Are you thinking about starting a company in Bangladesh? Well, this is a great decision as the growing economy and supportive business environment are ideal for business. Moreover, the facilities and potential of the economy make Bangladesh an ideal place to turn your dream into reality.
However, like every other country, there are some specific rules for company formation in Bangladesh. Sounds really intimidating, right? Don’t worry; we are here to help you in this process. Here is a guideline that will help you navigate through the legal requirements for company formation in Bangladesh. So, without beating around the bushes, let’s get started.
Choosing the Right Business Structure for Company Formation in Bangladesh
The first question that comes to mind is, what kind of business are you planning about? The structure of a business is a crucial decision for sure. You can consider it like choosing a vehicle for a road trip. The structure you choose will shape the business operations, tax payments, and even risk management. Now you can guess how important it is, right?
There are basically 3 mainstream business structures.
- Sole Proprietorship: In this structure, you will be like a lone wolf with full control of the business in your hands. It may sound fun and good but you are on the hook personally for any debt or liabilities. The benefits are all for you personally, same with the risks.
- Partnership: Are you planning on teaming up with someone? Then, a partnership is the best way for you. In this structure, you and your partner will share the risks, responsibilities, and profits.
- Limited Company (Private or Public): If you are planning on going big from the start, then a limited company is the ultimate option. Your company will be a separate legal entity and protect your personal assets in case things go south. Plus, a limited company attracts both investors and customers by offering reliability.
Well, there are some fundamental differences in the regulations for the formation of private limited companies in Bangladesh and the formation of public limited companies in Bangladesh.
| Feature | Private Limited Company (Ltd.) | Public Limited Company (PLC) |
|---|---|---|
| Minimum Shareholders | 2 | 7 |
| Maximum Shareholders | 50 | No limit |
| Minimum Directors | 2 | 3 |
| Maximum Directors | 50 | 20 |
| Public Share Trading | Cannot issue shares to the public | Can issue shares to the public |
| Stock Exchange Listing | Not allowed | Allowed |
| Minimum Capital Requirement | No minimum required | No minimum, but practical capital depends on stock market regulations |
| Legal Compliance | Less complex, fewer reporting requirements | More complex, requires compliance with SEC and RJSC |
| Annual General Meeting (AGM) | Not mandatory | Mandatory |
| Regulatory Authority | Registrar of Joint Stock Companies (RJSC) | RJSC & Bangladesh Securities and Exchange Commission (BSEC) |
| Financial Disclosure | Less strict, only annual reports to RJSC | More stringent, must publish financial statements |
| Ownership Transfer | Restricted, requires approval from existing shareholders | Freely transferable shares |
Legal Requirements for Company Formation Process in Bangladesh for 2025
Have you decided upon what type of company structure you will go for? Then, let’s move on to the legal requirements and processes for company incorporation process in Bangladesh.
Pick and Register Your Company Name
Have you thought about a name for your company yet? You’ll need a catchy and unique name that reflects your business. Once you are done selecting the name, you have to reserve the name for your company. How to reserve the name? Well, you can do it with the Registrar of Joint Stock Companies and Firms (RJSC). The whole thing is an online process, so it may take a day or two to complete.
Which Paperworks Do You Need for Incorporation?
Gathering the paperwork is probably the most complex step in the registration process. You will need a variety of documents. Here is a breakdown of the necessary paperwork for it:
- Memorandum of Association (MoA): This document is the introduction of your company. It defines what your company is all about, like its goals and functionality.
- Articles of Association (AoA): It is like the rulebook of your company, explaining how things will run.
These are the most complex ones to collect. Are you done collecting MoA and AoA? Now, let’s talk about some other supporting documents you need to collect.
- Copies of NID or passport of the directors.
- A utility bill as proof of your company address.
- Photographs of the directors.
- Sometimes you may need a bank reference letter in the process.
Yes, it is quite a bit of paperwork to gather, but it is the standard for company registration.
How to Submit the Documents?
When all the documents are in your hand, submit them to the RJSC. Wanna know the easiest way to submit all the paperwork? You can do the submission online which is super convenient, easy, and fast. If you are done submitting, wait for the organization to process all your documents.
Get Your Certificate of Incorporation
When RJSC is done checking your papers, they will issue you a Certificate of Incorporation. It is like the official declaration that states, “You are all set and ready to launch your company.” The process might take some time to complete. On average, it takes about 7 to 14 business days. But the certificate is not the end, and you have a lot more to do.
Register for Tax (TIN)
The next step is registering your company with the National Board of Revenue (NBR) to get a Taxpayer Identification Number (TIN). You can not skip this process if you want to avoid trouble in the future. It is a short, straightforward, and easy process, so you don’t need to worry about hassle at all.
VAT Registration
Does your company intend to do business with products or services that are subject to VAT? In such cases, you also need to register for a VAT certificate. The threshold for VAT depends on factors like your turnover and business type. So don’t forget to check if VAT is applicable to you or not.
Other Licenses and Permits
You may need to get some additional paperwork done based on what kind of business you are running. Here are some examples that come in handy:
- The food business needs a health certificate.
- Telecom companies need approval from BTRC.
- In case you are a foreign investor, you may need extra permits from the Board of Investment (BOI).
Open a Bank Account
Last but not least, you have to open a business bank account to operate your business transactions. It can be a lifesaver when you need to keep your business finances and personal cash separate. Besides, having a business bank account is a standard, ensuring a smooth transaction.
Benefits of Choosing Bangladesh Consultant for Company Incorporation
As you can see, there is a lot to do when you are talking about a company registration in Bangladesh. Yes, it is a big pain in the head, but you can make it easier.
Here comes Bangladesh Consultant, one of the best financial business consultancy firms in Bangladesh. You can rely on them to handle the entire company registration process. Here are the perks of depending on Bangladesh Consultant for the company incorporation:
- Expert Guidance
- Faster process
- Customized services
- Compliance and legal support
- Hands-off experience
- Ongoing support
- Cost-effective packages
- Reputation and trust
To sum it up, choosing Bangladesh Consultant means you will have a team of experts by your side handling the process and paperwork. It will make the process way faster, easier, and more efficient. We will do all the heavy lifting for you so you can spend your time and energy building your business.
Conclusion
In a nutshell, there are several steps to the company registration process that may take some time. Let’s recall the steps so that you don’t forget any crucial part. First, register a unique name for your company. Then collect required paperwork like MoA, AoA, director identifications with photo, and office address proof. Then submit them in the RJSC online portal.
When you get the incorporation certificate, register for other required regulatory bodies. Finally, create a business bank account. See? It’s not so hard in real!
FAQs
Do I need name clearance before forming a company in Bangladesh?
Of course, you must reserve a unique name for the company with RJSC before you start the formation process.
What is the minimum capital requirement for forming a company in Bangladesh?
There is no fixed minimum required capital for forming a company in Bangladesh. You can even start a company with 1000 Taka! However, most of the companies show at least 100,000 Taka to maintain credibility and smooth business operations. For foreign companies, you must have a capital of 50,000 USD.
Is a trade license mandatory for operating a company in Bangladesh?
Yes, a trade license is a must for any company operating in Bangladesh. You can collect a trade license from the relevant City Corporation office.
Comments are closed