Business Startup Process in Bangladesh

How to incorporate a company in Bangladesh?

An entrepreneur has to follow nine specific procedures and legal steps to set up a business in Bangladesh. At the very first, the entrepreneur has to apply to Registrar of Joint Stock Companies and Firms (RJSC) for Name Clearance Certificate. After receiving the certificate, the next step is to pay stamp duty at a Designated Bank and again apply to RJSC for registration. Then the company makes seal and open a bank account and then apply for trade license to respective City Corporation or Municipal Corporations. After completing all those procedures, the entrepreneur has to approach to the National Board of Revenue (NBR) for receiving TIN Certificate and registering with the Customs, Excise, and VAT Commissionerate. Finally, the investor requires to apply to the Bangladesh Investment Development Authority (BIDA) for registration. The process at very high level looks like the following chart:

PROCEDURE 01

Name Clearance Certificate for Company

The first step is to apply to Registrar of Joint Stock Companies and Firms (RJSC) for receiving name clearance certificate. This is a pre-requisite for registration of a new company (other than Foreign Company and Partnership firms) or a society or a trade organization. An applicant needs to apply via RJSC website. The RJSC office will check the database and issue name clearance if it does not closely match or resembles with any of the existing names. It will be valid for next 180 days. An applicant will have to apply for registration within this timeline.

Legal Basis of the Certificate, The Companies Act 1994

Responsible Agency, Registrar of Joint Stock Companies and Firms (RJSC)

 

Process Step

Step 1: Applicant fills in the online application

Step 2: Opening an E-account an RJSC website

Step 3: Preliminary name search on RJSC website

payment of fees to designated Bank

Step 5: Submits  the money receipt

Step 6: Obtain the name clearance certificate

Required Documents

1.  A print out of the name clearance certificate

2. Original copy of Money Receipt

Process map of Name Clearance Certificate for Company

Time Less than one day (online procedure)

PROCEDURE 02

Pay Stamp Duty at a Designated Bank

Payment of stamp duty is made to the account of the Treasury at the BRAC Bank. According to the Stamp Act 1899 as amended on June 30th, 2012, for an authorized share capital of up to BDT 1,000,000, the total stamp duty fees are BDT 4,000. These include BDT 3,000 for affixing stamps on the Articles of Association, and BDT 1,000 for stamps on the Memorandum of Association. In addition, a certified copy of each document costs BDT 50.

Responsible Agency, Designated Bank

Process Step

Step 1: Payment of stamp duty is made to the account of the Treasury at the BRAC Bank

 

Required Documents

No document is required

Process map of Pay Stamp Duty at a Designated Bank

PROCEDURE 03

Register at Registrar of Joint Stock Companies and Firms (RJSC)

The promoters of a new entity (having name clearance, where applicable) apply for registration with necessary documents, prescribed forms & schedules and fees, as appropriate to the entity type. The promoters prepares Memorandum/Articles of Association as appropriate to the entity type, submit the registration application through website and Pay the registration fee at the designated Bank. RJSC issues a Certificate of Incorporation upon satisfaction that the promoters obtained name clearance of the proposed entity prior to the registration application, submitted the registration application the Memorandum & Articles of Association & prescribed forms and provided applicable fees.

Legal Basis of the Registration, The Companies Act 1994

Responsible Agency, Registrar of Joint Stock Companies and Firms (RJSC)

Process Step

Step 1: Preparing Memorandum of Association (MOA) and Articles of Association (AOA) as appropriate to the entity type

Step 2: Visiting RJSC website to apply for company registration

Step 3: Filling in Name Clearance Submission number and letter number

Step 4: Filling in the prescribed forms

Step 5: Attaching the MOA and AOA

Step 6: Submitting the Registration Application

Step 7: Depositing the required fee & receiving the payment slip form designated bank

Step 8: Uploading document in online

Step 9: Printing the uploaded documents and Submitting those documents & payment slip to RJSC office

Step 10: Receiving a Certificate of Incorporation from the RJSC Office

Required Documents

Process map of Register at Registrar of Joint Stock Companies and Firms (RJSC)

Time Less than one day (online procedure)

PROCEDURE 04

Make a Company Seal

Process Step

An entrepreneur will go to any seal making shop and order a company seal

Required Documents

No documentation is required

PROCEDURE 05

Open a Bank Account

A company must first open a bank account in order to register for VAT. An entrepreneur will go to the concerned Bank and open a Bank account.

Responsible Agency, Bank

Process Step

In order to register for VAT, the company must first open a bank account. Detailed procedures should be discussed with the Bank.

Entrepreneur can communicate with any public or private bank in Bangladesh

PROCEDURE 06

Obtain a Trade License

Getting a trade license is one of the important steps of starting business in Bangladesh. An entrepreneur needs to receive the trade license from City Corporation or City Council of the respective business area. The trade license filled-in application form must be accompanied by the required documents.

Legal Basis of the Certificate, The Companies Act  1994

1. Dhaka City Corporation Ordinance 1983

2. Municipal Taxation Rules 1986

Responsible Agency, City Corporation/ Municipal Corporation/ Union Parishad

Process Step

Step 1:  Collect prescribed Application Form from the City Corporation/ Municipal Corporation/ Union Parishad’s Office

Step 2: Submit completed Application Form with supporting documents to the concerned sectionStep 3: Inspection by the Licensing Supervisor

Step 4: Deposit required fees at the concerned office

Step 5: Obtain Trade License form the City Corporation/ Municipal Corporation/ Union Parishad office

Required Documents

PROCEDURE 07

Obtain a Tax Identification Number (TIN) Certificate for Company

In order to start business operations, every company must receive TIN Certificate from NBR. An entrepreneur can apply in online filling out prescribed online form and obtain TIN Certificate instantly. Alternatively, the entrepreneur can register for taxes at the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the National Board of Revenue (NBR) and obtain a tax identification number.

PROCEDURE 08

VAT Registration

For VAT purposes, companies register with the Customs, Excise, and VAT Commissionerate under the National Board of Revenue. The company’s VAT is regulated by the Customs, VAT and Excise Department of the region in which it operates. When an enterprise submits a VAT Registration application to the VAT authority an application must accomplish or enclosed the Trade License, Bank Solvency Certificate, TIN Certificate, Copy of BOI Registration & Deed of Agreement.

Legal Basis of the Registration, The Value Added Tax Act, 1991

Responsible Agency, National Board of Revenue (NBR)(RJSC)

Process Step

Step 1:  Collecting prescribed application form from the NBR Zonal Office or NBR website

Step 2: Submitting filled in application form with supporting documents to the Zonal Office

Step 3: Verifying the documents by NBR officials

Step 4: Physical inspection of the business premises

Step 5: Obtaining a VAT Registration Certificate

Required Documents

Fill-up an application form

Enterprise Trade License.

Bank Solvency Certificate.

Owners 02 photograph.

National ID/Passport copy of owners.

IRC/ERC if enterprise is doing Import and Export Business.

Article & Memorandum of Association (if enterprise is Limited Company.)

TIN Certificate

Location map of Enterprise premises

Copy of BOI Registration

Deed of Agreement

PROCEDURE 09

Registration with the Bangladesh Investment Development Authority (BIDA)

A foreign investor is required to be registered with BIDA. It is essential to obtain many licenses and permits such as Import Registration Certificate, Export Registration Certificate, Bond License, etc to run business in Bangladesh. The BIDA registration is also mandatory for obtaining industrial plot in the special economic zone. The investor needs to collect the application form from BIDA and submit the filled up form along with supporting documents to the respective department of BIDA.

Legal Basis of the Certificate, The Investment Board Act-1989

Responsible Agency, Bangladesh Investment Development Authority (BIDA)

Process Step

Step 1:  Collect a local investment registration form from Registration & Investment Division of BIDA

Step 2: Deposit the Registration fee, as per fee schedule from any scheduled bank in favor of Bangladesh Investment Development Authority and collect a pay order/bank order

Step 3: Submit the completed application form with supporting documents to the concerned section

Step 4: BIDA reviews the application and documents

Step 5: If the application is approved, the Registration Certificate will be issued

Required Documents

Discussion on company registration and start-up business

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).