Bangladesh allows 100% foreign ownership in most sectors, with no minimum local shareholding and full repatriation of profits and capital. For investors, the difficulty is rarely the policy - it is sequencing the approvals correctly so that a single missed document does not stall the whole setup for months.
This guide walks through the practical route to establishing a foreign entity in Bangladesh, from choosing a structure to the post-incorporation licences that make the company operational.
Choose the Right Legal Structure
Three structures cover almost every inbound investment:
Private limited company - a separate legal entity registered with the Registrar of Joint Stock Companies and Firms (RJSC). The default choice for manufacturing, trading and full commercial operations. Allows 100% foreign shareholding.
Branch office - an extension of the parent company, permitted to earn local income within the scope approved by the Bangladesh Investment Development Authority (BIDA).
Liaison or representative office - non-earning. It may only carry out market research, coordination and promotion, and is funded entirely by inward remittance from the parent.
The choice drives everything downstream: tax treatment, the approval body, remittance rules and how much local substance you are required to maintain.
Step 1: Name Clearance from RJSC
Apply for name clearance through the RJSC online portal. Clearance is typically issued within a working day and remains valid for a limited period, so file the incorporation documents promptly.
Step 2: Open a Temporary Bank Account and Remit Equity
For a foreign-owned company, share capital must arrive from abroad before incorporation. Open a temporary account in the proposed company name, receive the inward remittance, and obtain the encashment certificate from the bank. RJSC will not register a foreign-shareholder company without it, and Bangladesh Bank will not permit later repatriation of capital that was never properly documented on the way in.
Step 3: Incorporate with RJSC
Submit the Memorandum and Articles of Association together with Forms I, VI, IX, XII, shareholder and director particulars, and the encashment certificate. On approval, RJSC issues the certificate of incorporation, certified MoA/AoA and Form XII.
Step 4: BIDA Registration
Industrial and commercial projects with foreign investment register with BIDA. BIDA registration is the gateway to work permits for expatriate staff, remittance approvals for royalty and technical fees, and recommendations to other agencies. Branch and liaison offices need BIDA permission before they can operate at all.
Step 5: Post-Incorporation Licences
A certificate of incorporation alone does not make a company operational. The standard follow-on set includes:
Trade licence from the relevant City Corporation or municipality, renewed annually
Taxpayer Identification Number (TIN) from the National Board of Revenue
VAT registration (BIN) under the VAT and Supplementary Duty Act 2012
Import Registration Certificate (IRC) or Export Registration Certificate (ERC) from the Chief Controller of Imports and Exports, where the business imports or exports
Trade body membership - a chamber of commerce or the relevant sector association
Fire licence, factory licence and environmental clearance for manufacturing operations
Step 6: Work Permits for Expatriate Staff
Foreign nationals working in Bangladesh need a work permit from BIDA (or BEPZA inside export processing zones) plus the matching visa category. Approvals consider the expatriate-to-local employment ratio, so plan headcount early rather than after arrival.
Ongoing Compliance You Inherit on Day One
Once registered, the company carries a permanent compliance calendar: annual return and Schedule X filing with RJSC, an annual general meeting, audited financial statements from a practising chartered accountant, corporate income tax returns with the NBR, monthly VAT returns, monthly withholding tax statements and annual trade licence renewal.
Common Mistakes That Cost Months
Remitting share capital without an encashment certificate, which blocks future repatriation
Choosing a liaison office and then attempting to invoice locally
Drafting an objects clause too narrow for the actual business, forcing an early MoA amendment
Delaying VAT registration past the first taxable supply
Missing the expatriate-to-local ratio and having work permits refused
How AeroNext Helps
AeroNext handles foreign entity setup in Bangladesh end to end - structure selection, name clearance, equity remittance and encashment, RJSC incorporation, BIDA registration, licensing, work permits and the ongoing tax, VAT, payroll and audit compliance that follows. One team, one point of contact, instead of coordinating five vendors across five agencies.
