In order to set up a company in Bangladesh, an entrepreneur must follow certain precise procedures and legal requirements. The entrepreneur must first apply to the Registrar of Joint Stock Companies and Firms (RJSC) for a Name Clearance Certificate. Following receipt of the certificate, the next step is to pay stamp duty at a Designated Bank and reapply for registration with RJSC. The company will next produce a seal, open a bank account, and apply for a trade license with the appropriate City Corporation or Municipal Corporation. Following completion of all procedures, the entrepreneur must apply to the National Board of Revenue (NBR) for a TIN Certificate and registration with the Customs, Excise, and VAT Commissionerate. Finally, the investor must apply for registration with the Bangladesh Investment Development Authority (BIDA).

However, in order to understand how to incorporate or register a company in Bangladesh, we must first understand the type of company you wish to incorporate or register. It may be a difficult process if the right and suitable company incorporation procedure in Bangladesh is not known. According to the Companies Act 1994, company incorporation in Bangladesh takes many forms and procedures. The company registration procedure in Bangladesh varies based on the types of company registration one may choose in Bangladesh.

As per the Companies Act 1994, there are mainly three categories of companies:

Company limited by shares,
Company limited by guarantee; and
Company with unlimited liability.
Registration of a company limited by shares is the most prevalent form of company incorporation in Bangladesh. To register a company in Bangladesh, the Companies Act of 1994 does not offer a step-by-step procedure, since it is mostly facilitated by the Registrar of Joint Stock Companies and Firms (RJSC).

The step-by-step procedure of registering or incorporating a company in Bangladesh of a Private Limited Company

Step 1: Name Clearance Certificate for Company

The first step is to apply to the Registrar of Joint Stock Companies and Firms (RJSC) for a certificate of name clearance. This is a requirement for forming a new company (other than a foreign corporation or a partnership firm), a society, or a trade association. An applicant must apply on the RJSC website. If the name does not closely match or resemble any of the existing names, the RJSC office will examine the database and issue name approval. It will remain valid for the following 180 days. An applicant must apply for registration within this time frame.

Step 2: Drafting the Memorandum and Articles of Association:

It is of vital importance to draft a solid and consolidated constitution document of the company. The Memorandum of the Company should state the primary business objectives, the amount of paid-up capital & authorized capital, and state the list of the shareholders along with their respective shareholdings. It is to be noted here Bangladesh does not allow One Person Company (OPC) and a minimum of two (2) shareholders are required to set up a private limited company. However, in the case of a public limited company, the total number of shareholders required is seven (7).

The Articles of Association of the Company should include the list & number of the directors, power of the board, power of the Managing Director, meeting process, quorum, notice procedure, the appointment of auditors, etc. The minimum number of directors for a private ltd company is two (2) for a public ltd company is three (3).

Directors are required to hold a minimum of one share (qualification share) in the Company; however, the qualification share requirement is relaxed in case Directors are nominees of corporate entity shareholders. Also, it is possible to appoint Independent Directors.

Step 3: Opening Temporary Bank:

Once name clearance is obtained, a temporary bank account is required to be opened by the proposed company. Along with the name clearance documents, a copy of the Draft Memorandum and Articles of Association needs to be submitted to the respective Banks.

Step 4: Remitting Money to the Bank Account:

The Foreign Investors are required to remit the desired paid-up capital in the bank account of the company. The Bank will hold the remitted amount. Please note that for legal purposes, there are no minimum capital requirements for setting up a company; however, in order to obtain certain advantages including appointing foreign employees, the minimum requirement is USD 50,000. Upon remittance of the paid-up capital, an Encashment Certificate needs to be obtained from the respective bank.

Step 5: Submission of Digital Documents:

Upon receipt of the encashment certificate, the Promoters are required to upload a digital copy of the Memorandum & Articles, Directors Consent Forms to the RJSC server. On submission of the documents in the RJSC server, an Electronic Payment Slip will be printed and equivalent amounts need to be submitted to designated bank accounts of RJSC.

Step 6: Submission of Physical Documents:

Upon payment of fees to the designated bank account for governmental fees and charges as stipulated in the Electronic Payment Slip, a non-judicial stamp needs to be affixed to the Memorandum and Articles of Association and the same need to be submitted to RJSC along with the Directors Consent Form (Form IX), List of Consenting Directors ( Firm X), List of Directors and Managing Agents (Form XII); Original copy of the Encashment Certificate and Name Clearance Document and payment slip acknowledged by the Bank.

Step 7: Obtaining Incorporation Certificate and other Documents:

Within 3-4 working days from submission, the Company will receive an Incorporation Certificate, Digital Certified Copy of the Memorandum & Articles of Association, and List of Directors (Form XII). Once the company receives the Certificates, a copy needs to be furnished to the Bank to convert the temporary account to a regular account.

Step 8: Obtain Tax Identification Number (TIN):
In order to start business operations, every company must register for taxes at the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the National Board of Revenue (NBR) and obtain a tax identification number. Obtaining a Tax Identification number is free of cost and it is done electronically through the NBR server.

Step 9: Obtaining Trade License:

Companies have to obtain a trade license from the local governmental authorities in Bangladesh. For example, in the case of Dhaka, a trade license has to be obtained from the respective City Corporation. The proposed company will have to manually file its application at the nearest city corporation office. The cost of obtaining a trade license is approximately USD 200 and it can be renewed on yearly basis. The typical time frame is three-four working days.

Step 10: Obtaining VAT Registration Certificate:

For VAT purposes, companies register with the Customs, Excise, and VAT Commission under the National Board of Revenue. The company’s VAT is regulated by the Customs, VAT, and Excise Department of the region in which it operates. The typical time frame for obtaining VAT registration is about 5-7 working days.

Step 11: Registering with Bangladesh Investment Development Authorities:

Bangladesh Investment Development Authority (BIDA) is responsible to facilitate foreign investments in Bangladesh. BIDA’s responsibilities include issuing work permits for foreign employees, visas for foreign investors, processing loans from foreign sources, approval of remittance of royalties & technical fees, assisting in obtaining industrial plots, facilitating utility connections, approval of foreign loans, suppliers credit, and assist and advice on many investment related issues. Foreign Investors with Industrial Projects are strongly advised to register with BIDA upon the incorporation of their limited company. However, for Commercial or trading Companies, there is no requirement for registration with BIDA. The typical time frame for obtaining registration is about 7-10 working days.