Company Setup
A corporate foreign investor is eligible to register a subsidiary company in Bangladesh. 100% foreign investment is allowed, it shall also be treated as private limited company. It is one of the preferred market entry business arrangements for corporate investors who want to establish a local company in Bangladesh.
Characteristics of a subsidiary Company in Bangladesh
  • A subsidiary company is an LLC that is independent of its parent foreign corporate.
  • Foreigners can hold 100% of its shares.
  • A subsidiary company gets the consideration of a local company.
  • It enjoys all the tax incentives, waivers and allowances given by the local authority.
  • The holding company is only liable for the capital it has invested in the shares.
  • It is accountable for its own debts and losses arising out of its business operations.
  • It can have minimum 2 and maximum 50 shareholders (owners).
  • It must have minimum 2 directors.
  • An initial paid-up capital of at least BDT 1. Additional capital can be injected any time after incorporation.
  • 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.
  • 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 Registering a Subsidiary Company in Bangladesh
  • Select a proposed company name;
  • Apply for Name Clearance;
  • 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.
Documents Required Registering a Subsidiary Company in Bangladesh
  • Copy of the passport for all director & shareholders.
  • Photographs of all Shareholders.
  • Copy of the Incorporation Certificate, MOA & AOA of parent company.
  • A board resolution authorizing a specific individual to sign necessary subsidiary documents on behalf of the parent company or shareholders.
  • A board resolution to select the bank in Bangladesh to open a temporary/in-operative bank account to bring the initial equity investment and the bank signatories.
  • Draft MOA (Memorandum of Association) & AOA (Article of Association).
  • Signed subscriber form, directors’ consent and declaration of register address form.

Pros and Cons of a Subsidiary Company in Bangladesh

Pros Cons
  • No restriction in business activity, allowed engaging in any business activities which is unrelated to its parent.
  • Though subsidiary is an independent and separate legal entity than its parent, eligible to use the benefits of parent’s brand in the market
  • 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 changes in shareholders or directors.
  • 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.