Foreign Company Registration in Bangladesh
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Foreign Company Registration Consultancy in Bangladesh
বিদেশি কোম্পানির নিবন্ধন প্রক্রিয়া
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Introduction
Bangladesh maintains a liberal investment policy, allowing for 100% foreign equity ownership in most industrial sectors. Foreign investors can set up a subsidiary company (Private Limited), Branch Office, or Liaison Office. The Registrar of Joint Stock Companies and Firms (RJSC) is the primary authority for incorporation under the Companies Act, 1994.
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Process Overview
The registration lifecycle begins with obtaining a unique name clearance from RJSC, followed by opening a provisional bank account for the remittance of paid-up capital. Once the Encashment Certificate is secured from the bank, the digital filing of the Memorandum and Articles of Association (MOA & AOA) is executed. Upon verification and payment of statutory fees, the Certificate of Incorporation is issued, enabling subsequent post-registration compliances such as Trade License, TIN, VAT, and BIDA enrollment.
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Step 1: Name Clearance
The first step is to apply for a unique name for the proposed company via the RJSC website. If the name is available, a Name Clearance Certificate is issued, which remains valid for 30 days. This is a mandatory prerequisite for registration.
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Step 2: Bank Account & Capital Remittance
For foreign entities, opening a provisional bank account in Bangladesh is required to remit the paid-up capital. The foreign shareholder must transfer the share capital amount to this account. The bank will then issue an Encashment Certificate, which serves as proof of investment for RJSC.
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Step 3: Registration Filing
The application for registration is submitted to RJSC along with the Memorandum of Association (MOA), Articles of Association (AOA), and the Encashment Certificate. Directors must also submit their particulars (Form XII) and consent to act (Form IX).
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Step 4: Government Fees & Stamp Duty
Registration fees and stamp duties must be paid to the government treasury designated bank. The fee amount depends on the Authorized Capital of the company. Stamp duty is applicable for the MOA and AOA.
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Step 5: Incorporation Certificate
Upon verification of all documents and payments, RJSC issues the Certificate of Incorporation. This document gives the company its legal personality. For foreign companies, RJSC also issues certified copies of the MOA and AOA.
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Post-Registration Compliance
Following registration, the company must obtain a Trade License from the local City Corporation, an E-TIN from NBR, and a VAT Registration (BIN). Finally, registration with BIDA is essential for work permits, industrial utility connections, and profit repatriation.
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Required Documents
• Name Clearance Certificate
• Memorandum & Articles of Association (MOA & AOA)
• Encashment Certificate (Proof of Investment)
• Copies of valid passports of Directors/Shareholders
• Directors’ particulars (Form XII) and Consent (Form IX)
• Registered address details (Form VI)
• Joint Venture Agreement (if applicable)
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Investment Incentives
• Tax Holiday: 5 to 10 years for specific industries/zones.
• 100% Profit Repatriation: Allowed for dividends and capital.
• Bonded Warehouse: Facility for export-oriented industries.
• Accelerated Depreciation: On machinery and plants.
• Double Taxation Avoidance: Agreements with multiple countries.
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FAQ: Land Ownership by Foreigners
Under the Foreign Private Investment (Promotion and Protection) Act of 1980, foreign entities are legally permitted to possess property in Bangladesh. However, this is contingent upon securing government authorization, which often involves a detailed and protracted clearance procedure.
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FAQ: Opening a Branch Office
To establish a Branch Office, the following documents are mandatory:
1. Foreign Company's Certificate of Incorporation.
2. Memorandum and Articles of Association (AOA).
3. Audited Financial Statements of the parent company (last 2 years).
4. Board Resolution authorizing the Branch Office in Bangladesh.
5. Complete bio-data of Directors.
6. Encashment Certificate of US$ 50,000.
7. BIDA approval letter for the branch office.
8. Branch Office Incorporation Certificate from RJSC.
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FAQ: Local Representative Role
The Local Representative is a statutory role with responsibilities extending beyond simple liaison duties. Pursuant to Section 981 of the Act, the local representative is primarily answerable and responsible for ensuring compliance with the Act on behalf of the foreign company.
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Legal Basis & Authorities
Governing Law: The Companies Act, 1994.
Primary Authority: Registrar of Joint Stock Companies and Firms (RJSC).
Investment Authority: Bangladesh Investment Development Authority (BIDA).
Tax Authority: National Board of Revenue (NBR).
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Note: The registration process is subject to the PWD, RJSC, and BIDA fee schedules. This information is provided for procedural guidance based on the Companies Act, 1994, BIDA regulations, and standard industrial protocols. Professional consultancy is recommended for sensitive FDI matters.
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