Project Office, Branch Office and Liaison Office in Bangladesh: Legal Requirements for Foreign Companies
Learn how foreign companies can set up a representative (liaison) office, branch office, project office in Bangladesh. Understand legal requirements, approvals, documents, and business restrictions.
Introduction
Foreign investors seeking to expand their business presence in Bangladesh may consider establishing representative (liaison) office, project office or a branch office. Each structure serves a distinct legal and commercial purpose and is subject to specific regulatory approvals and compliance requirements.
This article provides a legal overview of the procedures, permissible activities, and documentation requirements for setting up such offices in Bangladesh.
Regulatory Approval
A foreign company intending to establish a representative office or branch office in Bangladesh must obtain prior approval from the Bangladesh Investment Development Authority. Such approval is a prerequisite for commencing any form of operational activity in the country.
Distinction Between Representative (Liaison) Office and Branch Office
Representative / Liaison Office
A liaison office is primarily established to facilitate non-commercial activities on behalf of the foreign parent company.
Typically, such an office may:
✅ Promote business interests and maintain liaison with local agents, distributors, and stakeholders
✅ Conduct market research and gather business intelligence
✅ Coordinate communications between the parent company and local entities
✅ Maintain a local bank account for operational expenses
✅ Receive foreign inward remittances to cover administrative costs and employee salaries
However, a liaison office is not permitted to engage in revenue-generating or commercial activities. Import of goods or equipment is generally restricted, except in limited circumstances permitted under applicable import regulations.
This structure is therefore suitable for foreign companies seeking to explore the Bangladeshi market without undertaking direct trading operations.
Branch Office
A branch office, by contrast, constitutes a legally recognized place of business of the foreign company and may engage in approved commercial activities in Bangladesh.
To establish a branch office, the foreign company must:
📌 Obtain regulatory approval from the relevant investment authority
📌 Register the office with the corporate registry in accordance with company law provisions
📌 Secure prior clearance from the central banking authority
📌 Remit a minimum amount of foreign currency to cover establishment costs and initial operational expenses
Once duly registered and approved, a branch office may undertake business operations consistent with the scope of activities authorised by regulators.
This structure is generally appropriate for foreign entities intending to enter into contracts, provide services, or conduct trading activities in Bangladesh.
Minimum Capital Requirement
Foreign companies establishing a branch office and project office are required to remit a minimum inward remittance equivalent to USD 50,000. This amount is intended to cover initial setup expenditure as well as operational costs for the first six months.
No such minimum capital requirement typically applies to liaison offices, as they are restricted to non-commercial functions.
Documentation Requirements
Foreign companies applying to establish either a representative office or branch office must submit comprehensive corporate and financial documentation, including:
✔ Audited financial statements of the parent company for the most recent financial year
✔ Board resolution approving the establishment of an office in Bangladesh
✔ Proposed organisational structure indicating expatriate and local staffing positions
✔ Detailed description of the parent company’s existing business activities
✔ Proposed scope of activities in Bangladesh
✔ Names and nationalities of directors or promoters
✔ Constitutional documents such as Memorandum and Articles of Association
✔ Certificate of Incorporation of the parent company
✔ Evidence of inward foreign remittance (applicable to branch offices)
Legal Considerations
Foreign companies should carefully assess:
⚖️ Regulatory compliance obligations
⚖️ Tax exposure and reporting requirements
⚖️ Employment and immigration laws
⚖️ Scope of permitted business activities
Obtaining proper legal and regulatory guidance is strongly recommended to ensure efficient establishment and ongoing compliance.
Frequently Asked Questions (FAQs)
1. Can a liaison office conduct business in Bangladesh?
No. A liaison office is restricted to promotional, coordination, and research activities and cannot generate revenue or undertake commercial transactions.
2. Is regulatory approval required before opening a branch office?
Yes. Prior approval from relevant authorities is mandatory before registration and commencement of business operations.
3. What is the minimum capital requirement for a branch office?
Foreign companies must remit at least USD 50,000 to cover establishment and initial operational expenses.
4. Can a liaison office open a bank account in Bangladesh?
Yes. A liaison office may maintain a local bank account to receive foreign remittances and pay operational expenses.
5. Which structure is more suitable for market entry?
A liaison office is suitable for market exploration and relationship-building, while a branch office is appropriate for conducting approved commercial activities.
Legal Assistance for Foreign Companies
Establishing a foreign business presence in Bangladesh involves complex regulatory procedures and compliance obligations.
Our law firm provides comprehensive legal services including:
✔ Regulatory approvals
✔ Corporate registration
✔ Drafting of resolutions and documentation
✔ Foreign investment compliance
✔ Tax and employment advisory
