Step-by-step process of company registration

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Step-by-step process of company registration

Name clearance: The first step to registering a company in Bangladesh is to get approval of the company's name from the Registrar of Joint Stock Companies and Firms (RJSC).

Drafting of required documents:Next, the Article of Association (AoA) and Memorandum of Association (MoA) need to be drafted. Other forms must also be prepared while drafting these, as per the requirements for compliance to RJSC.

Opening a bank account: The third step is to open a bank account in the proposed name of the company and make an inward remittance of at least $50,000 if the company will be hiring foreign employees.

Submitting documents to RJSC: The next step is to submit all the required papers to RJSC and pay the registration fees. The incorporation certificate can also be requested from the RJSC at this point.

Post-registration compliance: Upon receiving the certificate of incorporation, AoA, and MoA, the company will need to proceed to some additional licences and registrations including: Trade Licence, Tax Identification Number (TIN), VAT Registration Certificate, Fire Certificate, and the Environmental Clearance Certificate (if necessary).

The average estimated time-line of completing all registration procedures in Bangladesh is 45-60 days.

Alternatives to setting up a company

Branch: A branch is an extension of its parent company, as opposed to a separately incorporated entity, making the parent company responsible for its branch's liabilities.

A branch can engage in commercial activities, given the approval of Bangladesh Investment Development Authority(BIDA). However, the Exchange Control Guidelines will strictly monitor its operations.

The average establishment time of a branch in Bangladesh is 45-60 days.

Representative/liaison office: Similar to a branch, a liaison—also called a representative office—is subject to BIDA's approval.

Its activities are limited since it only serves as a communication or coordination instrument of the foreign parent company's business resources in Bangladesh.

Additionally, a liaison office cannot earn any local income in Bangladesh. The parent company shoulders all of its expenses and operational costs through remittance.

There also cannot be outward remittances of any kind from Bangladeshi resources, except the amount brought in from abroad. The liaison office follows the same general process of business registration in Bangladesh.

Franchise operation with local promoters

Foreign-owned companies can also enter into franchises in Bangladesh. A franchise can permit local promoters to use the franchiser's brand, provide them with technical support, and charge fees or commission on their activity.

Source: https://www.dhakatribune.com/business/2018/12/19/foreign-direct-investment-how-to-register-a-company-in-bangladesh