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Company Registration

Legal Solution BD > Company Registration

Business structure of Bangladesh

Mainly three types of business structure are continuing in Bangladesh. These are (1) Limited Company, (2) Partnership Firm and (3) Sole Proprietorship.Limited Companies are two types one is (a) Privet Limited Company and another is (b) Public Limited Company.

RJSC also register foreign company and Branch Office, Liaison Office, Representative Office of Multinational Company. Joint Venture Companies are also registered at RJSC.

To form Privet Limited Company minimum two and maximum fifty directors required. On the other hand, for Public Limited Company minimum member should be seven and the maximum is unlimited. For forming a Joint Venture Company minimum member should be two and maximum fifty. Out of all members minimum, one should be Bangladeshi and minimum one should be Foreigner. In Bangladesh no scope to start a Limited Company by one man.

Registration procedure of a private limited company in Bangladesh

REQUIRED DOCUMENTS for company incorporation in Bangladesh

For the purpose of company incorporation in Bangladesh, the following information is required;
  1. Company Name. A name clearance must be obtained.
  2. Memorandum of Association and Articles of Association: RJSC requires that the object clause in the MoA be within 400 words and 7 clauses.
  3. Shareholders/Directors Particulars: Address, eTin, NID, Passport (Download an instruction form )
  4. Photograph
  5. Registered Address
  6. Singed Form IX and Subscriber Page:
  7. For foreigners: (a) Copy of passport of shareholder/director. (b) Encashment Certificate (Learn more about enchantment certificate 

Minimum Capital Requirement

There is no official minimum capital requirement in Bangladesh. For this reason, $1 is considered the minimum capital contribution. However, investors should keep in mind that they need to make an inward remittance of no less than $50,000 if they intend to hire foreign employees.

KEY FACTS ABOUT COMPANY FORMATION of a private limited Company

Company Name.  The name must be approved (cleared) before incorporation of the company in Bangladesh.Directors.  Minimum two directors are mandatory. Directors can be either local or foreign. Directors must be at least 18 years of age and must not be bankrupt or convicted for any malpractice in the past. The law requires that a director must own qualification shares stated in the Articles of Association. A shareholder which is not a natural person (i.e. a company) can select nominee director.

Shareholders.  A private limited company in Bangladesh can have a minimum of 2 and maximum of 50 shareholders. A director and shareholder can be the same or a different person. The shareholder can be a person or another legal entity such as another company. 100% local or foreign shareholding is allowed in most sectors. New shares can be issued or existing shares can be transferred to another person anytime after the Bangladeshi company has gone through the incorporation process.

Authorized Capital. You must state the authorized capital in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that the company is authorized to issue (allocate) to shareholders. Part of the authorized capital can remain unissued. There is no minimum or maximum limit for authorized capital in Bangladesh.

Paid-up Capital.  Minimum paid-up capital for registration of a Bangladeshi company is Taka 1. Paid-up capital (also known as share capital) can be increased anytime after the incorporation of the company.

Registered Address.  In order to register a company in Bangladesh, you must provide a local address as the registered address of the company. The registered address must be a physical address (can be either a residential or commercial address) and cannot be a P.O. Box.

Memorandum and Articles of Association. The company to be incorporated must prepare a memorandum of association (MoA) and articles of association (AoA).

Post-Registration Formalities

After company registration more tasks should be done to operate the business. First of all, need a Trade License for the company name and it collect from nearby license providing authority (In case City Corporation area City Corporation Authority issue the Trade License or for rural area Union Council authority issue the Trade License).Getting Trade License an eTIN certificate is needed for the newly registered company. eTIN should be collected from the National Board of Revenue (NBR).

If you want to go for Export Business you have need Export Registration Certificate (ERC) or if you want to do Import Business then you have to need Import Registration Certificate (IRC). If you can start Indenting Business then you have to need Indenting Registration Certificate. All of ERC, IRC & Indenting Certificate issue by Office of the Chief Controller of Imports and Exports.

At present VAT Registrationcertificate needed for most of the business in Bangladesh. For starting special type of business you have to need prior permission from the respective authority.

Considerations for foreigners

  • NAME CLEARANCE: Name clearance of the proposed company obtained from the Registrar of Joint Stock Companies and Firms (RJSC) is mandatory.
  • BANK ACCOUNT: A bank account in the name of the proposed company is mandatory.
  • VISIT BANGLADESH: Company incorporation formalities can be done without having to visit Bangladesh. The only exception may be opening a bank account.
  • NATIONALITY:  One/more or all director and shareholders can be a foreigner.
  • VISA: There is no requirement for obtaining any special Bangladesh visa if merely want to incorporate a private limited company but have no plans to relocate to Bangladesh. Anyone can free to operate the company from overseas as well as free to visit Bangladesh on a business visa whenever required to attend to company matters on a short-term basis.
  • WORK PERMIT: If any foreigner plan to relocate to Bangladesh to operate your company then it is required to obtain a work permit.
Alternative 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.

Learn more…

STEP 1: NAME CLEARANCE

To set up a Bangladesh company, the first step would be to obtain a name clearance for the proposed company name. An approved name will be reserved for 6 months from the date of clearance.

 

STEP 2: DRAFTING OF REQUIRED DOCUMENTS

Secondly, you need to draft the Article of Association (AoA) and Memorandum of Association (MoA). While preparing those, you need to draft it along with other forms as requirements for compliance to RSJC.

STEP 3: BANK ACCOUNT OPENING AND BRINGING IN THE PAID UP CAPITAL

This step is only applicable if the proposed company has a foreign shareholding.Next, you will have to open a bank account in the proposed company name with any scheduled bank in Bangladesh. After opening the account, you will have to remit money equal to the shares to be owned by the foreign shareholder from outside Bangladesh in the account. The Bank will issue an Encashment Certificate which will be required by RJSC for incorporation.

 

STEP 4: REGISTER COMPANY

In this step, all required information to be uploaded to the RJSC’s website with form IX and subscriber Page.Then registration fees along stamp duty to be paid.

After making the payment the registration is done, then RJSC officials will check the documents and information. If they are satisfied, they will issue the digitally signed i) Certificate of Incorporation; ii) MoA and AoA, and iii) Form XII. These documents will be mailed by the RJSC.