Foreign Company Formation: An entrepreneur has to follow nine specific procedures and legal steps to set up a business in Bangladesh. At the very first, the entrepreneur has to apply to the Registrar of Joint Stock Companies and Firms (RJSC) for Name Clearance Certificate. After receiving the certificate, the next step is to pay stamp duty at a Designated Bank and again apply to RJSC for registration. Then the company makes a seal and open a bank account and then apply for trade license to respective City Corporation or Municipal Corporations. After completing all those procedures, the entrepreneur has to approach to the National Board of Revenue (NBR) for receiving a TIN Certificate and registering with the Customs, Excise, and VAT Commissioner-ate. Finally, the investor requires to apply to the Bangladesh Investment Development Authority (BIDA) for registration.
Name Clearance Certificate for Foreign Company Formation
The first step is to apply to the Registrar of Joint Stock Companies and Firms (RJSC) for receiving a name clearance certificate for Foreign Company or any Company. This is a pre-requisite for registration of a new company (other than Foreign Company and Partnership firms) or a society or a trade organization. An applicant needs to apply via the RJSC website. The RJSC office will check the database and issue name clearance if it does not closely match or resembles any of the existing names. It will be valid for the next 30 days. An applicant will have to apply for registration within this timeline.Legal Basis of the Certificate, the Companies Act- 1994 Responsible Agency, Registrar of Joint Stock Companies and Firms (RJSC)
Process Step for Foreign Company
- Step 1: Applicant fills in the online application
- Step 2: Opening an E-account an RJSC website
- Step 3: Preliminary name search on the RJSC website
- Step 4: Payment of fees to the designated Bank
- Step 5: Submits the money receipt
- Step 6: Obtain the name clearance certificate
- A print out of the name clearance certificate
- Original copy of Money Receipt
PROCEDURE 02: Pay Stamp Duty at a Designated Bank
Payment of stamp duty is made to the account of the Treasury at the BRAC Bank. According to the Stamp Act, 1899 as amended on June 30th, 2012, for authorized share capital of up to BDT 1,000,000, the total stamp duty fees are BDT 4,000. These include BDT 3,000 for affixing stamps on the Articles of Association and BDT 1,000 for stamps on the Memorandum of Association. In addition, a certified copy of each document costs BDT 50.Legal Basis of the Registration, the Companies Act- 1994 Responsible Agency, Registrar of Joint Stock Companies and Firms (RJSC)
PROCEDURE 03: Process Step for Foreign CompanyStep 1: Preparing Memorandum of Association (MOA) and Articles of Association (AOA) as appropriate to the entity type Step 2: Visiting RJSC website to apply for company registration Step 3: Filling in Name Clearance Submission number and letter number Step 4: Filling in the prescribed forms Step 5: Attaching the MOA and AOA Step 6: Submitting the Registration Application Step 7: Depositing the required fee & receiving the payment slip form designated bank Step 8: Uploading document in online Step 9: Printing the uploaded documents and Submitting those documents & payment slip to RJSC office Step 10: Receiving a Certificate of Incorporation from the RJSC Office
Required Documents for Foreign Company Formation
- Name clearance certificate
- Memorandum and Articles of association
- Filled in Form I: Declaration on Registration of Company
- Filled in Form VI: Notice of Situation of Registered Office and of Any Change therein
- Filled in Form IX: Consent of Director to act
- Filled in Form X: List of Persons Consenting to be Directors
- Filled in Form XII: Particulars of the Directors, Manager and Managing Agents and of any change therein Evidence of Name Clearance
- Proof of payment (i.e. receipt from the designated bank) for Treasury Stamps
- TIN Certificate of all Directors
PROCEDURE 04: Make a Company SealBusiness founders can make a company seal at the Seal maker for BDT 100-200
PROCEDURE 05: Open a Bank Account
A company must first open a bank account In order to register for VAT. An entrepreneur will go to the concerned Bank and open a Bank account.
In order to register for VAT, the company must first open a bank account. Detailed procedures should be discussed with the Bank.
PROCEDURE 06: Obtain a Trade License
Getting a trade license is one of the important steps of starting a business in Bangladesh. An entrepreneur needs to receive a trade license from City Corporation or City Council of the respective business area. The trade license filled-in application form must be accompanied by the required documents.
PROCEDURE 07: Obtain a Tax Identification Number (TIN) Certificate for Company
In order to start business operations, every company must receive TIN Certificate from NBR. An entrepreneur can apply in online filling out prescribed online form and obtain TIN Certificate instantly. Alternatively, the entrepreneur can register for taxes at the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the National Board of Revenue (NBR) and obtain a tax identification number.
PROCEDURE 08: VAT Registration
For VAT purposes, companies register with the Customs, Excise, and VAT Commissionerate under the National Board of Revenue. The company’s VAT is regulated by the Customs, VAT and Excise Department of the region in which it operates. When an enterprise submits a VAT Registration application to the VAT authority an application must accomplish or enclosed the Trade License, Bank Solvency Certificate, TIN Certificate, Copy of BOI Registration & Deed of Agreement.
PROCEDURE 09: Registration with the Bangladesh Investment Development Authority (BIDA)
A foreign investor is required to be registered with BIDA. It is essential to obtain any licenses and permits such as Import Registration Certificate, Export Registration Certificate, Bond License, etc. to run business in Bangladesh. The BIDA registration is also mandatory for obtaining an industrial plots in the special economic zone. The investor needs to collect the application form from BIDA and submit the filled up form along with supporting documents to the respective department of BIDA.
- Step 1: Collect a local investment registration form from Registration & Investment Division of BIDA
- Step 2: Deposit the Registration fee, as per fee schedule from any scheduled bank in favor of Bangladesh Investment Development Authority and collect a pay order/bank order
- Step 3: Submit the completed application form with supporting documents to the concerned section
- Step 4: BIDA reviews the application and documents
- Step 5: If the application is approved, the Registration Certificate will be issued
- Application in duly filled in the prescribed form
- Trade License
- Certificate of Incorporation along with Memorandum of Association (MOA)
- Partnership Deeds
- Deeds of the proposed land
- Project profile, if the total project cost exceeds BDT 100 million
- Background of the proprietors in officials letterhead pad
- Pay Order/Bank Order for applicable registration fee in favor of Bangladesh Investment Development Authority
- TIN Certificate
- Investing in Bangladesh: Incentives
The BIDA offers a range of valuable business-related services to the international and national investment community. The office helps prospective investors and promoted firms in obtaining official permits and documents required for conducting business, including visas, work permits, and permanent residency permits. The BIDA also assists investors in gaining access to utilities such as water, electricity, gas, land, and telecommunications.
Information on Investment Opportunities
The Investment Services Center maintains comprehensive information on investment opportunities in Bangladesh, both by sector and by district. Information and investment advice is readily available to both Bangladeshi and foreign investors at no charge.
One-Stop Service CenterThe BIDA coordinated the establishment of a One-Stop Service Center for
- Trade License from respective city corporations and local government bodies are given within 48 hours, assuming all required documents are provided. Bangladesh Investment Development Authority with local government division insures this service.
- Company registration from Joint Stock Register’s office company registration complete within 48 hours.
- Registration of Bangladesh Investment Development Authority is complete within a day, assuming all required documents are provided.
- Electricity connection’s results are given within 10 days after receiving the application from BIDA where a representative of power development board authority is working.
- Environmental certificates are given within 10 days from BIDA where a respective officer from the Environment Department is working.
- From Bangladesh Investment Development Authority representative of Titas Gas Authority, the result of gas connection is given within 10 days from the date of application received.
- Foreign loan borrowing application disposed within 30 days assuming all required documents are provided.
- The tax-related complication is taken from BIDA by respective National Board of Revenue officers after getting an application from the entrepreneur and results are given within 10 days.
- Online services also provided by BIDA.
- Assistance for Land acquire is supported by BIDA.