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Branch office Incorporation in Bangladesh
As an alternative to forming a Company, you can expand to Bangladesh by establishing a branch office of a foreign company. In this article, we will outline the steps involved in registering a branch office in Bangladesh.
Activities permitted for a branch office in Bangladesh:
A branch functions as an extension of its parent company, so no separate legal entity will be created. The parent company is responsible for the branch office’s debts, obligations, and other activities.
One of the primary differences between a branch and a liaison/representative office is that a branch can engage in commercial activities with prior approval from the Bangladesh Investment Development Authority (BIDA). For example, a branch may:
Collect payments on behalf of the parent company, generate local income, and make outbound payments from Bangladesh with prior BIDA approval.
Standards procedure for branch registration in Bangladesh:
There is no minimum time requirement for the parent company to be registered in its country of domicile, and any legally established company with audited financial statements and a proven track record of operations may open a branch office in Bangladesh.
The primary requirement for the establishment of a branch is Bangladesh Investment Development Authority approval (BIDA).
For approval, you must submit the following materials to BIDA:
- Application form completed and signed by the authorized signatory
- The parent company’s Memorandum of Association, Articles of Association, and Certificate of InCompany
- Names and nationalities of the parent company’s directors and promoters
- Last year’s audited financial statements for the parent company
- Resolution of the company’s board of directors regarding the opening of an office in Bangladesh
- Proposed office organogram including both expatriates and local employees
- Specifics of the activities of the Bangladesh branch
- Forwarding letter
- All documents accompanying the application and cover letter must also be attested by the Bangladesh Embassy/High Commission of the respective country or the country’s apex business chamber.
BIDA requires four copies of each of the specified documents. Additionally, you must translate any non-English documents before submission.
Minimum capital requirement for Branch office Incorporation in Bangladesh
As branch offices are not distinct legal entities, there is no minimum capital requirement for them.
In Bangladesh, however, a minimum inward remittance of US$ 50,000 is required for all registered entities, including branches and representative offices. This remittance should be sufficient to cover the initial establishment costs and six months of operating expenses.
The steps involved in Bangladesh branch registration in Bangladesh:
The average time required to establish a branch in Bangladesh is between 45 and 60 days.
#1 Document submission to BIDA
As the initial step in registering a branch in Bangladesh, you must submit all required documents to BIDA. Officials from BIDA will submit the application and supporting documents to the Inter-Ministerial Committee, who, if satisfied, will grant approval.
The typical duration for completion is one month or less. Note that the BIDA may also request additional documentation or a physical representation, which will lengthen the process. It is essential, therefore, to prepare the documents thoroughly.
#2 Financial institution account opening
The next step, after receiving permission to open a branch office in Bangladesh, is to open an account at any Bangladeshi bank.
As stated previously, a branch does not require any minimum paid-up capital. In Bangladesh, however, a transfer of US$ 50,000 is required within two months of the date the BIDA permission letter was issued.
It can be used for operational and establishment expenses, visas, food, lodging, etc.
#3 Acceptance by the Bangladesh Bank
Additionally, all branch, liaison, and representative offices must report to the central bank of Bangladesh within thirty days of receiving permission from Bangladesh Investment Development Authority (BIDA).
#4 Enrollment with the RJSC
In Bangladesh, the Registrar of Joint Stock Companies and Firms (RJSC) is the governing body.
After receiving approval from both the Bangladesh Bank and BIDA, the final step is to register with the RJSC.
You must submit the following documents to accomplish this:
- Approval letters from BIDA and the Bangladesh Central Bank
- Official copies of the Memorandum of InCompany and Articles of InCompany or other governing documents
- The complete address of the company’s registered or principal office.
- List of the company’s directors and secretary (if any).
- The name and address of a Bangladeshi authorized to represent the company in document processing and acceptance.
- The complete address of the company’s office in Bangladesh
- The standard approval period for establishing a branch or liaison office is three years, but it can be extended if necessary.
It is also possible to open multiple branch offices in Bangladesh; however, each office requires its own BIDA approval.
Employing international workers for Branch office Incorporation in Bangladesh:
If you intend to employ foreign nationals in your Bangladesh branch office, remember that you must also secure their work permits.
Foreign employees wishing to work in Bangladesh must also possess a work permit. It is a multiple-entry visa with an initial validity period of three months that can be extended.
A branch manager may be a foreigner, but he or she must be a Bangladeshi resident. Also, note that Bangladeshi law limits a branch to a maximum of 5% foreign employees.
How do I begin the process of registering a branch in Bangladesh?
Contact TRR using the below information to begin registering a branch in Bangladesh. We will gladly assist you throughout the entire procedure.
KEY FACTS ABOUT COMPANY FORMATION
KEY FACTS ABOUT COMPANY FORMATION
Company Name. The name must be approved (cleared) before incorporation of the company in Bangladesh.
Directors. Minimum of two directors are required. Directors can be either domestic or international. Directors must be at least 18 years old and cannot have been declared bankrupt or convicted of misconduct in the past. The law stipulates that a director must hold the qualifying shares specified in the Articles of Association. A shareholder that is not a natural person (i.e., a corporation) may nominate a director.
All about Capitals:
The authorized capital must be stated in the Memorandum of Association and Articles of Association. It is the maximum amount of authorized share capital that can be issued (allocated) to shareholders. A portion of the authorized capital may be held in reserve. In Bangladesh, there is no minimum or maximum limit on authorized capital.
The minimum paid-up capital required to register a Bangladeshi company is 1 Taka. Paid-up capital (also known as share capital) can be increased at any time following a company’s incorporation.
MoA and AoA:
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).
Shareholders for a Private Limited Company:
A Bangladeshi limited liability company can have between two and fifty shareholders. A director and shareholder may or may not be the same individual. A shareholder may be a person or another legal entity, such as a corporation. In most industries, 100% foreign or domestic ownership is permissible. After the Bangladeshi company has completed the incorporation process, new shares may be issued or existing shares may be transferred to another party at any time.
The legal team of TRR, The Law Firm in Bangladesh. The Law Firm in Bangladesh are highly experienced in providing all kinds of services related to forming and registering a Private Limited Company in Bangladesh . For queries or legal assistance, please reach us at:
Address: House 410, Road 29, Mohakhali DOHS
In addition:These are the Types of Companies in Bangladesh
There are six ways of doing business in Bangladesh: