In recent times, Bangladesh has become one of the emerging markets in the world. Due to this, many international companies are showing their interest in launching their business in Bangladesh.
However, RJSC registration is required for company registration in Bangladesh. When registering a new business or relocating an existing business, those are registered as Private Limited Liability Companies.
According to the Companies Act 1994, incorporation of companies in Bangladesh comes in a different practice and procedure. The system of company registration in Bangladesh is also different under the law.
Depending on the type of company registration in Bangladesh, a person can choose in Bangladesh. We first need to understand the types of companies you want to register with before registering a business.
Types of Legal Entities Available in Bangladesh
# Private Limited Liability Company (LLC)
A significant number of companies in Bangladesh are registered as Private Limited Liability Companies. A Private LLC is a separate legal entity where the liability is limited to the shared capital of shareholders.
Shareholders are not liable for the company’s debt beyond their contributed share capital. In Bangladesh, a private limited company can be entirely foreign-owned. Actually, the rules are simple.
According to the Companies Act 1994, anyone above 18 years old can register a company in Bangladesh. Besides, the company must include a minimum of 2 and a maximum of 50 shareholders and 2 directors. You can form a joint venture with local entities to share strengths and reduce risks.
# Public Limited Company (PLC)
Conversely, a Public Limited Company is managed by directors, and shareholders own it. It can offer the public to hold shares. Besides, a PLC is generally registered and listed on a stock exchange.
The details about it need to be more open and public. This company has at least seven members, three directors, and a lot of shareholders. The shareholders can b anyone above 18 and legally qualified by Bangladesh Law.
However, the fund in PLC is raised by the public. The primary goal of a public limited company is to generate profit and maximize shareholder value. Besides Company Act 1994, the PLC should obey the Securities and Exchange Commission Act 1993.
# Branch Office
Any foreign company can expand their business as a branch office. No minimum capital is required to start a branch office in Bangladesh. Besides, there is no obligation for the number of minimum members. The foreign parent company must control this entity.
# Representative Office
A representative office is registered primarily for research or marketing activities and development activities. It is also known as the Liaison office. Like the Branch office, there is no requirement for several members. Also, no minimum capital is required.
Company Registration in Bangladesh Requirements
Allowable Foreign Ownership
Bangladesh is very open about foreign ownership. It allows foreign ownership up to 100% in most sectors. However, you need prior endorsement in some sectors. Conversely, some sectors confine both foreign and local investment.
Minimum Capital Prerequisite
There is no minimum capital needed to register a company in Bangladesh officially. Hence, $1 is measured as the minimum capital contribution. Investors should remember that they need to make at least $50000 if they want to hire foreign employees.
How to Register a Business in Bangladesh?
The following is the step-by-step process for registering a business in Bangladesh.
Step 1: Get Name Clearance
At first, you need approval for your business’s name. So, you need to apply for name clearance in RJSC (Registrar of Joint Stock Companies and Firms). You need the following to obtain name clearance.
- Application form
- Company’s proposed name
Step 2: Drafting Necessary Documents
You need to draft the Memorandum of Articles (MoA) and Articles of Association (AoA). Then, you need the resolution to open a new company in Bangladesh. Complete the following forms for company registration in RJSC;
- Form I: Announcement regarding registration of the company
- Form VI: Notification of the status of the registered office
- Form IX: Director’s consent to act
- Form X: List of people who have agreed to be directors
- Form XII: Details of directors, managers, and managing agents
Step 3: Bank Formalities
Directors shall open a temporary bank account in any scheduled banks in the proposed company’s name. Provided that the account will be regularized after the company is correctly registered with the company house.
Mention the capital contribution to the bank account opened. Then, obtain an encashment certificate mentioning that the amount required for capital contribution has been duly transferred to the temporary bank account of the proposed company.
Step 4: Submitting the Documents to RJSC
Submit all the required documents to the RJSC with the registration fees. Complete registration of a company in Bangladesh takes around 45-60 days. Meanwhile, you can keep an eye on RJSC for an incorporation certificate.
Step 5: Post-registration Consent
For the time being, you have obtained a Memorandum of Association (MoA) and Articles of Association (AoA). This means you have registered a company lately in Bangladesh. Then, you will require a few additional licenses and registrations;
- Tax Identification Number (TIN)
- Trade License
- VAT Registration Certificate
- Fire Certificate
- Environment Clearance Certificate
How Much Time Registration of a Company Takes?
Once the formalities mentioned above are followed, it’ll take 6-8 working days for RJSC to provide the Certificate of Incorporation. From the date of submitting all the documents, it takes two to three weeks to register a company in Bangladesh.
Get in touch with ACE Advisory for more support.