The process for registration of companies has been simplified over the years the government of Bangladesh with its apex body Registrar of Joint Stock Companies and Firms (RJSC) has taken various initiatives to digitalize the process of company or business registration in Bangladesh.
Key information for registering a company is as follows:
- For registering a company, in most cases, local shareholders or local directors are not required.
- Companies can be opened completely and remotely and the investors do not need to visit Bangladesh.
- Remote access to the bank account is possible.
- The investor must send the paid-up capital into a bank account of the company before registration.
- There is no minimum or maximum paid-up capital for registering a company. However, there is a threshold of USD 50,000 which gives certain advantages including the appointment of foreign workers to the company.
- Once the paid-up capital is received in the bank account, a company can be registered within 2 weeks.
- Any equity in the company is tax-free.
So, the process for registration can be summarized as follows:
Step 1: Investors can hire a legal consultant to register a company
When an investor decides to register a company, he can engage a legal law firm or legal consultant to prepare all the necessary documentation. The first and foremost stage is to obtain
- A name clearance of the proposed company
This can be done digitally within 30(thirty) minutes once the lawyer is instructed. Digital payments are also accepted on the RJSC website.
Step 2: Lawyers and shareholders must draft object clauses carefully
Once the name clearance is obtained the lawyer need to prepare statutory document including the Memorandum and Articles of Association, particulars of the director and consent of the directors. There is prescribed information which needs to be mandatorily present in the Memorandum and Articles of Association beyond that, the shareholders are at liberty to draft necessary clauses. Moreover, it should be kept in mind that Bangladesh limits the object clauses that can be inserted into the Memorandum and because changing the Memorandum is quite burdensome it is advised that the lawyers and the shareholders carefully draft those object clauses. At the discretion of the shareholder, the articles of association can be modified at any time.
Step 3: Shareholders must open bank accounts and verify Encashment Certificates
Once these documents are prepared the shareholder need to open a bank account. Most banks allow a remote account opening for this purpose and the lawyers can be authorized to open the bank account for the company. This is a locked account, and any money sent to this account cannot be withdrawn by anybody as per the laws of Bangladesh. Once the bank account is open, the shareholders need to send money into the bank account. As stated earlier, there is no minimum paid-up capital; it will depend on the business needs of the company. Everything that is listed as paid-up capital must be remitted before the registration of the company as per the laws of Bangladesh. Once the money comes into the account the consultant needs to obtain an encashment certificate from the bank with the encashment certificate the company needs to apply to the RJSC website for registering the company. Once the documents are uploaded into the RJSC system a prescribed fee is paid after that RJSC will verify the authenticity of an encashment certificate.
Timeframe of an Encashment Certificate
It normally takes 7 working days to complete the verification process. Our consultant can expedite the verification process in case the shareholders have a strict time limit for registering a company. Once it is verified the company will be registered in 2-3 working days. So, as stated the complete registration process is digital.
Formalities after Company Registration
Upon the registration of the companies, the consultant needs to obtain a few other basic licenses (or permission) which enables a company to start its business. This includes
Obtaining Trade License
The Trade License can be obtained from any local government body (City Corporation or Pouroshova) the local government authority at a prescribed fee and the Trade License will mention the type of business the company intends to undertake. It should be noted that for a trade license company must have a business place and this business place has to be a commercial address. Additionally, the company can also operate a virtual office and we can provide a virtual address to the company for the trade license purpose. Secondly, with the trade license, the company needs to obtain a Tax Identification Number (TIN) which normally takes 1 hour to obtain through the National Board of Revenue (NBR) website. Thirdly, also a company needs to obtain a Value Added Tax (VAT) Registration certificate from the National Board of Revenue. This typically takes 6-7 working days.
After getting a Trade License and TIN company needs to inform Bangladesh Bank through their bank and once the intimation has happened the account will be converted into a regular current account and the company is allowed to use the balance held in the account. Most of the banks in Bangladesh allow complete remote online trading within the territory of Bangladesh. For outward remittance, a manual application has to be submitted to the respective banks.
It should be noted that for the initially proposed account digital signature is acceptable but for the regularization of the account the company is required to send the original copies of the bank account opening forms and other documents as prepared by the consultant and we can remotely regularize the account without the investors needing to be present in Bangladesh.
Following additional services that Jural Acuity provides:
· Nominee Director Services (please note that in Bangladesh there is no requirement for a resident director and the director can leave abroad. However, for operating purposes and signing necessary documentation company can authorize someone as a nominee director to take necessary action. Furthermore, the company can also authorize an officer of the company to operate the bank account and other statutory formalities and in that case, the nominee director is required.
- Virtual Addresses
- End-to-end company secretarial support.
- We can also deliver accounting support, TAX and VAT return support other licensing support (statutory Audit through the designated chartered accountant fund)
- Employment agreement and other necessary licensing processes
- Statutory Audits through our partner Audit Firms.
On-going obligation
Unlike many jurisdictions in Bangladesh once the company is registered it does not need to renew on yearly basis. However, there are certain statutory format which needs to be complied with year to year basis.
In summary
- A company needs to hold at least four board meetings in a year. This can be held virtually.
- A company needs to submit and prepare a statutory audit report every financial year
- A company needs to submit that audit report to the National Board of Revenue (NBR) Along with its Tax return annually.
- A company needs also to submit an audit report to the RJSC annually
- Annual General Meeting (AGM) needs to be held every single calendar year.
- Foreign companies need to submit FDI returns every quarter through the designated bank
- The company needs to submit a VAT return every single month through the online portal
- The Company needs also to submit its Annual Tax Return at the designated tax circle office
Any tax that is being deducted from the employees or vendors must be submitted to the government treasury.
Types of Business Entities Foreigners can use various options available but typically foreign investors can register a Private Limited company or Public Limited company or can register a branch of the Liaison office.
For the Branch of Liaison office please click the link below to follow the registration process
In case of any query or fee quote, feel free to reach out to us
Procedure for Opening Liaison Office/ Branch Office in Bangladesh – Jural Acuity
Frequently Asked Questions
What are the basic requirements of shareholders?
For a private limited company minimum of 2(two) shareholders and a public minimum of 7(seven) shareholders are required.
Is a local director/shareholder required to register a company in Bangladesh?
Generally, a resident or local director is not required to register/operate a company in Bangladesh. Bangladesh also supports 100% FDI in most cases.
What amount of paid up capital should be paid up to register a company?
There is no minimum or maximum paid-up capital for registering a company. Nonetheless, there is a USD 50,000 threshold that allows certain advantages, such as the hiring of foreign employees by the company.
Remote Registration?
- Yes, the investors are not required to visit Bangladesh.
- Yes, investors can open bank accounts without visiting Bangladesh.
Do you provide address support to clients?
Yes, we do provide virtual office addresses. It is mandatory in Bangladesh to have a registered address.
Do you provide other ongoing supports for operating the Company.
We will be happy to set up a call over Zoom or Teams should you desire to have detailed consultation. info@juralaucity.com or +8801707108000 [ whats app]
