Basic information on doing business in Bangladesh

The capital is Dhaka.

Bangladesh has a population of approximately 161 million.

The official language in the country is Bengali (Bengali), however, in the service sector and state institutions, English is also used.

More than 85% of the believers are Sunni Muslims, about 12% are Hindu, Buddhist - 0.5%, Christian - 0.3%. The state is located in South Asia, in the northeastern part of the Indian subcontinent, bathed by the Bay of Bengal of the Indian Ocean. In the west, north and east it borders India, in the southeast with Burma (Myanmar). The area of the country is approximately 144 thousand square kilometers.

The climate is subequatorial, monsoon.

A good time to visit Bangladesh is the cold season, when the climate is dry and quite cool. A visit in April is not recommended when the humidity and high air temperature make the stay in the country unbearable.

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Types of companies in Bangladesh

In Bangladesh, the following types of companies can be distinguished:

Private Limited Company (LLC) is the most popular business form in Bangladesh for small and medium-sized businesses. The obligations of the company are limited by its authorized capital. This type of company can be used by foreign investors. Furthermore, the law prescribes a minimum of two and a maximum of 50 shareholders and two directors.Private Limited Company (OJSC): If you plan to increase the additional liquidity associated with selling shares on the stock exchange, you will need a company in the form of an OJSC. This company must have at least seven founders, three directors, and the maximum number of shareholders is unlimited. Buyers of shares can be both people over 18 years of age and other companies. Placing shares on exchanges is optional. In addition to the Companies Law, the activities of said legal persons are regulated by the Securities Commission.Branch: not recognized as a separate legal entity. A branch of a foreign company in Bangladesh can conduct business and profit. However, only after obtaining written permission and under close supervision is the Bangladesh Investment Development Authority (BIDA).Representative office: to register a representative office as well as a branch, the permission of BIDA will be required, as well as the presence of a true "parent company". Representative functions may include building relationships with consumers, as well as coordinating actions in the local market. The branch cannot conduct business in Bangladesh.

A subsidiary can establish an LLC or OAO and conduct business in Bangladesh.

Summary table with brief characteristics of the legal forms in Bangladesh:

Type of Company
Maximum allowable foreign ownership level
Minimum capital requirement of the Charter
Minimum number of shareholders in a company
Limited liability company
100%
$1*
2
Limited public company
100%
$1*
7
Subsidiary company
51%-100%
$1*
2
Branch office
100%
Without capital *
No shareholders
Representative office
100%
Without capital *
No shareholders

* However, if you want to hire a foreign employee, you must provide up-front capital of $ 50,000.

Business registration procedure in Bangladesh

Checking the name. The name of your company must be agreed in the Registry of Stock Companies and Companies, RJSC.Preparation of the necessary documents. The standard is: Articles of Association of the Company (AoA); and Memorandum of Association (MoA).Open a bank account. If you plan to hire foreign employees, you must transfer at least $ 50,000 per employee.Presentation of documents to the registration authority. After payment of the state fee, the prepared documents are sent to RJSC.Obtaining a tax identification number.Registration as a VAT payer.

Depending on the field of activity, you may need to obtain additional documents, such as:

Commercial license.Importer certificate.Exporter's certificate.Fire certificate.Environmental cleanliness certificate.Production license.

Bangladesh business income tax

25% are publicly traded companies, i.e. companies registered on any exchange in Bangladesh (with the exception of banks, insurance companies, other financial institutions, as well as textile, clothing, mobile phone and tobacco manufacturers) .35% are unlisted companies, including branches of foreign companies (in addition to banks, insurance companies, banks and other financial institutions, the textile, clothing industry, mobile operator companies and manufacturers of tobacco products) .40%: unlisted banks, insurance companies and other financial companies.37.5% - publicly traded banks, insurance companies and other financial companies.45% - for manufacturers in the tobacco industry. In addition, an additional surcharge is applied to the previous tax in the amount of 2.5%.45% are mobile operators and 40% if at least 10% of the company's shares are listed.

Bangladesh business income tax

25% are publicly traded companies, i.e. companies registered on any exchange in Bangladesh (with the exception of banks, insurance companies, other financial institutions, as well as textile, clothing, mobile phone and tobacco manufacturers) .35% are unlisted companies, including branches of foreign companies (in addition to banks, insurance companies, banks and other financial institutions, the textile, clothing industry, mobile operator companies and manufacturers of tobacco products) .40%: unlisted banks, insurance companies and other financial companies.37.5% - publicly traded banks, insurance companies and other financial companies.45% - for manufacturers in the tobacco industry. In addition, an additional surcharge is applied to the previous tax in the amount of 2.5%.45% are mobile operators and 40% if at least 10% of the company's shares are listed.

Bangladesh Tax Preferences

15% - textile industry (preference extended until June 30, 2022).Jute manufacturers (for the period 2019-2020).12% are manufacturers and exporters of woven and woven garments (until 2019-2020).10%: manufacturers and exporters of woven and woven garments certified according to the necessary environmental standards (until 2019-2020).Universities, colleges - 15%.Production of granular feed for poultry, production of granular feed for fish, shrimp and livestock, seed production, commercialization of locally produced seeds, animal husbandry, dairy farming, horticulture, breeding, sericulture, mushrooms and floriculture:

       3%: earnings of up to 1,000,000 TC.

      10% - profit up to 2,000,000 TC.

      15% - on the amount of profit on.

Half of the income received by any export taxpayer is exempt from tax, with the exception of companies not registered in Bangladesh and companies that pay income tax at a reduced rate.