What is a Liaison Office?

Liaison offices are often registered or formed in a country merely to maintain liaison or contact with the business resources of that country while the parent company remains in the native country. It acts as a mere permit to operate in Bangladesh as an entity in charge of liaising with the parent company and its agents or distributors in the host country. It is unable to create any form of income or profit. In contrast to a liaison office, a branch office, once registered, can earn revenue with the prior authorization of a recognized authority in Bangladesh.

How to Register Liaison Office in Bangladesh

The first step to registering a liaison office in Bangladesh is to obtain clearance from the Bangladesh Investment Development Authority. All relevant papers pertaining to the parent company, such as the MOA, AOA, Meeting Minutes of the approval, and Board Resolution providing approval, with an application, must be submitted.

Following approval, the Liaison offices must continue to operate at the time specified in the approval letter provided by the Bangladesh Investment Development Authority. Furthermore, a minimum of USD 50,000 must be remitted to Bangladesh as the estimated cost of the initial installation and six months of operational expenses.

After receiving approval from BIDA, a Liaison office must receive further clearance and licenses from specific government authorities in order to conduct business in Bangladesh. Furthermore, the authorized Branch or Liaison office must pay the income tax/ VAT and other taxes due to the government under Bangladeshi legislation. They will have to provide the appropriate paperwork for renewal at the very least.

Scope of Liaison Office in Bangladesh

It is vital to note that a Representative Office and a Liaison Office are the same corporate entity in Bangladesh. However, the operation and scope of activity of a Liaison Office vary from those of a Branch Office.

The liaison office can continue to carry out very restricted activities by maintaining coordination with the local agent, distributors/exporters’ institutions, and the principal via human contact, electronic media, or corresponding work. Occasionally, the liaison office collects business information, compiles analytical business data, and conducts essential surveys relating to its sphere of activity, as previously stated mentioned in its letter of approval. The liaison office is not permitted to profit from local commercial operations, and the full establishment, operation, and staff management costs must be carried out by the Parent company.

How to set up a Liaison Office in Bangladesh

Permission from the Bangladesh Investment Development Authority (BIDA) is necessary to set up a Liaison Office. The foreign investor must submit an application in the prescribed form, together with the accompanying papers, which must be attested by the Bangladesh Embassy/High Commissioner of the country of origin or the nation’s Apex Chamber of Commerce:

• Apply in a prescribed form, duly filled in, signed, and sealed,
• Memorandum of Association and Articles of Association of the principal Company.
• Incorporation Certificate of the principal Company.
• Nationalities and names of the directors/promoters of the principal Company.
• A board resolution for opening a Liaison office in Bangladesh.
• Last financial year’s audited accounts of the principal company.
• Projected organogram of the office viewing the posts to be occupied by local personnel as well as expatriates.
• List of activities on the Company letterhead of the proposed office.

For getting the permission of the Liaison Office a fee of BDT 25,000/- will have to be deposited in any branch of Bangladesh Bank or Sonali Bank by treasury challan.

Liaison Office License would be valid for a period of 3 (three) years, after which the license would have to be renewed by applying to BIDA.

A bank account must be opened in any bank in Bangladesh after getting approval from a Liaison office. As inward remittance, an amount of foreign exchange equivalent to US$ 50,000 or more must be brought to Bangladesh within 02(two) months from the date of issuance of the BIDA permission.

After obtaining approval from BIDA, registration with the RJSC is required for the Liaison office.