Company registration in Bangladesh

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Company registration in Bangladesh

This guide will provide you a detailed overview of company registration requirements, procedure, and timeline for registering a private limited company in Bangladesh. Like most other jurisdictions, Bangladesh has a set of initial and ongoing regulatory compliance requirements for starting and operating a company. 

When considering the registration of a new company or relocation of your existing company to Bangladesh, note that most Bangladeshi companies are registered as private limited liability companies (commonly known as private limited companies). A private limited company in Bangladesh is a separate legal entity and shareholders are not liable for the company’s debts beyond the amount of share capital they have contributed. According to the Companies Act 1994, any person (foreign or local) above the age of 18 can register a company in Bangladesh.

PRE-REGISTRATION – WHAT YOU NEED TO KNOW

KEY FACTS ABOUT COMPANY FORMATION

Company Name.  The name must be approved (cleared) before incorporation of the company in Bangladesh.

Directors.  Minimum two directors are mandatory. Directors can be either local or foreign. Directors must be at least 18 years of age and must not be bankrupt or convicted for any malpractice in the past. The law requires that a director must own qualification shares stated in the Articles of Association. A shareholder which is not a natural person (i.e. a company) can select nominee director.

Shareholders.  A private limited company in Bangladesh can have a minimum of 2 and maximum of 50 shareholders. A director and shareholder can be the same or a different person. The shareholder can be a person or another legal entity such as another company or trust. 100% local or foreign shareholding is allowed. New shares can be issued or existing shares can be transferred to another person anytime after the Bangladeshi company has gone through the incorporation process.

Authorized Capital. You must state the authorized capital in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that the company is authorized to issue (allocate) to shareholders. Part of the authorized capital can remain unissued. There is no minimum or maximum limit for authorized capital in Bangladesh.

Paid-up Capital.  Minimum paid-up capital for registration of a Bangladeshi company is Taka 1. Paid-up capital (also known as share capital) can be increased anytime after the incorporation of the company.

Registered Address.  In order to register a company in Bangladesh, you must provide a local address as the registered address of the company. The registered address must be a physical address (can be either a residential or commercial address) and cannot be a P.O. Box.

Memorandum and Articles of Association. The company to be incorporated must prepare a memorandum of association (MoA) and articles of association (AoA).

CONSIDERATIONS FOR FOREIGNERS

Foreigners wishing to open a Bangladesh company, must take into consideration the following points:

  • You must open a bank account in the name of the proposed company with the name clearance obtained from the Registrar of Joint Stock Companies and Firms (RJSC)e. the registrar of companies and bring in the initial paid up capital. This is a mandatory for company incorporation in Bangladesh.
  • All company incorporation formalities can be handled without you having to visit Bangladesh. The only exception may be opening a bank account, depending upon the bank you choose.
  • All the director and shareholders can be foreigner.
  • There is no requirement for you to obtain any special Bangladesh visa if you merely want to incorporate a private limited company but have no plans to relocate to Bangladesh. You are free to operate your company from overseas as well as free to visit Bangladesh on a business visa whenever required to attend to company matters on a short-term basis.
  • If you plan to relocate to Bangladesh to operate your company, you are required to obtain a work permit.

REQUIRED DOCUMENTS

For the purpose of company incorporation in Bangladesh, the following information is required by the company registrar:

  • Company Name. A name clearance must be obtained.
  • Memorandum of Association and Articles of Association.RJSC requires that the object clause in the MoA to be within 400 words and 7 clauses.
  • Shareholders Particulars(National ID if the shareholder is a Bangladeshi)
  • Directors Particulars(including Tax Identification Number)
  • Registered Address
  • Singed Form IX and Subscriber Page. Scanned copy in pdf will be required.
  • For foreigners:Copy of passport of shareholder and director.

REGISTRATION PROCEDURE

Company registration procedure in Bangladesh is partially computerized.

There are three distinct steps involved in the Bangladeshi company setup procedure: a) Name Clearance; ii) Bank account opening and bringing in the paid up capital; and finally b) Company Registration. Step ii is only applicable if there is any foreign shareholder in the proposed company.

STEP 1: NAME CLEARANCE

To set up a Bangladesh company, your first step would be to obtain a name clearance for the proposed company name. You will have to visit www.roc.gov.bd and create a username first. Then you will be able to apply for name clearance. After you made the application for name clearance, you will receive a bank payment slip and you will have to pay Taka 600 to the designated bank. After making the payment, you will have to log in to your account on the RJSC website and then you will get the name clearance.

You may read this guide prepared by RJSC for name clearance.

Tip: use Internet Explorer and Mozilla Firefox while using the RJSC website. Other browser might not work properly.

To improve your chances of quick name approval, make sure the name:

  • is not identical or too similar to any existing local company names
  • does not infringe with any trademarks
  • is not obscene or vulgar
  • is not already reserved

An approved name will be reserved for 6 months from the date of clearance. You can extend the name by filing an extension request just before the expiry date.

STEP 2: BANK ACCOUNT OPENING AND BRINGING IN THE PAID UP CAPITAL

This step is only applicable if the proposed company has foreign shareholding.

Next, you will have to open a bank account in the proposed company name with any scheduled bank in Bangladesh. After opening the account, you will have to remit money equal to the shares to be owned by the foreign shareholder from outside Bangladesh in the account. The Bank will issue an Encashment Certificate which will be required by RJSC for incorporation.

STEP 3: REGISTER COMPANY

The last step is to submit all the required information in the RJSC’s website. Also you will be required to upload Form IX and Subscriber Page. After you finish all the process, you will receive a bank payment slip for paying the registration fees along with stamp duty.

You may read this guide prepared by RJSC for submitting all the information in the RJSC’s website.

After making the payment in the bank, you are done. Now you will have to follow up with the RJSC for obtaining the incorporation certificate. RJSC officials will check the documents and information. If they are satisfied, they will issue the digitally signed i) Certificate of Incorporation; ii) MoA and AoA; and iii) Form XII. These documents will be mailed to your email address associated with your RJSC account.

There are cases when the incorporation procedure can get delayed if the shareholders or directors are of certain nationalities, although this happens in rare cases only. In such cases, the authorities might ask for additional information.

POST-REGISTRATION FORMALITIES

DOCUMENTS ISSUED BY RJSC:

  • Certificate of Incorporation: RJSC will issue a Certificate of Incorporation of the company. The certificate will have the registration number, name of the company and the date of incorporation.
  • Form XII: Form XII contains the list of directors of the incorporated company.
  • Certified copies of MoA and AoA

Some of the other items you will almost certainly need upon registration of your Bangladeshi company include:

  • Share certificates for each of the shareholders.
  • Register for shareholders, shares, directors etc.
  • Company seal for the company
  • A rubber stamp for the company

APPLYING FOR TRADE LICENSE, TAX IDENTIFICATION NUMBER AND OTHER LICENSES

After the incorporation, you should buy a commercial space or rent some space in any commercial area.

Then you need to apply for Trade License and Tax Identification Number. Depending on your company’s business activities, you may need to obtain more business licenses.

RETURN FILING REQUIREMENTS

Annual Return:  Each calendar year, an Annual General Meeting must be held. The AGM must be conducted within 18 months of company incorporation, after which no more than 15 months can elapse between one AGM and the next.

Regular Return: In case of any change in the board of directors or in the shareholding structure or any other change, a relevant return must be filed with the RJSC within a certain period of time

Source: ogrlegal.com