Complete Guide to Foreign Company Incorporation in Bangladesh 2021
The Bangladesh incorporation environment improved significantly in 2021 through digital transformation, even amid the COVID-19 pandemic. Thanks to upgrades to RJSC's (Registrar of Joint Stock Companies and Firms) online registration system and the digitalization of BIDA's One-Stop Service (OSS), more than 80% of the incorporation process can now be handled remotely without physical presence. It has become standard practice for Korean companies to complete preparation from Korea and finalize the process with just one or two in-country visits.
The corporate tax rate for unlisted entities was reduced to 27.5% in 2021 (down from 32.5% in 2020), continuing Bangladesh's business-friendly tax reform. 100% foreign ownership is permitted, and the number of Korean companies registered with BIDA increased to more than 60 — up from the previous year. Active local incorporation by Korean companies spans manufacturing, IT, and services across the board.
Full Comparison of Entity Types in 2021
The main legal business forms available to foreign investors in Bangladesh are a Private Limited Company (PLC), a Branch Office, a Liaison (Representative) Office, and a Joint Venture (JV). More than 90% of Korean companies choose a PLC, which is the most advantageous form in terms of limited liability, profit repatriation, and investment incentive eligibility.
| Form | Foreign Ownership | Min. Capital | Director Req. | Tax | Suitable Sectors |
|---|---|---|---|---|---|
| Private Limited Co. | 100% permitted | None | 2 or more | Corp. tax 27.5% | Manufacturing, trading, services broadly |
| Public Limited Co. | 100% permitted | BDT 300M | 7 or more | Corp. tax 22.5% | Large-scale, listing target |
| Branch Office | Parent 100% | None | None | Corp. tax 27.5% | Sales and services (manufacturing not permitted) |
| Liaison Office (LO) | Parent 100% | None | None | Exempt (no commercial activities) | Market research, early-stage exploration |
| Joint Venture (JV) | 51–99% | By negotiation | By agreement | Corp. tax 27.5% | Required in certain sectors (e.g., media) |
| Single-Director Co. | 100% permitted | None | 1 person | Corp. tax 27.5% | Small-scale services, IT |
Step-by-Step Incorporation Procedure (2021 Update)
RJSC significantly upgraded its online registration system (roc.gov.bd) in 2021, consolidating document submission, fee payment, and status tracking online. Electronic signatures are also partially permitted, and a digital Certificate of Incorporation (COI) can now be issued upon completion.
Full Step-by-Step Checklist
| Stage | Procedure | Lead Time | Cost | 2021 Improvements |
|---|---|---|---|---|
| Pre | Company name search and reservation | 1 business day | BDT 500 | Enhanced online search |
| Stage 1 | Draft MOA and AOA | 3–5 days | Legal fees USD 500–2,000 | Electronic signature partially permitted |
| Stage 2 | Submit RJSC documents online | 1 business day | — | Online filing 100% available |
| Stage 3 | RJSC incorporation complete | 7–14 business days | BDT 5,000–50,000 | Digital COI issued |
| Stage 4 | BIDA investment registration (IRC) | 3–5 business days | Free | QR-code electronic IRC |
| Stage 5 | TIN issuance | 1–2 business days | Free | Same-day issuance possible |
| Stage 6 | VAT / BIN registration | 1–2 business days | Free | Online processing |
| Stage 7 | Capital remittance and bank account | 2–5 business days | Deposit required | FRC issued |
| Stage 8 | Trade licence | 3–5 business days | BDT 5,000–30,000 | Online application available |
| Final | Environmental and other permits | 30–90 business days | Actual costs | Varies by industry |
Four Practical Strategies for Korean Companies
Registration Costs and 2021 Tax Overview
| Item | Amount or Rate | Payment Timing | Notes |
|---|---|---|---|
| RJSC Registration Fee | BDT 5,000–50,000 | At registration | Progressive, scaled to capital amount |
| Law Firm Fee | USD 1,500–5,000 | At contract | Varies by scope of services |
| MOA Stamp Duty | BDT 3,000–10,000 | At registration | Based on capital amount |
| Trade Licence | BDT 5,000–30,000 | Annual renewal | By region and industry |
| Corporate Tax (Unlisted PLC) | 27.5% | Annual | Reduced from 32.5% in 2020 |
| Corporate Tax (Listed PLC) | 22.5% | Annual | Upon stock exchange listing |
| VAT | 15% | Monthly | Export goods exempt |
| Dividend Withholding Tax | 20% (10% with treaty) | At dividend payment | Korea-Bangladesh tax treaty |
| Customs Duty (Raw Materials) | 0–15% | At import | Exemption possible for export manufacturing |
Bangladesh incorporation in 2021 became far simpler than before through digital transformation. The optimal approach is to use a local law firm and KOTRA Dhaka as the two key pillars, complete 80%+ of preparation from Korea using the RJSC and BIDA online systems, and finalize everything in a short visit. With the continued trend of tax cuts and improving digital services, 2021 is an excellent time to move forward with entry into Bangladesh.