Company registration Bangladesh
Steps and law of limited company registration Bangladesh will be discussed after brief of Bangladesh economy. Due to geographical location, cheap labor and other favorable conditions Bangladesh is a golden place to do business. It has a population over 16 crores. A lot of companies are doing their business based on them. Like other south Asian countries, Bangladesh is also a country where relationship with the company matters more than the transactions in terms of selecting a company. Bangladesh is a rapidly growing country. Both in terms of population and in terms of economy. Not very ago from now, Bangladesh was an underdeveloped country and now it is a developing country and because of digitization and the projects that Bangladesh government has undertaken like “SDG” sustainable development goal, Digital Bangladesh etc. it is very much likely that if it goes this way, soon Bangladesh will stand in the line of the developed countries. Then the markets will be more lucrative. So, you can start right away now. But to do business in Bangladesh, to start up your own company at first you must legalize them. And what is the way to legalize them? – The only way to legalize your company is that you must apply for the registration and you will have to register your company.
Register is a public authority responsible for managing corresponding registry. Companies registry can be managed by courts such as Germany, Austria or government offices like United Kingdom, Ukraine, Bangladesh, India etc. Each country has its own features about company register, contents, purpose, public availability. At first let us know what a company register is –
A company register is a register of organizations in the jurisdiction they operate under. Now why would you register your company? Let me explain why –
Having a registered company name makes a difference when you approach clients and partners. To be more particular, it tells your customers that you are not a fly-by-night operator and you are here for the long-term business. You become more trustworthy to them. They will believe you. Consequently what this does is that it helps you convert customers more easily and efficiently than when running the business as an individual. “COMPANIES ACT,1994” states that, ‘any person (local or foreign) above the age 18, can register a company in Bangladesh. But to run your company you must understand the demands and meet them. Before limited company registration Bangladesh there are some key facts that you need to know –
Company name must be approved before incorporation of the company in Bangladesh. The Registrar of joint stock companies and firms (RJSC) is the sole authority which facilitates formation of companies and keeps track of all ownership related issues as prescribed by the laws in Bangladesh.
There is a requirement in the number of directors required in limited company registration Bangladesh. At least two is the number of director to register your company. At least 2 board members are required for your company registration in case of a private company limited and it increases to seven in case of a public company. Previously you had to do this application for registration process in black and white. But due to the digitization, now you can apply and finish all these tasks sitting on your home via online.
There is no limit on capital repatriation, it promotes growth for global firms because there is flexibility. There are no hard and fast rules regarding the investment capital, it depends solely on you, your type of business.
In a tax-free zone 100% foreign ownership can be implied. The corporate tax rate in Bangladesh at 25 percent and foreign ownership company tax is 35 percent at present. From 1997 to 2016 the average tax rate of Bangladesh was 30.88 percent. The highest tax rate was 40 percent in 1998 and the lowest tax rate was 25 percent in 2010. So, tax rate in Bangladesh is not a fixed number. It is dynamic in Bangladesh.
Steps of company formation Bangladesh
As a foreigner if you want to set up business in Bangladesh then there are some important key facts that you need to know:
At first steps of company formation Bangladesh is must select and clear the name of your company from the Registrar of Joint stock companies and firms (RJSC) and then you must open a bank account in the name of the company that you selected and cleared beforehand. Then you must bring in the initial paid up capital. This is a must for the foreigners to register your company in Bangladesh. All tasks and formalities of private limited company registration Bangladesh cannot be done without you having to visit Bangladesh. But in only one step, where opening the bank account in the registrar of joint stock company, it may need your presence. It also depends upon the bank you choose. If you choose an international bank which do business in Bangladesh, then you don’t need to come for that also. In Bangladesh there is no fixed rule that one or some of your directors must be local or something like that. So, all the directors and shareholders of your company can be foreigners. If you don’t want to relocate your company to Bangladesh, then there is no requirement for you to have any special Bangladesh Visa you don’t even need that. So, you can see the rules are very much friendly and flexible for the foreigners to do business in Bangladesh. It’s like Bangladesh is inviting them warmly to do business here in Bangladesh. If any Bangladeshi lives in the foreign countries, will be able to run their business and this will not be considered as a problem. Besides, the foreign people also can register their company in Bangladesh and they can visit any time in Bangladesh for the business purpose. But if you want to move to Bangladesh, then you are going to need a work permit. The business process steps can be named as follows –
- Registering a private limited company
- Registration of branch office by BOI, BEPZA.
- Registration of project office by BOI
- Franchise agreement.
Now you are ready to register your company. For registering your company, you are to follow certain necessary steps. These are described below –
- Name Clearance: Obviously you need to give your company a name. The name must not be common to any other company registered. You must get the name clearance at first and for this you must apply in their website following the rules given in the website. Then you will have to apply for name clearance and upon receiving a bank payment slip, 600 taka needs to be deposited to the designated bank. After completing all the above process, the applicant will get the clearance through the account in RJSC.
- Bank account opening and bringing up the paid capital (only for foreign shareholdings): Next you will have to open a bank account in the proposed company name with any scheduled bank in Bangladesh. You have to do just normal necessary tasks to open that bank account in your designated bank. The permission of sending remit is allowed in Bangladesh. When the applicant will complete all the processing of opening account, he or she will have been able to remit money to the account of foreign shareholders that are outside from Bangladesh. RJSC will need an encashment certificate that means you are okay from the bankside. So, the bank will issue you an encashment certificate that RJSC will need to register your company.
- Submit all the documents: The last steps of company registration Bangladesh are to submit all the required information’s and documents in the RJSCs website. After you finish all the processes, you will receive a bank payment slip for paying the registration fees along with stamp duty. When you made your payment in the bank, your part is done. The rest of the task will be done by the Registrar of Joint stock companies and firms. When all the above-mentioned process will be finished, now he or she will wait for the confirmation from RJSC because of the checking of the documents and other stuffs. After that the applicant will get
*MOA and AOA
These documents will be emailed to your account that is linked with the RJSC account. That’s why while giving your email address to the RJSC website must make sure that the mail address is official and it’s in use.
There are some barriers for only some selected nationalities for doing business in Bangladesh. In the rare case, it is seen that if the directors or shareholders are from outside, the total registration process would be got delayed because of the security and confirming issues properly. And in those cases, The RJSC will ask for some additional information’s and if you provide them correctly and if it doesn’t go against the policy then there is no problem you will get the registration certificate.
After the registration is done, there are some post steps of company formation Bangladesh formalities that you are to follow. These are –
#Share certificates for each of the shareholders.
#Register for shareholders, shares, directors etc. That means forming of your company.
#Company seal for the company.
#A rubber stamp for the company.
So, you can see the procedures are very much easy to register your company in Bangladesh. And now in the era of digitalization, you don’t need to go person to person. You can perform all the steps sitting at home. So, it is as simple as that to be an entrepreneur in Bangladesh. You just have to start up your own company, follow the necessary steps to apply for registration of your company. After a few days you will get your registration Certificate and you are free to conduct your business in Bangladesh. So, just indulge yourself, be a leader, be an entrepreneur, do your own business. Show a new path to the young generations. And register your own company by following these easy steps.
- Company registration by RJSC
- Work permit or visa is issued by BOI, BEPZA
- Income tax certificate or submission authority is NBR
- Recommended banks are local banks locating Gulshan area, Dhaka
- VAT is issued by local VAT office
- Trade license is issued by City Corporation or Union Porishad
- Expected required time of company registration Bangladesh for foreigner is: 10 days to 3 months, depend on nature of business and ministry approval
- Expected total Cost: Taka 130,000 to Taka 400,000, provided that in case of factory setup long time and many other additional permissions are required.