Registering a Foreign-Owned Company or Branch Office in Bangladesh: 100% FDI, BIDA & RJSC Guide (2026)

Foreign Direct Investment in Bangladesh is legally protected by a robust legislative framework, primarily anchored in the Foreign Private Investment (Promotion and Protection) Act, 1980 (Act No. XI of 1980), the Companies Act, 1994, and the Bangladesh Investment Development Authority Act, 2016.

Key statutory guarantees enjoyed by foreign investors include:

• Non-Discriminatory Treatment: Foreign investors are accorded legal parity with domestic enterprises; no arbitrary discriminatory taxation or commercial restrictions apply.
• Protection Against Expropriation & Nationalization: Section 5 of the 1980 Act strictly prohibits nationalization or expropriation of foreign private investment except under eminent public interest, which requires prompt, adequate, and effectively realizable market compensation.
• Unrestricted Outward Repatriation: Section 8 explicitly guarantees the right to remit post-tax net profits, annual dividends, intellectual property royalties, technical fees, and the net liquidation proceeds of capital investment.
• Bilateral Investment Treaties (BITs): Bangladesh has concluded over 30 bilateral investment promotion treaties (including with the USA, UK, Germany, Japan, Singapore) providing international arbitration recourse under ICSID.

Foreign corporate entities must choose the appropriate vehicle matching their commercial objectives:

A. Wholly-Owned Private Limited Company (100% FDI Subsidiary)

A separate legal corporate entity incorporated under the Companies Act 1994. It can be 100% owned by foreign corporate entities or individuals. It possesses unlimited commercial capacity: it can sign domestic contracts, hire employees, market products, issue VAT invoices, purchase industrial land, earn local revenues, and remit post-tax net profits abroad. Most widely selected by US, UK, and European enterprises.

B. Branch Office (শাখা কার্যালয়)

An operational arm of the foreign parent company established under Section 378–386 of the Companies Act 1994 read with BIDA regulations. Requires prior formal permission from BIDA. A Branch Office can engage in commercial trading and service execution specifically approved in its BIDA charter, but its financial liabilities attach directly to the overseas parent corporation.

C. Liaison / Representative Office (লিয়াজোঁ অফিস)

Established solely as a communication conduit between the foreign parent and local partners, quality inspection, or market research. Under BIDA standing rules, a Liaison Office is strictly prohibited from earning any local revenue, issuing invoices, or engaging in commercial sales in Bangladesh. All operational expenses (office rent, staff salaries) must be funded 100% through inward foreign currency remittances via commercial banks.

The following table illustrates the operational, tax, and governance parameters across each vehicle:

Incorporation begins with securing corporate name exclusivity from the Registrar of Joint Stock Companies and Firms (RJSC) at roc.gov.bd:

1. Submit 2 to 3 alternative proposed names through the digital portal.
2. RJSC reviews names against existing registered corporate names and registered trademarks (Department of Patents, Designs and Trademarks - DPDT).
3. Names containing sensitive state words (e.g. 'Federal', 'Republic', 'National') are restricted.
4. Upon approval, RJSC issues a formal Name Clearance Certificate (fee: BDT 600 per name). The certificate is valid for 30 days, extendable upon application.

For entities with foreign shareholders, establishing documented foreign capital inflow is a strict statutory prerequisite:

The Bank Encashment Rule: Using the approved Name Clearance and draft MoA, your corporate counsel opens a temporary bank account in Bangladesh with an Authorized Dealer bank (e.g. Standard Chartered, HSBC, BRAC Bank, City Bank). The foreign shareholders wire their designated subscription equity in foreign currency (USD, GBP, EUR) via SWIFT. The commercial bank encashes the foreign currency into Bangladeshi Taka and issues an official Inward Remittance Encashment Certificate (এনক্যাশমেন্ট সনদ). RJSC will NOT approve final incorporation without this certificate.

Corporate counsel drafts the foundational constitutional documents:

• Memorandum of Association (MoA - স্মারকলিপি): Outlines the company's objects clauses (commercial activities), authorized capital, and share distribution among subscribers.
• Articles of Association (AoA - পরিমেল নিয়মাবলী): Governs board composition, quorum, voting thresholds, foreign director appointments, and dividend declarations.
• Statutory Filing Package: Submitted digitally to RJSC along with:
  • Form I: Statutory Declaration on Registration.
  • Form VI: Notice of Situation of Registered Office.
  • Form IX: Consent of Directors to Act.
  • Form X: List of Persons Consenting to be Directors.
  • Form XII: Particulars of Directors, Managers, and Managing Agents.
• RJSC conducts digital review and issues the official Certificate of Incorporation with a distinct Corporate Registration Number.

Following RJSC incorporation, industrial and commercial enterprises must register with the Bangladesh Investment Development Authority (BIDA) through its One Stop Service portal bida.gov.bd:

• Eligibility for Industrial Privileges: BIDA registration unlocks duty-free capital machinery imports (concessionary 1% duty under SRO), accelerated depreciation, and utility connection fast-tracking.
• Approval for Foreign Remittances: BIDA registration is mandatory to secure commercial bank authorization for outward payment of royalties, technical know-how fees, and foreign consultancy charges under Section 18 of the BIDA Act.
• Branch & Liaison Offices: For branch and liaison offices, BIDA registration is the primary constitutive operating license, requiring audited accounts of the foreign parent, board resolutions, and a letter of commitment attested by the Bangladesh Embassy abroad.

To commence commercial operations, execute contracts, and issue invoices, the new entity must secure foundational operational registrations:

1. Commercial Trade License (ট্রেড লাইসেন্স): Obtained from the competent City Corporation (e.g. DNCC, DSCC) or local Union Parishad based on the physical registered office tenancy agreement.
2. Corporate Tax Identification Number (e-TIN): Obtained online from the National Board of Revenue (NBR) in the company's legal name.
3. Value Added Tax (VAT) / Business Identification Number (BIN): Mandatory 9-digit registration from NBR under the VAT and Supplementary Duty Act 2012.
4. Import / Export Registration Certificates (IRC / ERC): Obtained from the Chief Controller of Imports and Exports (CCI&E) if engaging in international merchandise trade.
5. Environmental Clearance (ECC) & Fire License: Mandatory if establishing industrial manufacturing, warehousing, or chemical operations.

Foreign executives, managing directors, and technical expatriates must comply with Bangladeshi immigration regulations:

• Initial Entry Visa: Foreign directors enter Bangladesh on a multiple-entry Business Visa (B-Visa) or Employment Visa (E-Visa) based on a BIDA recommendation letter.
• BIDA Work Permit Application: Within 15–30 days of arrival, submit an online work permit application through BIDA OSS. Key condition: The entity must have received minimum inward foreign capital of $50,000 USD.
• Expatriate Ratio Rule: Industrial enterprises must maintain a statutory local-to-foreign employment ratio (typically 5:1 in industrial sectors and 20:1 in commercial sectors).
• Security Clearance: BIDA transmits the application to the Ministry of Home Affairs (Security Services Division) and Special Branch (SB) Police for final security vetting.

Under Section 8 of the Foreign Private Investment Act 1980 and Bangladesh Bank GFET guidelines:

Standing Remittance Freedom: Authorized Dealer commercial banks are legally empowered to remit 100% of net post-tax dividends to overseas foreign shareholders WITHOUT seeking prior case-by-case approval from Bangladesh Bank. The bank executes SWIFT wires directly upon receiving: (1) Audited financial statements, (2) Board dividend declaration resolution, (3) NBR tax deduction and payment certificates, and (4) Auditor's compliance certificate.

Furthermore, technical know-how fees, franchise royalties, and software licenses can be remitted up to statutory limits (typically 6% of revenue) under standard BIDA-approved agreements.

Understanding corporate tax liabilities under the Income Tax Act, 2023 is essential for financial modeling:

• Non-Publicly Traded Companies (Private Limited): Standard corporate rate is 27.5% (reduced to 25.0% if all transactions are conducted via banking channels).
• IT & Software Enabled Services (ITES): 100% corporate tax exemption for qualifying software development, nationwide cloud services, and IT export enterprises.
• Tax Holidays for Industrial Undertakings: 5 to 10-year phased tax exemptions under Section 46 of the Income Tax Act for investments in designated economic zones (BEZA), high-tech parks (BHTPA), renewable energy, and export manufacturing.
• Withholding Tax on Dividends: 20% standard withholding tax on dividends paid to non-resident corporate shareholders, reduced to 10%–15% under bilateral Double Taxation Avoidance Agreements (DTAA).

Background: A Delaware-based enterprise software firm sought to establish an offshore software engineering and support hub in Gulshan, Dhaka, employing 40 Bangladeshi engineers with 100% foreign equity ownership.

Chamber Execution Blueprint:

1. Secured RJSC Name Clearance within 24 hours. Drafted specialized Articles of Association protecting Delaware board governance and IP ownership.
2. Opened a temporary equity account at Standard Chartered Bank, Dhaka. The US parent wired $50,000 USD via SWIFT, securing the official Foreign Inward Encashment Certificate.
3. Submitted digital incorporation to RJSC; Certificate of Incorporation and Form XII issued in 8 business days.
4. Processed Trade License with Dhaka North City Corporation, corporate e-TIN, and VAT/BIN registration within 10 days.
5. Completed BIDA registration through the One Stop Service portal, securing 3-year multiple-entry E-visas and work permits for two US executives.
6. Established banking protocols for tax-free IT export earnings and automated post-tax dividend remittance. The subsidiary became fully operational in 26 business days.

Yes. Under the Foreign Private Investment Act 1980, foreign citizens and foreign corporate entities can own 100% equity in a Bangladeshi Private Limited Company across almost all industrial and commercial sectors.

There is no statutory minimum capital to incorporate at RJSC. However, to sponsor BIDA work permits for foreign executives, the company must bring in a minimum inward foreign remittance of $50,000 USD.

A locally incorporated private limited company subsidiary is legally a Bangladeshi corporate person under the Companies Act 1994 and can purchase industrial or commercial land, subject to BIDA registration and sector approvals.

RJSC incorporation takes 7 to 14 business days once the bank encashment certificate is issued. Post-incorporation licensing (Trade license, TIN, VAT, BIDA) takes an additional 2 to 4 weeks.

Yes. Foreign post-tax dividends can be remitted freely through Authorized Dealer commercial banks under standing Bangladesh Bank GFET guidelines upon submitting audited financial accounts and NBR tax certificates.

A Subsidiary is an independent corporate entity with limited liability and full commercial rights. A Branch Office is an operational extension of the foreign parent whose liabilities attach directly to the foreign parent.

Yes. Under modern corporate practice and standard Articles of Association drafted under the Companies Act 1994, board meetings and general meetings can be held electronically via Zoom or MS Teams.

No. Under Section 2 of the 1980 Act, foreign-invested companies enjoy absolute parity with domestic companies; standard corporate tax rates (25%–27.5%) apply equally to both.