There are many legal challenges to starting and running a business in Bangladesh. Regardless of whether you are a small business owner, an entrepreneur or will be running a large organisation, familiarising yourself with these legal issues can save you money and ensure operations run smoothly. Don’t be scared, as we have got you covered, because Legal Advice BD is your companion on this legal journey!
Here are the ten most common legal issues businesses face in Bangladesh and how to navigate them.
1. Business Registration and Licensing
You need to properly register and use a license to operate each business in Bangladesh. This will depend on the structure of your business (i.e. whether you are a sole trader, partnership, or limited company).
- Sole proprietorships: Unregistered sole proprietorships for the business have to be registered with the City Corporation or Union Parishad.
- Partnerships: Partnerships are required to be registered under the Partnership Act of 1932.
- Private and public limited companies: As per the Companies Act 1994, Private and Public Limited Companies must be registered with the Registrar of Joint Stock Companies and Firms (RJSC).
The penalties for non-registration include the inability to open a bank account on behalf of the business, difficulties obtaining investment or loans, and potential legal consequences.
2. Taxation and VAT Compliance
Need to comply with tax laws under the National Board of Revenue (NBR)businesses This includes:
- Income tax – A company is required to submit annual tax returns.
- Value Added Tax (VAT) – Firms with an annual turnover of BDT in excess of Royalty.
- Withholding tax – Employers need to deduct tax at source from employees’ salaries.
Failure to comply with these regulations can lead to steep penalties, litigation, or a complete cessation of business.
3. Employment Laws and Worker Rights
The employment policies are defined in the Bangladesh Labour Act of 2006:
- Minimum wage and overtime pay
- Leave and holidays
- Occupational health and worker benefits
Businesses which continue to violate laws with respect to labour can find themselves in legal trouble, be subjected to fines, and lose their reputation. Written employment contracts are also needed to avoid disputes with employers.
4. Intellectual Property Protection
Intellectual property (IP) protection is key for businesses, particularly in competitive marketplaces. Key areas include:
- Trademarks – Trademarking brand names and logos with the Department of Patents, Designs, and Trademarks protects the use of these from others.
- Copyrights – Safeguards creative works such as software, music, and publications.
- Patents – Protect inventions so others cannot copy or sell them.
Without proper IP protection, businesses face the risk of theft or their brand identity being compromised, thus losing their competitive edge.
5. Business Contracts and Agreements
Business contracts need to be well-written and protected. Common contracts include:
- Contracts with suppliers and vendors
- Employment contracts
- Partnership agreements
- Client service agreements
Disputes arise among many businesses due to vague verbal or ineffective written agreements. Professional guidance is advisable for these legal contracts you still have.
6. Land and Property Disputes
Land disputes are a common legal issue, given that many businesses lease or own commercial properties. Challenges include:
- Unclear land ownership – A lot of businesses purchase disputed land without their knowledge.
- Fraudulent land documents – Invalid land deeds become legal fakes.
- Lease disputes – Disagreements between landlords and tenants regarding the terms of a lease.
If correct legal due diligence is done before purchasing or leasing the appropriate property, the earlier-mentioned issues can be avoided.
7. Business Loans and Debt Recovery
While they borrow loans, they fail to repay the loan amount and land up in legal matters. On the same note, companies struggle to collect funds from clients. Legal solutions include:
- Bankruptcy laws – A company may seek bankruptcy protection under the Bankruptcy Act 1997 if they are unable to pay debts.
- Arbitration and mediation – Methods of resolving disputes outside the court system, often faster.
- Legal notices – Issuing legal notices to defaulters prior to initiating legal action.
Applicable financial management and legal contracts are, therefore, assets of businesses, helping them prevent being in the debt solution of legal issues.
8. Corporate Governance and Compliance
Companies are required to comply with corporate laws such as the Companies Act 1994, which includes:
- Conducting Annual General Meeting (AGM)
- Maintaining financial records
- In accordance with agreements with shareholders
Non-compliance may lead to penalties, limitations on the way of conducting business, or even termination of the company. Corporate governance policy is an important driver of transparency and functionality.
9. Consumer Rights and Product Liability
According to the Consumer Rights Protection Act 2009, businesses have an obligation to produce goods of appropriate quality and sell products at fair prices. Common legal issues include:
- False advertising – Making deceptive claims about the benefits of a product.
- Defective products – Selling dangerous or substandard products.
- Unfair pricing – Charging more than the advertised price.
Companies must adhere to ethical marketing guidelines and put processes in place to assure quality and prevent consumer lawsuits and penalties.
10. Cybersecurity and Data Protection
As online businesses increase, cybersecurity laws are becoming more diverse. Section 8 of the Digital Security Act 2018 states that:
- Protection of personal data – Enterprises dealing with customer data must adopt confidentiality.
- Cyber fraud prevention – Preventing unauthorised access to digital information.
- E-commerce compliance – Internet companies need to complete transactions and data through the proper rules.
Losing business and customer data can result in fines, lawsuits, and reputational damage.
Learn More: Different Types of Writ Petitions in Bangladesh for 2025
Why Choose LegalAdviceBD.com?
Legal Advice BD can help you get it done, all the while your legal needs are covered. Here’s the reason businesses rely on us:
- Experienced Legal Professionals – We are lawyers specialising in business law contracts, taxation and regulatory compliance.
- Tailored Legal Solutions – We follow your business requirements, whether you are a Startup, SME or large corporation, with our legal counsel.
- Quick and Reliable Support – Receive speedy replies and professional solutions to resolve legal matters effectively.
- Affordable and Transparent Pricing – No hidden fees, just clear and fair pricing for legal assistance.
- Comprehensive Legal Resources – Maintain the legal compliance of your business with our articles, guides and legal updates.
Final Thoughts
Since legal issues are an unavoidable aspect of modern-day business in Bangladesh, if you do not want to pay heavily for making mistakes, then you need to be aware of it. Finally, do not overlook the importance of seeking professional legal advice and ensure that you comply with your local laws, as this will protect your business in the long run.
For expert guidance on business laws in Bangladesh, Legal Advice BD provides reliable legal support to help businesses navigate challenges effectively.