Bangladesh has a steady annual economic growth averaging 6. The improvement in the country’s economy is its textile exports which composes 80% of the country’s total exports. The principal financial centers of the country are Dhaka and Chittagong, where the Dhaka Stock Exchange and the Chittagong Stock Exchange is located. As per Doing business report of The World Bank –Bangladesh ranks 176 for 2017 survey in terms of ease in doing business.
The Bangladesh economy is growing steadily, with the government taking various measures and initiatives to sustain this growth. Low labour costs, abundant natural resources, economies of scale, cost-effective products and a large population are just some of the advantages the country offers over other Asian markets. Bangladesh can also be a gateway to the larger markets of South Asia. The government has eased the procedure for company formation in Bangladesh, giving investors a wide range of business ideas to choose from in an economy where a small capital is not a limiting factor.
List of Businesses Available in Bangladesh
Bangladesh offers you a wide range of business opportunities in the 32 thrust sectors identified by the government. These have the potential to attract considerable foreign investments as well as increase export earnings for the country. These key sectors include infrastructure, agriculture, energy & power generation, light engineering, ICT, pharmaceuticals, apparel, handicrafts, ceramics, frozen food, tourism, and healthcare amongst others.
The government has set up a number of SEZs, industrial parks and hi-tech parks. Special incentives and tax benefits have also been chalked out for these key sectors.
How to start a Business in Bangladesh
If you are going in for business in Bangladesh, there are various types of business entities to choose from. Each has a different procedure for incorporation and regulation.
A Bangladeshi citizen can choose to set up:
- Sole Proprietorship – the business and the owner are one entity.
- Partnership – with 2 to 20 partners with a formal agreement, where the partners are liable for the partnership.
- Company – a limited liability company where the liability is limited only to the amount of share capital. It can be a private limited company with less than 50 shareholders or a public limited company where the shares are offered to the general public.
Foreign investors need to take a slightly different route by setting up:
- Subsidiary company – most preferred by foreign businesses. The parent company is a shareholder in this limited liability company set up in Bangladesh.
- Branch office – an extension of the parent company, which covers its liabilities.
Company Registration Procedure in Bangladesh
The Registrar of Joint Stock Companies And Firms (RJSC) needs certain information for company registration in Bangladesh. Here are the steps involved in this procedure:
- Company Name Clearance - a name approval or clearance is a must before the company can be set up. Memorandum of Association and Articles of Association – need to be formulated as per RJSC guidelines that the object clause in the MoA should have less than 400 words and 7 clauses.
- Directors – at least two local or foreign directors. They should be over 18 years of age and of sound financial status.
- Shareholders – a minimum of 2 and a maximum of 50 shareholders in a private limited company. Shares can be transferred or new ones issued anytime after company registration in Bangladesh.
- Registered address – a physical local address of the company is mandatory. A P.O. Box cannot be used.
- Submit all necessary documents –Paying the registration fees will complete the company registration application. Once the RJSC is satisfied with all the documents, they will issue the:
• Certificate of Incorporation with the company name, registration number and date of incorporation
• Form XII with the list of directors of the company
• Copies of MoA and AoA duly certified
Once the company is registered, share certificates are issued to the shareholders. A company seal and a rubber stamp for the company have to be created. A Register for shares, shareholders and directors also needs to be maintained.
Foreign Company Registration Procedure in Bangladesh
Subsidiary companies offer great flexibility for businesses in Bangladesh – these can be public or private limited companies. 100% foreign ownership is possible in most sectors, as is a joint venture with foreign or local partners. Some sectors may require prior approval from government agencies.
For the most part, incorporation for subsidiary companies is similar to other private limited companies. There are, however, a few additional points to keep in mind:
- Bank account for the Authorized and Paid-up Capital – must be opened before the registration application.
- The subsidiary company is treated as a domestic company for tax purposes.
- All the shareholders and directors can be foreigners.
- A work permit for foreigners is required only if they relocate to Bangladesh to operate the company.
The Bangladesh government is encouraging new businesses to be incorporated in the country, and has made company formation in Bangladesh a fairly quick and smooth process.