How to Open a Proprietorship Business in Bangladesh

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Generally, three types of businesses entities are observed operating in Bangladesh. These are Limited Company, Partnership Firm, and Proprietorship Business. Around 65% businesses are being operated as sole proprietorship basis. A single entrepreneur can start a proprietorship business. Generally, small and medium-size business venture go for proprietorship.

How to get a trade license in Bangladesh?

If someone wants to start proprietorship business,  it is required to obtain a Trades License from the local authority, it might be City Corporation Office, Municipality Office, Upozila council and Union Council or respective Govt. authority. To obtain a Trade License, one needs to fix a good name for the Proprietorship business then submit with necessary documents and pay Govt. fees (kinds of business) to the Trade License issuing authority. After checking all  the papers and the authority issues the Trade License with a required field investigation.

Following Issues are taken into account by the authority:

  • Name of the Proprietorship Business
  • Owner’s name
  • Kinds of business such as Export, Import, Supplier etc
  • Business Address
  • Owner’s Address, Date of Birth, Parents Name
  • Owner’s National ID cards copy
  • Owner’s Photograph
  • Registered address of the business
  • VAT chalan copy of Trade License
  • Office rental deed
  • Fill up Trade license form with the Owner’s signature


A proprietorship is not considered as a separate legal entity. The owner is liable for all the business consequences.


The owner shall have to pay the tax by his individual head as his personal income from the business.

Maintenance & Operation:

  • The operating cost is comparatively low for a proprietorship business
  • It is not required to prepare a profit & loss balance sheet & audit report annually
  • The owner is the only person who decides any business decision

Further required approvals:

Once the Trade License is obtained for proprietorship business, a TIN certificate (Taxpayers’ Identification Number) is required to open a bank account (business account) to operate business transaction. At present most of the business implement VAT (Value Added Tax). To deduct VAT, one needs to collect VAT Registration Certificate. TIN Certificate needs for deducting AIT (Advance Income Tax) at the source to operate the business.

If proprietor wants to get involved with international business, he/she shall require Export Registration Certificate or Import Registration Certificate for doing international and multinational business. Now Bangladesh is one of the leading readymade garments, Jute, Frozen Food, Leather Goods and Potato exporting country in the world. A good number of business entities like Proprietorship, Partnership Firm, and Limited Companies are interested to involve International business or Export & Import Business in Bangladesh. When two or more entrepreneurs want to start a business in Bangladesh, either they have to form a Limited Company or a Partnership Firm.