Types Of Company Registration In Bangladesh

A foreign company must register an entity in Bangladesh before it can commence it business here. If you are looking to incorporate or expand your business to Bangladesh, you may consider the following options. Investor can register one of the below options:

Private Limited

Private Limited Companies are suitable for individual businesses entrepreneurs that require registration as a private entity. In this type of company, a group of shareholders distributes the liability amongst themselves to help protect their personal assets. The total capital of such business types is the total of all the shares held by each member of the company. Also, the personal and business assets of the members are considered separate, allowing for better protection and security. The shares of such a company cannot be publicly traded or transferred. As per the Bangladesh Companies Act, 1994 to be eligible for this type of company registration, the private limited company must meet the following criteria:

Minimum of two and maximum of 50 shareholders
Minimum of two directors
100% foreign shareholding or foreign investment is allowed
Share Capital shall be any amount, BDT 1 (one) for each shareholder at minimum
Must have a registered office address in Bangladesh

Subsidiary Company

For the corporate shareholder, the most popular option is to register a subsidiary company in Bangladesh. The subsidiary company shall enjoy the same benefits what a local corporate enjoys.

As per the Bangladesh Companies Act, 1994 to be eligible for this type of company registration, the private limited company must meet the following criteria:

Minimum of two and maximum of 50 shareholders
Minimum of two directors
A corporate shareholder must nominate representative director on their behalf
100% foreign shareholding or foreign investment is allowed
Share Capital shall be any amount, BDT 1 (one) for each shareholder at minimum
Must have a registered office address in Bangladesh

Representative or Liaison Office

It is commonly considered as a representative office of the foreign parent company in Bangladesh, it can be your first step to enter into Bangladesh market as a temporary setup. The purpose of this legal entity is to conduct customer coordination, customer support, customer relationship, market research & analysis, etc. Liaison office is not permitted to allowed any revenue generating activities.

Branch Office

Apart from setting up a subsidiary company, foreign companies wishing to take a presence in Bangladesh can consider branch office as an option. A registered branch office in Bangladesh is an extension of its foreign parent company registered outside of Bangladesh and it is allowed to carry out commercial activities in a limited area.

Comparatives among Different Options

	Subsidiary Company	Branch Office	Branch Office Liaison /Representative office
Description	Separate legal entity from its parent company;	Not a separate legal entity from the headquarter (foreign company); An extension of the foreign company;	Not a separate legal entity from the headquarter (foreign company); An extension of the foreign company;
Key Registration Requirements	Name: The name can be different from the parent company; Constitution: Having its own constitution/MOA/AOA; Registered Address: Registered office address located in Bangladesh Shareholding: Parent company can hold 100% shareholding Paid up Capital:Minimum BDT 1 paid up capital	Name: The name of the Bangladesh liaison must be the same of the foreign company Constitution: No separate constitution/MOA/AOA from the foreign company Registered Address: Registered office address located in Bangladesh Shareholding: N/A Paid up Capital:N/A	Name: The name of the representative/ liaison office must be the same of the foreign company Constitution: No separate constitution/MOA/AOA from the foreign company Registered Address: Registered office address located in Bangladesh Shareholding: N/A Paid up Capital:N/A
Documents Required	Copy of the passport for all director & shareholder 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 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 & AOA Signed subscriber form, directors consent and declaration of register address	Certified copy of the passport for all directors of the foreign company Photograph of all directors of foreign company Certified copy of incorporation certificate, MOA&AOA, auditors report for last FY, Tax registration details of the foreign company A board resolution to take the decision to open a liaison office in Bangladesh, authorizing a specific individual to sign necessary registration documents on behalf of the foreign company A board resolution to select the bank in Bangladesh to open an operative bank account and the bank signatories Deceleration of business activities conducted in Bangladesh under the liaison office Bangladesh office organization chart	Certified copy of the passport for all directors of the foreign company Photograph of all directors of foreign company Certified copy of incorporation certificate, MOA&AOA, auditors report for last FY, Tax registration details of the foreign company A board resolution to take the decision to open a liaison office in Bangladesh, authorizing a specific individual to sign necessary registration documents on behalf of the foreign company A board resolution to select the bank in Bangladesh to open an operative bank account and the bank signatories Deceleration of non-commercial activities conducted in Bangladesh under the liaison office Bangladesh liaison office organization chart
Compliance Filing	RJSC: File Annual Return and audited financial report of the subsidiary to RJSC; Tax: 2 monthly TDS tax reporting, 1 half yearly TDS reporting, 2 annual TDS reporting and 1 annual tax return filing VAT/GST: Monthly VAT return, declaration of input-output coefficient and required to maintain VAT/GST record keeping FDI : Quarterly FDI reporting to Bangladesh central bank Licensing: Renewal of trade license, IRC & ERC;	BIDA: File quarterly return to BIDA/Bangladesh central bank and tax authority Tax: monthly TDS tax reporting, 1 half yearly TDS reporting, 2 annual TDS reporting and 1 annual tax return filing VAT/GST: Monthly VAT return, declaration of input-output coefficient and required to maintain VAT/GST record keeping; Licensing:Renewal of trade license, IRC & ERC;;	BIDA: File quarterly return to BIDA/Bangladesh central bank and tax authority Tax: 2 monthly TDS tax reporting, 1 half yearly TDS reporting, 2 annual TDS reporting and 1 annual tax return filing VAT/GST: Monthly VAT return and maintenance VAT/GST record keeping is only required when liaison office has VAT/GST registration Licensing:Renewal of trade license
Allowed Activities	Can have different business activities from the parent company Business activates defines as per business objective clause of Memorandum	Must be the same as the foreign company BIDA shall not allow any business activities other than its parent’s business.	Can only do market research, customer coordination or feasibility studies No business activity.
Valid period	Till company is closed	Till the validity of BIDA permission period It is renewable, application for renewal must be placed before 2 months of the expiry of current permission	Till the validity of BIDA permission period It is renewable, application for renewal must be placed before 2 months of the expiry of current permission
Liability	Since it is a separate legal entity. Any legal proceeding will be towards the subsidiary company only;	Parent company is fully responsible for any liabilities from the branch office;	Parent company is fully responsible for any liabilities from the representative/liaison office;
Taxation	Considered as a resident company and is eligible for tax benefits like a local company General Corporate Tax rate is 35%	Considered as non-resident company for tax purposes. No Tax benefits General Corporate Tax rate is 35%	N/A
Staff Hiring	No restriction on hiring local employee 1 foreign employee can be hired against each 5 local employees	No restriction on hiring local employee 1 foreign employee can be hired against each 5 local employees	No restriction on hiring local employee 1 foreign employee can be hired against each 5 local employees

Types Of Company Registration In Bangladesh

Comparatives among Different Options

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