How To Register A Subsidiary Company In Bangladesh
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