Starting or operating a business in Bangladesh requires compliance with various legal formalities, and obtaining a Trade License is one of the most fundamental steps. Issued by local government authorities such as City Corporations, Municipalities (Paurashavas), or Union Parishads, a trade license grants legal permission to conduct commercial activities within a specific jurisdiction. As of 2026, the process remains governed by key legislation including the Local Government (City Corporation) Act 2009 and Municipal Taxation Rules 1986, with increasing emphasis on digital applications for efficiency.
This comprehensive guide covers everything you need to know about trade licenses in Bangladesh in 2026, ensuring your business stays compliant and avoids unnecessary hurdles.
What Is a Trade License in Bangladesh
A trade license is an official permit that authorizes individuals or entities to carry out trade, business, or commercial activities in a designated area. It serves multiple purposes: it ensures businesses adhere to local taxation rules, health and safety standards, zoning regulations, and environmental guidelines. Without a valid trade license, operating a business is illegal, and it is often a prerequisite for opening bank accounts, obtaining other permits (like TIN or VAT registration), and engaging in formal trade.
The license is non-transferable, tied to the specific business location and activity, and typically valid for one fiscal year (July 1 to June 30).
Who Needs a Trade License in Bangladesh
Virtually every business entity in Bangladesh requires a trade license, regardless of size or structure. This includes:
- Sole proprietorships
- Partnerships
- Private limited companies
- Retail shops, e-commerce businesses, restaurants, and service providers
- Manufacturing units and factories
- Import/export-oriented businesses
Even small-scale operations in rural areas (under Union Parishads) must obtain one. Foreign investors or companies with expatriate employees may need additional approvals, such as work permits from the Bangladesh Investment Development Authority (BIDA).
Exemptions are rare and limited to certain non-commercial activities.
Types of Trade Licenses in BD
Trade licenses in Bangladesh are primarily categorized into three types based on business nature:
- General Trade License: For most service-based or small-scale businesses (e.g., consulting firms, small shops not involving manufacturing or large-scale trading).
- Commercial Trade License: For retail, wholesale, or trading businesses (e.g., stores, e-commerce platforms dealing in goods).
- Manufacturing/Industrial Trade License: For factories or production units involving manufacturing processes.
The type determines the application form (e.g., “K” form for commercial, “I” form for manufacturing in some corporations) and additional requirements like fire or environmental clearances.
Step-by-Step Application Process (2026)
The process in 2026 is increasingly digitized, especially in major cities like Dhaka (North and South City Corporations). Here’s the standard procedure:
- Determine the Issuing Authority: Apply to the relevant body based on location (e.g., DNCC/DSCC for Dhaka, local Paurashava or Union Parishad elsewhere).
- Collect/Fill the Application Form: Download or obtain the prescribed form (often online via portals like erevenue.dncc.gov.bd or etradelicense.gov.bd).
- Submit Documents: Attach required paperwork (detailed below) and a declaration of compliance.
- Inspection/Verification: A Licensing Supervisor may visit the premises for verification, especially for manufacturing or high-risk businesses.
- Pay Fees: Deposit the scheduled fees (including signboard tax and VAT if applicable) at designated banks.
- Receive License: Upon approval, collect or download the digital license (processing time: 3-7 working days for straightforward cases).
Online applications are now the preferred method in most urban areas for faster processing.
Required Documents Checklist
Common documents include:
- Completed application form
- 3 passport-sized photos of the owner/applicant
- National ID (NID) or passport copy
- Proof of premises ownership/rent agreement and recent receipt
- Holding tax payment receipt
- Non-judicial stamp declaration (affirming compliance with rules)
- Memorandum & Articles of Association (for companies)
- TIN certificate
- Bank solvency certificate
- Fire license (for applicable businesses, e.g., restaurants or factories)
- Environmental clearance (for manufacturing)
- BIDA work permit (for foreign involvement)
Additional documents may apply based on business type and location.
Trade License Fees & Renewal
Fees vary by business type, size, location, and paid-up capital (for companies). In 2026, expect ranges from BDT 100 to over BDT 40,000, plus signboard tax and VAT.
- Renewal: Mandatory annually by June 30. Late renewal incurs surcharges and penalties. Process is similar to new applications but simpler online—pay fees and update details if needed.
Check official portals for the latest fee schedules, as they are updated periodically (e.g., Dhaka City Corporations publish category-wise lists).
Common Application Mistakes to Avoid
- Incomplete or incorrect documents (e.g., outdated rent receipts)
- Wrong form selection (commercial vs. manufacturing)
- Failing to get premises inspection ready
- Delaying renewal, leading to fines
- Not declaring all business activities accurately
- Ignoring additional clearances (e.g., fire license for food businesses)
Double-check requirements on official websites and consider professional assistance for complex cases.
Online vs. Offline Application Options
- Online: Highly recommended in 2026 for efficiency. Use portals like erevenue.dncc.gov.bd (for DNCC), similar for DSCC, or etradelicense.gov.bd. Register, upload documents, pay online, and track status—often auto-approved for low-risk businesses.
- Offline: Visit the zonal office, submit physically, and follow up. Slower but still available, especially in rural areas.
Online reduces visits and processing time significantly.
Related Permits & Registrations
A trade license is foundational but often paired with:
- TIN and VAT registration (National Board of Revenue)
- Import/Export Registration Certificate (IRC/ERC) for traders
- Fire license (Fire Service & Civil Defence)
- Factory layout approval (DIFE for industries)
- Environmental clearance (Department of Environment)
- BIDA registration for foreign investment
Secure these sequentially for full compliance.
Penalties & Compliance for Non-Compliance
Operating without a valid trade license is a serious offense:
- Fines up to BDT 50,000 or more, plus daily penalties
- Business shutdown or sealing by authorities
- Seizure of goods
- Legal action, including potential imprisonment in repeated cases
- Difficulty obtaining other permits or banking services
Enforcement has strengthened in recent years—regular inspections ensure compliance.
In summary, securing a trade license is essential for legal, hassle-free operations in Bangladesh. Stay updated via official government portals, and renew promptly to avoid disruptions. For personalized guidance, consult local authorities or legal experts. Compliant businesses thrive in Bangladesh’s growing economy!