How to Register a Private Limited Company in Bangladesh
Business structure of Bangladesh
There are basically three types of business structures in Bangladesh. These are (1) Limited Company, (2) Partnership Firm and (3) Sole Proprietor.
Limited companies are one of two types: (a) Private Limited Company and the other (b) Public Limited Company.
The RJSC also registers foreign companies and branch offices, communications offices, representative offices of multinational companies. Joint Venture Companies are also registered with the RJSC.
A Private Limited Company requires a minimum of two and a maximum of fifty directors. On the other hand, the minimum number of members for a government limited company should be seven and the maximum should be unlimited. For a joint venture company, the minimum number of members should be two and a half and a maximum of fifty. One of the lowest members should be Bangladeshi and at least one foreigner. You cannot start a limited company as a soul owner in Bangladesh
Documents required for register a company in Bangladesh
For the purpose of incorporated in Bangladesh, the following information is required;
- Company name. A name clearance must be obtained (learn more about name clearance).
- Memorandum of Association and Association of Articles: The RJSC requires that the object clause in the MOA be between 400 words and 7 terms.
- Shareholders / Directors details: Address, Etienne, NID, Passport (Download a guide form)
- Registered address
- Signed form IX and customer page
- For Foreigners: (a) Copy of shareholder/manager’s passport. (B) Encashment Certificate (Learn more about Enhancement Certificate
Key points about the company structure of a private company
Company Name: The name must be approved (deleted) before the company can be included in Bangladesh.
Director: At least two directors are required. The directors may be local or foreign. Managers must be at least 18 years old and should not be insolvent or guilty of any past weakness. The law requires a director to hold the eligibility actions described in the Articles of Incorporation. Any shareholder who is not a natural person (i.e. a company) may be appointed by a designated director.
Shareholder: a private equity company in Bangladesh can have a minimum of 2 and a maximum of 50 shareholders. A director and a shareholder may be the same or different person. The shareholder may be a natural person or any other legal person, such as another entity. 100% local or foreign action is allowed in most sectors. New companies may be issued or existing shares may be transferred to another person at any time after the process of incorporation of companies in Bangladesh has passed.
Authorized capital: You must enter the approved capital in the Memorandum of Association and Articles Association. This is the maximum amount of share capital that the company is authorized to pay to shareholders (allotments). Part of the authorized capital may be left unresolved. There is no minimum or maximum limit for approved capital in Bangladesh.
Paid-up capital: the minimum paid-up capital for the registration of a company in Bangladesh is 1 Taka. The paid-up capital (also known as the share capital) can be raised at any time after its establishment.
Registered address: To register a company in Bangladesh, you must provide the local address as the registered address of the company. The registered address must be a physical address (maybe a residential or business address) and the PO cannot be a box.
Memorandum and articles of organization: The entities involved must prepare a Memorandum of Association (MOA) and articles of association (AOA).
Minimum capital requirements
There is no minimum government capital requirement in Bangladesh. For this reason, $ 1 is considered a minimum capital contribution. However, investors must remember that they are planning to hire foreign employees if their internal remittances are not less than $ 50,000.
Post Registration Formalities
After registering the company, more work should be done to manage the business. First, the company name requires a trade license and collects it from a nearby licensing authority (in case the city corporation provides the city corporation trade license or the rural union council issues a trade license).
An E-TIN certificate is required for newly registered companies to receive a trade license. E-TIN should be collected from the National Board of Revenue (NBR).
If you want to go into export business you need an export registration certificate (ERC) or if you want to import business, you need an import registration certificate (IRC). If you can start an indenting business, you need an indenting registration certificate. Issue of all imports and exports of the ERC, IRC and Indenting Certificate by the Office of the Chief Regulator.
Currently, most businesses in Bangladesh need a VAT registration certificate. To start a particular type of business you need the prior permission of the concerned authority.
Consideration for foreigners
Name clearance: The name of the proposed company obtained from the Registrar of Joint Stock Companies and Firms (RJSC) is mandatory.
Bank account: A bank account is mandatory in the name of the proposed company.
Travel to Bangladesh: The Company can be formalized without visiting Bangladesh. The only exception can be opening a bank account.
Nationality: One or more or all directors and shareholders may be foreigners.
Visa: Just want to include a private limited company but there is no need to get any special Bangladesh visa unless there is no plan to relocate to Bangladesh. Whenever there is a need to participate about companies on a short-term basis, anyone can be free to operate the company from abroad as well as visit Bangladesh on a business visa.
Work Permit: If a foreigner plans to transfer to Bangladesh to operate your company, it is necessary to obtain a work permit.
Alternative options for foreign investors to set up business
Bangladesh is very open about foreign ownership, up to 100% foreign ownership is allowed in most sectors. Some sectors, however, require approval from your government and some sectors restrict both domestic and foreign investment. Similarly, other benefits include the right to buy land and property in the name of the company, tax incentives, etc.