Starting or operating a business in Bangladesh requires navigating a web of regulatory requirements, with a business license being one of the most fundamental. Often referred to as a “Trade License,” this official permission allows entrepreneurs to legally conduct commercial activities. Issued by local authorities such as City Corporations, Municipalities, or Union Parishads, it ensures compliance with taxation, zoning, and public safety rules. In this guide from Jural Acuity, we demystify the process, drawing on the latest regulations as of 2025 to help you set up and sustain your venture smoothly.
What is a Business License?
A business license in Bangladesh is a legal document that authorizes an individual, partnership, or company to operate a specific type of commercial activity within a defined jurisdiction. It serves as proof of legitimacy, helping to regulate businesses, collect taxes, and protect public interests. Governed by laws like the Dhaka City Corporation Ordinance, 1983, and the Municipal Taxation Rules, 1986, it’s mandatory for all commercial entities—regardless of size. Without it, you can’t open a business bank account or engage in formal trade. The license is non-transferable and tied to the business’s location and nature, making it a cornerstone of compliant operations in Bangladesh’s dynamic economy.
Types of Business Licenses in Bangladesh
Bangladesh offers various licenses tailored to business activities, ensuring sector-specific oversight. The primary types include:
- Trade License (General Commercial): For retail, wholesale, or service-based businesses like shops, restaurants, or consultancies. Issued by local City Corporations (e.g., Dhaka North or South) or Municipalities.
- Factory License (DIFE): Required for manufacturing units under the Department of Inspection for Factories and Establishments (DIFE). It enforces labor laws, safety standards, and environmental compliance.
- Import Registration Certificate (IRC): Issued by the Chief Controller of Imports & Exports (CCI&E) for businesses importing goods. Essential for foreign trade.
- Export Registration Certificate (ERC): Similar to IRC but for exporters, allowing unrestricted exports once obtained.
- Drug Business License: For pharmacies or pharmaceutical operations, regulated by the Directorate General of Drug Administration (DGDA), involving strict health and safety checks.
- Fire License: Mandatory for high-risk businesses (e.g., factories or hotels) from the Fire Service and Civil Defence, focusing on fire safety.
Each type aligns with the business’s scale and sector, with some requiring additional environmental or industry-specific approvals.
Who Needs a Business License
Virtually every business operating in Bangladesh requires some form of license. This includes:
- Sole Proprietors and Partnerships: Small shops, freelancers, or family-run enterprises.
- Private Limited Companies: Even RJSC-registered firms need a local trade license for day-to-day operations.
- Foreign Investors: Multinationals or joint ventures must secure licenses for local activities, often alongside BIDA registration.
- Sector-Specific Entities: Importers/exporters, manufacturers, or healthcare providers face additional mandates.
Exemptions are rare and typically apply to non-commercial activities like personal farming. If your business generates revenue through trade, services, or production, a license is non-negotiable to avoid legal hurdles.
Steps to Apply for a Business License
The application process is streamlined through online portals like the e-Trade License system or LIMA for factories, but it varies by type and location. Here’s a general step-by-step guide for a standard Trade License:
- Determine Jurisdiction: Identify your issuing authority (e.g., Dhaka North City Corporation for northern Dhaka businesses).
- Gather Documents: Prepare required paperwork (detailed below).
- Fill Application Form: Use the online portal (e.g., etradelicense.gov.bd) or visit the zonal office. Select the correct form based on business type (manufacturing vs. commercial).
- Pay Fees: Deposit via designated banks or online; obtain a challan receipt.
- Submit and Verify: Upload/submit documents for inspection. Authorities may conduct a site visit.
- Receive License: Processing takes 3-7 working days for trade licenses; up to weeks for specialized ones.
For factories or import/export licenses, apply via the respective ministry portals (e.g., CCI&E for IRC/ERC).
Documents Required for Application
Requirements differ slightly by license type and business structure, but common documents for a Trade License include:
- National ID (NID) or passport copy of the owner/proprietor.
- Proof of business address (rent agreement or ownership deed).
- Recent passport-sized photo of the applicant.
- Tax Identification Number (TIN) certificate.
- VAT registration certificate (if applicable).
- Bank solvency certificate.
- Non-judicial stamp declaration affirming compliance with local rules.
- For companies: RJSC incorporation certificate, memorandum/articles of association.
- For foreigners: Work permit or visa copy.
Factory licenses additionally need factory layout plans and machinery lists. Always scan and upload clear copies for digital submissions.
Fees and Renewal Process
Fees are activity-based and location-dependent, with VAT (15%) and signboard charges added. For Trade Licenses:
Business Type | Initial Fee (BDT) | Renewal Fee (BDT) |
Small Retail/Shop | 1,000–5,000 | 500–3,000 |
Medium Commercial | 5,000–20,000 | 3,000–10,000 |
Large/Manufacturing | 20,000–40,000+ | 10,000–25,000+ (based on capital) |
Import/Export (IRC/ERC) | 5,000–15,000 | 2,000–10,000 annually |
Renewal is annual (by June-July for most), involving a similar process: submit prior license, pay fees (often 50-70% of initial), and get a challan. Late renewals incur penalties (up to 50% extra). Use online portals for auto-renewal via bank deposit.
Common Challenges and How to Avoid Them
Entrepreneurs often face hurdles like bureaucratic delays, incorrect categorization leading to high fees, or missing documents. Other issues include site inspection failures due to zoning violations or complex online portals.
Avoidance Tips:
- Pre-Application Audit: Consult a lawyer to classify your business accurately and check eligibility.
- Digital Tools: Use e-portals early and track status via SMS/email.
- Timely Preparation: Start 1-2 months before launch; budget 20% extra for unforeseen costs.
- Professional Help: Engage firms like Jural Acuity to handle liaison with authorities, reducing processing time by 50%.
Proactive planning minimizes disruptions in Bangladesh’s evolving regulatory landscape.
Legal Consequences of Operating Without a License
Running unlicensed is a serious offense under the City Corporation and Taxation Rules, leading to:
- Fines: Up to BDT 50,000+ per violation, plus daily penalties.
- Business Closure: Immediate shutdown by authorities like DIFE or City Corporations.
- Confiscation: Seizure of goods, especially for imports/exports.
- Legal Action: Criminal charges, license blacklisting, or imprisonment in extreme cases.
- Reputational Harm: Loss of bank accounts, partnerships, and market access.
In 2024-2025, enforcement has intensified, with raids on non-compliant factories resulting in closures. Compliance isn’t optional—it’s essential for sustainability.
Tips for Smooth Approval
- Categorize Correctly: Match your application to the exact business activity to avoid rejections.
- Go Digital: Apply via etradelicense.gov.bd or LIMA for faster processing (3-4 days vs. weeks offline).
- Double-Check Documents: Ensure all are current and notarized; include extras like photos.
- Budget Holistically: Factor in agent fees (10-30% of license cost) if using consultants.
- Follow Up: Monitor applications weekly and respond to queries within 24 hours.
- Plan for Renewal: Set calendar reminders 60 days before expiry.
These steps can cut approval time in half while boosting your application’s success rate.
Where to Get Help and Guidance
Don’t navigate alone—leverage these resources:
- Government Portals: e-Trade License (etradelicense.gov.bd), Bangladesh Trade Portal (bangladeshtradeportal.gov.bd), or DNCC/DCC websites.
- Regulatory Bodies: Contact City Corporations, CCI&E, or DIFE directly for queries.
- Legal Consultants: Firms like Jural Acuity, LegalSeba, or Counsels Law offer end-to-end services, from application to renewal.
- Business Support: Bangladesh Investment Development Authority (BIDA) for foreign investors; free webinars via SME Foundation.
- Hotlines: Call 16263 for trade queries or visit zonal offices.