Bangladesh’s expanding economy and advantageous location make it a profitable place to expand your commercial activities. In Bangladesh, registering a foreign corporation requires negotiating many legal procedures and processes. In this guide, we will walk you through the process of properly registering your foreign business in Bangladesh, ensuring that it complies with local laws and enabling a smooth entry into the Bangladeshi market.
In this article, we discuss How to register a foreign company in bangladesh.
STEP 1: Obtain Name Clearance
Before setting up your company in Bangladesh, you must first obtain approval for your chosen company name. This involves submitting an application to the Registrar of Joint Stock Companies and Firms (RJSC) for name clearance. The RJSC will review the name to ensure it is unique and does not conflict with any existing business names or violate intellectual property rights. Once the name is approved, you can proceed with the company registration process in Bangladesh.
STEP 2: Documentation
The following documents must be prepared for the purpose of the incorporation of the company:
- Memorandum of Association (MoA): This outlines the company’s objectives and scope of activities.
- Articles of Association (AoA): This defines the company’s internal regulations, including the roles and responsibilities of directors and shareholders.
- Registered Address: A registered address is mandatory for company registration in Bangladesh, as it serves as the official location for receiving legal and government correspondence. If you don’t have a registered address, Legal Advice BD can assist by arranging a temporary address to help you complete the incorporation process smoothly.
- Capital Details: Information regarding the authorized capital and paid-up capital must also be included. You can find a detailed explanation of Authorized Capital and Paid-Up Capital at the end of this article.
- Obtaining & executing the following forms:
- Subscriber page of MoA.
- Form i (Declaration on registration of the Company)
- Form ix (Consenting to be a director; minimum 2 directors required)
- Form xii (Particulars of the directors)
[If this process seems complex, there’s no need to worry. Your lawyer will handle all of these steps for you. Feel free to contact us.]
STEP 3: Initiating a Temporary Corporate Bank Account
- For international businesses venturing into Bangladesh, opening a corporate bank account is a crucial step. Begin by securing a temporary bank account in the company’s proposed name, ensuring you have the name clearance certificate from RJSC (Registrar of Joint Stock Companies and Firms). This account is pivotal for your business’s initial financial transactions and must be regularized once your company secures full registration.
- Upon account creation, it’s essential to transfer the initial capital contribution to this account. Following this, obtaining an Encashment Certificate from the bank is necessary. This certificate verifies the successful remittance of your capital contribution. Keep in mind, this account serves solely for the registration phase of your foreign company in Bangladesh.
STEP 4: Finalizing Registration With the RJSC
Completing your company’s registration involves submitting all prepared documents and the requisite government fees to the RJSC. This final step is fundamental in officially establishing your foreign business in Bangladesh. Upon thorough review of your submission, the RJSC will register your company and issue your Certificate of Incorporation, marking the beginning of your business journey in Bangladesh.
STEP 5: Post-Registration Compliances
After the registration process is completed, a Private Limited Company may have to obtain any or all the following documents, depends on the natures of business:
- Trade license from the relevant City Corporation.
- Trademark & Copyright registration.
- Tax Identification Number (TIN) from the National Board of Revenue (NBR)
- VAT Registration Certificate from NBR
- Fire Certificate from the Bangladesh Fire Service and Civil Defense Authority (for industrial ventures)
- BIDA registration, Export / Import Licenses, and Membership in relevant business associations in Bangladesh.
- Environment Clearance Certificate from the Department of Environment, if the company is involved in industrial projects (for industrial ventures)
- Investor visas, work permits and employee visas for foreign nationals.
Legal Advice BD provides a full range of post-registration legal services, tailored to meet your business’s needs. We offer flexible and cost-effective solutions to ensure your company remains compliant with all regulations. Our services are available in three convenient formats: monthly legal services, yearly legal packages, or work-based services, allowing you to choose the best option based on your specific requirements. Whether you need ongoing legal support or assistance with specific tasks, Legal Advice BD is here to provide expert, affordable legal solutions.
Documents / Information Checklist for Foreign Nationals
- Proposed company name(s).
- Office address & email address.
- Scanned copy of the Passport of each director.
- Signature of all directors and shareholders.
- Photo of all directors and shareholders.
- Mobile number & email address of all directors.
- Authorised capital, paid-up capital & Percentage of share.
- Who will operate the Bank Account(s)?
- Who will be the Chairman, Managing Director, Director, etc?
Capital Details: Authorized Capital vs. Paid-up Capital
When incorporating a company, two key terms you’ll encounter are Authorized Capital and Paid-Up Capital. Understanding these is crucial for setting up your business in Bangladesh.
- Authorized Capital is the maximum amount of share capital a company is legally permitted to issue to its shareholders. It acts as a ceiling for how much the company can raise through the issuance of shares. For example, if your company’s authorized capital is $1,00,000 this means your company can issue shares worth up to this amount. It’s important to note that government fees for company registration and other formalities are based on the amount of authorized capital. However, you don’t have to issue all of this capital at once, and the authorized capital can be increased anytime in the future if your business expands.
- Paid-Up Capital: On the other hand, Paid-Up Capital refers to the actual amount of money contributed by shareholders during the incorporation process. This is the initial contribution made by the shareholders and is typically lower than the authorized capital. For instance, if your company’s authorized capital is $1,00,000 but only $2000 is paid by shareholders during incorporation, the paid-up capital will be $2000. Like authorized capital, paid-up capital can also be increased later as the business grows.
By keeping these factors in mind, you can structure your company’s capital to allow flexibility for future expansion.
Conclusion
To successfully register and establish your presence in the Bangladeshi market, it is important to understand the legal requirements, organize the necessary paperwork, and fulfill all post-registration responsibilities. If you are looking to register a foreign company in Bangladesh our company lawyers can ensure the process is seamless for you. We hope our guide has helped you familiarize yourself more with how to register a foreign company in Bangladesh.