Business entities in Bangladesh
Since 2003, Healy Consultants has advised our Clients on the optimum corporate structure for Bangladesh business setup. There are several ways of doing business in Bangladesh, the most common being the setup of a limited liability company (LLC). Entrepreneurs may alternatively opt to establish a public limited liability company (PLC). Foreign legal entities are also allowed to set up branch offices or representative offices in Bangladesh.
The Bangladesh limited liability company (LLC)
- The Bangladesh LLC is the most preferred legal entity used by entrepreneurs setting up businesses in Bangladesh. A LLC requires at least 2 shareholders and 2 directors, who can either be individuals or legal entities. The directors and shareholders can be of any nationality and do not need to be resident in Bangladesh. A US$1 minimum paid-up share capital is also required to complete the incorporation process;
- The LLC must submit annual audited accounts to the Bangladesh Income Tax Authority.
The Bangladesh public limited company (PLC)
The Bangladesh PLC requires a minimum of 7 shareholders who can either be individuals or corporates. A PLC must also appoint at least 3 directors who can be of any nationality and do not need to be residents in Bangladesh. This entity can be publicly traded on the Bangladeshi securities market, the Dhaka Stock Exchange. A PLC must undergo annual accounts auditing process.
The Bangladesh branch
The Bangladesh Companies Act allows foreign entities looking to do business in Bangladesh to set up branch offices in Bangladesh. This entity must register with the Bangladesh Board of Investment (BOI) and comply with its regulations. A branch office is required to submit quarterly accounts statements of remittances from its parent company to the BOI and the Bangladesh Income Tax Authority. This entity must also appoint a statutory auditor.
The Bangladesh representative office
A Bangladesh representative office is not considered a legal entity and is not allowed to carry out any commercial activities in Bangladesh. This entity must register with i) the BOI ii) the Bangladesh Bank and iii) the Registrar of Joint Stock Companies and Firms. A rep office may only carry out market research and promote products and services of the parent company within Bangladesh.
Comparison table between Bangladesh business entities
|LLC||PLC||Branch office||Rep office|
|How long to set the company up?||5 weeks||7 weeks||7 weeks||6 weeks|
|How long to open company bank account?||4 weeks||5 weeks||4 weeks||4 weeks|
|Wholly foreign owned?||Yes||Yes||Yes||Yes|
|Minimum share capital?||US$1||US$1||US$50,000||US$50,000|
|File annual tax return?||Yes||Yes||Yes||No|
|Tax registration certificate required?||Yes||Yes||Yes||No|
|Recommended corporate bank account?||Standard Chartered||HSBC||Commercial Bank||Habib Bank|
|Does our Client need to travel?||No||No||No||No|
|Resident director required?||No||No||No||No|
|Resident shareholder required?||No||No||No||No|
|Minimum directors allowed?||2||3||1||1|
|Tax identification code (TIN) needed?||Yes||Yes||Yes||No|
|Bangladesh resident company secretary required?||No||No||No||No|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes|
|Corporate director(s) allowed?||Yes||Yes||Yes||Yes|
|Bangladesh corporate tax rate?||35%||35%||35%||0%|
|Annual financial statements required?||Yes||Yes||Yes||No|
|Statutory audit required?||Yes||Yes||Yes||No|
|Regulated by?||Registrar of Joint Stock Companies and Firms||Registrar of Joint Stock Companies and Firms||Registrar of Joint Stock Companies and Firms||Registrar of Joint Stock Companies and Firms|
|Allowed to issue sales invoices?||Yes||Yes||Yes||No|
|Allowed to sign contracts?||Yes||Yes||Yes||No|
|Allowed to import and export goods?||Yes||Yes||Yes||No|
|Can rent an office space in Bangladesh?||Yes||Yes||Yes||Yes|
|Can buy Bangladesh property?||Yes||Yes||Yes||No|
|Can own equity in other Bangladesh companies?||Yes||Yes||Yes||No|
|Total Bangladesh business setup costs in Yr. 1||US$12,710||US$16,620||US$15,950||US$15,970|
|Subsequent annual costs (incl. accounting and tax fee)||US$3,500||US$3,400||US$3,400||US$3,400|
|Sample engagement invoice|
Frequently asked questions
How do I setup an LLC in Bangladesh?Healy Consultants will assist our Clients with Bangladesh business setup by i) getting name approval from RJSC ii) opening a corporate bank account to deposit the paid up capital required iii) preparing all incorporation documents and iv) obtaining a TIN certificate and Trade License.
How many shareholders and directors do I need for Bangladesh company setup?At least 2 shareholders and 2 directors are required to setup a company in Bangladesh.
What is the minimum share capital required for Bangladesh LLC setup?There is no minimum share capital requirements for LLC. However, branch offices and representative offices must remit US$50,000 into their Bangladesh corporate bank account within 2 months of getting approval from the BOI.