How to Form a 100% Foreign-Owned Company in Bangladesh 2026: BIDA Registration & Tax Guide

By Advocate Md. Shah Alam · 2026-07-24 · 12 min read

⚠️ Legal Disclaimer: This article provides general legal information only and does not constitute legal advice. For advice specific to your situation, consult Advocate Md. Shah Alam directly at +880 1712-655546.

Bangladesh is one of South Asia's fastest-growing economies, offering lucrative incentives for foreign direct investment (FDI). Under the Companies Act 1994 and BIDA Guidelines 2026, foreign investors, NRBs, and multinational corporations can set up a 100% foreign-owned Private Limited Company, Branch Office, or Liaison Office in Bangladesh without any local shareholding requirement. For full corporate incorporation and tax licensing support, consult Supreme Court Advocate <a href="/advocate-md-shah-alam" style="color:var(--accent);font-weight:600;">Advocate Md. Shah Alam</a>.

: · Land & Property Registration Lawyer Bangladesh

Quick Answer Table — Key Legal Facts at a Glance (2026)

Key Legal AspectOfficial Rule, Fee & Law (2026)
Registration Fee & Stamp Duty1% Registration Fee + 1.5% Stamp Duty on deed value
Local Government Tax & VAT2%–3% Local Govt Tax + 1.5%–4.5% VAT (varies by City/Pourosova/Union)
Source Tax (Gain Tax / TDS)1% to 8% depending on mouza classification under Income Tax Act 2023
Official Land & Mouza Portalsland.gov.bd, dlrms.land.gov.bd, and eporcha.gov.bd
📋 In This Article
  1. Legal Vehicles for Foreign Investors in Bangladesh
  2. Key Advantages of a 100% Foreign-Owned Subsidiary
  3. Step 1: RJSC Name Clearance & Statutory Drafting
  4. Step 2: Capital Inflow & Encashment Certificate from Bangladesh Bank
  5. Step 3: RJSC Incorporation Certificate & Form XII Filing
  6. Step 4: BIDA Registration & Work Permit for Foreign Directors
  7. Post-Incorporation Licenses: Trade License, TIN, BIN (VAT) & RJSC Annual Compliance
  8. Profit Repatriation & Dividend Transfer Rules in Bangladesh

Legal Vehicles for Foreign Investors in Bangladesh

Foreign companies and entrepreneurs can enter the Bangladesh market through three primary corporate structures:

  • 100% Foreign-Owned Private Limited Company: A separate legal entity incorporated under the Companies Act 1994. Best for long-term commercial operations, manufacturing, tech startups, and trading.
  • Branch Office: An extension of a foreign parent company. Permitted to undertake commercial activities approved by BIDA.
  • Liaison / Representative Office: Permitted only for market research and customer coordination; prohibited from generating local revenue or invoices.

Consult a qualified Corporate Lawyer in Dhaka to choose the optimal legal entity based on your business strategy.

Key Advantages of a 100% Foreign-Owned Subsidiary

Bangladesh offers significant legal and fiscal benefits for Foreign Direct Investment (FDI):

  • 100% foreign equity ownership permitted in almost all industrial sectors (excluding defence, minting, forest reserve, and nuclear energy).
  • Unrestricted repatriation of net profits, dividends, and invested capital under Foreign Exchange Regulation Act 1947.
  • Tax holidays (up to 5–10 years) for companies established in Economic Zones (BEZA) or High-Tech Parks (BHTPA).
  • Protection of foreign investments under Bilateral Investment Treaties (BITs).

Step 1: RJSC Name Clearance & Statutory Drafting

Incorporation begins at the Registrar of Joint Stock Companies and Firms (RJSC):

  1. Name Clearance: Submit proposed company name online at roc.gov.bd. Fee: BDT 230 per name. Valid for 180 days.
  2. Drafting MOA & AOA: Prepare the Memorandum of Association (MOA) and Articles of Association (AOA) setting out business clauses, authorized capital, and share distribution.

Step 2: Capital Inflow & Encashment Certificate from Bangladesh Bank

To complete 100% foreign company registration, equity money must originate from abroad:

  • Open a temporary bank account in the proposed company name at a commercial bank in Bangladesh (e.g., Standard Chartered, HSBC, City Bank).
  • Remit paid-up capital from the foreign investor's overseas bank account to this Bangladesh account via official banking channel.
  • The bank issues an official Encashment Certificate (অবকাশিক এনক্যাশমেন্ট সনদ) verifying foreign currency inflow. This is mandatory for RJSC filing.
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Step 3: RJSC Incorporation Certificate & Form XII Filing

Once encashment is received, submit incorporation documents online to RJSC:

  • MOA & AOA signed by foreign subscribers.
  • Encashment Certificate & Bank Statement.
  • RJSC statutory forms: Form I (Declaration), Form VI (Notice of Situation), Form IX (Consent of Director), Form XII (Particulars of Directors).
  • Pay RJSC registration fees based on Authorized Capital scale.
  • Upon review, RJSC issues the digital Certificate of Incorporation.

Step 4: BIDA Registration & Work Permit for Foreign Directors

After incorporation, register the entity with the Bangladesh Investment Development Authority (BIDA) via oss.bida.gov.bd.

BIDA Registration provides:

  • Eligibility for B-Visa (Business Visa) and Work Permits for foreign directors and expatriate executives.
  • Approval for foreign commercial loan technology transfer fees, and royalties.
  • Import registration certificate (IRC) & Export registration certificate (ERC) recommendations.

Post-Incorporation Licenses: Trade License, TIN, BIN (VAT) & RJSC Annual Compliance

To commence commercial operations, secure post-incorporation operational approvals:

  • E-TIN (Tax Identification Number): Obtained online free of charge from NBR.
  • Trade License (ট্রেড লাইসেন্স): Issued by local City Corporation (e.g., DNCC/DSCC).
  • BIN / VAT Registration (ভ্যাট নিবন্ধন): Mandatory 9-digit e-VAT number from NBR portal.
  • RJSC Annual Return Filing: Submit audited financial statements and Form Schedule X annually to maintain active corporate status.

Profit Repatriation & Dividend Transfer Rules in Bangladesh

Under Foreign Exchange Circulars issued by Bangladesh Bank, foreign investors can easily repatriate profits:

  • Dividends declared after paying applicable corporate tax can be remitted through an authorized dealer bank without prior Bangladesh Bank approval.
  • Required documents: Audited Balance Sheet, Board Resolution declaring dividend, Tax Clearance Certificate, and Auditor Certificate.
  • Capital gains upon exit or share sale can also be remitted after valuation assessment by Bangladesh Bank.

Advocate Md. Shah Alam — Supreme Court Advocate in Dhaka — provides end-to-end corporate setup, RJSC filing, BIDA approvals, and foreign investment structuring for international clients.

⚖️ Planning Foreign Direct Investment in Bangladesh? Contact Supreme Court Advocate Advocate Md. Shah Alam for complete RJSC incorporation and BIDA approval services. Visit our Corporate Legal Services Page or Contact Us Directly.

Frequently Asked Questions

Can a foreign national be the sole director of a Bangladesh company?

Under the Companies Act 1994, a Private Limited Company requires a minimum of 2 directors. Both directors can be foreign nationals; no resident Bangladeshi director is legally required.

What is the minimum paid-up capital for a foreign company in Bangladesh?

Legally, there is no statutory minimum paid-up capital requirement under the Companies Act. However, to obtain BIDA work permits for foreign staff, a minimum paid-up capital of USD 50,000 is generally required.

How long does it take to register a 100% foreign-owned company in Dhaka?

With proper documentation, RJSC incorporation takes approx 7–14 days. Full post-incorporation setup (BIDA, Trade License, VAT) takes 3 to 4 weeks.

Are foreign companies allowed to buy commercial land in Bangladesh?

Yes. A Bangladeshi Private Limited Company (even if 100% foreign-owned) is a local corporate entity and has the legal right to acquire and register land in its corporate name.

Legal Disclaimer: The information provided in this article is for general legal awareness and educational purposes only. It does not constitute formal legal advice and does not establish an attorney-client relationship. For specific legal remedies tailored to your case, please consult directly with an enrolled advocate of the Supreme Court of Bangladesh or the Judges Court.
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