Starting a Business in Bangladesh: Legal Requirements
If you’re looking to start a business in Bangladesh, it’s important to know about the legal requirements you need to comply with. This article covers the basic legal formalities that must be completed in order to start a business in Bangladesh. Although the requirements vary for different types of businesses, there are some that are common to all. Ignoring these requirements can lead to legal complexities and negatively impact your business.
1.Selecting a Business Form:
The three options available in Bangladesh are: (i) Sole Proprietorship, (ii) Partnership, and (iii) Incorporated Company. Each form has its own advantages and disadvantages, which will be discussed in a separate article. Briefly, a Sole Proprietorship is owned by one person and has unlimited liability. A Partnership is formed between two or more individuals, also with unlimited liability. An Incorporated Company requires at least two shareholders and is a separate legal entity, with shareholders’ liability limited to their investment in the company.
2. Registering Your Business in Bangladesh:
Depending on the business form, different registration processes are required. A Sole Proprietorship only needs a Trade License, while a Partnership may register with the Registrar of Joint Stock Companies & Firms but is not mandatory. An Incorporated Company must be registered with the Registrar of Joint Stock Companies and Firms after filing the Memorandum of Association and Articles of Association, along with other required forms.
3.Obtaining a Trade License:
Obtaining Trade License is mandatory for all forms of businesses in Bangladesh. After forming your business, you need to obtain a Trade License from the relevant City Corporation, Union Parishad office, or as directed by the government. The information required may include your business name, incorporation certificate, Partnership Deed, documents showing your business location (such as rental or lease agreements), and passport-sized photos of the owner, partners, and Managing Director.
4.Tax Registration and Business Identification Numbers:
Upon obtaining a Trade License, you need to open a Tax Registration Number (TIN) for tax payments and a Business Identification Number (BIN) for Value Added Tax (VAT) payments from the National Board of Revenue.
4.Special Permits:
Depending on your type of business, you may need to obtain additional permits from various authorities. For example, a drug store requires a drug license from the Directorate General of Drug Administration, while a chemical or power generation business requires permission from the relevant government department. You will also need an Export Registration Certificate (ERC) and Import Registration Certificate (IRC) for exporting or importing products outside of the country.
Once you’ve completed all the necessary permissions and obtained the required licenses, you’re ready to start your business. Note that most of these licenses are required to be renewed annually. Good luck in your entrepreneurial journey in Bangladesh!
If you need any legal assistance in Bangladesh for your business, you may contact us or WhatAapp.
