Complete Guide to Foreign Company Incorporation in Bangladesh 2020
The most common form of foreign investment entity in Bangladesh is a Private Limited Company (PLC). As of 2020, using BIDA's (Bangladesh Investment Development Authority) One-Stop Service (OSS), the incorporation timeline is reduced to 15–20 business days. With no minimum capital requirement and the ability to incorporate with as few as two directors (foreigners permitted), the conditions are highly attractive for Korean companies.
Incorporating in Bangladesh involves multiple stages: RJSC (Registrar of Joint Stock Companies and Firms) registration, BIDA investment registration, NBR (National Board of Revenue) tax registration (TIN and VAT), bank account opening, and obtaining a trade licence. As of 2020, a substantial portion of these steps can be handled on a one-stop basis through the BIDA OSS portal. More than 50 Korean companies are registered with BIDA in Bangladesh, and connection to local law firms through KOTRA Dhaka is the primary entry pathway.
Business Vehicle Selection Guide: PLC vs Branch vs Liaison Office
There are three main legal forms under which foreign investors can conduct business in Bangladesh: a Private Limited Company (PLC), a Branch Office, and a Liaison (Representative) Office. The overwhelming majority of Korean companies choose a local subsidiary (PLC), which offers limited liability, guaranteed profit repatriation, and eligibility for investment incentives.
Step-by-Step Incorporation Procedure Detailed Guide
PLC incorporation is processed through the RJSC online registration system (roc.gov.bd) and can be linked with BIDA OSS for parallel investment registration. Understanding the timeline and costs of each step in advance and preparing documents accordingly will shorten the overall schedule.
| Stage | Procedure | Lead Time | Cost | Responsible Agency | Notes |
|---|---|---|---|---|---|
| Stage 1 | Company name reservation | 1 business day | BDT 500 | RJSC Online | Similar names may be rejected |
| Stage 2 | Draft MOA and AOA | 3–5 business days | Legal fees BDT 30,000+ | Local law firm | State business purpose broadly |
| Stage 3 | RJSC incorporation filing | 5–7 business days | BDT 5,000–50,000 (capital-scaled) | RJSC | Certificate of Incorporation (COI) issued |
| Stage 4 | BIDA investment registration | 3–5 business days | Free | BIDA OSS | Foreign investment IRC issued |
| Stage 5 | TIN registration | 1–2 business days | Free | NBR | Director's TIN issued simultaneously |
| Stage 6 | VAT / BIN registration | 1–2 business days | Free | NBR | VAT taxpayer BIN number |
| Stage 7 | Corporate bank account | 2–5 business days | Deposit USD 50,000+ | Local commercial bank | FDI capital remittance required |
| Stage 8 | Trade licence | 3–5 business days | BDT 5,000–30,000 | City Corporation | Business premises lease agreement required |
| Stage 9 | Seal and document registration | 1 business day | BDT 1,000+ | Notary | Corporate seal production |
| Stage 10 | Business commencement notification | 1–2 business days | Free | BIDA | Full business commencement permitted |
Four Key Strategies for Korean Companies
Tax Registration and Key Cost Structure
| Item | Rate or Amount | Payment Frequency | Notes |
|---|---|---|---|
| Corporate Tax (Manufacturing) | 25% | Annual | Export-oriented manufacturing may qualify for preferential rates |
| Corporate Tax (Services / Trading) | 37.5% | Annual | Listed companies 25%; unlisted 37.5% |
| VAT | 15% | Monthly | Export companies may claim refunds |
| Withholding Tax (Employees) | 0–30% (progressive) | Monthly | Non-resident foreigners 30% |
| Dividend Withholding Tax | 20% (10% with treaty) | At dividend payment | Korea-Bangladesh double taxation treaty |
| Customs Duty (Imports) | 0–25% by industry | At import | Raw material exemption possible for manufacturing |
| Stamp Duty | 0.1–1.5% of transaction value | At transaction | Contracts, share issuances, etc. |
| Trade Licence Renewal | BDT 5,000–30,000 | Annual | Varies by region and industry |
Success in Bangladesh incorporation depends on document preparation and early selection of a local law firm. By combining the one-stop processing available through BIDA OSS with support from KOTRA Dhaka, Korean companies can prepare documents from Korea in advance and complete the entire incorporation in just one or two visits. The most important steps for preventing future disputes are drafting the MOA with a sufficiently broad scope of business and clearly specifying the purpose of the capital remittance.
After incorporation, there are ongoing obligations: a statutory audit of the first accounting year and annual return submission to RJSC, as well as annual investment status reporting to maintain BIDA registration. It is important to either delegate the post-incorporation compliance schedule to the law firm or designate an internal person responsible for tracking it.