Preface: Registering a company in Bangladesh becomes a hassle-free endeavor when you’re acquainted with the right steps. That’s why engaging the services of company registration consultants in Bangladesh is highly advantageous, ensuring a convenient and time-efficient process. Fionza Consultants is your reliable partner in this journey, allowing you to redirect your time and focus towards the critical aspects of your business.
Our comprehensive service package covers all essential aspects for conducting business in Bangladesh:
- Company registration with the Registrar of Joint Stock Companies and Firms
- Provision of a local company secretary and registered address
- Facilitation of the opening of local or international corporate bank accounts
- Tax registration services
- Annual accounting and tax services
Many international investors opt for the registration of limited liability or joint stock companies in Bangladesh, drawn by its strategic geographical location and robust and cost-effective workforce. With competitive production costs, Bangladesh consistently ranks high for those considering establishing a business.
Under the Bangladesh Companies Act 1994, foreign investors have the opportunity to register a new company in Bangladesh through the Registrar of Companies. The process of proprietorship company registration in Bangladesh has become increasingly straightforward in recent years, thanks to the government’s initiatives to streamline incorporation procedures. This has made starting operations in Bangladesh more accessible, efficient, and less time-consuming for investors.
PROS AND CONS OF CHOOSING TO REGISTER COMPANY IN BANGLADESH
POLITICAL LANDSCAPE IN BANGLADESH
In terms of the business environment, Bangladesh has shown improvement, as highlighted by the World Bank Group’s Doing Business 2020 study, moving from the 176th to the 168th position globally. However, challenges persist, including concerns about corruption, with Bangladesh ranking 14th on the Global Corruption Perception Index in 2019. Political instability is indicated by a harsh crackdown on dissidents of the ruling Awami League.
Bangladesh boasts low labor costs, particularly in sectors like garment manufacturing, where monthly salaries for workers range from $70 to $100. The World Economic Forum predicts continuous GDP growth, but poor infrastructure remains a barrier to overall economic development.
Significant strides have been made in poverty reduction, with Bangladesh successfully decreasing poverty from 44.2% in 1991 to 14.8% in 2016, according to the World Bank. The literacy rate stands at 73.91%, as reported by UNESCO. However, potential language barriers exist, as Bengali is the official national language and English proficiency is ranked 71 out of 100 countries.
Bangladesh is emerging as a significant player in the digital economy, ranking as the second-largest supplier of online labor, according to the Oxford Internet Institute. The country is evolving into an IT hub with the participation of major tech companies, but challenges like unstable power supply hinder tech sector growth.
Bangladesh’s business laws are progressing to meet international standards, including enhancements in money laundering regulations and intellectual property laws. However, concerns persist regarding the independence of the judiciary, with executive influence over appointments. Legal processes are known for being slow, leading to frustrating delays in commercial dispute resolution.
The Government of Bangladesh is actively implementing environmental policies, such as the Safe Access to Fuel and Energy Plus Livelihoods project. However, environmental issues persist due to unsustainable practices, contributing to pollution and resource depletion. The environmental challenges are estimated to cost Bangladesh $6.5 million annually, equivalent to about 3.4% of the country’s 2015 Gross Domestic Product.
In navigating Bangladesh’s business landscape, understanding these political, economic, social, technological, legal, and environmental factors is crucial for informed decision-making.
WHEN CAN I EXPECT TO START BUSINESS?
Fionza Consultants streamlines the company registration process in Bangladesh, ensuring completion within a swift 2 weeks. Upon receiving the necessary due diligence documents from directors and shareholders, we guide you through the company name registration process. Utilizing Bangladesh company search, we check the availability of your preferred name and prepare the required incorporation documents for the name clearance application.
Eliminating the need for travel, both foreign company registration in Bangladesh and corporate bank account opening can be seamlessly completed online. Once your Bangladesh entity is successfully incorporated, we dispatch essential corporate documents, including the Certificate of Incorporation, Articles and Memorandum of Association, and the RJSC certified copy, to your chosen address.
Fionza Consultants’ legal team extends support for obtaining a Business license in Bangladesh if necessary. Following registration, our banking team proceeds to open a Bangladesh corporate bank account. Depending on your organization’s nature and long-term goals, we also facilitate the opening of overseas offshore corporate bank accounts. This involves obtaining an encashment certificate, crucial for a foreign entity incorporating in Bangladesh, and typically takes about 4 weeks post-registration.
Within a comprehensive 6-week timeframe from our engagement, your firm is fully set up with a corporate bank account established. Subsequently, Fionza Consultants’ team of Chartered Accountants aids in securing your VAT registration number and other essential tax numbers.
For those eager to delve deeper into the process, Fionza Consultants provides a step-by-step explanation of all the required steps for company incorporation in Bangladesh.
DIFFERENT TYPES OF BUSINESS IN BANGLADESH
Choosing the right form of business ownership in Bangladesh is crucial, tailored to meet your firm’s unique needs and long-term objectives. When you engage with Fionza Consultants, we thoroughly comprehend your requirements and recommend the most suitable entity for you. Frequently, foreign investors opt for a Bangladesh Limited Liability Company (LLC) or register a joint-stock company.
BANGLADESH LLC (LIMITED LIABILITY COMPANY)
A Bangladesh LLC, or limited liability company, is an independent entity from its owners and shareholders, possessing a separate legal personality. Directors are not personally liable for business debts or obligations. Liability is limited to a specified amount of declared liability insurance. These companies offer different classes of members with specific rights, powers, and duties, typically accommodating 2 to 50 members. At least 2 directors, aged 18 or older with no bankruptcy or criminal history, are necessary. There are no nationality or residency restrictions for directors. Opting for a Bangladesh LLC structure protects personal assets while avoiding the complexities associated with corporations. Fionza Consultants guides you through the entire process of private limited company registration in Bangladesh.
BANGLADESH PLC (PUBLIC LIMITED COMPANY)
A public limited company can be listed or unlisted on the Bangladeshi Securities Market, the Dhaka Stock Exchange. It can issue shares and debentures to the public. A minimum of three directors is required. Unlike an LLC, the public limited company registration process is completed after obtaining the Certificate of Commencement of Business.
For investors extending a foreign company into Bangladesh, a branch office is an alternative to registering an LLC. After Bangladesh Investment Development Authority approval, a branch office can engage in local commercial activities, trading, and transacting business within the country. Quarterly account statements of remittances are required, and a statutory auditor must audit its accounts.
Also known as a liaison office, a representative office is limited in the types of activities it can conduct, primarily liaising or coordinating between the principal and local agents, and collecting and disseminating business information. However, it cannot engage in regular business activities like importing and exporting goods. Costs are borne by the foreign parent company, which is liable for all debts and liabilities.
A subsidiary company is an independent Limited Liability Company, with the parent company liable only for its proportion of shares. Two directors and two shareholders of any nationality, either natural persons or corporate entities, are needed. Full foreign ownership is allowed, and the minimum paid-up capital is as low as $1.
Fionza Consultants streamlines the process, providing expert guidance for seamless business setup in Bangladesh.
HOW TO REGISTER COMPANY IN BANGLADESH?
STEP 1: OPTIMAL BUSINESS STRUCTURE SELECTION
Choosing the right business structure is a crucial first step. Fionza Consultants offers expert advice to determine the most suitable business entity, with a focus on the commonly preferred limited liability company (LLC) or a company limited by shares.
STEP 2: NAME RESERVATION
Fionza Consultants conducts a thorough search and secures name clearance for your company through the Registrar of Joint Stock Companies and Firms (RJSC). Your company’s name is reserved for up to 1 month.
STEP 3: DOCUMENT PREPARATION AND SUBMISSION
Our team guides you through the preparation of essential corporate documents, including Form X11, copies of shareholders’ passports, and the Memorandum and Articles of Association (MOA/AOA). Upon receiving these documents, Fionza Consultants assists in registering your company with the RJSC, resulting in a Certificate of Incorporation and approved MOA and AOA.
For those considering a branch office or representative office, Fionza Consultants facilitates registration with the Bangladesh Investment Development Authority (BIDA).
STEP 4: TRADE LICENSE APPLICATION
All businesses operating in Bangladesh must secure a trade license. Fionza Consultants supports your company in applying for a trade license from the City Corporation in the province of business operation. Options include a general trade license, commercial license, or manufacturing license based on your business activities.
STEP 5: TAX REGISTRATION
Fionza Consultants initiates your company’s tax registration application, obtaining a Tax Identification Number (TIN) and Business Identification Number (BIN) from the National Board of Revenue (NBR). The TIN enables payment of corporate income tax, while the BIN facilitates value-added tax (VAT) payments for businesses with an annual turnover exceeding 30 Lakhs taka.
Post-registration, Fionza Consultants continues to assist your company in meeting annual accounting and tax obligations.
STEP 6: CORPORATE BANK ACCOUNT OPENING
Our team streamlines the process of consolidating documents and opening a corporate bank account with your chosen reputable bank. Typically, directors and shareholders are not required to travel to Bangladesh for this process. If necessary, Fionza Consultants arranges a representative for in-person meetings or negotiates conference calls with the banks. Once the account is established, internet banking tokens and access codes are couriered to your preferred address.
LOOKING FOR ALTERNATIVES TO REGISTERING A BANGLADESH ENTITY?
ALTERNATIVE BUSINESS APPROACHES FOR FOREIGN INVESTORS IN BANGLADESH
For foreign investors unable to directly register a Bangladesh entity within the jurisdiction, there are alternative avenues to explore.
Consider engaging in a franchise model, collaborating with Bangladeshi promoters who can be authorized or compensated for promoting your brand. This approach allows for business expansion without the need for direct operations within the jurisdiction.
BRANCH OFFICE SETUP
Setting up a branch office is another option, enabling the conduct of commercial activities in Bangladesh. Approval from the Bangladesh Investment Development Authority (BIDA) is crucial, and strict adherence to local Exchange Control Guidelines is essential for compliance.
REPRESENTATIVE OFFICE ESTABLISHMENT
A representative office can also operate in Bangladesh, albeit with certain limitations. While it is prohibited from generating local profits, it can play a role in liaising between the principal and local agents, as well as collecting and disseminating business information. Approval from BIDA is required to commence operations. The detailed incorporation requirements for both representative and branch offices have been outlined above.
Exploring these alternative approaches provides flexibility for foreign investors to participate in the dynamic business landscape of Bangladesh without the necessity of direct operational involvement.