How foreign investors can incorporate company in Bangladesh?

Why Incorporate in Bangladesh?

Bangladesh has emerged as a promising destination for foreign investors thanks to its strategic location, growing consumer base, competitive labor costs, and supportive government policies. The country permits 100% foreign ownership in most sectors, allowing international entrepreneurs to fully control their businesses. However, proper legal registration is essential to operating legally and efficiently in the region.

Types of Companies Foreign Investors Can Register

Foreign investors in Bangladesh can incorporate several types of entities, including:

• Private Limited Company – The most common structure, limited to 2-50 shareholders.
• Public Limited Company – Ideal for larger ventures planning to raise public capital.
• Joint Ventures – Partnerships between foreign and local investors.
• Branch or Liaison Offices – For market research or representation purposes.

This article focuses on incorporating a private or public limited company under the Companies Act, 1994.

Legal Framework: The Companies Act, 1994

All companies incorporated in Bangladesh must comply with the Companies Act, 1994. This law governs company structure, shareholder rights, financial obligations, and the responsibilities of directors. Companies can engage in any lawful business activity and operate across Bangladesh once registered.

Step-by-Step Company Incorporation Process

Step 1: Name Clearance from RJSC

The first step involves securing a unique name for your company through the Registrar of Joint Stock Companies and Firms (RJSC). This ensures your brand name is not already taken or too similar to existing entities. Once approved, the name is reserved for a limited period during which incorporation must be completed.

Step 2: Open a Temporary Bank Account for Capital Deposit

Before incorporation, foreign investors must open a temporary bank account in Bangladesh to deposit the proposed capital. According to Bangladesh Bank Circular No. 11 (dated May 17, 2021), temporary bank accounts can be opened online for Foreign Direct Investment (FDI) purposes. The deposited funds must be transferred from the investor’s overseas account to the temporary account, with appropriate documentation to verify the transaction.

Step 3: Prepare and Submit Incorporation Documents

Next, you’ll need to prepare essential documents including:

• Memorandum of Association (MoA)
• Articles of Association (AoA)
• Form IX (Consent of Director)
• Form XII (Particulars of Directors)
• Address of the registered office

These documents must be submitted to RJSC along with government fees. A digital signature and user ID for the RJSC portal will be required for online filing.

Timeline

The incorporation process typically takes around 5 weeks to complete. Delays may occur if any document needs resubmission or clarification.

Post-Incorporation Requirements

Once your company is registered, there are a few additional tasks to ensure compliance:

• Trade License – Obtain from the local city corporation or municipal office.
• Tax Identification Number (TIN) – Required for opening operational bank accounts and filing taxes.
• VAT Registration – If applicable, register with the National Board of Revenue (NBR).
• Import/Export License – If your business is trade-oriented.

Online Support via BIDA’s OSS Portal

Bangladesh Investment Development Authority (BIDA) has launched a One-Stop Service (OSS) Portal at https://bidaquickserv.org/. This platform simplifies the application process for both local and foreign investors, providing a checklist of required documents, tracking tools, and updates on your application status.

Common Challenges and Pro Tips

• Document Clarity: Ensure all incorporation documents are accurate and aligned with the Companies Act.
• Local Legal Support: Engage with a local law firm familiar with RJSC and foreign investment processes.
• Bank Communication: Confirm your receiving bank understands the requirements for FDI fund transfers to avoid delays.
• Follow BIDA Guidelines: Regularly check BIDA’s portal for updated rules and circulars.

Conclusion

Incorporating a company in Bangladesh as a foreign investor may seem complex, but it becomes straightforward when approached step-by-step.

By securing name clearance, following capital deposit rules, and submitting complete documentation, you can register your business and start operations legally.

With BIDA’s OSS platform and modern banking regulations, foreign investment is easier than ever. Whether you’re launching a startup or expanding globally, Bangladesh offers fertile ground for growth and opportunity.