Foreign Company Registration Bangladesh – Branch Office, Liaison & Investment Guide

Bangladesh actively encourages foreign direct investment (FDI) and has among the most open FDI regimes in South Asia. The key legal framework for foreign investment includes:

• Foreign Private Investment (Promotion and Protection) Act 1980 — the foundational FDI protection statute
• Companies Act 1994 — governs company formation including foreign-owned companies
• Bangladesh Investment Development Authority Act 2016 — established BIDA as the one-stop investment facilitation body
• Foreign Exchange Regulation Act 1947 (FERA) — governs foreign exchange transactions

Key advantages for foreign investors in Bangladesh:

• 100% foreign equity ownership permitted in most sectors
• Full repatriation of profits, dividends, and capital
• No discrimination between foreign and domestic investors
• Tax holidays in Special Economic Zones (SEZs) and Export Processing Zones (EPZs)
• Bilateral Investment Treaties (BITs) with over 30 countries including the USA, UK, Germany, and China

The most common structure for foreign companies entering Bangladesh is to incorporate a private limited company under the Companies Act 1994 — known as a "subsidiary" when the parent company holds a majority of shares.

Key features:

• The subsidiary is a separate legal entity from the foreign parent — it assumes its own liabilities
• 100% foreign shareholding is permitted in most sectors
• No prior government approval required for most sectors — incorporation through RJSC is sufficient
• Can carry out full commercial operations in Bangladesh
• Can employ Bangladeshi nationals and obtain work permits for foreign employees

Process:

1. Name clearance from RJSC
2. Prepare Memorandum and Articles of Association
3. File registration documents and pay fees at RJSC
4. Obtain Certificate of Incorporation
5. Post-incorporation: Trade Licence, TIN, VAT registration, encashment certificate for inward remittance of capital

A corporate lawyer in Dhaka will handle the complete setup process, including ensuring the MOA/AOA correctly reflects the foreign ownership structure and business objectives.

A foreign company may establish a Branch Office in Bangladesh without incorporating a separate local entity. The branch is an extension of the foreign parent company — not a separate legal person.

Regulatory requirements:

• Approval from BIDA (Bangladesh Investment Development Authority) is mandatory
• Registration with the RJSC as a foreign company under Part XII of the Companies Act 1994
• Bangladesh Bank approval for remittance of branch establishment expenses
• Minimum inward remittance requirement (typically USD 50,000 or equivalent)

Permitted activities for a Branch Office:

• Undertaking commercial operations on behalf of the foreign parent
• Generating revenue from sales of goods/services in Bangladesh
• Contracting with Bangladesh government or private entities

Restriction: A Branch Office cannot export its own goods from Bangladesh — it operates on behalf of the foreign parent's business only.

Branch offices must file audited accounts with both RJSC and BIDA annually, and remit profits only after obtaining Bangladesh Bank permission for outward remittance.

A Liaison Office (also called a Representative Office) is a limited-activity presence in Bangladesh. It cannot generate revenue in Bangladesh — it exists solely to promote the foreign parent company's business, collect market information, and facilitate communication.

Permitted activities:

• Market research and business promotion
• Facilitating orders and communications between Bangladesh customers and the foreign parent
• Quality inspection and sourcing liaison (common for garment buyers)

Prohibited activities:

• Issuing invoices or signing contracts in Bangladesh
• Generating local revenue or income
• Engaging in import/export on its own account

Requirements: BIDA approval, RJSC registration, and Bangladesh Bank approval for remittance of operating expenses. The parent company typically remits operating expenses in foreign currency, which the office uses to fund its Bangladesh operations.

A Liaison Office is ideal for foreign companies exploring the Bangladesh market before committing to a full Branch Office or subsidiary.

A Joint Venture (JV) is a company incorporated in Bangladesh where a foreign investor co-owns shares with a Bangladeshi partner. This is often preferred:

• In sectors where local partnership is legally required (e.g., media, certain defence-related industries)
• When the Bangladeshi partner brings essential local knowledge, licences, or market access
• To share investment risk while leveraging local networks

A JV company is incorporated like any other private limited company under the Companies Act 1994, but the shareholders include both foreign and Bangladeshi parties. The JV agreement — governing profit sharing, management control, exit mechanisms, and dispute resolution — is a critical document that must be carefully drafted by a corporate lawyer.

Choosing the wrong Bangladeshi partner or having an inadequately drafted JV agreement is one of the most common and costly mistakes foreign investors make in Bangladesh. Engage a corporate lawyer before signing any JV arrangement.

BIDA (Bangladesh Investment Development Authority) operates as Bangladesh's primary investment promotion and regulatory body. BIDA approval (now called Investment Registration Certificate / IRC) is required for:

• Establishing a Branch Office in Bangladesh
• Establishing a Liaison Office
• Importing machinery and equipment (for project purposes)
• Obtaining work permits for foreign employees (BIDA issues work permits)
• Accessing certain investment incentives and tax holidays

BIDA also facilitates the One-Stop Service (OSS) centre, which allows investors to access up to 152 government services from a single platform — including company registration, work permits, and utility connections.

For subsidiary company incorporation, BIDA registration is not mandatory (though recommended for work permit purposes). For Branch and Liaison Offices, it is essential.

Most sectors in Bangladesh are open to 100% foreign ownership. However, a small number of sectors require local partnership or are reserved for Bangladeshi nationals:

• Reserved sectors (100% Bangladeshi-owned): Small and cottage industries, retail trading (except certain categories), internal waterway transport
• Sectors requiring local equity: Print and electronic media, certain defence/security-related industries
• Sectors with additional regulatory approval: Banking (Bangladesh Bank), insurance (IDRA), telecommunications (BTRC), power (BPDB/BERC), pharmaceuticals (DGDA)

Before committing to any Bangladesh investment, a corporate lawyer should conduct a sector-specific regulatory analysis to confirm investment is permitted and identify any additional licences or approvals required.

Bangladesh offers significant tax incentives to attract foreign investment:

• Tax holiday: Companies in designated Special Economic Zones (SEZs) and Export Processing Zones (EPZs) qualify for 10-year tax holidays
• Reduced corporate tax: Publicly traded companies pay 22.5% vs 27.5% for private companies — encouraging stock market listing
• Double Taxation Avoidance Agreements (DTAAs): Bangladesh has DTAAs with many countries, reducing withholding tax on dividends, interest, and royalties
• Duty-free machinery import: For new industrial investment, import of capital machinery may be duty-free
• Accelerated depreciation: Available for certain categories of industrial investment

Tax planning from the outset is essential. Engage a tax lawyer to structure your Bangladesh investment in the most tax-efficient manner.

For a foreign company setting up a subsidiary (private limited company) in Bangladesh — the most common structure — the process is:

1. Corporate structure decision: Engage a corporate lawyer to confirm the right structure (subsidiary, branch, liaison, JV) for your business model.
2. Name clearance: Apply to RJSC for name clearance (1–3 days).
3. Document preparation: Prepare MOA/AOA, apostilled/notarised parent company documents, board resolution authorising Bangladesh investment, director NID/passports.
4. RJSC registration: File incorporation documents and pay fees. Certificate of Incorporation issued in 3–7 days.
5. Post-incorporation: Trade Licence, TIN, VAT (BIN) registration, corporate bank account opening.
6. Capital remittance: Remit initial equity capital from abroad through banking channels and obtain encashment certificate.
7. BIDA registration: Apply for Investment Registration Certificate (IRC) from BIDA to facilitate work permits and access to BIDA services.
8. Work permits: Apply for work permits for foreign employees through BIDA's OSS centre.
9. Sector-specific licences: Apply for any additional sectoral licences required for your specific business.

Total timeline from engagement to operational readiness: typically 4–8 weeks with proper legal support. Contact Adv. Shah Alam for a customised setup plan for your Bangladesh entry.

Yes, in most sectors. Bangladesh permits 100% foreign ownership in the majority of industries. Only a small number of reserved sectors require local equity partnership or are closed to foreign investment. Confirm sector eligibility with a corporate lawyer before proceeding.

There is no statutory minimum for a subsidiary (private limited company) incorporated locally. For a Branch Office, BIDA typically requires a minimum inward remittance of USD 50,000. Special Economic Zones may have specific minimum investment thresholds.

Yes. Bangladesh guarantees full repatriation of dividends, profits, and capital for foreign investors under the Foreign Private Investment Act 1980. Repatriation requires Bangladesh Bank permission for outward remittance, which is routinely granted upon producing audited accounts and tax clearance.

A private limited company requires a minimum of two directors, but there is no legal requirement for a Bangladeshi director. In practice, banks often prefer at least one director with a Bangladesh address. Foreign directors must provide notarised and apostilled identity documents.

Work permits are issued by BIDA through its One-Stop Service. Processing typically takes 3–8 weeks. Foreign employees should enter Bangladesh on a visa appropriate to their employment status and should not work until the work permit is formally issued.