Foreign Company Incorporation in Bangladesh: A Complete Guide (2025)

Guide to Foreign Company Incorporation in Bangladesh (2025)

Your complete resource for understanding foreign investment and company registration in Bangladesh. This guide provides a detailed comparison of business structures, BIDA requirements, and the RJSC process to help you make an informed decision.

Business Structure Profiles at a Glance

For foreign investors planning to set up a business in Bangladesh, choosing the right entity is the first critical step. This chart provides a holistic view of each business structure across key strategic dimensions, helping you quickly identify which option best aligns with your goals for flexibility, liability, and operational scope.

Comprehensive Comparison Chart

Feature
Company (Subsidiary)
Liaison Office
Branch Office
Project Office
Governing Law
Governed by Companies Act, 1994. Primary authority is RJSC. BIDA, BB, and NBR are also key regulators.
Permission granted by BIDA. Regulated by BB for foreign exchange and NBR for tax compliance. Requires RJSC registration post-approval.
Permission granted by BIDA. Regulated by BB for foreign exchange and NBR for tax compliance. Requires RJSC registration post-approval.
Permission by BIDA, regulated by BB & NBR, plus terms of the specific project contract govern its operations. RJSC registration is also required.
Legal Personality
Separate Legal Entity. A domestic company distinct from its parent, providing a corporate veil.
Extension of Parent Company. No separate legal identity in Bangladesh.
Extension of Parent Company. No separate legal identity in Bangladesh.
Extension of Parent Company. Legally tied to the specific project.
Liability
Limited Liability. Parent company's assets are protected from the subsidiary's debts and obligations.
Unlimited Liability. The foreign parent company is fully liable for all debts and actions of the LO.
Unlimited Liability. The foreign parent company is fully liable for all debts and actions of the BO.
Unlimited Liability. Parent company is fully liable for all project-related debts and actions.
Permitted Scope
Broadest scope. Can conduct any legal business activity (manufacturing, trading, services) unless in a restricted sector.
Strictly non-commercial liaison functions. Cannot generate revenue, trade, or sign local contracts.
Limited commercial activities as specified in the BIDA approval. Can earn local revenue from these approved activities.
Strictly limited to executing the specific, BIDA-approved project. Cannot perform any activity outside the project scope.
Capital Requirement
No minimum share capital for incorporation. USD 50,000 inward remittance required to hire expatriates.
No share capital, but a mandatory minimum inward remittance of USD 50,000 is required for setup and initial operations.
No share capital, but a mandatory minimum inward remittance of USD 50,000 is required for setup and initial operations.
No share capital, but a mandatory minimum inward remittance of USD 50,000 is required for setup and initial operations.
Taxation
Taxed as a domestic entity on its income. Subject to standard corporate tax, VAT, and TDS.
Generally not subject to income tax. Liable for VAT on local expenses and TDS on salaries and vendor payments.
Taxed on income earned within Bangladesh from its approved activities at standard corporate rates.
Taxed on income attributable to its project activities in Bangladesh, subject to DTAA provisions.
Duration
Perpetual existence. Continues indefinitely unless formally dissolved.
Temporary. BIDA permission is granted for a limited period (e.g., 3 years) and requires renewal.
Temporary. BIDA permission is granted for a limited period (e.g., 3 years) and requires renewal.
Temporary. Permission is linked to the project timeline and requires renewal if the project extends.
Closure Process
Formal winding-up process under the Companies Act, requiring a liquidator and tax clearance.
Requires BIDA approval, public notice, tax clearance from NBR, and de-registration from RJSC.
Requires BIDA approval, public notice, tax clearance from NBR, and de-registration from RJSC.
Closure is tied to project completion and requires BIDA approval, tax clearance, and de-registration.

How LegalSeba LLP Can Help Your Foreign Investment Project

Navigating the legal and regulatory landscape for foreign company incorporation in Bangladesh can be complex. As a specialized law firm, LegalSeba LLP provides end-to-end support to ensure your entry into the market is seamless, compliant, and strategically sound.

Strategic Advisory

We help you choose the most suitable business structure (Company, LO, BO, PO) based on your commercial objectives, liability considerations, and long-term goals.

Registration & Incorporation

Our team manages the entire registration process, from name clearance and document drafting to filings with RJSC and securing necessary approvals from BIDA.

Ongoing Compliance

We provide comprehensive Corporate Secretarial Services to handle all your annual filings, board resolutions, and other statutory requirements.

Transparent Financial Packages

We offer clear and competitive pricing for our services. You can explore our company incorporation financial packages to find a solution that fits your budget.

Our goal is to be your trusted legal partner in Bangladesh. For expert guidance, contact us at [email protected].

Document Checklist for Registration in Bangladesh

Proper documentation is critical for a smooth registration process with BIDA and other authorities. The following lists outline the key documents required for each business structure. Note that specific requirements may vary.

For Company Incorporation (with RJSC)

The process of company formation in Bangladesh is primarily handled by the Registrar of Joint Stock Companies and Firms (RJSC).

  • Name Clearance Certificate from RJSC.
  • Memorandum of Association (MoA) and Articles of Association (AoA).
  • Personal details of shareholders and directors (NID/Passport).
  • Registered Address information in Bangladesh.
  • Form IX and Subscriber's Page, signed by all parties.
  • For foreign directors/shareholders: Passports and photographs.
  • Bank Encashment Certificate for foreign investment.

For Liaison Office Permission (from BIDA)

  • Completed application form in quadruplicate.
  • Parent company's Certificate of Incorporation, MoA, and AoA (attested).
  • Board Resolution from the parent company to establish the LO.
  • Audited financial statements of the parent company for the last year.
  • List of directors and promoters of the parent company.
  • Appointment letter for the local office head.
  • Detailed statement of proposed activities.
  • Encashment certificate for the initial inward remittance of USD 50,000.

For Branch Office Permission (from BIDA)

  • Completed application form in quadruplicate.
  • Parent company's Certificate of Incorporation, MoA, and AoA (attested).
  • Board Resolution from the parent company to establish the BO.
  • Audited financial statements of the parent company for the last year.
  • List of directors and promoters of the parent company.
  • Appointment letter for the local office head.
  • Detailed statement of proposed commercial activities.
  • Encashment certificate for the initial inward remittance of USD 50,000.

For Project Office Permission (from BIDA)

  • Completed application form in quadruplicate.
  • Parent company's Certificate of Incorporation, MoA, and AoA (attested).
  • Board Resolution from the parent company to establish the PO.
  • Copy of the project agreement/contract signed with the Bangladeshi entity.
  • Audited financial statements of the parent company for the last year.
  • Detailed information about the project activities, timeline, and funding.
  • Appointment letter for the project head.
  • Encashment certificate for the initial inward remittance of USD 50,000.

Strategic Considerations for Foreign Investors

Choosing the right structure is crucial for success. Your decision should be based on your intended activities, desired liability exposure, and long-term commitment to the Bangladeshi market.

Full-Scale Operation: Company

Best for full-scale commercial operations, manufacturing, trading, or providing broad services. Offers the greatest operational flexibility and protects the parent company through limited liability. It signifies a long-term commitment to the market.

Market Exploration: Liaison Office

Ideal for market exploration, research, establishing contacts, and acting as a communication channel. It cannot engage in any revenue-generating activities. A low-commitment entry point with a lower compliance burden.

Limited Commerce: Branch Office

Suitable for entities needing to perform specific, BIDA-approved commercial activities and generate local revenue, such as providing certain services. It's a step beyond a Liaison Office but stops short of full manufacturing or unrestricted trade.

Project-Based Work: Project Office

Exclusively for executing a specific, time-bound contract awarded to the foreign parent company. Its existence and activities are strictly tied to the approved project's scope and duration.

Frequently Asked Questions

What is the main difference between a Company and a Branch Office for foreign investors in Bangladesh? +
The primary difference lies in legal status and liability. A Company is a separate legal entity in Bangladesh, offering limited liability that protects the foreign parent company's assets. A Branch Office is merely an extension of the parent company, which bears full, unlimited liability for the branch's actions and debts in Bangladesh. A Company has wider operational freedom, while a Branch Office's activities are restricted to what is approved by the Bangladesh Investment Development Authority (BIDA).
Is there a minimum investment required for foreign company incorporation in Bangladesh? +
For the purpose of company incorporation itself with the Registrar of Joint Stock Companies and Firms (RJSC), there is no mandated minimum share capital. However, to hire any expatriate employees, a company must show an inward remittance of at least USD 50,000. This amount is also the mandatory minimum inward remittance for establishing a Liaison, Branch, or Project Office.
Which authority governs foreign business registration in Bangladesh? +
Multiple authorities are involved. The Bangladesh Investment Development Authority (BIDA) is the primary agency for granting permission for Liaison, Branch, and Project Offices and for processing work permits for expatriates. For incorporating a Company (subsidiary), the main governing body is the Registrar of Joint Stock Companies and Firms (RJSC). Additionally, Bangladesh Bank regulates foreign exchange, and the National Board of Revenue (NBR) oversees all taxation matters.