Option 1: Liaison/Representative Office

A liaison office is the first route foreign companies can pursue when intending to set up in Bangladesh. Such setups are intended to be temporary and short-term and cannot engage in any commercial activities that would otherwise generate revenue.

A liaison office works as a communication channel between the parent company settled abroad and their parties in Bangladesh. Foreign companies setup liaison office in Bangladesh to explore and support business prospects in Bangladesh.

Such an office acts as a communication bridge. It promotes import and export from/to Bangladesh, promotion of technical and financial participation of foreign parents, conducting market research, customer/supplier coordination/relationship, providing feedback, etc.

Permitted Activities of Liaison Office in Bangladesh:

• Establish communication and coordination between the foreign principal company and the parties in Bangladesh with an intention to create market opportunities.
• Promotion of import/export relationship between countries.
• Form a financial and technical collaboration between Bangladesh and overseas companies.
• Represent the foreign parent company in Bangladesh.

To learn more, see requirements and procedure for setting up a Liaison/Representative Office in Bangladesh.

 Option 2: Branch Office

Setting up a branch office in Bangladesh is the next possibility. Branch offices are extensions of the foreign company itself and thus allowed to conduct the relevant business activities that fall within its scope of business. Unlike a registered office, it is able to repatriate 100% of its earnings and revenue, and there are no limitations on the number of employees it can have. Setting up and registering a branch office in Bangladesh can be a better long-term option than a representative office.

In order to successfully set up a branch office in Bangladesh, the foreign company must meet the following statutory requirements:

• Minimum Investment Requirement – A parent company must invest $50,000 or 6-months operative expenses including initial office setup cost whichever is higher.

• Age of the Parent Company – The foreign parent company shall be at least 2 years old as a registered company outside Bangladesh.

• Operating Expenses – A Branch Office must cover all the expenses of the Bangladesh office using remittances from the Head office or revenue generated from BIDA approved Bangladesh operations.

• Name & Approval of Branch Office – The name must be similar to that of the foreign parent company. In addition, an approval is needed for liaison office from Bangladesh Investment Development Authority (BIDA) .

• Auditing & Taxation – Annual statutory auditing and filing of annual tax is mandatory. 

To learn more, see the requirements and procedures for setting up a Branch Office in Bangladesh.

Option 3: Subsidiary Company

A subsidiary company is essentially a private limited company with a corporate entity as the major shareholder. It can be 100% completely owned by a foreign entity. Not only can it conduct its relevant business activities here in Bangladesh, but also repatriate and account for all its earnings made. There are no limitations on the number of employees it can have.

To register as a subsidiary company, the foreign company must meet the following statutory requirements:

• The subsidiary must have a registered office address in Bangladesh.
• 100% foreign shareholding & foreign director is permitted.
• The minimum number of directors is 2 and the maximum is 50.
• The minimum number of shareholders is 2 and the maximum is 50.
• The minimum amount of share capital is BDT 1 by each shareholder.
• All the directors and members of the company shall be above 18 years of age and have a sound mind.
• Both an artificial person (corporate) and a natural person can be the shareholder of a private limited company.

Furthermore, the following annual compliance conditions must also be met:

• Submission of annual audited accounts.
• Filing of Annual Returns to be completed.
• Filing of tax returns to be completed.

To learn more, see the requirements and procedures for company registration in Bangladesh.

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