Starting a business in Bangladesh: opportunities in a high-growth market

A private limited company is one of the most commonly used structures for foreign investors establishing a long-term presence in Bangladesh. It is incorporated locally through the RJSC and exists as a separate legal entity from its shareholders and any overseas parent company.

Shareholders' liability is generally limited to the amount unpaid on their shares. Up to 100% foreign ownership is permitted in many sectors, although restrictions, licensing conditions or additional approvals may apply to certain activities.

There is generally no universal minimum share-capital requirement for an ordinary private limited company. However, the appropriate capital level may depend on the proposed activities, operating costs, immigration requirements, sector regulations and any approvals sought from the relevant authorities.

A public limited company may be suitable for a larger business or one that intends to raise capital from a wider group of investors. It may also seek a listing on the Dhaka Stock Exchange or Chittagong Stock Exchange, subject to satisfying the applicable listing and securities requirements.

A public limited company may remain unlisted and does not necessarily raise capital from the public. Compared with a private limited company, it is generally subject to more extensive governance, disclosure, audit and reporting requirements. A listed company is also subject to oversight by the Bangladesh Securities and Exchange Commission (BSEC) and the rules of the relevant stock exchange.

A branch office is an extension of its foreign parent company and does not normally have a separate legal identity. Establishing a branch office generally requires approval from the BIDA.

A branch may carry out the commercial activities expressly permitted under its approval, which may include activities connected with the parent company's projects, contracts or services in Bangladesh. The permitted scope should be reviewed carefully, as the branch cannot automatically undertake every activity conducted by its overseas parent.

A branch is generally taxable on income attributable to its operations in Bangladesh. A corporate income tax rate of 27.5% may apply to branch income under the general tax regime, although different rates and rules can apply to certain industries and types of income. The remittance of branch profits to the overseas parent may also give rise to additional tax or withholding obligations. Branch offices must comply with applicable accounting, tax, reporting and approval-renewal requirements.

A liaison or representative office may be established by a foreign company to undertake approved non-commercial activities in Bangladesh. These may include communicating with local stakeholders, collecting market information, promoting the parent company's products or services and coordinating with business partners. A liaison or representative office generally requires approval from the BIDA and is not permitted to earn income from local commercial activities.

A partnership may be formed under Bangladesh's applicable partnership legislation, with the partners' rights, responsibilities and liabilities governed by the partnership agreement and relevant law. Foreign investors considering this structure should assess its suitability carefully, including the implications for liability, taxation, foreign-exchange controls and the repatriation of profits.

A joint venture is generally not a separate category of legal entity. Instead, it commonly takes the form of a locally incorporated private or public limited company whose shares are held by foreign and Bangladeshi investors.

A joint venture may provide access to local industry knowledge, commercial relationships and operational capabilities. However, the parties should clearly document matters such as ownership, governance, funding, decision-making, profit distribution and exit arrangements.

A business operating within an economic zone or export processing zone is generally incorporated using a standard legal structure, most commonly a private limited company. It must also secure the relevant registration, licence or approval from the authority responsible for the zone.

Economic zones may come under the BEZA, while export processing zones are administered by the Bangladesh Export Processing Zones Authority (BEPZA). Other specialised locations, including high-technology parks, may be governed by separate authorities.

While businesses may have access to tax concessions, customs or import-duty benefits and zone-specific administrative services, these incentives are not automatically available. Eligibility depends on factors such as the location, business activity, investment date, export status and prevailing tax and customs legislation.

We provide guidance on the most suitable company form in Bangladesh based on your business objectives and operational needs. Our 'at-a-glance' comparison table outlines key information on different company formation options.

The cost of setting up a business in Bangladesh will depend on factors such as the legal structure, ownership arrangements, business activity, level of capitalisation and intended operating footprint.

• Registration and incorporation fees: These relate to establishing the company through the RJSC. They may include name clearance charges, incorporation filing fees, stamp duties and fees calculated by reference to the company's authorised share capital. Additional costs may arise where overseas documents require certification or authentication.

• Capitalisation requirements: There is generally no universal minimum share-capital requirement for an ordinary private limited company. However, an appropriate level of capital may be needed to fund the proposed operations and satisfy any applicable banking, immigration, investment or sector-specific requirements. Foreign investment used to subscribe for shares should normally be transferred through formal banking channels and supported by the required remittance and corporate documentation. Certain regulated activities may also be subject to specific capital requirements.

• Licensing and regulatory approvals: The licences and approvals required will depend on the company's activities. Businesses operating in banking, payment services, telecommunications, pharmaceuticals, education, energy and other regulated sectors may need approval from the relevant regulator or ministry in addition to company incorporation. Companies involved in international trade may also need an Import Registration Certificate (IRC), Export Registration Certificate (ERC), customs registration or product-specific approval.

• Tax registration: Following incorporation, a company will generally need to register with the NBR for an e-TIN. VAT registration or turnover-tax enlistment may also be required, depending on the company's turnover, activities and applicable statutory requirements. Registered businesses may incur costs associated with periodic returns, record-keeping, tax advice and responding to any review or audit by the authorities.

• Visa and work permit costs: These costs may arise where foreign directors, executives or technical employees will work in Bangladesh. Depending on the individual's role and the location of the business, the process may involve an E Visa application, a work permit, security clearance and subsequent renewals. Applications may be handled through the BIDA or another authority responsible for the relevant economic zone, export processing zone or specialised jurisdiction.

• Office and local presence costs: A locally incorporated company must maintain a registered office address in Bangladesh. Rental and operating costs will depend on the location, type of premises and infrastructure required. Costs in Dhaka and Chattogram may differ from those in secondary cities, industrial areas or designated economic zones.

• Banking and foreign exchange compliance costs: Opening and maintaining a corporate bank account involves customer due diligence and compliance checks by the relevant bank. Foreign-owned companies must also follow Bangladesh Bank requirements. Related expenses may include bank charges and professional or administrative costs associated with preparing and submitting the required supporting documentation.

• Professional fees: Companies may engage corporate service providers, legal advisers, tax consultants and accountants to assist with incorporation, licensing, employment matters, tax compliance and ongoing statutory filings. The level of professional support required will depend on the structure, industry and complexity of the proposed operations.

• Document authentication and administrative costs: Documents issued outside Bangladesh may need to be notarised, certified, attested or otherwise authenticated in the manner required by the receiving authority. Translation, certification, stamping, authentication and courier charges may therefore add to the overall cost.

• Other potential costs: Additional expenses may include trade licences, import or export registrations, customs procedures, intellectual property protection, insurance, environmental approvals and IT infrastructure.

At Hawksford, we follow a structured, step-by-step process that can support your company formation in Bangladesh. We can guide you through each stage, helping you manage administrative requirements and establish operations within Bangladesh's legal and commercial framework.

We typically begin with a detailed consultation to understand your business objectives, proposed activities, operational requirements and sector focus. This can help us identify an appropriate legal structure and highlight any foreign ownership considerations, licensing requirements or regulatory constraints at an early stage.

Based on the consultation, we will then develop a tailored market entry plan covering the proposed legal structure, ownership arrangements, tax considerations and compliance requirements. This stage can also include assessing whether registration with the BIDA, approval from an economic zone authority or any sector-specific permission may be relevant to the proposed operations.

We can then assist with preparing the documentation required for incorporation. This may include the company's constitutional documents, shareholder and director details, identity-verification materials and documents relating to an overseas corporate shareholder.

We can coordinate the name clearance and incorporation process with the RJSC. Name clearance is generally required before an application to register a new locally incorporated company can be submitted.

Where relevant, we can also assist with registration or approval applications involving the BIDA or another authority responsible for a branch office, liaison office, industrial project, economic zone or regulated activity.

Following incorporation, we can help with registration through the NBR, including applying for an electronic Tax Identification Number (e-TIN). We can also assess whether VAT registration or turnover tax enlistment is required and support the set-up of appropriate tax records, filing processes and withholding tax procedures. The precise requirements depend on the company's turnover, activities and tax profile.

We can work with you on the application to open a corporate bank account with a bank in Bangladesh. The process can involve Know Your Customer (KYC) checks, verification of the company's ownership and business activities and review of the source of funds. Account opening and acceptance of the proposed arrangements remain subject to the bank's internal requirements and approval.

Where the proposed activities are regulated, we can support applications for the relevant licences, registrations and approvals. The authorities involved and the documents required will depend on the sector, location and nature of the business.

Beyond incorporation, we can provide ongoing support as the business develops its operations in Bangladesh. This may include accounting, audit coordination, tax compliance, corporate governance, company secretarial support and regulatory reporting. Where foreign executives or employees will work in Bangladesh, we can also assist with visa applications, work permits and related immigration requirements.

The time required to establish a business in Bangladesh can vary according to the chosen legal structure, the nature of the proposed activities and the licences or regulatory approvals involved. We can provide guidance on the expected stages and indicative timelines, supporting your entry into the market.

• Chosen legal structure: Private limited companies can be incorporated relatively quickly once the required documents are in order and the proposed name has been cleared. Branch or liaison offices may take longer due to approval processes.

• Industry licensing requirements: Companies operating in regulated sectors may require licences or approvals from the relevant regulatory or government authorities, which can extend set-up timelines. Businesses intending to operate within an economic zone, export processing zone or another designated area may also need registration or approval from the authority responsible for that location. These additional procedures can extend the overall set-up timeline.

• Efficiency of document processing: The time it takes for relevant authorities to review and approve submitted documentation also plays a role. Timely submission of complete and accurate documentation can help avoid delays.

• Tax and regulatory registrations: Following incorporation, a company will generally need to register with the NBR for an e-TIN. The company may also need to complete VAT registration or turnover-tax enlistment and receive a Business Identification Number (BIN). The time required to complete these and other operational registrations can affect when the business is ready to begin operating.

• Bank compliance procedures: Establishment may involve the RJSC, the NBR, the BIDA, local licensing bodies and any relevant sector regulator. Processing capacity and coordination between these authorities can influence the overall timeline.

• Administrative procedures: Government processing times, public holidays and inter-agency coordination can affect the overall set-up speed. Administrative efficiency may vary depending on the complexity of the business, the authorities involved and the completeness of the application.

• Operational conditions: The time needed to become fully operational may also depend on the availability of suitable premises and other infrastructure. These considerations can vary between Dhaka, Chattogram, industrial areas, economic zones and other locations.

With access to key jurisdictions globally, we draw on our experience supporting cross-border business expansion to help companies approach new markets with a clearer understanding of the requirements involved. If you're looking to set up a presence in Bangladesh or elsewhere in the world, we can work closely with you on the information and documents required to get started.

• Initial planning and documentation preparation: Typically 1 to 2 weeks.

• Company incorporation and registration: Generally 1 to 2 weeks under normal conditions.

• Tax and sales tax registration: Usually 1 to 2 weeks following incorporation.

• Bank account opening: Usually 2 to 4 weeks, depending on compliance procedures.

The above timelines are indicative and can differ depending on the business activity, approval requirements and the time taken by external parties. To discuss company formation in Bangladesh, please get in touch with us.

A business will generally need to keep its corporate records accurate and up to date throughout its lifecycle. Depending on the jurisdiction and legal structure, this may include information about shareholders, beneficial owners, directors and officers, as well as registered office details, constitutional documents and important corporate resolutions.

Certain changes may also need to be reported to the relevant authorities. For example, a company may need to submit a filing when there is a change to its directors, shareholders, registered address, beneficial owners or share capital.

Companies are typically required to maintain proper accounting records, financial statements and supporting documents. Local bookkeeping, financial reporting and statutory audit requirements may also apply, depending on the company's size, activities, legal structure and jurisdiction.

The company may also have obligations relating to corporate income tax, VAT, sales or consumption taxes, payroll withholding and social security contributions. Other local or sector-specific taxes may apply as well. As filing and payment deadlines differ between jurisdictions, it is important to understand what is required and keep the necessary records organised.

A company may need to submit annual returns, financial statements, licence renewals, confirmation statements or sector-specific reports on a recurring basis. The exact requirements will depend on where the company is registered, how it is structured and the type of activities it carries out.

Keeping a clear compliance calendar and maintaining accurate records can make these obligations easier to manage and reduce the risk of missed deadlines or unexpected disruption.