How to Incorporate a Company in Bangladesh
Incorporating a company in any country is a complex task because you are most likely unfamiliar with local rules, requirements, and procedures.
If you want to incorporate or register a company in Bangladesh, this guide will educate you on how to incorporate a company in Bangladesh. You will clearly understand everything from start to end.
From choosing the company structure to finishing the incorporation process, the whole process seems difficult. But with this comprehensive and updated guide, the process is way easier than you guess.
So, keep exploring to know everything upfront to make your incorporation journey much easier.
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Select the Most Suitable Company Structure
You must confirm a legal entity type or structure to incorporate or register a company in Bangladesh. According to the Companies Act 1994, you can choose from the following legal structures in Bangladesh:
- Sole Proprietorship
- Partnership Business
- Private Limited Company (LLC)
- Public Limited Company (PLC)
- Branch Office
- Liaison Office or Representative Office
Here, a Private Limited Company (a company limited by shares) is the most popular company structure in Bangladesh with numerous benefits. Hence, the registration of a Private Limited Company is the most common form of company incorporation in Bangladesh. So, we’ll discuss how to incorporate a private limited company in Bangladesh.
Note: The Companies Act 1994 does not include a step-by-step procedure on how to incorporate a company. The Registrar of Joint Stock Companies and Firms (RJSC), also known as the Company House of Bangladesh deals with all company incorporation in Bangladesh.
Step-by-Step Procedure to Incorporate a Company in Bangladesh (Private Limited Company)
Follow these steps to incorporate a company in Bangladesh:
Step 1: Pass the Name Clearance
Step 2: Complete Documentation
Step 3: Remit the Paid-Up Capital in the Company’s Bank Account (if foreign)
Step 4: Finalize Registration with RJSC
Step 1: Pass the Name Clearance
Choose a unique name for your business and register it with RJSC.
You can’t register a name that closely matches or resembles a name that is already taken (registered, booked, or under the process of registration of the same entity type). Avoid a name that violates or infringes on any trademark. Also, avoid a vulgar name.
Create an account and perform a name clearance search on the RJSC website to confirm your chosen name is not already taken. If your chosen name is available, apply to the RJSC to register the name and get a Name Clearance certificate.
After submitting the name clearance application, pay the name clearance fee of BDT 500 per company name to the designated RJSC office counter. Update the payment information to your RJSC account.
Now RJSC will evaluate the uniqueness of your company name. It may take 1 to 2 business days to approve the name. Upon satisfaction, RJSC will issue a Name Clearance certificate.
Things to consider during the Name Clearance:
- You will only get a single approved name per Name Clearance application.
- The approved name or Name Clearance certificate will remain valid only for 30 days.
- You can extend the validity time of a Name Clearance certificate. You have to pay BDT 200 per time extension.
Step 2: Complete Documentation
Collect the required information and complete the documentation by preparing the following essential documents:
- Name Clearance certificate
- Memorandum of Association and Articles of Association
- A registered physical company address
- Confirm the name of the managing director, director, etc.
- All director’s and shareholder’s information
- Copies of NIDs of directors and shareholders (if Bangladeshi)
- Copies of passports of directors and shareholders (if foreigners)
- Photos of all directors and shareholders
- Information about authorized capital, paid-up capital, etc.
Note: All documents must follow local rules and regulations. So, seek professional assistance to prepare these documents correctly.
Now collect and duly fill out the following forms:
- Form I (Declaration on registration of company)
- Form VI (Notice of situation of registered office and any changes)
- Form IX (Director’s consent form)
- Form X (List of persons consenting to be directors)
- Form XII (Particulars of the directors, manager, and managing agents and any changes)
- Subscriber page of MoA
Note: Include the required signatures in these forms.
Step 3: Remit the Paid-Up Capital in the Company’s Bank Account (if foreign)
This step applies to a foreign-owned or invested company.
According to the Companies Act 1994 and the RJSC policy, a foreign company, shareholders, or investors must remit the minimum paid-up capital money to the company’s bank account.
If your company is foreign or has any foreign investors, open a temporary bank account in any of the suggested banks in your company’s name.
Submit the following documents to the bank for opening a temporary bank account:
- Name Clearance Certificate
- A copy of the Memorandum of Association
- A copy of the Articles of Association
- Copy of passports of directors and shareholders
- Photos of all directors and shareholders
- Other information and documents required by the bank
After the bank account is created, deposit the minimum required paid-up capital to this account. Then the bank will give you an Encashment Certificate stating that you have properly deposited the required paid-up capital money into the company’s bank account.
Note: Preserve the Encashment Certificate to submit to the RJSC for verification during the company registration.
Step 4: Finalize Registration with RJSC
Finalize and attach all the documents and forms mentioned above including the Encashment Certificate. Check twice that you have correctly filled the forms and taken the required signatures. Ensure all necessary details are included to avoid any complexity or rejection.
Now, submit these documents and forms to the RJSC. Submit digital and physical documents as recommended by RJSC and pay the registration fee at the authorized RJSC counter. The company incorporation fee varies based on your company’s authorized capital.
Physical documents include copies of the Name Clearance Certificate, MoA, AoA, Form IX, Firm X, Form XII, etc. Digital documents include scanned copies of MoA, AoA, Encashment Certificate, Form IX, etc.
RJSC officials will take 3-4 working days to review and approve your submission. Once the RJSC has approved your documents, they will issue and email the following documents:
- Certificate of Incorporation (includes your company name, registration number, and incorporation date)
- Memorandum of Association (MoA)
- Articles of Association (AoA)
- Form XII
So, you have completed your company incorporation in Bangladesh! Download and preserve the Certificate of Incorporation and other documents in digital and printed forms.
Post-Incorporation Formalities to Legally Run Your Company Activities in Bangladesh
Complete the following post-incorporation formalities to legally run your company activities in Bangladesh:
- Make the temporary bank account permanent to manage the company’s financial affairs. Submit the Certificate of Incorporation, MoA, AoA, and other required documents to the bank to make the account permanent.
- Obtain a TIN Certificate, VAT Registration Certificate, Trade License, and Fire Certificate.
- Obtain an Environmental Clearance Certificate and other permits based on your industry or business operations.
- Fulfill all liabilities and local compliance requirements.
- Register with BIDA (if foreign).
- Obtain visas and work permits for foreign investors and employees (if applicable).
Legal and Compliance Requirements for a Foreign-Owned or Invested Company
Foreign-owned or invested companies in Bangladesh must meet the following legal and compliance requirements to avoid regulatory issues and ensure smooth business operations.:
- Foreign companies or investors must fulfill the capital requirements. It varies depending on the industry.
- They must comply with foreign investment regulations and register with the Bangladesh Investment Development Authority (BIDA).
Benefits of Company Incorporation in Bangladesh
Investors or entrepreneurs, especially foreigners should consider the following benefits of incorporating a company in Bangladesh:
- A big and rapidly growing economy
- Suitable geographical location
- Abundant supply of resources to run various businesses
- Highly affordable labor and adequate laborers
- Favorable business environment
- Friendly investment/business rules and policies
- Easy ownership, investment, and trade policy and procedure
- Inexpensive company registration process
- Limited liability for shareholders
- Numerous highly profitable business opportunities
- Tax exemptions for many industries
- High tax incentive facilities for companies in the Economic Zones of Bangladesh
Challenges of Company Incorporation in Bangladesh
Consider the following challenges or disadvantages of incorporating a company in Bangladesh:
- Lengthy regulatory processes
- Unexpected issues in obtaining permits and licenses
- Increased inflation
- Expensive annual auditing for small businesses
- Delay in payments
- Delay in profit repatriation
- Deficiency of skilled laborers
- Deficiency of some technologies
- Lack of digitalization
Conclusion
Incorporating a company in Bangladesh lets you access a promising market and numerous opportunities. Thus, execute proper documentation, fulfill all compliance and legal requirements, and follow the right steps to incorporate your company in Bangladesh seamlessly.
No matter, if you’re a newcomer. Follow our comprehensive guide to simplify your journey of incorporating a venture in Bangladesh.
Consult with a company incorporation expert for the best guidance and assistance.
FAQs
On average, it takes about a month to complete the whole incorporation process with the RJSC, provided all documents are correctly submitted and all actions are correctly executed.
The cost to register a company in Bangladesh varies based on company type and its authorized capital. The cost includes government fees, digital signature costs, and other administrative expenses. On average, total costs range from $120 to $140.
Key documents include the Memorandum of Association, Articles of Association, shareholder information, copies of NIDs of directors and shareholders, a registered office address, etc. Foreign investors need additional documents, such as passport copies and BIDA approvals.
No, a foreign company doesn’t need a local partner to incorporate a company in Bangladesh. Bangladesh allows full foreign ownership for most types of businesses. A foreign entity or person can establish a company that is fully owned by that entity or person.
