How to Setup a Branch Office in Bangladesh | Process, Eligibility?

Overview of Branch Office Registration

In Bangladesh, foreign company are permitted to setup a branch office. However, unlike forming a Private Limited Company, establishing a branch office necessitates approval from the Bangladesh Investment Development Authority (BIDA).

For setting up a Branch Office, the BIDA is the approval authority. The foreign company can only begin operations after receiving a branch license from the BIDA.

However, the following factors are also relevant to the BRANCH Office:

  • BRANCH office is suitable for foreign companies that want to open a temporary office in Bangladesh but aren’t interested in or planning long-term activities in Bangladesh.
  • BRANCH office registration allows it to function as a legitimate business entity in Bangladesh.
  • BIDA is the Governing body for the branch office License.
  • The Bangladesh branch office’s name must be the same as the foreign parent companies.
  • BIDA allows Branch Office to do business in Bangladesh but only for the activities listed in the Branch Office application. Any additional activity carried out by the Branch Office will be illegal.
  • The branch office can conduct business in the same way that the parent company does in their home country.
  • BRANCH OFFICE, on the other hand, is restricted when it comes to manufacturing activity. A branch office, for example, cannot conduct manufacturing activities directly but can subcontract them to a Bangladesh company.

Permitted Activities of Branch Office in Bangladesh

  • It can import and export commodities.
  • Professional and consulting services are provided.
  • Conduct research in all areas where the parent company is already present.
  • On behalf of the parent company, increasing technical/financial partnership.
  • Working in Bangladesh as a representative of a parent company and acting as a buying/selling agent.
  • Can provide IT services and produce software.
  • Indulging in the provision of technical support for the parent company’s products.
  • Working in Bangladesh as an authorised representative for a foreign shipping or airline company.

Important points to consider before setting up Branch office in Bangladesh

  • 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.
  • Taxation In Bangladesh – As the Branch office does generate revenue in Bangladesh so that all regular tax compliances including profit tax @30% are applicable to Branch Office in Bangladesh.

List of Documents for Branch Office Registration

Documents Required from Parent Company –
  1. Certificate of Incorporation of Foreign Company.
  2. Memorandum & Article of Association.
  3. Audited financial statements of Parent Company (last two years).
  4. Board Resolution for opening the BRANCH office in Bangladesh.
  5. Complete details of Directors.
  6. Complete details of shareholders of the applicant company.
  7. A declaration stating the nature of the activity Parent Company.
  8. A declaration stating the nature of the activity of the proposed BRANCH office in Bangladesh
  9. Employee list of the proposed BRANCH office.
  10. Authorization letter to a consultant who shall process the application on behalf of the applicant.

Documents mentioned in points 1-4 must be translated into English and attested by the concerned Bangladesh High Commission of the respective country.

Step-by-Step Process to Setup Branch Office Bangladesh

Step-1:  Obtaining BIDA Permission

The following process shall take to Obtain Permission –

  • Account creation with BIDA web portalBefore filing an application, creating a user id is a pre-requisite after depositing the govt. fees for account creation.
  • Filling of application to BIDA –  A foreign company’s liaison office application is filed with BIDA. The application is submitted Online.
  • Approval of application by ECThe meeting of the executive committee (EC) of BDIA hold twice every month. Upon documents verification results and decision by the executive committee, BIDA shall approve the Liaison Office application.
  • BIDA Permission LetterIn two (2) weeks after approval from Executive Committee, BIDA issue an e-letter for BIDA permission. This permission letter is the key and primary legal documents for Liaison Office as approved Liaison Office.
Step-2:  Certificate of Filing to RJSC

An online filing shall make to RJSC (Register of Joint Stock Company) to register the Branch Office as a Foreign Company.

Step-3:  Trade License

Apply to local government to have Trade License to run Branch Office commercial activities in Bangladesh. To have a trade license you must have a commercial office address and rental agreement thereto.

Step-4:  Tax Identification Number

The income tax department of Bangladesh issues a unique 12-digit number, known as E-TIN. Once the E-TIN is obtained, the liaison office is eligible to open its bank account.

 Step-5:  Bank Account Opening

A bank account can be opened in any commercial scheduled bank in Bangladesh. The initial investment of $ 50,000 must be remitted to Bangladesh by 2 months from the BIDA permission letter date.

Step-6:  Inward Remittance of Initial Investment

The initial investment of $ 50,000 must be remitted to Bangladesh within 2 months from the date of BIDA permission. An additional 5% of total remittance shall require bringing to Bangladesh as a penalty in case of non-compliance of the said 2 months tenure.

Step-7: VAT Registration

After receiving the initial remittance, a 13-digit online VAT registration / BIN (Business Identification Number) shall obtain.

However, if Branch Office makes any import/export business they need to obtain IRC (Import Registration Certificate) for import business and ERC (Export Registration Certificate) for export business.

After receiving the above permission and registration a Branch Office in Bangladesh is eligible to start its activities in Bangladesh.

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