Private Limited Company

Company Setup

A foreign investor is eligible to register a 100% foreign owned Private Limited Company (PLC) in Bangladesh which is commonly known as FDI company. It is the preferred business arrangement for individual entrepreneurs who want to establish a local company in Bangladesh.

Characteristics of a Private Limited Company in Bangladesh

It can have minimum 2 and maximum 50 shareholders (owners).
It must have minimum 2 directors.
Any individual, who is at least 18 years old, is eligible for shareholder.
An initial paid-up capital of at least BDT 1. Additional capital can be injected any time after incorporation.
It has legal identity entitlements of a natural person.
Registered office address must be a physical address.
It can own property in its name.
It can sue or be sued in its own right. Thus, shareholders are not involved in the legal proceedings.
It does not depend on any individual member or shareholders for its existence.
Foreigners can have 100% ownership of company shares.
Share transfer and transmission is allowed.
The name of the company should end with Ltd., Private Limited or Limited.

It must appoint an auditor within 30 days from the date of its incorporation.

Steps and Procedure to Register a Private Limited Company in Bangladesh

Select a proposed company name;
Apply for Name Clearance (validity of name clearance certificate is 30d ays);
Drafting MOA & AOA and other FORMs;
Open a temporary / in-operative Bank Account in Bangladesh to bring the initial share capital;
Transfer the initial share capital to temporary Bank Account in Bangladesh;
Collect the Encashment Certificate from Bank;
Online application to RJSC portal for company registration;
Verification of Encashment Certificate by RJSC with respective Bank;
Receive the certified copies of Incorporation Certificate, MOA & AOA and Form XII;
Apply for others registration and license, like trade license, tax registration, VAT/GST registration, import and export registration etc.

Pros and Cons of a Private Limited Company in Bangladesh

Pros	Cons
No restriction in business activity, like any other local company a FDI local company can do any business. Shareholders are not liable for the company's debts beyond the amount of capital they have put into the company. It is easy to transfer ownership through the selling of shares or issuing of new shares to new investors. It has perpetual succession, which means there is no need to wind up the company in the event of deaths, or changes in shareholders or directors. It is easier to obtain funding from investors or loans from financial institutions. It has higher credibility and status in the minds of customers and partners.	There are tighter rules and regulations compared to Liaison office or Liaison office. Equity investment is not allowed to remit back to source until dissolution of the company. Dissolution process is long procedural, bit costly and time consuming.

Pros

Cons

No restriction in business activity, like any other local company a FDI local company can do any business.
Shareholders are not liable for the company's debts beyond the amount of capital they have put into the company.
It is easy to transfer ownership through the selling of shares or issuing of new shares to new investors.
It has perpetual succession, which means there is no need to wind up the company in the event of deaths, or changes in shareholders or directors.
It is easier to obtain funding from investors or loans from financial institutions.
It has higher credibility and status in the minds of customers and partners.

There are tighter rules and regulations compared to Liaison office or Liaison office.
Equity investment is not allowed to remit back to source until dissolution of the company.
Dissolution process is long procedural, bit costly and time consuming.