Registering a Branch Office in Bangladesh can be a smart move for foreign companies that want to get a foothold in this growing market in South Asia. Bangladesh has a growing economy and a wide range of business possibilities, which makes it a good place for international companies to do business. But figuring out how to go through the complicated registration process is important if you want to follow local rules and get your business up and running smoothly.
How to register a Branch Office in Bangladesh? is explained in this book. We will show you the key steps and requirements for registering a Branch Office in Bangladesh. This will help you make smart choices and set up your business for success in this dynamic and promising market. Whether you’re a large global company or a smaller business, it’s important to know how the registration process works if you want to grow in Bangladesh.
What Is a Branch Office?
A Branch Office is a branch of a company or business that works in a different place or area. A branch office is not a different legal entity from its parent company like a subsidiary is. Instead, it acts as a local representative of the parent company. It normally operates like the parent company and can help it grow, access new markets, or provide localized services. The main business closely monitors branch offices to ensure they match corporate standards and goals, and they must observe local regulations.
Branch office in Bangladesh: Key Information
- With BIDA’s permission, a foreign company’s branch office can take part in business activities.
- A Branch office can earn local income through Bangladeshi-legal commercial activities with BIDA’s license.
What Is a Liaison Office?
Foreign companies establish limited-function Liaison Offices, sometimes known as regional offices, in other countries. In contrast to a branch or a company, a liaison office does not do business or make money. Instead, its main goal is to make it easier for people to talk to each other and support the interests of the parent company. Networking, market research, and creating contacts with local firms and government bodies can help. contact offices usually have to follow strict rules, and they can only do non-commercial, contact, or coordination work. This ensures local regulations are observed.
The liaison office in Bangladesh: Key Information
- In Bangladesh, there is no difference between the Liaison Office and the Representative Office.
- A liaison or representative office of a foreign company is only allowed to do a small number of things. For example, it can only communicate with local agents, suppliers, and exporters’ agencies through letters, personal agreements, and other online platforms listed in the approval letter. It can also only collect, organize, analyze, and share business data related to its field of activities.
- A liaison or regional office in Bangladesh will not make any money there. The parent company outside of the country will pay for all of the office’s start-up and ongoing costs, including the salaries of both local and expatriate workers.
How to register a Branch Office in Bangladesh
To register a branch office in Bangladesh, you must follow a number of legal steps. Here is a general description of what happens:
In general, the following are needed to open a branch office in Bangladesh:
Step one: Submitting Documents to BIDA
To open a branch office in Bangladesh, the first step is to get permission from BIDA. The following papers must be sent to BIDA in order to get approval for BIDA.
Documents
Gather all the necessary documents required for registering a Branch Office in Bangladesh. Commonly required documents include:
- Certificate of Incorporation of the parent company.
- Memorandum and Articles of Association of the parent company.
- Board resolution authorizing the establishment of the Branch Office.
- Business plan outlining the proposed activities in Bangladesh.
- Audited financial statements of the parent company.
- Passport copies and photographs of the proposed Chief of the Branch Office.
Inspection
The BIDA Inter-Ministerial committee will thoroughly review the files. Then, if the group is happy, they will give the go-ahead or ask for more information. So, it is very important to carefully prepare the papers.
Time
On average, it takes one month to send something in and get approval. However, BIDA may want to see the papers in person, which could make the process take longer.
Government Cost for approval
The government has to pay USD 300 (three hundred dollars) to get the OK from BIDA.
Step two: Opening Bank Account to set up a branch office
After getting permission from BIDA, the next thing to do is open a bank account in Bangladesh. Establishing a branch office doesn’t require a minimum amount of paid-up capital, but it does require a US$ 50,000 transfer within two months after BIDA authorization.
Documents
The documents required for opening a bank account are:
- BIDA permission letter
- Draft Article and Memorandum of Association
- in addition, the Passport of the bank account signatory (if foreign national) and
- lastly, NID (if Bangladeshi national)
Step three: Bangladesh Bank Approval
Bangladesh Parliament recently amended the Foreign Exchange Regulations Act 1947. But now, the 18B approval from the Bangladesh Bank is no longer needed. Also, the change says that the branch office must report to the Central Bank of Bangladesh after getting approval from BIDA. A report like this should be done within 30 days of the clearance.
Four Step and (Final Step): Registration with the RJSC
The Registrar of Joint Stock Companies runs Bangladesh. The last step is to register with the RJSC after getting approval from Bangladesh Bank and BIDA. To do this, you will need the following papers:
- BIDA’s letter of approval.
- Letter of approval from the Central Bank of Bangladesh.
- Certified copies of the Articles of Association, Memorandum of Association, and other legal papers.
- The full address of the registered or main office of the company.
- If there are any, a list of the company’s owners and secretaries.
- A Bangladeshi person’s name and address who could handle and accept documents on behalf of the business.
- The full address of the company’s office in Bangladesh.
Statutory formalities
- Register with the Bangladesh Investment Development Authority.
- Repatriation of Investment amount within 2 months from the date of registration with BIDA Trade License from the Local City Corporation VAT and Income Tax Registration with the National Board of Revenue.
- The rules of Bangladesh say that you need any other licenses, permissions, or NOCs.
Trade License from the Local City Corporation
To get a business license, you have to apply to the right city organization. The application needs to have the following information and papers:
- Photocopy of Memorandum of Association and Articles of Association
- Photocopy of Managing Director or Chairman
- TIN of the Branch office
- The Rental agreement of the office
- Lastly the Nature of Business
Duration
Most of the time, it takes 3–4 working days to get a business license.
Charge
The government has to pay USD 100 for a business license.
Income Tax Registration and VAT Registration
Businesses need to follow tax rules by registering for both income tax and value-added tax (VAT). Income Tax Registration means registering your business with the tax office so you can report and pay income tax on your profits. It’s necessary to keep track of your taxable income, file tax forms, and follow the law.
On the other hand, companies that sell goods and services must be registered for VAT. It lets you receive VAT from customers and then send that money to the tax office. VAT Registration makes it easier to gather taxes, makes sure that everything is clear, and keeps legal problems from happening.
Each country has its own thresholds and standards for both types of registration. To escape fines and stay within the limits of tax laws, it’s important for businesses to understand and follow these steps.
Can a foreign employee be employed in the Branch office?
Sponsors can apply for Private Investors Visas. Foreign employment can be hired. Foreign workers in Bangladesh need to get a work pass in order to be able to work there. It’s a visa that lets you go in and out of the country more than once. At first, it’s good for 3 months, but you can extend it later.
A branch boss can be from another country, but he or she must live in Bangladesh. Also, keep in mind that Bangladeshi law limits the number of foreign workers in a store to no more than 5%. According to the Board of Investment (now called the Bangladesh Investment Development Authority) Handbook 2011, the current maximum ratio of foreign to local workers is 1:5 for commercial offices and 1:20 for industrial enterprises.
Validity Period of Approval
The permission to open a branch is commonly given for three years, after which it has to be extended or renewed. You must apply for renewal or an extension at least two months before the current term ends.
Capital requirement for branch office
Branch offices don’t need to have a certain amount of cash in Bangladesh. For branch offices to be registered in Bangladesh, however, a minimum of US$ 50,000 must be sent in from outside the country. This should cover the cost of setting up the office and running it for six months.
Time period to set up a branch office
In total, it takes between 60 and 90 days to open a branch office in Bangladesh.
Business activities of a Branch office
A branch office is a part of a parent company that is in a different place, usually in the same country or in another country. The main job of a branch office is to promote the parent company and do certain business tasks on its behalf. Some of these are sales and marketing, selling, helping customers, and even research and development. Branch offices are a way for companies to grow, reach new markets, and use local resources while still staying connected to the main group. But most of the time, they work under the legal and financial control of the parent business and have to follow local rules.
