DOING BUSINESS IN BANGLADESH
A company, corporation or other legal or juridical entity incorporated outside Bangladesh may register a legal presence in Bangladesh in a number of forms. They are as follows:-
- Representative/Liaison Office:
Foreign companies may establish representative or liaison offices in Bangladesh through registration with the Bangladesh Investment Development Authority (which took over from the Board of Investment in 2016). Permission will also be required from Bangladesh Bank (i.e. the Central Bank of Bangladesh) to establish a representative or liaison office. The Bangladesh Investment Development Authority usually specifies the number of foreign and local staff that may be employed in representative offices. No business may be carried out through representative offices and as such it will not be permitted to import equipment or goods except in a limited set of circumstances as stated in the Import Policy Order 2016-2019. However, a bank account may be opened and maintained by a representative office. Funds may remitted from outside Bangladesh to run and operate the representative office and pay salaries to the staff employed at such office.
- Registration as a Branch office of a foreign company.
Foreign companies may establish a place of business in Bangladesh by registering with Registrar of Joint Stock Companies and Firms under section 378 of the Companies Act, 1994. However, prior registration is required with the Bangladesh Investment Development Authority and with the central bank. Prior permission from Bangladesh Bank before a foreign company may be registered with the Registrar of Joint Stock Companies and Firms. By registering under the Companies Act, 1994, the foreign company can carry out normal commercial operations including operation of bank accounts, employment of foreign nationals and import goods and equipment after obtaining the necessary permits. Foreign companies, registered with the Registrar of Joint Stock Companies and Firms are subject to annual filing requirements under the Companies Act.
- Incorporating a 100% owned subsidiary under the Companies Act, 1994.
Foreign companies may incorporate a 100% foreign-owned local subsidiary company under the Companies Act, 1994. The shares of the local subsidiary would be held by foreign companies and/or foreign national. The local subsidiary formed would be subject to the laws of Bangladesh. Annual General Meetings and Board Meetings would have to be held in accordance with the Companies Act, 1994 and the company would have to comply with the annual filing requirements as specified in the Companies Act. The local subsidiary would be able to perform all kinds of activities, including opening and operation of bank accounts, employment of staff (including foreign nationals) and import goods upon obtaining necessary permits.
- A Joint Venture Company.
Foreign nationals and companies may enter into joint venture agreements with local companies and nationals to incorporate a local company under the Companies Act, 1994. The local company would be able to perform all kinds of activities, including opening and operation of bank accounts, employment of staff (including foreign nationals) and import goods upon obtaining necessary permits.
- Charitable Association under section 28 of the Companies Act, 1994.
An association established for a charitable purpose may be incorporated as a company under section 28 of the Companies Act. Such an Association will enjoy all the benefits of a limited company, but is not required to use the word “limited” in its name. However, permission from the Government is required prior to the formation of such companies and this can be quite time consuming and complicated. The Government is also empowered in this regard to insert additional clauses and conditions in the Memorandum and Articles of Association of the Association and also impose restrictions on the same before granting such permission.
- Establishing a Society under the Societies Registration Act, 1860.
An unincorporated body like a society may also be formed in Bangladesh for the purpose of registering a legal presence in Bangladesh. Most Non Government Organizations in Bangladesh are registered as societies. Such society will consist of members and shall be managed by a Managing/Governing body in accordance with the Societies Registration Act, 1860. The society would be registered with the Registrar of Joint Stock Companies and Firms. The security and law enforcement services will carry out investigations into the background of each founding member and setting up a society can be quite time consuming
- Establishing an NGO.
In order to establish an NGO which intends to receive foreign donations, firstly a charitable company or a society needs to be set up. The receipt and utilization of foreign funds are governed by the Foreign Donations (Voluntary Activities) Ordinance, 1978 (“Ordinance of 1978”), Foreign Donations (Voluntary Activities) Rules, 1978 (“Rules of 1978”) and the Foreign Contributions (Regulation) Ordinance, 1982 (“Ordinance of 1982”). Under the aforementioned Ordinances and Rules, additional registration with the NGO Affairs Bureau is mandatory.Further, approval from the Government is also required for the receipt and utilization of such funds.
Recent representative clients
Oracle-Singapore, RTI Global, USA (Liaison Office), Abt Associate, USA (Branch Office), Dell Global, B.V. Netherlands (Liaison Office), Tyco Healthcare Pte, Singapore (Liaison Office), Columbia Spotswear Company, USA (Liaison Office), Total, France (Joint Venture Company), Caterpillar Power Generation Systems (Bangladesh) Limited (100% foreign-owned subsidiary), Power Apparels Limited (100% foreign owned company).