Due to its convenient location near two large seaports for exports, its low cost to establish a business and continuous rapid growth, investors are quickly identifying Bangladesh as a promising emerging market. Additionally, it offers tax holidays and exemptions, economic zones and a simplified process to import raw materials and machinery, making it even more attractive for foreign investment. Bangladesh has its own unique regulatory guidelines for setting up and operating foreign-owned companies.
Before setting up your business, there are a few things that you will need to consider. For example, you will need to provide a local address to use as your registered address. This must be a physical address. LegalGenius™ can assist you with establishing a local, registered office.
Additionally, you will need to open a corporate bank account and deposit your initial paid-up capital. The process to set up a company in Bangladesh has been simplified for foreigners. All directors and shareholders can be foreigners. Additionally, you can complete the company incorporation process without having to visit Bangladesh.
You will not need to obtain any special visa to incorporate a business in Bangladesh. A business visa should be adequate if you want to visit periodically or attend company events on a short-term basis. However, if you want to relocate here, you will need to obtain a work permit.
Types of Business Entities
There are several different types of entities that you can set up in Bangladesh, including:
Limited liability company
The most common and preferred type of business entity in Bangladesh for foreign businesses is a limited liability company. The most compelling reason for most foreign investors to set up this type of business is that private limited company shareholders are not liable for the debts of the company that exceed the amount of share capital they have contributed. Most sectors in Bangladesh allow 100% foreign ownership.
At least two directors must be appointed to set up a limited liability company in Bangladesh. These directors can be local or foreign. However, they must be at least 18 years old and must not have ever been convicted of malpractice in the past and must not currently be bankrupt. The articles of association for this type of business must state information about qualification shares that the directors must own.
There must also be at least two shareholders. There can be up to 50 shareholders, which may be natural persons or corporations. Directors can simultaneously be shareholders. After the incorporation process has been completed, additional shares can be issued and shareholders can transfer their shares to others.
You must prepare the memorandum of association and articles of association as part of the incorporation process. The memorandum of association must state the authorized capital. Bangladesh does not impose a minimum or maximum amount of authorized capital. The minimum paid-up capital to register a company in Bangladesh Taka 1. This amount can be increased after the incorporation process.
Limited liability companies in Bangladesh must submit audited financial statements to the Bangladesh Income Tax Authority every year.
Public limited company
Public limited companies are necessary if you want to trade shares on the Dhaka Stock Exchange.
To set up a public limited company, you will need to have at least seven shareholders who can be individuals or businesses. You must also need a minimum of three directors of any nationality. Public limited companies can raise public funds. These companies must comply with Bangladesh’s Securities and Exchange Commission Act 1993.
Alternatives to setting up a company in Bangladesh
Businesses that want to test the market or only engage in certain activities in Bangladesh may wish to use an alternative to setting up a company in Bangladesh, such as:
A branch office is considered an extension of an overseas parent company and not its own separate entity. It must register with the Board of Investment and comply with its regulations. Branch offices can engage in commercial activities if they have the Bangladesh government’s approval. The parent company is liable for the branch office’s liability.
Branch offices must submit quarterly remittance statements and are subject to audit.
A representative office is permitted if there is a parent company abroad. This type of office cannot earn any local income or engage in commercial activities. Instead, it is used for coordination, communication and marketing efforts. The parent company pays all of the expenses and operational costs of the representative office.
The representative office must register with the Board of Investment, the Registrar of Stock Companies and Firms, and the Bangladesh Bank.
How we can help you
If you are considering forming a business or you need expert help with company registration in Bangladesh, LegalGenius™ is ready to assist you with its skilled team of lawyers, consultants and tax experts. We are committed to making the process as stress-free and streamlined as possible for you, and we will take care of all your document preparation and administrative tasks regarding the registration forms, payment of government fees, local address registration, banking support, etc., whilst always keeping your exact objectives and unique vision in mind throughout the process.
Please use our Company Formation Wizard if you would like to set up your registered company in Bangladesh or if you would like to know the costs involved prior to proceeding with our exceptional services. For other queries and special requests for complex or customised company formation services, please contact us at email@example.com