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Branch / Liaison Office

Legal Solution BD > Branch / Liaison Office

How to open a Branch or Liaison Office in Bangladesh?

BRANCH OFFICE

An investor may conduct business in Bangladesh by establishing a branch office of its foreign company. A branch office operates similar to a company except that it is only permitted to conduct business in areas permitted by the Bangladesh Investment and Development Authority (“BIDA”). The permission to operate as a branch office is also subject to renewal after 3 years. However, the winding down process of a branch office is far less complicated than a company. A branch office is an extension of the foreign company, whereas a locally registered company is a separate entity from the foreign company,In addition to obtaining approval by the BIDA, a Branch Office must also register with the Registrar of Joint Stock Companies and Firms (“RJSC”) and comply with its obligations under the Companies Act.

LIAISON OFFICE

A liaison office allows the foreign investor to establish a more direct communication channel with the Bangladesh market. A liaison office is not permitted to conduct any commercial activity. According to the BIDA, the only activities a liaison office is permitted to undertake are the following:

  • Maintain liaison/coordination between principal and local agents, distributors/exporters’ institutions through correspondences, personal contacts and other electronic media.
  • Collect, compile analyze and disseminate business information related to its field of activities as mentioned in the approval letter.

All costs associated with the liaison office must be paid by the foreign investor through inward remittance. No outward remittance from Bangladesh sources will be permitted.

Similar to a branch office, establishing a liaison office requires approval from BIDA and must register with the RJSC.

Available Options for Foreign Investors to setting up a Business

Bangladesh is very open regarding foreign ownership, allowing up to 100% of foreign ownership in most sectors. In some sectors, however, you need prior approval from the government and a few sectors restrict both local and foreign investment. Similarly, other benefits include the right to purchase land and property in the name of the company, tax incentives, etc.

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Procedure to open a Branch or Liaison Office in Bangladesh

Step 1: Obtaining Permission from the Bangladesh Investment and Development Authority (BIDA)

In order to open a branch office or a liaison office in Bangladesh, it is necessary to obtain permission from BIDA. To apply for permission, the following documents are required:
Completed and signed an application form.

Certificate of Incorporation of the foreign company

MOA and AOA of the foreign company

Particulars of the directors/promoters of the foreign company.

Audited accounts of the last financial year of the foreign company.

Board resolution approving the establishment of the branch office or liaison office

Proposed organogram of the office detailing the posts occupied by local and foreign personnel

Particulars of proposed activities.

The documents must be attested by the Bangladesh Embassy or High Commission of the country of origin. Alternatively, it may be attested by the Apex Chamber of Commerce of the country of origin. Additionally, BDT 25,000 must be paid and the Pay Order must be submitted to BIDA. BIDA may request further documents or information as part of the application process. The application along with the documents will be reviewed by the Inter-Ministerial Committee. If the application is approved, BIDA will issue an approval letter. The approval is valid for three years.

 

Step 2: Opening a Bank for Remitting Establishment and Initial Operational Cost

After approval from BIDA, a bank account must be opened. The purpose of opening the bank account is to remit at least USD 50,000. The remittance is intended to cover the establishment and operational costs of the first 6 months. The foreign investor must remit this amount within two months from the date of approval from BIDA.

 

Step 3: Register with the RJSC

The final step is to register the branch or liaison office with the RJSC. To register with the RJSC, the following information or documents will be required:
Approval letter from BIDA
Certified copies of all constitutional documents
A list of all Directors and Secretary
Address of the principal place of business
Address of the principal place of business in Bangladesh
The name and address of every person authorized to accept any document that must be served on the foreign company.