/Environmental License, TIN, Trade License, and other certificates.

In order to establish a Pharmaceutical Company in Bangladesh, Tahmidur Rahman Remura Wahid can give the following services:

Tahmidur Rahman Remura Wahid offers a great and experienced team that can set up a Pharmaceutical Company business efficiently and without difficulty. The legal counsel of Tahmidur Rahman Remura Wahid is able to assist clients with any form of business incorporation through consultations and discussions.

In order to incorporate any form of business, a number of deeds, contracts, and other documents must be created. The legal experts at Tahmidur Rahman Remura Wahid can assist clients in formulating and writing these documents.

Before establishing a business, it is necessary to find an appropriate piece of land. Tahmidur Rahman Remura Wahid can provide a service to the client by locating an ideal place for the client’s business establishment. In addition, Tahmidur Rahman Remura Wahid can assist with the drafting of lease agreements, the inspection of land by the appropriate land registry office, the preparation for the acquisition of land, including registration, and so on.

Tahmidur Rahman Remura Wahid can also assist with the payment of government fees to the appropriate body, such as BIDA or RJSC, and interact with them to get the necessary documentation for business incorporation. Legal professionals, such as TAHMIDUR RAHMAN REMURA, have excellent working relationships with government authorities, making it easy to obtain any certificate or license.

Trademark/Copyright/Patent registration is sometimes required to incorporate a Pharmaceutical Company in order to obtain protection against infringement, to add value to the organization, and to increase legal protection. Tahmidur Rahman Remura Wahid aids its customers in registering for

Trademark/Copyright/Patent from the Department of Patents, Designs, and Trademarks (DPDT), providing the legal protection of the company.

Tahmidur Rahman Remura Wahid also offers services for obtaining or renewing any form of license; for operating a Pharmaceutical Company business in Bangladesh, it is necessary to obtain multiple licenses. The legal experts at Tahmidur Rahman Remura Wahid can aid with acquiring these licenses and, if necessary, renewing them on time.

Tahmidur Rahman Remura Wahid provides clients with labor-related services, such as creating employment agreements, resolving labor-related issues, and rendering legal opinions on labour legislation.

Tahmidur Rahman Remura Wahid is able to provide counsel and assistance to ensure that a company’s routine operations function smoothly.

Impact of COVID-19 on business

While the entire world is urging people to remain at home for safety reasons, this has had a devastating effect on the global economy. In order to safeguard its citizens from the COVID-19 pandemic, the Bangladeshi government has resorted to a lockdown mechanism, as have other governments around the world. However, this has had a negative impact on the country’s economic sectors, particularly export-oriented companies.

Economic Package COVID-19 for the sector:

The Bangladeshi government has announced stimulus packages totaling Tk 95,619 crore (3.3% of the country’s GDP) to combat the potential negative effects of the COVID-19 outbreak on the national economy. The government has offered export-oriented firms a Tk 5,000 billion “stimulus package” to pay workers’ wages. The fund may only be utilized to compensate workers and employees in export-oriented industries with salary and benefits. In addition, the government would give significant enterprises and service sectors affected by COVID-19 with operating capital of Tk 30,000 billion at an interest rate of 4.5 percent. Although the loan’s interest rate will be 9 percent, the government will subsidize the remaining interest paid by each bank.

Taxation for Pharmaceutical Company in Bangladesh:

The current general tax rate in Bangladesh is 32.5 percent, as stipulated by its legislation. Locally created limited liability companies are required to submit a variety of reports to the National Board of Revenue (NBR), including: opening a Tax Identification Number (TIN), submitting an annual return, and submitting an annual return for the previous year. Monthly Tax Deduction Statement, Semi-Annual Withholding Tax Statement, Annual Statement Relating to Employee Tax Return Filing, Annual Statement Relating to Salary Paid by the Company to Employees. Quarterly Advance tax deposit, Annual tax return submission, representing the company at appeal/hearing sessions, Monthly VAT return, 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.

The article’s information may be influenced by market data system outages or faults, both internal and external, as well as by the rapid occurrence of market events. The report may contain forward-looking statements, projections, estimates, and forecasts that are based on reasonable assumptions and information currently available to us and are subject to certain risks and uncertainties.

Numerous unknown or uncontrollable risks and uncertainties may cause actual results to differ materially from the results, performance, or expectations expressed or implied by such forward-looking statements. All investors should be warned that the forward-looking statements contained in this report are not assurances of future performance. Prior to making any investment, investors should exercise sound discretion and conduct thorough research.

All opinions and estimations in this report are subject to change without notice and without legal liability due to unforeseen circumstances. Tahmidur Rahman Remura Wahid TRW disclaims any duty to update or alter any such forward-looking statements to reflect new information, events, or circumstances after the article’s publication to reflect the occurrence of unanticipated events and their outcomes.

Are you intending to set up a Pharmaceutical Company in Bangladesh?

Get your Pharmaceutical Company in Bangladesh set up 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 acquiring a Pharmaceutical Company in Bangladesh. For queries or legal assistance, please reach us at:

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