A branch office in Bangladesh carries compliance obligations across 4 regulatory domains: BIDA (Bangladesh Investment Development Authority), NBR (National Board of Revenue), the VAT authority, and RJSC (Registrar of Joint Stock Companies and Firms). Miss any one of them and you risk penalties, licence suspension, or loss of BIDA approval.
We’ve built this as a complete compliance checklist, organised by frequency. Go section by section and map each obligation to your calendar.
Still in the setup phase? Read our guide on branch office setup in Bangladesh before working through this checklist.
What a branch office must comply with
A branch office is an extension of its foreign parent. Under Bangladeshi law it’s not a separate legal entity. The parent company is directly liable for every tax obligation, penalty, and regulatory breach the branch incurs.
The compliance obligations fall into 4 categories:
• BIDA reporting (quarterly, annual, renewals)
• Income tax (monthly TDS, half-yearly return, annual return)
• VAT (monthly returns, VDS deductions, tax invoices)
• RJSC filings and licence renewals
The consolidated compliance calendar at the end pulls everything into one table.
BIDA compliance obligations
BIDA (Bangladesh Investment Development Authority) approves and regulates all branch offices. Your branch cannot operate legally without a valid BIDA approval letter. Every material activity, employment decision, and address change flows through BIDA.
Quarterly progress report
File a quarterly activity report to BIDA covering business activities, foreign nationals employed, and foreign remittances received. Deadline: within 30 days of each quarter end.
Annual report with audited financials
Submit a separate annual report to BIDA each year. This must include audited financial statements from an FRC-enlisted auditor. The annual report is more detailed than the quarterly reports and is your primary accountability filing with BIDA.
BIDA approval renewal
BIDA approval is granted for a fixed term (typically 2 years). Apply for renewal at least 2 months before the current approval expires. Operating with an expired BIDA approval is illegal.
Work permits for foreign nationals
Every foreign national working in the branch office requires an individual BIDA work permit. Each permit is renewed annually. Security clearance from the Ministry of Home Affairs is required for each permit and takes up to 45 days from the BIDA approval letter date.
Foreign nationals must also hold a certificate of income tax exemption or clearance from NBR at all times.
Address changes and multiple branches
Notify BIDA in writing before changing your registered address. BIDA approval is required before any change takes effect. If you want to open a second branch location in Bangladesh, a separate BIDA authorisation is required for each.
Income tax compliance (Income Tax Act 2023)
The Income Tax Act 2023 replaced the Income Tax Ordinance 1984. All branch offices must comply with the new Act for TDS, half-yearly returns, and annual filing. The structure of obligations is monthly, half-yearly, and annual.
TDS (Tax Deducted at Source) — monthly
A branch office must deduct tax at source on every applicable payment. This includes:
• Salaries paid to employees
• Supplier invoices for goods and services
• Rent payments
• Contract labour fees
• Professional service fees
Each month, in order:
1. Deduct TDS at the applicable rate when payment is made or becomes payable
2. Deposit the withheld TDS to the government treasury account
3. Issue a TDS certificate to the payee
4. File the salary TDS statement under Rule 21
5. File the supplier TDS statement under Rule 18
The branch office must hold a valid TIN (Taxpayer Identification Number) from NBR before any of these obligations begin. Obtain it before starting operations.
Half-yearly TDS return
File a consolidated withholding tax return under Section 75A every 6 months.
• 31 January (covering July to December)
• 31 July (covering January to June)
Annual income tax return
File the branch office’s annual income tax return under Section 75. Deadline: 30 November following the close of the income year (30 June). The return must be supported by audited financial statements.
Annual salary TDS and employee tax reporting
Two additional annual filings are required alongside the tax return:
• Annual return of salary TDS statements under Section 108
• Employee annual tax return submission details under Section 108A
See our tax services in Bangladesh for a full breakdown of what we handle on your behalf.
VAT compliance (VAT and SD Act 2012)
VAT compliance for a branch office has 2 dimensions: collecting VAT on your taxable supplies and deducting VDS (VAT Deducted at Source) when making payments to VAT-registered suppliers. Both obligations are monthly.
Monthly VAT return (Mushak 9.1)
File Mushak 9.1 by the 15th of each following month. This return covers all VAT-able sales and purchases for the period.
Tax invoices (Mushak 6.3)
Issue a Mushak 6.3 tax invoice for every taxable supply. Maintain a VAT register with all invoices issued. The register must be available for VAT authority inspection at any time.
VDS (VAT Deducted at Source)
When paying VAT-registered suppliers, deduct VAT at the applicable rate. Then:
• Deposit the VDS amount to the government treasury
• Issue a Mushak 6.6 VDS certificate to the supplier
Input-Output Coefficient (IOC) declaration
Declare your IOC to the VAT authority. If your input prices change by more than ±7% from the last declared price, file a revised IOC declaration immediately.
Annual VAT clearance certificate
Obtain an annual VAT clearance certificate. You’ll need this for your BIDA annual report submission and for licence renewals.
RJSC compliance (Companies Act 1994)
A foreign company operating a branch office in Bangladesh must be registered with the RJSC under the Companies Act 1994. 2 annual compliance obligations flow from this registration.
Statutory audit
Appoint an FRC-enlisted chartered accountant to conduct the statutory audit annually (Companies Act 1994, Section 183). Since 2023, auditors must be registered with the FRC (Financial Reporting Council) of Bangladesh. An audit by a non-FRC firm is not valid for RJSC or BIDA purposes.
Our audit and assurance services include statutory audits for branch offices, conducted by our FRC-enlisted partners.
The HQ audit from your parent company’s home country does not replace the Bangladesh statutory audit. A separate Bangladesh audit is always required by RJSC and BIDA.
Annual return with RJSC
File the annual return with RJSC after the close of each financial year. The return includes the audited financial statements from your statutory audit.
Bangladesh Bank obligations
Within 2 months of receiving BIDA approval, remit at least USD 50,000 into Bangladesh as the startup remittance. This covers your startup costs and the first 6 months of operational expenses.
Open a dedicated bank account at a scheduled bank in Bangladesh. All inward foreign remittances must flow through this account per Bangladesh Bank’s Guidelines for Foreign Exchange Transactions.
Submit quarterly reports to Bangladesh Bank covering foreign remittances received and operational expenditure drawn from those remittances.
All foreign exchange transactions — including salary payments to foreign nationals and any remittances back to the parent — must be processed through a scheduled bank in Bangladesh and reported to Bangladesh Bank. Mixing operational funds and remittance funds in the same account creates reconciliation problems at audit time.
Licence and registration renewals
These renewals recur every year unless stated otherwise:
• Trade licence (city corporation or municipality): annually
• Trade body membership (FBCCI or relevant chamber): annually, if applicable
• Import/Export Registration Certificate: annually, if applicable
• BIDA approval: before expiry (typically every 2 years)
• Work permits for each foreign national: annually
• Certificate of income tax exemption or clearance for foreign nationals: annually
• Industry-specific licences (if any): per the relevant licensing authority’s schedule
For a full list of annual deadlines across all entity types, see our Bangladesh Annual Compliance Calendar.
Consolidated compliance calendar
Use this table to map every branch office obligation to its frequency.
| Monthly | Quarterly | Half-Yearly | Annual |
| Deduct TDS on all payments (salaries, suppliers, rent, services) | Submit quarterly activity report to BIDA (within 30 days of quarter end) | File half-yearly TDS/withholding tax return under Section 75A | Statutory audit by FRC-enlisted auditor (Companies Act 1994 s183) |
| Deposit TDS withheld to government treasury | Submit unaudited quarterly financials to BIDA | Deadline: 31 January (Jul-Dec) | 31 July (Jan-Jun) | File annual return with RJSC |
| Issue TDS certificates to payees | Submit quarterly report to Bangladesh Bank (remittances and expenditure) | File annual income tax return under Section 75 (deadline: 30 November) | |
| File salary TDS statement (Rule 21) | Submit quarterly report to NBR Tax Authority | File annual salary TDS return under Section 108 | |
| File supplier TDS statement (Rule 18) | Submit employee tax details under Section 108A | ||
| File monthly VAT return (Mushak 9.1) by 15th of following month | Submit annual activity report to BIDA with audited financials | ||
| Issue Mushak 6.3 tax invoices for each taxable supply | Obtain annual VAT clearance certificate | ||
| Deduct VDS from supplier payments; deposit to treasury | Renew trade licence | ||
| Issue Mushak 6.6 VDS certificate to suppliers | Renew BIDA approval (at least 2 months before expiry) | ||
| Maintain VAT registers and records | Renew work permits for each foreign national | ||
| Renew trade body membership (if applicable) | |||
| Renew Import/Export Registration Certificate (if applicable) |
5 common mistakes branch offices make
1. Skipping the quarterly BIDA reports
Most branch offices file the annual BIDA report but miss the quarterly ones. BIDA can suspend or revoke approval for persistent non-compliance. The quarterly report is not optional.
2. Missing TDS on payments other than salaries
TDS applies to supplier invoices, rent, contract labour, and professional fees, not just salaries. Each missed deduction is a separate penalty risk under the Income Tax Act 2023. Establish a TDS checklist before processing any payment.
3. Letting BIDA approval lapse
Renewal must be filed at least 2 months before expiry. There is no grace period. Operating during a lapse in BIDA approval exposes the parent company directly to regulatory action in Bangladesh.
4. Using auditors not listed with the FRC
Since 2023, statutory auditors must be on the FRC panel. An audit by a non-FRC firm is rejected for both RJSC filing and BIDA annual report purposes. Confirm your auditor’s FRC registration before engagement.
5. Not maintaining a dedicated remittance account
Bangladesh Bank requires all foreign remittances to flow through a designated bank account. Mixing operational and remittance funds makes it impossible to produce accurate quarterly remittance reports for Bangladesh Bank and BIDA.
Need help managing branch office compliance?
We manage the full compliance load for branch offices under the KAC Corporate Compliance Architecture: BIDA quarterly and annual reports, TDS deductions and filings, monthly VAT returns, statutory audit, and RJSC annual returns, handled end to end by our team. Contact us and we’ll walk you through your specific obligations.
Frequently asked questions
Does a branch office in Bangladesh need to file an annual income tax return?
Yes. A branch office must file an annual income tax return under Section 75 of the Income Tax Act 2023. The deadline is 30 November following the income year end. TDS must also be deducted monthly, and a half-yearly TDS return filed every 6 months under Section 75A.
How often does a branch office submit reports to BIDA?
A branch office submits quarterly activity reports to BIDA within 30 days of each quarter end, plus a separate annual report with audited financials. Work permit renewals, BIDA approval renewals, and address change notifications are submitted as they fall due throughout the year.
What is the minimum remittance required for a branch office in Bangladesh?
USD 50,000 must be remitted into Bangladesh within 2 months of receiving BIDA approval. This covers startup costs and 6 months of operations. All remittances must flow through a dedicated account at a scheduled bank in Bangladesh, per Bangladesh Bank’s Guidelines for Foreign Exchange Transactions.
Can a branch office employ foreign nationals in Bangladesh?
Yes, with individual BIDA work permits. Each foreign national requires a separate work permit from BIDA and must hold a certificate of income tax exemption or clearance from NBR. Ministry of Home Affairs security clearance is also required. Work permits are renewed annually.
What happens if a branch office misses the BIDA approval renewal deadline?
Operating without a valid BIDA approval is illegal. Apply immediately if you’ve missed the deadline and include a reason for the delay. BIDA may grant an extension, but operating during the lapse period exposes the parent company to regulatory action. Apply at least 2 months before expiry.
