In an attempt to encourage foreign companies to establish themselves in the area, the local government of Bangladesh has made the process of registering a corporation easier over time.
Limited liability company registration is the most popular and simplest option offered to foreign investors in Bangladesh. The government body that makes company and firm incorporation easier is the Registrar of Joint Stock Companies and Firms (RJSC).
You can get in touch with our group. If you need further expert guidance and are thinking about registering a company in Bangladesh.
Directors
A private limited company in Bangladesh must have two directors at minimum, according to the Companies Act of 1994. Directors may be nationals or international individuals. The directors ought to be at least eighteen years old, insolvent, and free of malpractice convictions. According to the Companies Act, qualifying shares specified in the Articles of Association must be owned by a minimum of one director.
Shareholders
In Bangladesh, a private limited corporation can have up to 50 shareholders, however two shareholders is the minimum required. A shareholder and a director may be the same person. In Bangladesh, foreign ownership is permitted to reach 100%. Following the incorporation process, the firm may issue new shares or transfer existing shares to a different owner at any moment.
Authorized And Paid-Up Capital
Bangladesh does not have a minimum or maximum amount of permitted capital. Both the association’s articles and memorandum of association must specify the permitted capital. A portion of the approved capital needs to be held in reserve.
For a private limited company, the minimum paid-up capital requirement is $1, and for a Bangladesh branch, it is US$50,000. It is possible to raise the paid-up capital following incorporation. Prior to registration, the shareholders must deposit the company’s designated paid-up capital into the share capital bank account.
As soon as the shareholders send in the share capital, the Bangladesh bank will issue an encashment certificate. This is a crucial document that the authorities demand when registering a company.
Registered Office Address
It is mandatory to provide a local registered office address during the company registration.
Trade License
Every company registered in Bangladesh is required to apply for a trade license or business license, which verifies that the recently formed firm is allowed to operate within the designated industry listed in the trade license. For further details on trade permits in Bangladesh, click the link provided.
TYPES OF LEGAL ENTITIES IN BANGLADESH
Private Limited Company
In Bangladesh, a sizable portion of businesses are registered as private limited corporations. Only the shared capital of the shareholders is subject to liabilities. In Bangladesh, private limited businesses may be entirely owned by foreign entities. In Bangladesh, anyone above the age of eighteen may register a corporation.
As per the law, a minimum of 2 and a maximum of 50 shareholders and 2 directors are required. The minimum paid-up capital requirement for a 100% foreign-owned company is $1.
Branch Office
An extension of a parent company is referred to as a branch. The branch isn’t a distinct organization. All of the branch’s debts must be paid for by the main company. A branch is permitted to conduct business in accordance with BIDA. In Bangladesh, opening a branch typically takes 45 to 60 days.
Representative Office
A representative office ought to have an overseas parent firm, just like a branch does.
The representative office’s limited operations serve as a means of coordination and communication for Bangladesh’s business resources. In Bangladesh, the representative office is unable to generate any local revenue.
Public Limited Company
A public limited company allows anyone to become a member. A Public Limited Company can have as few as seven members, and there is no upper limit to the number of members.
Companies Limited By Guarantee
Share capital and shareholders are not always present in companies limited by guarantee. Guarantors who consent to pay a predetermined sum of money to cover the firm’s liabilities in the event of debt control a company limited by guarantee.
Sole Proprietorship
The owner and the business entity are the same in a sole proprietorship. The owner’s liability is unlimited, and the owner is personally liable for all the liabilities. A sole proprietor is not required to register with RJSC.
COMPARISON TABLE OF BANGLADESH ENTITIES FOR INCORPORATION
| Sole Proprietorship | Partnership | Limited Company | Branch/Liaison Office | |
| Perpetual succession | up to the owner’s death. Later, it will be carried by the heirs. | up to the partner’s death. Later, it will be carried by the heirs. | Perpetual in nature unless agreed otherwise | Perpetual in nature unless agreed otherwise |
| Equity based share allotment | Not applicable | Not applicable | Applicable | Applicable |
| Residential status of the owners | Must be BD Citizens | Must be BD Citizens | Not required | Not required |
| Liability | Owner is required to take on all liability. | Owners are required to take on all liability. | Limited liability applies to directors and shareholders. | Limited liability applies to directors and shareholders. |
| Taxation | Tax will be calculated on the proprietor’s individual head of business at the individual tax rate. | Tax will be calculated on the partner’s individual head of business at the individual tax rate. | Tax will be calculated using the corporation tax rate. | For the branch office, tax will be assessed at the corporate tax rate. |
| May be owned by another business, rather than individuals | No | Yes | Yes | Yes |
DOCUMENTS REQUIRED FOR COMPANY REGISTRATION IN BANGLADESH
- Name clearance certificate from the RJSC
- Memorandum of Association and Articles of Association and other relevant corporate documents.
- A detailed narration of the business activity of the company.
- Detailed information of the shareholders.
- If the directors or shareholders are Bangladeshi, a National ID is required.
- A copy of their passports is needed if the directors and shareholders are foreigners.
- The registered office address of the Company.
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