Complete Guide to Setting Up a Real Estate Developer Business in Bangladesh

Introduction

The real estate development industry in Bangladesh has evolved into a formalized sector with stringent regulatory requirements. Since 2017, the Ministry of Commerce has mandated that all real estate developers must obtain REHAB membership to legally operate housing businesses in the country. This requirement was implemented to protect consumers from fraudulent companies and bring discipline to the housing sector.

This guide provides comprehensive information on establishing a real estate developer business, covering legal structures, registration processes, licensing requirements, and industry-specific compliance obligations.

Section 1: Choosing Your Business Structure

Private Limited Company (Recommended)

For real estate development, a Private Limited Company is the most suitable business structure. This corporate entity provides limited liability protection, professional credibility, and meets the eligibility criteria for REHAB membership.

• Limited liability protection for shareholders
• Separate legal entity status
• Enhanced credibility with clients and financial institutions
• Easier access to capital and financing
• Mandatory structure for REHAB membership
• Professional business image

Alternative Structures

• Partnership Business: Less common in real estate development due to unlimited liability concerns and REHAB membership restrictions.
• Sole Proprietorship: Not recommended for real estate development as it lacks the corporate structure required for REHAB membership and offers no liability protection.

Section 2: Company Incorporation Process

Step 1: Name Clearance

Apply to the Registrar of Joint Stock Companies and Firms (RJSC) for name clearance of your proposed company name.

• Submit name clearance application through RJSC online portal.
• Propose 3-5 alternative names (avoid similar names to existing companies).
• Ensure the name includes "Limited" or "Ltd." suffix.
• Wait for approval (typically 2-3 business days).

Step 2: Prepare Incorporation Documents

• Memorandum of Association (MOA): Defines the company's objectives, authorized capital, and relationship with external parties.
• Articles of Association (AOA): Governs internal management and operations.
• Form IX: Consent of directors to act (duly filled, signed, and sealed).
• Form XII: Particulars of directors, shareholders, managers, and managing agents.

Director and Shareholder Requirements:

• Minimum 2 directors (at least one must be a Bangladeshi resident).
• Minimum 2 shareholders (Maximum 50).
• Directors must be at least 18 years old (No maximum age limit).

Step 3: Open Temporary Bank Account

Open a Non-Resident Taka (NRT) account or regular bank account to deposit the initial share capital. Requirements include the name clearance certificate from RJSC, director IDs, and the minimum capital deposit to obtain a bank encashment certificate.

Step 4: Submit Incorporation Application

File incorporation documents with RJSC along with required fees. Submission Package:

• Memorandum and Articles of Association (signed by all subscribers)
• Completed Form IX (director consent forms)
• Completed Form XII (director and shareholder particulars)
• Bank encashment certificate
• Government fee payment receipt
• Passport-size photographs of directors
• National ID copies for Bangladeshi directors
• Passport copies for foreign directors
• Detailed statement of company activities
• Registered office address proof

Step 5: Receive Incorporation Certificate

RJSC will review and verify submitted documents and issue the Certificate of Incorporation (Typically 3-4 weeks after submission).

Section 3: Post-Incorporation Registrations

Tax Identification Number (TIN)

Obtain a TIN certificate from the National Board of Revenue (NBR) through the e-TIN portal (typically takes 1-2 weeks). Required documents and information:

• Company incorporation certificate
• Director identification documents
• Registered office address proof
• Local phone number

Value Added Tax (VAT) Registration

Register for VAT and obtain a Business Identification Number (BIN) via the local VAT office or NBR portal. Requirements include:

• Certificate of Incorporation
• TIN certificate
• Trade license
• Memorandum and Articles of Association
• List of directors with National IDs
• Registered office lease/ownership documents

Trade License

Obtain a trade license from the relevant local authority (City Corporation, Municipal Authority, or Union Parishad). Application requirements:

• Certificate of Incorporation
• TIN certificate
• VAT registration certificate
• Lease agreement or ownership deed of office premises
• Company documents (MOA, AOA)
• Director identification documents
• Passport-size photographs
• Government fees payment

Section 4: Real Estate Specific Registrations

Registration Under Private Residential Land Development Rule, 2004

All private residential project developers operating within masterplan areas must register with the concerned authority. Failure to register may result in penalties and business closure.

Required Documents:

• Trade License (current and valid)
• TIN Number certificate
• VAT Registration Number (BIN)
• Memorandum of Association and Articles of Association
• Certificate of Incorporation
• List of directors and shareholders
• Proof of land ownership or development rights

Approval Authority Registration

Obtain a company enlistment certificate from the relevant development authority based on your jurisdiction:

Application Requirements:

• Company incorporation documents
• Trade license
• TIN and VAT certificates
• Land ownership documents
• Project concept and feasibility details
• Professional staff credentials (architects, engineers)

Section 5: REHAB Membership (Mandatory)

Since May 25, 2017, REHAB membership has been mandatory for all real estate developers operating housing businesses in Bangladesh under Section 13(1) of the Trade Organisation Ordinance of 1961.

Eligibility Criteria

• Registered as a Private Limited Company engaged in the real estate business.
• Completed construction of at least one project with approval from the concerned authority.
• For land developers: Must own a minimum of 6.5 bighas of land with proper purchase deeds.
• Must have a presentable independent office with a clear signboard/nameplate.
• Sufficient qualified manpower and organizational structure.

Required Documents for REHAB Membership

Prepare and submit the following comprehensive document package:

Corporate Documents:

• Letter of introduction expressing interest in REHAB membership (on company letterhead, addressed to REHAB President/General Secretary)
• Completed Membership Application Form with Declaration and Certification (duly signed and sealed)
• Completed Nomination Form (duly signed and sealed)
• Certified copy of Memorandum and Articles of Association (from RJSC)
• Certificate of Incorporation (attested by Managing Director)

Regulatory Documents:

• Income Tax Certificate of last assessment year (attested by MD)
• VAT Registration Certificate (attested by MD)
• Current Trade License (attested by MD)
• Annual summary of Share Capital and List of Shareholders Directors (Schedule XII if needed)

Director Information:

• List of other companies where Chairman, Vice Chairman, MD, and Directors hold shareholdings (attested by MD)
• Photograph and bio-data of shareholder-director representing the company (3 copies of photo, bio-data on letterhead)

Project Documentation:

• List of completed and ongoing projects with all deeds (agreement deeds, power of attorney, project details)
• RAJUK/CDA/KDA approved plans for plots/buildings developed or under development
• Project brochure(s) printed at printing press with RAJUK/CDA/KDA approval numbers
• Photos of project sites showing construction/development status with signboard
• Company enlistment certificate from RAJUK/CDA/KDA (for land developers)

Organizational Details:

• List of employees with designations (on letterhead, attested by Chairman/MD)

REHAB Membership Process

1. Document Submission: Submit application form, MOA, AOA, TIN, VAT, Trade License, and project documents.
2. Inspection: REHAB officials conduct a physical inspection of the corporate office and project sites.
3. Interview: Membership Development Committee (MDC) conducts a view-exchange meeting with Directors.
4. Approval & Fee Payment: Executive Committee approves, and the applicant deposits fees.

Section 6: Professional Staff & Infrastructure Requirements

Required Professional Staff

• Licensed Architect: For design and architectural planning.
• Civil Engineer: For structural design and construction supervision.
• Project Manager: For project execution and coordination.
• Legal Advisor: For land transactions and regulatory compliance.
• Marketing Team & Accounts Department.

Note: Architects and engineers must be registered under the Private Residential Land Development Rule, 2004 for plan formulation.

Office Infrastructure

REHAB requires an independent (not shared) office space with a clear, visible signboard, professional reception, workspace, proper filing systems, and communication infrastructure.

Section 7: Land Acquisition & Project Development

Land Acquisition Process

Conduct thorough title verification through the land records office. Verify the land is free from encumbrances, disputes, and litigation. Check land use classification, plot boundaries, and obtain land mutation after purchase.

Due Diligence Documents:

• Chain of title documents (previous ownership records)
• Current deed and ownership certificate
• Land revenue receipts (updated taxes)
• Non-encumbrance certificate
• Survey records and plot demarcation
• Local authority land use certificate

Minimum Requirement: Land developers seeking REHAB membership must own a minimum of 6.5 bighas.

Project Approval Process (RAJUK/CDA/KDA)

• Prepare detailed layout plan by a registered architect/city planner.
• Submit architectural/structural drawings, soil test reports, and utility plans to the development authority.
• Obtain fire safety and environmental clearances.
• Receive building plan approval before construction and display the approval number on all project materials.

Section 8: Environmental & Additional Clearances

Department of Environment (DOE) Clearance

Fire & Utility Clearances

• Fire Safety: Obtain fire license from Fire Service and Civil Defence (FSCD) by providing building designs with fire safety measures, emergency exits, and alarm systems.
• Utilities: Secure approvals from WASA (Water/Sewerage), DESA/DESCO/DPDC (Electricity), and Titas Gas.

Section 9: Legal Compliance & Ongoing Obligations

Real estate developers must comply with the Companies Act 1994, Building Construction Act, Environmental Conservation Act 1995, and Consumer Rights Protection Act 2009.

Consumer Protection

Protect customer interests through clear written agreements, transparent pricing without hidden costs, accurate timelines, regular updates, and timely handover of properties honoring all warranty commitments.

Annual Compliance

Maintain ongoing obligations such as annual return filings with RJSC, NBR tax returns, VAT returns, trade license renewals, REHAB annual subscriptions, and audited financial statements.

Section 10: Financial & Banking Requirements

While the Companies Act does not prescribe minimum capital, adequate capitalization (minimum BDT 5-10 million for small-scale operations) is essential for land acquisition, construction, regulatory fees, and working capital.

Maintain separate project bank accounts, implement proper accounting systems, and utilize project financing options like bank loans, developer-buyer agreements, or joint venture partnerships.

Section 11: Marketing & Sales Compliance

Advertisement and Promotion

When advertising, you must display RAJUK/CDA/KDA approval numbers and your REHAB membership number. Ensure accurate project information without misleading claims (mark 3D renderings clearly). Include company registration details, contact information, transparent pricing, and payment terms.

Sales Documentation

Essential Agreements:

• Sale agreement or deed of agreement between developer and buyer
• Clear payment schedule and terms
• Project delivery timeline and penalties for delays
• Property specifications and measurements
• Common area and facility provisions
• Transfer and registration procedures
• Dispute resolution mechanisms

Section 12: Timeline & Cost Summary