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Small Business In Bangladesh generally, three types of entities are observed operating in Bangladesh. These are Limited Company, Partnership Firm, and Proprietorship Business. Around 65% of businesses are being operated as a sole proprietorship basis. A single entrepreneur can start a proprietorship business. Generally, small and medium-size business venture goes for proprietorship.


Following Issues are taken into account by the authority

Name of the Proprietorship Small Business
Owner’s name
Kinds of Small Business In Bangladesh such as Export, Import, Supplier, etc.
Business Address
Owner’s Address, Date of Birth, Parents Name
Owner’s National ID cards copy
Owner’s Photograph
The registered address of the business
VAT challah copy of Trade License
Office rental deed
Fill up Trade license form with the Owner’s signature


A proprietorship is not considered as a separate legal entity. The owner is liable for all the business consequences.


The owner shall have to pay the tax by his individual head as his personal income from the business.

Maintenance & Operation:

The operating cost is comparatively low for a proprietorship business
It is not required to prepare a profit & loss balance sheet & audit report annually
The owner is the only person who decides any business decision

Further required approvals:

Small Business In Bangladesh Once the Trade License is obtained for proprietorship business, a TIN certificate (Taxpayers’ Identification Number) is required to open a bank account (business account) to operate business transaction. At present most of the business implement VAT (Value Added Tax). To deduct VAT, one needs to collect a VAT Registration Certificate. TIN Certificate needs for deducting AIT (Advance Income Tax) at the source to operate the business.

If the proprietor wants to get involved with international business, he/she shall require Export Registration Certificate or Import Registration Certificate for doing international and multinational business. Now Bangladesh is one of the leading readymade garments, Jute, Frozen Food, Leather Goods, and Potato exporting country in the world. A good number of business entities like Proprietorship, Partnership Firm, and Limited Companies are interested to involve International business or Export & Import Business in Bangladesh. When two or more entrepreneurs want to start a Small Business In Bangladesh, either they have to form a Limited Company or a Partnership Firm.

This guide provides information on registration of a sole proprietorship in Bangladesh. To learn about various types of business entities in Bangladesh, refer to start a business in Bangladesh.

A sole proprietorship is the simplest form of structure in Bangladesh. However, it is suitable only for very small single-owner type business that does not carry any risks. Unlike a private limited liability company, a sole proprietorship does not provide limited liability protection and your personal assets are not protected from business risks.


A sole proprietorship in Bangladesh does not constitute a separate legal entity therefore it is not distinct from the owner/ proprietor. The business owner is personally accountable for all liabilities incurred during the course of the business.
Any Bangladeshi citizen of at least 18 years of age is eligible for a sole proprietorship.
A local commercial address must be provided as the business address for the sole proprietorship.
Profits of the sole proprietorship are treated as income of the individual who owns the entity, thus it is subjected to a tax rate as that of personal income.
As a Small Business In Bangladesh sole proprietorship is not a legal entity, it cannot register another business firm.
Sole proprietorships do not need to audit their accounts as any profits will be taxed as personal taxes.
Trade License is the basic requirement for proprietorship.
Trade License needs to be renewed annually.


Small Business In Bangladesh Practically, a sole proprietorship is not an option for foreigners. Foreign business professionals should incorporate a private limited company instead. For further details about private limited companies, refer to company registration in Bangladesh guide.


In order to register a sole proprietorship Small Business In Bangladesh, the following documents/information are required:

Proposed business name in Bangla
Description of principal activities
Local business address for the proposed business in any commercial area.
Lease/Rent Agreement or title deed for the office address.
Copy of National ID for the owner.


Ease of setting up: It is the easiest and least expensive business structure to set up.
Owner Control: As a sole proprietor you are in complete control of all the business affairs including decision making.
No profit-sharing: You accrue all income generated by the business.
Ease of termination: Terminating a sole proprietorship is easier, less time consuming and less expensive than other business entities.
Least compliance requirements: You are free of the obligation of filing returns annually and only need to renew your membership every year.


No separate legal entity: You are inseparable from your business. This makes you financially and legally responsible for all debts and legal actions against the business.
Unlimited liability: Creditors may sue you for debts incurred and can also obtain a court order to claim against your personal assets, including your property.
No corporate tax benefits or incentives: Taxes are determined at your personal income tax rate and you do not enjoy special tax benefits that are available to a private limited company.
Limited capital: Capital is limited to your personal finances and the profits generated by the business. Thus, business expansion is limited and difficult.
No perpetual succession: The business lives and dies with you as you and the business are one and the same thing. However, after the death of the owner of the proprietorship, the successor may continue the business in the same name.
Low public perception: This entity is the least preferred for serious businesses as nobody would be willing to lend you large sums of money. It is also difficult to attract high-caliber employees, or senior level executives who usually look for a more advanced form of business structure such as a private limited company.
Sale/transfer of all or part of the business: You can transfer the business only by the sale of business assets.

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Small Business FAQ

The most profitable businesses in Bangladesh with an investment of 25-30 lakh taka (approximately 29,000-35,000 USD) include: Clothing business: Bangladesh is known for its garment industry. ... Grocery store: Starting a grocery store in a densely populated area can be a profitable business idea.

However, an overwhelming number of these enterprises are micro (having less than 10 workers), small (10-49 workers) and medium (50-99 workers) enterprises, usually called MSMEs/SMEs.

Requirements for Starting a Business in Bangladesh Approval of the RJSC. A bank account in Bangladesh. Trade license issued by the local authority. Business Identification Number and Tax Identification Number. Rent an office in a non-residential location. Prepare blueprint and the map of business for factory setup permission
Company Registration Process in Bangladesh