Company Incorporation in Bangladesh: Comprehensive Guide for Private Limited Company Registration

Why Choose Bangladesh for Company Incorporation?

Bangladesh’s competitive business environment, low labour costs, favourable geographical location, abundant natural resources, and supportive policies for foreign investment make it an attractive destination for establishing a business. Whether you are a local entrepreneur or a foreign investor, understanding the legal aspects and registration procedures is crucial for successful company incorporation. This guide provides a detailed, step-by-step overview to help you navigate the process of incorporating a private limited company in Bangladesh with ease.

Step-by-Step Guide to Private Limited Company Registration in Bangladesh

Registering a private limited company in Bangladesh involves several key steps. While the process can be elaborate, the advantages of establishing a private limited company far outweigh the effort. Below, we outline the detailed steps along with the legal requirements and benefits involved.

A private limited company in Bangladesh is a privately held business owned by investors who enjoy limited liability. This structure is ideal for long-term strategies, offering financial confidentiality and operational flexibility. It also allows 100% foreign ownership, making it an attractive choice for international investors.

Benefits of a Private Limited Company in Bangladesh

A private limited company in Bangladesh offers several benefits, including being recognized as a separate legal entity, and providing legal protection to its shareholders. The company enjoys perpetual succession, meaning it continues to exist even if there is a change in ownership. Shareholders have limited liability, which means their financial risk is limited to their investment. The entry barriers are low, and the process of starting or closing a business is straightforward. These companies are well-suited for startups and new ventures due to their structured framework, minimal paid-up capital requirement, and ease of share transfer among members.

Check Out our Foreign Investment Guide for Bangladesh>

Check out Foreign Investment Facilities in Bangladesh>

Requirements for Private Limited Company Registration

To register a private limited company in Bangladesh, you must fulfil several requirements. First, you need to obtain name clearance from the Registrar of Joint Stock Companies (RJSC). The company must have a minimum of two and a maximum of fifty directors, who must be at least 18 years old, of sound mind, and free of malpractice or bankruptcy convictions. A minimum of two and a maximum of fifty shareholders are also required, and 100% foreign shareholding is allowed. Each shareholder must invest a minimum of BDT 1. The company must have a registered address in Bangladesh, and it is required to submit audited accounts, annual returns, and tax filings to ensure compliance.

Liabilities and Compliance Requirements

A private limited company in Bangladesh has specific compliance obligations. It must hold an annual general meeting and appoint a statutory auditor to verify its financial activities. Financial reporting is also required, and the company must file annual income tax returns.

Required Documents for Company Registration

Name Approval Certificate from RJSC.
MOA and AOA of the proposed company.
NID or Passport Copies of all shareholders.
Bank Account Application for opening a non-operating account.
For corporate shareholders, Incorporation Certificate, MOA, AOA, and last year’s audit report are required.

Special Cases (Investment in Kind)

Though the Companies Act 1994 does not detail procedures for investment in kind, such as machinery or equipment, this form of investment is common in Bangladesh. To complete this type of investment, the company must be registered with RJSC, and the investor must fill out relevant forms and agreements between vendors and shareholders.

Obtaining Encashment Certificate for Foreign Shareholders in Bangladesh

A foreign shareholder is required to remit their share subscription funds to a temporary bank account opened in the name of the proposed company during the incorporation process. Once the required paid-up capital has been deposited into this account, the bank will issue an encashment certificate, which must then be submitted to the Registrar of Joint Stock Companies and Firms (RJSC) for the issuance of shares to foreign investors in Bangladesh.

To learn more about this process, please visit This Article>

Company Incorporation Process in Bangladesh

1. Name Approval

The first step in registering a private limited company is to obtain name clearance from the RJSC via its web portal. The name clearance certificate is valid for 30 days.

2. Drafting Documents

Prepare and draft the Memorandum of Association (MOA), Articles of Association (AOA), and other required documents. Key forms to fill out include:

•Form I: Declaration of company registration.

•Form VI: Notice of registered office location.

•Form IX: Consent of directors.

•Form XII: Details of directors and managing agents.

3. Opening a Non-Operating Bank Account

Open a non-operating bank account in a scheduled commercial bank to receive inward remittance for capital investment. An Encashment Certificate must be obtained, which RJSC verifies during registration.

4. Inward Equity Remittance

Paid-up capital must be deposited in the bank, which issues an Encashment Certificate confirming the remittance.

5. Online Submission to RJSC

Upload the MOA, AOA, signed forms, and Encashment Certificate on the RJSC portal to complete the registration process.

6. Post-Registration Licenses and Documentation

Once the RJSC approves the registration, the company will receive:

•Incorporation Certificate

•Certified Copy of the MOA and AOA

•Certified Copy of Form XII (Director Particulars)

7. Additional licenses required post-registration include:

•Trade License

•Tax Identification Number (E-TIN)

•VAT Registration (BIN)

•Chamber of Commerce Membership (for imports/exports)

•Import/Export Registration Certificate (if applicable)

8. Liabilities and Compliance Requirements

A private limited company in Bangladesh must adhere to specific liabilities, including:

•Annual General Meeting: Must be held annually.

•Statutory Auditor: Must appoint an auditor and submit audited financial reports.

•Tax Returns: Annual income tax filings are mandatory.

Pros and Cons of a Private Limited Company in Bangladesh

Pros:

Tax exemptions for specific industries.
Eligibility to hire foreign staff.
Tax-free status for foreign technical staff for three years, depending on business nature.
Easier access to financial and banking facilities.
Limited liability for shareholders.
Option to issue shares and add shareholders flexibly.

Cons:

Annual auditing can be costly for small companies.
Compliance requirements are stricter compared to sole proprietorships or partnerships.
Dividend tax and company-level taxes apply.

Taxation for Companies

A company needs to pay corporate tax on its profit (Revenue expenses); if it doesn’t have the profit, it doesn’t need to pay tax. This is subjected to the following:

i. File income tax return annually (usually on 15th January of next year following financial closing, usually (July-June)

ii. Make sure to inject paid-up capital into the company’s bank account by cheques.

iii. Make sure the debit-credit in the bank statements is adequately explained

iv. Minimum tax usually @.06% of gross revenue to be paid.

Corporate Tax Rate in Bangladesh:

Publicly traded companies (listed companies on stock market)	25%
Non-publicly traded companies (private companies limited by shares)	27.5 %
Publicly traded banks, insurance, and financial institutions other than merchant banks	37.5%
Non-publicly traded bank, insurance, and financial institutions	40%
Publicly Traded mobile network operators	40%
Non-publicly Traded mobile network operators	45%
Publicly Traded cigarette manufacturers	45%
Non-publicly Traded cigarette manufacturers	45%
One Person Company	25%

One-person company registration in Bangladesh has been officially launched in Bangladesh.

Besides, there are several tax exemption facilities for companies based on the nature of business & location.

Still, have a question? Let’s answer them all 😊

Are there any minimum shareholders required to form a company?

For a private limited company, there should be minimum of two shareholders.

Are there any minimum Directors required to form a company?

For a private limited company, the minimum requirement is to have two directors.

Is there any requirement of resident / local director to operate a foreign company in Bangladesh??

Generally, there is no requirement of a resident/local director. However, to open a bank account, one director must be physically present.

Is there any minimum amount for the authorize and paid-up capital to be prescribed?

As to limitation on capital amount; there is no limit on authorized or paid-up capital amount. However, it is suggested to have, at least, the authorized capital of BDT equivalent to USD 50000 for other legal purposes & paid-up capital as required to operate your business as you think proper.

Are there any guidelines whether the activities of company need to be reflected in the name?

There are no such guidelines; however, in practice, it is suggested.

Please note that, if the Company House finds the name (for which application for name clearance has been filed) similar to the name of any other existing company then the Company House shall suggest proceeding with a different name.

Is it mandatory to have a registered local address for the company?

Yes, it is mandatory to have a registered address for the company.

Do you provide office address?

Yes, we provide virtual office addresses on a yearly basis if required.

Company formation checklist (Required documents)

3 proposed names for the proposed company
Signed documents (MOA AOA, and others)
Particulars of the shareholders and directors (i.e. addresses, passport copies, email address, contact number, national identity, e-TIN, and other information)
Encashment Certificates (upon remitting the paid-up capital amount to the temporary bank account in Bangladesh the concerned bank shall issue the Encashment Certificate). It is only required for the foreign nationals & entities.

Therefore, it is suggested to start the processing right after obtaining the name clearance.

Any other things if asked by the Company House depending on the nature of the company.

Whether prior permission of regulatory authority is needed for making investment - say Board of Investment?

No; there are no such prior requirements. However, for manufacturing companies, it is advisable to start the process with BIDA.

Paid-up capital of the Foreign Shareholders and time of deposit.

Foreign entities or persons need to send the entire amount of his/her paid-up capital to a proposed bank account or temporary bank account of the company right after the name clearance. The encashment certificate is required to get a company incorporation approval from Company House.

This process is not required for the local share subscribers.

What is the difference between authorize capital & paid-up capital?

Authorize capital refers to the amount that a company is authorized to raise from its present and future shareholders. Paid-up capital denotes the amount that the shareholders are going to invest at the time of incorporation of the company.

Example: The authorized capital of XYZ Limited is 1 core divided by 1 lac shares with tk. 100 per share value. 3 shareholders started the company with the paid-up capital 30 lac taka with equal shareholding. Every shareholder owns 33.3% of the company holding 10,000 shares each. The company now wants to raise more from its shareholder. However, now they can raise up to 70 lac from the current shareholders or future shareholders since their authorized capital is tk. 1 crore. To raise more than 70 lac, the company needs to apply to the Company House to increase its authorized capital limit by paying extra fees.

Whether Director need to obtain any registration before becoming director of the company?

No.

Is this mandatory to appoint a company secretary?

For a private limited company, it is not mandatory to appoint the company secretary in Bangladesh.

What is the timeline for company formation?

Step 1: 1-2 working days to get name clearance

Step 2: 3-7 working days from filing the application.

Step 3: To get the certificate of incorporation, 1 week or less from filing the complete application provided all the documents are ready

Note that the process is a little different for foreign entities. Usually, it takes around 30-40 days to complete the process including the proposed bank account opening.

What are the post company formation required licenses and approvals?

In order to operate the business, the company needs to obtain relevant permits, licenses, approvals, and clearances from different governmental authorities. These permits, licenses, approvals, and clearances shall depend on the nature of business and industry like environment clearance, factory permission, fire certificate etc.

Most common licenses is Trade License, The Trade License needs to be obtained from a relevant city corporation or union Parishad.

TIN (Tax Identification Number) Certificate,and VAT (Value Added Tax) Registration Certificate. For the TIN and VAT Registration, the concerned authority is the relevant department under the National Board of Revenue (NBR) & Customs & VAT Commissonerate.

When will a company be fully ready to operate legally in Bangladesh complying all the procedure?

Once a company gets:

Company Incorporation Certificate
Trade License
TIN Certificate
VAT Registration Number
Finally, the Bank Account
Any membership/license approval with the concerned business sector (if required)

The company shall be completely ready to operate in Bangladesh.

Are there any restriction/strict guidelines to follow in case of alteration in company operation & management in future?

Yes, a certain procedure shall have to follow in case of the following issues:

Election and removal of directors
Appointment of auditors
Investment in associated entities
Increase in share capital
Dividend declaration, etc.

What are the changes or updates a company need to submit with the Company House?

Annual Return

Each year, an Annual General Meeting must be held. The meeting must be conducted within 18 months of company.

Regular Corporate Filling:

In case of any specification change in the shareholding structure or board of directors or any other change, a relevant return must be filed with the RJSC (Company House) within a certain period of time.

Show me the minimum share capital chart for company and other business entities.

Type of Entity	Maximum allowed foreign ownership	Minimum paid-up capital	Minimum no. of shareholders
Private Limited Company	100%	$1*	2
Public Limited Company	100%	$1*	7
Subsidiary Company	51% -100%	$1*	2
Branch Office	100%	No capital*	No shareholders
Representative Office	100%	No capital*	No shareholders

What are the documents required for bank account opening?

Updated Trade License
Certificate of Incorporation
AOA & MOA of the company
Board resolutions regarding bank opening on company letterhead pad
Picture & NID of those who will operate the bank account
Minimum Balance
TIN of the company
Seal in the name of the Managing Director, Chairman, Director
VAT Certificate (BIN) is not required in the beginning.

My company name is Sachi Technologies Ltd., can i have a website in the name of 'avana.com"?

A company is an entity & it can own several businesses in different names in compliance with the Memorandum of the company.

If it wishes to carry a different business that is not mentioned in the memorandum of the company, the company needs to apply with the High Court to add that category.

Foreign Company Incorporation in Bangladesh, Company Incorporation Procedure in Bangladesh, Company Lawyer in Bangladesh, Company Law Firm in Bangladesh, Company Incorporation in Bangladesh, Company Incorporation Service in Bangladesh, Company Formation Service in Bangladesh, Company Incorporation Package in Bangladesh,
Company Incorporation Cost in Bangladesh, Company Incorporation in Bangladesh, Affordable Company Incorporation Package in Bangladesh. Best Corporate Law Firm in Bangladesh, Best Company Lawer in Bangladesh, Cheap Compay Incorporation Package in Bangladesh, Company Incorporation Cost in Bangladesh, Company Formation Cost in Bangladesh, Company Establishment Fee in Bangladesh, Doing business in Bangladesh

Contact Us

For more information or to begin the process of setting up a company in Bangladesh, contact LegalSeba.com today. Our team is ready to provide you with tailored assistance to ensure a seamless setup.

Phone/Whatsapp: +8801753718223
Email: [email protected]

Choose LegalSeba.com for expert guidance and support in establishing your company in Bangladesh. Our comprehensive services will ensure that you meet all legal requirements efficiently and effectively. Contact us today to get started on your journey to establishing a successful presence in Bangladesh.

Company Incorporation in Bangladesh: Comprehensive Guide for Private Limited Company Registration

Why Choose Bangladesh for Company Incorporation?

Step-by-Step Guide to Private Limited Company Registration in Bangladesh

Benefits of a Private Limited Company in Bangladesh