How to register a foreign company in Bangladesh?

Procedure for setting up business in Bangladesh and the documents required for incorporation

Foreign companies may incorporate a 100% foreign owned local subsidiary company under the Companies Act 1994 (“Companies Act”). In such a case, the shares of the local subsidiary will be held by a foreign entity or a foreign national. The local subsidiary formed would be subject to the laws of Bangladesh. Annual general meeting(s) and board meetings will be held in accordance with the Companies Act and the company will comply with the annual filing requirements as specified in the Companies Act. The local subsidiary would be able to perform all kinds of activities, including opening and operation of bank accounts, employment of staff (including foreign nationals) and undertake any legally permissible business and set up operations at any place in Bangladesh.

There is a one stop online portal operated by Bangladesh Investment Development Authority, hereinafter referred as the BIDA, providing various services regarding setting up of businesses in Bangladesh. Moreover, for investments in economic zones, there is a distinct one stop online portal maintained by BEZA. To register under the one-stop service portal, basic personal information is required, such as name, email address, phone number and etc.

Foreign companies must obtain name clearance from the Registrar of Joint Stock Companies and Firms prior to making applications for company incorporation. 

n order to set up a foreign company, the following documents are required:

(i)            Name clearance certificate;

(ii)           Office address which is to be provided as the registered address of the company;

(iii)          Opening of temporary bank account for inward remittance of the paid up capital of foreign shareholder;

(iv)          Encashment certificate issued by the bank for each of the foreign shareholder;

(v)           Memorandum and articles of association;

(vi)          Copies of the information section of the passport of any foreign shareholder;

(vii)         National identity card of the native shareholders;

(viii)        Photographs of each shareholder; and

(ix)         Scanned signature

Moreover, a foreign organization may opt to set up a branch or liaison office in Bangladesh. 

Representative / Liaison Office: Foreign companies may establish representative or liaison offices in Bangladesh by obtaining a registration from BIDA. BIDA usually specifies the number of foreign and local staff that may be employed in representative offices.

No business may be carried out through representative office and as such it will not be permitted to import equipment or goods except in a limited set of circumstances as stated in the Import Policy Order, 2021-2024[1] (yet to be translated in English). However, a bank account may be opened and maintained by a representative office. Funds may be remitted from outside Bangladesh to run and operate the representative office and pay salaries to the staff employed at such office.

A liaison or representative office can maintain and coordinate between principle and local agents, distributors, exporters’ institutions through correspondences and personal contacts. It can collect, compile, analyse and disseminate business information related to its field of activities as mentioned in the approval letter.

Branch Office: Foreign companies may establish a place of business, i.e., a branch office, in Bangladesh by registering with BIDA and Registrar of Joint Stock Companies and Firms under Section 379 of the Companies Act.

Prior permission from Bangladesh Bank is required before a foreign company may be registered with the Registrar of Joint Stock Companies and Firms. There is a requirement for a minimum of US$ 50,000 inward remittance for registration of branch offices in Bangladesh which would cover the cost of initial establishment and six months’ expenses for operation.

By registering under the Companies Act, the branch office can engage in commercial activities. However, to do so, prior approval from BIDA is required.

To set up a branch or liaison office, the following documents are required:

(i)          Audited accounts of last financial year of the principal company;

(ii)          A resolution of the board of directors of the principal company regarding opening of office in Bangladesh;

(iii)         Proposed organogram of the office showing the posts to be occupied by both expatriates and local personnel;

(iv)        Details of activities of the principal company and details of the activities to be performed through the proposed branch office in Bangladesh;

(v)         Name and nationality of the directors / promoters of the principal Company;

(vi)        Memorandum and articles of association of the principal company;

(vii)        Certificate of incorporation of the principal company ; and

(viii)       An inward remittance of USD 50,000 for setting up a branch office is required.