A foreigner can set up in Bangladesh a fully-owned limited company or conjointly with a local resident. In order to register a fully-owned limited company, permission is required from the Bangladesh Investment Development Authority. In addition, permission of the Bangladesh Investment Development Authority is required for opening of branch, liaison or representative office.
If a foreigner wants to set a limited company with a local resident as a shareholder, permission of the Bangladesh Investment Development Authority is not required. There is a streamlined and simple procedure which may be completed within 3-10 working days.
Firstly, a name clearance of the proposed company is required from the Office of the Registrar of Joint Stock Companies and Firms (RJSC).
Secondly, the Memorandum of Association and Articles of Association have to be composed. These shall contain the details of the proposed company including its name, registered office address, objects clause, names of subscribers or shareholders and other internal rules governing the management of the company. It is important to execute a commercial property rent agreement prior to registration of the company.
Third, a temporary bank account has to be opened in a scheduled bank and the amount equivalent to the share capital of the foreign investor has to be inward remitted in the said bank account. The bank will then issue an Encashment Certificate for submitting it to the RJSC.
Fourth, application for company registration has to be filed through the website of the RJSC. The copies of the passport/national ID card of each of the shareholders, photographs and encashment certificate for the foreign investor will be required in filing the application.
Once the company is registered, the RJSC will issue a Certificate of Incorporation. The certified copies of the Memorandum of Association, Articles of Association and List of Directors (Form XII) can be collected upon payment of required charges.
Registration of a company does not mean that one can start doing business.
Income tax and VAT registration
The company registered shall have to obtain tax identification certificate (TIN certificate) and VAT registration from the National Board of Revenue. This may take up to 3-15 working days.
Once the aforesaid formalities are completed, the business can be said to be legally registered. Depending on the nature of business and industry concerned, other relevant licenses and permissions will be required to be obtained prior to its full operation, which may encompass export/ import registration certificate, fire license, environment clearance certificate, factory license, membership of concerned trade association.
The video herein contains a detailed discussion on company registration procedure:
Barrister Shanjid Siddique discussed about company formation and start-up business which was telecasted in ATN Bangla on 17 November 2020 in its program Law and Order. He has discussed about procedures of registering foreign companies, authorized and issued share capital, investing in economic zones and procedure of obtaining permission from Bangladesh Investment Development Authority (BIDA)
