Choose a branch office if you need to earn revenue in Bangladesh. Choose a liaison office if you don’t. That’s the core of the decision. BIDA approval, RJSC filing, and USD 50,000 remittance apply to both structures. The only thing that separates them is whether your Bangladesh operations need to generate local income.
This article covers the decision only. For the full setup process, documents and government fees, see our Branch Office Setup in Bangladesh and Liaison Office Setup in Bangladesh service pages.
The single most important difference
Revenue. That’s it.
A branch office can earn revenue in Bangladesh through BIDA-approved commercial activities. It signs contracts, invoices customers, delivers services, and repatriates profit back to your parent company.
A liaison office can’t earn a single taka locally. BIDA rules are explicit: no local source of income. Your liaison office runs entirely on inward remittances from your overseas parent. It can coordinate, research, audit suppliers, and support your HQ. It can’t bill.
That one difference determines which structure you need.
When a branch office is the right choice
A branch office fits if any of these apply to your Bangladesh plan:
- You need to sign contracts with Bangladesh customers and invoice them locally
- You’re delivering services, executing projects, or installing equipment here
- Your team needs to generate revenue within the first 12 months of operation
- You want to import goods and sell them in Bangladesh
- You plan to repatriate profit back to your parent company
A branch office pays corporate tax on Bangladesh-sourced income and files annual returns with NBR (National Board of Revenue). It’s more compliance-intensive than a liaison office. But it’s the only non-equity option that lets you earn locally.
For the full registration process, documents and costs: Branch Office Setup in Bangladesh.
When a liaison office is the right choice
A liaison office fits if all of these apply:
- Your sales happen offshore. Your Bangladesh team supports but doesn’t sell.
- You need a local presence for market research, supplier audits, or partner coordination
- You want to test Bangladesh before committing to commercial operations
- You’re comfortable funding all local costs through HQ remittances
Don’t confuse ‘no local income’ with ‘no compliance.’ A liaison office needs BIDA approval, TIN registration, and BIDA permission renewal every 3 years. Staff salaries trigger withholding tax obligations with NBR (National Board of Revenue). It’s lighter than a branch, not hands-off.
For the full registration process, documents and costs: Liaison Office Setup in Bangladesh.
Branch office vs liaison office: side-by-side
| Branch office | Liaison office | |
| Local revenue | Allowed within BIDA-approved scope | Not allowed |
| BIDA approval | Required | Required |
| RJSC registration | Required | Not required |
| Minimum remittance | USD 50,000 within 2 months of BIDA approval | USD 50,000 within 2 months of BIDA approval |
| Corporate tax | Yes, on Bangladesh-sourced income | No (no local income) |
| Withholding tax | Yes | Yes |
| BIDA permission | 3 years, extendable by 2 years | 3 years, extendable by 2 years |
| Typical timeline | 8-12 weeks | 6-10 weeks |
| Best for | Selling, invoicing, executing contracts locally | Research, coordination, supplier audits |
Note: Timelines run from document preparation to first operational day. Government fees apply to both structures. Contact us for a current fee schedule.
3 mistakes we see before companies pick a structure
Choosing liaison when local invoicing is needed. We see this regularly. A company opens a liaison office, then discovers 3 months in that their Bangladesh work requires local contracts. They have to go back to BIDA and apply for a branch or incorporate a subsidiary. A clearer decision upfront avoids that cost entirely.
Assuming liaison means no compliance. A liaison office still needs BIDA approval, a TIN, a bank account, and BIDA renewal every 3 years. Staff salaries trigger withholding tax. Parent company remittances need proper accounting. Liaison is lighter than branch, not compliance-free.
Missing the USD 50,000 remittance deadline. Both offices must remit a minimum of USD 50,000 to Bangladesh within 2 months of BIDA approval. This is mandatory for both structures. Late remittance triggers a 5% penalty on the full amount. Plan your SWIFT transfer from day one.
Can you start with a liaison office and upgrade later?
Yes. We see this path regularly. A foreign company opens a liaison office to test the market, build relationships, and assess demand. Once they’re ready to sell locally, they apply to BIDA for branch office approval as a new application.
The transition isn’t a simple switch. Your liaison office keeps operating while your branch application is processed. Once the branch is approved and operational, you wind down the liaison. The new BIDA application needs updated activity declarations that match your commercial plans.
If you want full commercial operations under a separate legal entity, a subsidiary company is a better long-term fit. A subsidiary is a Bangladesh company incorporated under local law. It’s not an extension of the parent. It’s its own legal entity with its own liability. See: Types of company registration in Bangladesh for the full comparison of all 4 options.
Need help deciding which structure fits your business?
We’ve helped foreign companies choose between branch and liaison office setups since 2012. We use the KAC Foreign Investor Expansion Process to map your business model to the right structure before you apply to BIDA. The Khan Akber Regulatory Readiness Framework means your documents are correct before submission, not corrected after rejection.
Start here: Business setup in Bangladesh. Or go directly to the setup page for the structure you’ve chosen: Branch Office Setup in Bangladesh | Liaison Office Setup in Bangladesh
Frequently asked questions
What is the main difference between a branch office and a liaison office in Bangladesh?
A branch office can earn revenue in Bangladesh through BIDA-approved commercial activities. A liaison office cannot earn any local income. Both require BIDA approval and a minimum USD 50,000 remittance within 2 months. The revenue restriction is the single deciding factor between the 2 options.
Do both branch and liaison offices need BIDA approval in Bangladesh?
Yes. Both require BIDA (Bangladesh Investment Development Authority) approval before they can legally operate. BIDA reviews applications at 2 executive committee meetings per month. Approval takes 4-6 weeks. Neither office can open a bank account or begin operations without the BIDA permission letter.
Can a liaison office earn any income in Bangladesh?
No. BIDA rules explicitly prohibit liaison offices from earning any local income. All operating expenses must be funded by inward remittances from the overseas parent company. If you need to invoice customers or sign commercial contracts in Bangladesh, you need a branch office or a subsidiary company.
Can I convert a liaison office to a branch office in Bangladesh?
Yes. You apply to BIDA for branch office approval as a new application. Your liaison office continues operating during the process. Once BIDA approves the branch, you wind down the liaison. The conversion isn’t automatic. It requires a full new BIDA application with updated activity declarations.
Which is faster to set up: a branch office or a liaison office in Bangladesh?
A liaison office is slightly faster: typically 6-10 weeks vs 8-12 weeks for a branch office. Both require BIDA approval, which takes 4-6 weeks. The branch office adds RJSC registration after BIDA approval, adding 1-2 weeks. For full process details, see our branch and liaison office setup pages.
