Overview

Bangladesh has witnessed extraordinary growth in recent years. Its GDP has consistently clocked at a 6-7% rate, reflecting its unprecedented potential. In the status quo, this nation is brimming with limitless possibilities for businesses worldwide. Its corporate and industrial sector is thriving like never before, allowing more investors to get on board.

Its strategic geolocation connects with nations like China, India, etc., showcasing its EXIM potential. Starting a venture in this country can be a great decision, provided you know where and how to start. You may need to address the plenty of legalities to set up a venture here. Let’s drill down what these legalities are all about. We will also take a closer at regulations around company registration in Bangladesh.

Why choose Bangladesh for your business endeavors?

Bangladesh is one of the few Asian nations that offer innumerable benefits to investors globally. Some of them are listed below:

Remarkable Economic Growth

Bangladesh’s GDP has remained consistent over the year, precisely clocking at 6% on average. The healthy export rise and the influx of overseas funding contribute to its extraordinary growth.

Phenoneamal Foreign Direct Investment (FDI)

Bangladesh has been brimming with overseas funding coming from several nations. In 2020, the nation registered $3.1 billion of foreign funding. This figure jumped to 3.5 billion in 2022, making Bangladesh a premier investing hub.

Unmatched Textile Industry

There is an excellent demand for Bangladeshi garments worldwide- thanks to the ever-growing textile hub, which is amongst the world's second-largest.

Growing ICT Sector

Even the IT sector of the country is witnessing steady growth and is poised to attract ample overseas investment.

Thriving Healthcare and Education Sector

The growing economy is fueling the growth of the healthcare and education sectors, giving more investment options to entrepreneurs globally.

Strategic geolocation

Bangladesh enjoys strategic geolocation, ensuring comprehensive connectivity with several nations. This helps strengthen import-export capabilities, making it ideal for businesses seeking seamless logistics.

Simplified Incorporation

The government-backed scheme like 'One Stop Service' has simplified the lethargic incorporation process, leading to faster registration.  This facility is available to both local and overseas entities.

Ease of Doing Business

Bangladesh ranks among the top nations for fostering a conducive corporate environment and ensuring ease of doing business. The liberalized regulations allow diverse businesses from local or overseas locations to operate seamlessly, making Bangladesh an ideal business hotspot.

Legal Structures for Company Registration in Bangladesh

Bangladesh’s legal structure offers several business models suitable for different types of entities. Select a business structure that aligns with your objectives and corporate needs. Some common structures available for Company Registration in Bangladesh include LLC, PLC, Branch Office, subsidiary company, etc.

Bangladesh LLC (Limited Liability Company)

The LLC, or limited liability company, is legally distinguished from its members, mitigating unnecessary risk for shareholders’s assets. None of the members are liable to address the entire losses borne by the company. Instead, they only have to pay up to the extent of their contribution.

PLC (Public Limited Company)

A Public Limited Company is entitled to be listed on the recognized stock exchange. These entities can issue shares and debentures accessible to the public.  Legally, at least three directors must serve such a business structure.

Branch Office

Setting up a branch office is one of the standard practices for initiating business undertakings in Bangladesh. It is much simpler to open a BO instead of an LLC, which attracts a myriad of legalities. The Bangladesh Investment Development Authority legalizes BOs in any jurisdiction; hence, their approval is mandatory before commencing commercial undertakings.

Representative Office (RO)

The representative office adheres to operational limitations imposed by the law. They can only indulge in business activities such as sharing business info, securing corporate details, and liaising with concerned agents. You can visit the Bangladesh Investment Development Authority to legalize the RO.

Subsidiary Company

Unlike LLC, a subsidiary company has an extended operational ability. They can run their separate affairs but are answerable to the parent company.

Corporate Tax Structure in Bangladesh

The following tax structure applies to the corporate landscape in Bangladesh. Adherence to the underlying tax rates is vital to staying compliant. Before you rush to the authority for company registration in Bangladesh, knowing the applicable tax rates is vital.

Statutory Tax Rate

The standard corporate tax rate has been capped at 27.5 %, applicable to private entities such as BOs, liaison establishments, unlisted entities, etc. The 30% rate applies to the following:

• All receipts and earnings come via banking sources and
• Funding and Expenses crossing the threshold amounting to BDT 500,000 separately, or BDT 3.6 mi overall yearly, via banking channels

The table below depicts the tax rates active in the status quo:

Capital Gains

• Statutory Tax Rate- 15 %
• Surtax Based on Statutory Tax- Nil
• Surtax Based on Income falling under taxation regime- Nil
• Statutory Tax Deductable-Nil
• Surtax Deductible from Taxable Income- Nil
• Effective Tax Rate-15 %

Note: Entities ensuring capital gains via the sale of tangible assets like shares are taxable at the rate of 15 percent.

Company Registration in Bangladesh: Required Paperwork

The following paperwork is required for Company Registration in Bangladesh:

• Charter documents such as MoA and AoA.
• Details concerning authorized signatories
• Address and ownership proof of the establishment in question.
• Details about members, or subscribers, or shareholders, depending on the structure chosen.
• Prescribed application form as per the chosen business structure
• Agent details liable for addressing incorporation formalities, if any

Guide to Secure Company Registration in Bangladesh

Choose the following steps to secure company registration in Bangladesh:

Step 1: Select a business structure

Structure selection is critical as it has everything to do with your business's success. The structure you choose will define how much compliance will come into play, how much taxes you will pay, and how often your finances will undergo inspection. So, selecting based on these facts is vitally essential.

Step 2: Register the company name

Head to the Registrar of Joint Stock Companies and Firms (RJSC) to perform name searches and reservations. While evaluating, ensure that the selected name is non-offensive and trademark-free to avert any legal hindrances.

Step 3: Arrange the documents

Arrange required paperwork such as Form X11, shareholder’s passport, and charter documents (MoA and AoA).

Step 4: File application

Head to the authority concerned to apply for the incorporation certificate. The application shall be filled with legit information and attest required paperwork.

Step 4: Secure industry-specific approvals

The industry-specific approvals include trade licenses, factory licenses, permits from local bodies, etc. Their applicability will depend on the business type and the legislation being followed.

Step 5: Secure TAN and BIN

TAN and BIN stand for Tax identification number and Business Identification Number, respectively.  Both serve as legal approvals issued by the National Board of Revenue (NBR). The TIN helps with tax filing, and the BIN allows for VAT submission. VAT only applies to entities reaping annual revenue over 30 Lakhs taka.

Step 6: Corporate bank account opening

Lastly, you must open a corporate bank account for business transactions. Typically, directors and shareholders need not present in person to open a corporate bank account.

Compliances Around Company Registration in Bangladesh

• LLC can boast as many as 50 members and as few as two. The member should not be a minor, nor should they possess any criminal record.
• The LLC must have at least two directors handling its business affairs, and there is no cap on their nationality or residency. The members are liable to abide by the underlying power and duties.
• The incorporation conditions for a subsidiary company include the presence of at least two directors and two shareholders (no cap on nationality), 50 shareholders (max limit), and $1 of minimum paid-up capital.
• Unlike an LLC, PLCs must secure a Certificate of Commencement of Business beforehand to initiate business endeavors.
• A branch office is liable to share their account statements of remittances with the authority concerned quarterly. The financial dossiers must undergo scrutiny performed by the appointed statutory auditor.
• ROs cannot perform overseas trade, rent space office, transact property, etc. It serves as an aid to the foreign parent company.

Adviso: Your Reliable Partner for Company Registration in Bangladesh

Adviso has poised itself at the forefront of the compliance and licensing realm. Our unwavering commitment and unmatched support have helped many clients go global successfully. We can overcome any obstacles or legal barriers that hinder your global ambition. Connect with us today to start your business with confidence and clarity.

Why Us?

• Hands-on experience dealing with overseas regulations.
• Leveraging field experts to overcome barriers leading to establishment issues.
• End-to-end support concerning global incorporation, dispute settlements, and mandatory approvals.
• Fostering a team of professionals serving key areas like taxation, compliance, licensing, customer support, etc.