Liaison Office and Branch Office Registration in Bangladesh: Step-by-Step Process

Foreign companies looking to establish a presence in Bangladesh often choose between a Liaison Office (also called Representative Office) and a Branch Office. These structures serve as extensions of the parent company rather than separate legal entities. The Bangladesh Investment Development Authority (BIDA) primarily regulates their setup. This guide provides a comprehensive, step-by-step overview of the registration process, requirements, and ongoing obligations.

What is a Liaison Office and Branch Office?

A Liaison Office (or Representative Office) acts as a communication channel between the foreign parent company and local entities in Bangladesh. It supports non-commercial activities such as market research, promotion of the parent company’s products/services, coordinating with distributors or agents, and gathering information. It cannot generate any local revenue or engage in commercial transactions.

A Branch Office functions as an extension of the foreign parent company and can undertake commercial activities (subject to BIDA approval). It may earn revenue from approved operations, issue invoices, and conduct business similar to the parent company (with limitations, e.g., no unrestricted manufacturing or retail without special permissions). Both are not separate legal entities; the parent company bears full liability.

Key Differences Between Liaison and Branch Offices

Here is a clear comparison:

Liaison suits exploratory or support roles; Branch fits active business operations.

Legal Requirements in Bangladesh

Permission from BIDA is mandatory. Applications are submitted via BIDA’s One Stop Service (OSS) portal. Post-approval, additional steps include opening a bank account, inward remittance, trade license, TIN, and (for branches) RJSC registration. All documents not in English must be translated and attested (e.g., by Bangladesh Embassy or relevant chamber).

Who Can Apply?

Foreign companies incorporated outside Bangladesh with a sound track record (often requiring proof of profitability and net assets) can apply. The parent company must demonstrate legitimate business purposes aligned with Bangladesh’s investment policies. Individuals generally cannot apply directly; it must be a registered foreign entity.

Required Documents

Common documents for BIDA (submit 4 copies, attested where required):

• Board resolution from the parent company authorizing the office in Bangladesh.
• Certificate of Incorporation, Memorandum & Articles of Association of the parent company.
• Audited financial statements of the parent (last financial year).
• List of proposed activities and organizational chart.
• Passport copies/details of proposed representatives/directors.
• Power of attorney if applicable.
• Prescribed application form.

Additional documents may be needed depending on the office type.

Registration Process with BIDA

1. Create an account and submit the online application via BIDA OSS portal with scanned documents and fees.
2. BIDA reviews (may involve committee meetings).
3. Receive approval letter (e-permission).
4. For Branch: Register with RJSC.
5. Open a local bank account and bring in inward remittance.
6. Obtain Trade License, TIN, VAT/BIN registration.

The process is largely online but may require physical submission of originals.

Approval Time and Costs

• Timeline: BIDA approval typically 4-6 weeks (up to 1 month in ideal cases). Full setup: Liaison 6-10 weeks; Branch 8-12 weeks.
• Costs: BIDA fees vary (BDT 5,000–100,000+ based on investment scale) + 15% VAT. Government fees around BDT 25,000–35,000 for some steps. Initial inward remittance: Minimum USD 50,000 (for establishment costs and 6 months’ operations) within 2 months of approval. Professional/legal fees extra (USD 2,000–4,000+).

Compliance After Registration

Submit quarterly expense statements to Bangladesh Bank (for Liaison). Annual tax returns, even with no income. Maintain proper books. Renew permissions periodically. Comply with labor, immigration, and environmental laws.

Allowed and Restricted Activities

Liaison: Allowed — liaison, market research, promotion, coordination. Restricted — any commercial/trading activity, revenue generation, contracts that generate income.

Branch: Allowed — approved commercial activities, services, limited manufacturing (via subcontracting). Restricted — activities beyond BIDA approval; full manufacturing/retail often limited.

Always operate strictly within the approval letter.

Tax and Banking Requirements

• Open a local bank account post-BIDA approval.
• Remit USD 50,000+ inward.
• TIN mandatory. VAT/BIN if applicable.
• Liaison: No corporate tax on local income (none generated); withholding taxes on salaries/payments.
• Branch: Corporate tax on Bangladesh income (rates applicable to foreign entities). File returns with NBR.

Report remittances to Bangladesh Bank.

Hiring Employees and Work Permits

Both can hire local and foreign staff. For expatriates: Obtain work permits from BIDA and security clearance. Bangladesh Bank permission for salary remittances. Follow labor laws (Factories Act, etc.) for locals.

Renewal Process

Approvals are typically granted for 3 years. Apply for renewal at least 2 months before expiry via BIDA with updated documents, performance reports, and fees. Extensions depend on compliance and need justification.

Common Mistakes to Avoid

• Incomplete or unattested documents delaying approval.
• Starting activities before full approvals/remittance.
• Engaging in unapproved commercial activities (especially Liaison).
• Missing quarterly reports or tax filings.
• Underestimating inward remittance requirements.
• Ignoring renewal timelines.

Benefits of Legal Assistance

Navigating BIDA, attestations, compliance, and sector-specific rules is complex. Experienced lawyers or consultants help avoid delays, ensure accurate documentation, handle negotiations, and provide ongoing advisory — reducing risks of rejection or penalties.