Company Registration in Bangladesh-Overview Bangladesh is one of the fastest-growing economies in the world. It has attracted numerous investors across the globe who are now considering company registration in Bangladesh to set up businesses in various sectors or industries. Bangladesh is home to the longest sea beach and largest mangrove forest on the planet Earth. It's a nation with steady annual economic growth over the past years. Bangladesh is one of the hubs for foreign investments in diverse industries due to open and investor-friendly government policies, low-cost labour, and the possibility of carrying out cost-competitive business within the country, thus attracting foreign investments. If you are seeking company formation in Bangladesh, an applicant needs to understand Bangladesh's different types of business structures and their mandatory requirements. Bangladesh offers an open gate to foreign investors to invest in various industries except defense, mining, nuclear energy, and forest plantation industries. Thus, Bangladesh is considered one of the ideals for global trade. Benefits of Company Registration in Bangladesh In recent years, Bangladesh has emerged as a hub for foreign investors to set up a company in Bangladesh. A company registration in Bangladesh has numerous benefits and advantages; here is the list of benefits: 1. Macroeconomic Environment Bangladesh is part of Next Eleven, a group of developing countries with potential growth and development. Due to various factors like macroeconomic, political stability, education quality, and openness to trade and investments, Bangladesh has been chosen to be part of Next Eleven. This has resulted in the establishment of new businesses to capitalize on, thus attracting new business registration in Bangladesh. 2. Easy Foreign Ownership Bangladesh is wide open for foreign investment and trade. It allows full ownership and no restrictions on appointing directors and shareholders from any country, thus easing foreigners' setup of a business in Bangladesh. 3. Attractiveness for FDI Bangladesh is an East Asian part of the globe, significantly performing better in the world post-pandemic in terms of foreign direct investment. As per the 2020 Global Investment Trends monitored by the UN Conference on Trade and Development, East Asia rose by 12%, and global FDI inflows fell by 42%. This signifies Bangladesh's potential to contribute to East Asian economic development. 4. Labour Force Bangladesh is also famous for low-cost producers of textiles and garments, which provide low-cost labour. They also have higher-skilled labour as part of Digital Bangladesh, a government initiative training skilled labour. Such initiatives are supported by the establishment of tech-centric economic free zones in the country, thus offering a good synergy for business dealings in such sectors. 5. Tax Incentives A company registration in Bangladesh also enjoys certain tax benefits, such as full tax exemption on income tax, dividend tax, capital gain tax, and duty-free imports. These duty-free imports benefit both export-import firms and manufacturing firms. 6. Bangladeshi Economic Zones Bangladeshi economic zones have eased the complications of doing business in Bangladesh by simplifying the customs declaration requirements and facilitating a smooth flow of goods. This has resulted in cost-efficient and less time-consuming. 7. Suitable Location Bangladesh, located along the Bay of Bengal, provides access to many maritime trading routes. It serves as a channel for maritime trade for its neighboring countries, making Bangladesh a regional hub for trade. 8. Free Trade Agreements Bangladesh is a member of multiple international organizations, such as the WTO, World Bank, IMF, and South Asian Association for Regional Cooperation, which enables companies registered in Bangladesh to easily and cheaply export goods in international trade. Types of Companies in Bangladesh An applicant needs to choose the correct type of company before starting the procedure for company registration in Bangladesh. Given below is the list of types of companies in Bangladesh: 1. Private Limited Company A private limited company is a separate legal entity, separate from its owners or distinct from its shareholders. It is the most flexible business entity, which can be a 100% foreign-owned company. Meanwhile, it limits the liability of its shareholders to the amount of unpaid shares they hold. Some of the key features of a Private Limited Company are: Must have a minimum of 2 and a maximum of 50 shareholders. Restricted to invite the public to subscribe to shares or debentures. Restriction on share transfer. A minimum paid-up capital of BDT 1. Minimum two directors 2. Public Limited Company According to the Companies Act 1994, a Public Company is a company that can be formed by at least seven persons as members, and such membership is open to the public. Additionally, the shares of a public limited company are registered in a stock exchange and can be traded publicly. Some of the key features of Public Limited Company: Minimum requirement of 7 members. There is no maximum limit to members. 3. Subsidiary Company A subsidiary company is a legal entity which a parent company controls. The key criteria for a subsidiary company are as follows: The minimum number of shareholders is two 51% to 100 % foreign investment is allowed 4. Branch Office (Foreign Owned) Any foreign company seeking to start its business operation in Bangladesh may opt for a branch office. This is another type of company registration in Bangladesh controlled by the foreign parent company. The key criteria for the Branch office are as follows: It is not a separate legal entity yet controlled by a foreign parent company. 100% foreign direct investment is allowed. Eligibility Criteria for Company Registration in Bangladesh Given below is the list of eligibility criteria to obtain a company Registration in Bangladesh: A person above 18 years old (Both foreign & Local). Minimum 2 Directors (either local or foreign). A minimum of two and a maximum of 50 shareholders are required for a private limited company. 100% local or foreign shareholding is permitted in most business sectors. There is no minimum limit on Paid-up capital; however, the common practice is to have a minimum paid-up capital of 100,000 BDT (around $1000). Minimum Authorised Capital is 1,000,000 BDT (around $10,000). All the Directors and Shareholders can be foreigners. Documents Required for Company Registration in Bangladesh In order to obtain a Company registration in Bangladesh, given below documents are required to be attached with the application before the concerned authority: Utility bill for last three months Shareholders' Details and Information Business Proposed name KYC details of Directors Copy of passport of both shareholders and directors (for foreigners) Bank Account Statement having Address Steps to Register a Business in Bangladesh Applicants looking forward to opening a company in Bangladesh must undergo a procedure before obtaining the registration certificate. The following is the step-by-step procedure to register a business in Bangladesh: 1. Choose the Type of Business Before starting the company registration process in Bangladesh, the applicant must choose the right type of business structure aligned with the business goals and objectives. LLC (Limited Liability Company) is the most common company registered in Bangladesh. 2. Company Name Reservation Obtain a name clearance for a company’s name through the RJSC (Registrar of Joint Stock Companies and Firms). 3. Corporate Bank Account Opening Foreign shareholders must open a bank account in the proposed company's name with the Bangladesh Schedule Bank. A minimum paid capital may be deposited in the said bank account or equal to the shares to be owned by the foreign shareholder. Typically, Directors and shareholders must travel to Bangladesh to open a corporate bank account. 4. Preparation and Submission of Relevant Documents The applicant company must submit all the necessary documents and information, such as Form X11, copies of shareholders' passports, MoA, and AoA, on the RJSC official website. A bank payment slip shall be sent to the applicant to pay the registration fees and stamp duty. Therefore, an applicant will be granted a certificate of Company Incorporation upon completing company registration in Bangladesh. 5. Trade License Application After obtaining a business registration certificate in Bangladesh, every company must obtain a trade license from the city corporation in the province where the company's business operation is set up. 6. Tax Registration Lastly, the company must obtain a TIN (Tax Identification Number) and BIN (Business Identification Number) from the National Board of Revenue (NBR). A company in Bangladesh with a turnover of more than 30 lakhs taka has to pay a VAT to the concerned government. Post-Registration Formalities for Company Registration The applicant company, after obtaining a company registration in Bangladesh, needs to apply for a Trade License, Tax Identification Number, and various other business licenses depending upon the type of business structure. Given below is the list of such post-registration formalities: 1. TIN Certificate Every company starting a business in Bangladesh must obtain a Tax Identification Number (TIN) from the taxation authority, i.e., the Deputy Commission of Taxes of Company Circle, Zonal Taxation Department. 2. Acquire Trade License After the company registration in Bangladesh, it is also mandatory for a company to obtain a trade license from the local government where the business is set up. 3. Acquire VAT Registration Certificate Companies must also obtain a VAT registration certificate after complying with the Customs, Excise, and VAT Commission under the authority of the National Board of Revenue. 4. Fire Certificate An applicant may obtain a fire certificate from the concerned authority. This certificate has been introduced as per the Firefighting Act of 2003, Bangladesh, to secure safety measures at business premises. 5. Environment Clearance Certificate Any company dealing with hazardous materials or processes must obtain an environmental clearance certificate to ensure an environmentally friendly and respectful business environment in Bangladesh. Who is the Regulatory Authority for Company Registration in Bangladesh? The Registrar of Joint Stock Companies and Firms (RJSC) is the primary regulatory body responsible for company registration and keeping Company records in Bangladesh. However, the primary responsibility includes company registration and acceptance of returns, thus ensuring the accuracy of company-related information. Company Tax Rate in Bangladesh In Bangladesh, a company needs to pay corporate tax on its profit, and in case no profit is incurred, no tax has to be paid by the company, subject to the following conditions: Income tax returns are to be filed annually between July and June. The company will pay a minimum tax of @.60% of gross revenue even if they lose in a year. Bangladesh Company Registration Fees The overall fees for Bangladesh company registration are around 1200 USD or 1,39,960 BDT. These expenses include legal documents preparation, company registration, company local address registration, taxes, and professional fees. Company Registration Timeline in Bangladesh The minimum time period for obtaining company registration in Bangladesh is 7 days to 12 days, depending upon the readiness of the necessary documents and legal requirements. Why Choose Enterslice? Enterslice is one of the renowned consultancy companies in India, helping businesses and entrepreneurs meet their day-to-day business requirements. Company registration in Bangladesh can be troublesome if the right guidance is not addressed. Therefore, one is suggested to take the help of experts to navigate the legal landscape for business registration in Bangladesh. We shall help our clients by finding a soothing business structure aligning with the goals and objectives of an applicant's business vision. We have the most cost-effective fees compared to the markets, ensuring customized solutions with 100% client satisfaction.
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