How to register a branch office in Bangladesh is a popular queries from foreign clients. This article will explain the step by step process for setting up branch office in Bangladesh. In addition, people want to know the required cost and documents for setting a branch office in Bangladesh. However, this article has articulate a complete guideline on how to register a branch office in Bangladesh.
A. Set up Process of a branch office in Bangladesh
Step one: Submitting Documents to BIDA
The first step for establishing a branch office in Bangladesh is to get the approval from BIDA. To get an approval BIDA, the following required documents need to be submitted to BIDA.
As per the guideline of BIDA, following papers/documents are required for application for opening of branch office. (4 copies of all documents).
1. Application in prescribed form signed by the authorized person for establishment of branch office
2. Memorandum and Articles of Association and Certificate of Incorporation of the principal/ parent company. (Attested by the concern Bangladesh Embassy)
3. Name and nationality of the directors/promoters of the principal company. (Attested by the concern Bangladesh Embassy)
4. Audited Accounts of last financial year of the principal company. (Attested by the concern Bangladesh Embassy)
5. Company’s board of director’s resolution regarding opening of office in Bangladesh. (Attested by the concern Bangladesh Embassy)
6. Proposed organogram of the office showing the posts to be occupied by both expatriates and local personnel.
7. Furthermore, Details of activities to be performed through the proposed branch/liaison/representative office in Bangladesh.
8. Finally, Any other documents BIDA, may ask for after primary reviewing
In addition, you must translate any documents that are not stated in English before submission.
Upon receiving the documents, it will be thoroughly inspected by the Inter-Ministerial committee of BIDA. Thereafter, if the committee is satisfied they will give the approval or may seek further documents. Therefore, it is essential to prepare the documents meticulously.
The average time needed for submission and getting the approval is one month. However, BIDA may seek physical representation of the documents as such this may make the process lengthier.
d) Government Cost for approval
The government cost for getting the approval from BIDA is USD 300 (three hundred dollar)
Step two: Opening Bank Account to set up branch office
The next step after receiving approval from BIDA, is to open a Bank account in Bangladesh. This is because although no minimum paid up capital is required for setting up branch office, a remittance of US$ 50,000 need to be injected within 2 (two) months from the date of issuance of the BIDA permission letter.
The documents required for opening bank account are:
- BIDA permission letter
- Draft Article and Memorandum of Association
- in addition, Passport of the bank account signatory (if foreign nationals) and
- lastly, NID (if Bangladeshi national)
Step three: Bangladesh Bank Approval
Lately, Bangladesh Parliament has amended the Foreign Exchange Regulations Act 1947. However, Now the requirement of 18B Approval from Bangladesh Bank has been removed. Furthermore, Pursuant to the amendment, after receiving approval from BIDA, the branch office need to report to the Central Bank of Bangladesh. Such a report should be made with 30 (thirty) days of the approval.
Step four: RJSC Registration for Branch office
Lastly, after obtaining an approval from both Bangladesh Bank and BIDA, the last step is to register the branch office with the RJSC.
- BIDA and Bangladesh Bank approval letter
- Certified copies of the Memorandum of Association and Articles of Association
- Full address of the registered or principal office of the company
- List of the directors and secretary (if any) of the company
- in addition, the name and address of a Bangladeshi who may represent the company in processing and accepting documents and
- The full address of the office of the company in Bangladesh
Step five: Trade License from the Local City Corporation
In order to get trade license an application need to be made to the concerned city corporation. Along with the application, the following information and documents need to be submitted:
- Photocopy of AOA and MOA
- Photo of Managing Director or Chairman
- TIN of the branch office
- in addition, Rental agreement of the office and
- lastly, Nature of business
It usually takes 3 to 4 working days to get a trade license. In order to know more about how to get trade license in Bangladesh.
The government for trade license is USD 100 (hundred dollar).
Step six: Income Tax Registration & VAT Registration
In order to carry out normal business operations in Bangladesh after setting up the branch office, it is essential that the branch office has a unique Business Identification Number (BIN). Therefore, to get a Business Identification Number, a VAT registration certificate need to be obtained from the Department of the National Board of Revenue (NBR). Applying for VAT registration is free.
- TIN Certificate
- Trade License
- Import / export Registration certificate
- Furthermore, Passport sized photos
- Deed of Agreement
- Bank solvency certificate
- in addition, BOI registration and
- lastly, Memorandum and Articles of Association
Can a foreign employee be employed in Branch office?
Sponsors may apply for Private Investors Visa. Foreign employees can appointment. In order to be able to work in Bangladesh, foreign employees need to secure a work permit. It is a multiple-entry visa and initially, it is valid for 3 months but can be extended afterward.
A branch manager can be a foreigner but he/she should be a resident in Bangladesh. Also, note that the Bangladeshi law limits a maximum of 5% (five percent) of foreigner employees in a branch. Furthermore, It is to be noted that the current maximum ratio of foreign to local employees is 1:5 for commercial offices and 1:20 for industrial enterprises, as per the Board of Investment (currently known as the Bangladesh Investment Development Authority) Handbook 2011.
Validity Period of Approval
The approval is usually provided to establish a branch for a period of three years and it has to be extended/ renewed. You have to apply for renewal or extension at least 2 (two) months before the expiry of the current term.
Capital requirement for branch office
There is not minimum capital requirement in Bangladesh for branch office. However, there is a requirement for a minimum of US$ 50,000 inward remittance for registration of branches offices in Bangladesh as this inward remittance should cover the cost of initial establishment and six months’ expenses for operation.
Time period to set up a branch office
To set up a branch office in Bangladesh it takes from 60 days (sixty) to 90 days (ninety) in total.
Business activities of a Branch office
Branch office does not have a separate legal entity of its own. This is because it functions as an extension of its parent company. Therefore, the parent company is fully responsible for the activities, debts and obligations of its branch office.
Unlike liaison office, a branch office can engage in commercial activities. However, in order to do so, prior approval from the Bangladesh Investment Development Authority (BIDA) is required.
Activities that a Branch office can engage in are:
- Payment collection on behalf of the parent company
- Local sources of income for the branch office
- in addition, Make outward payment from Bangladesh (with approval from BIDA)
LEGAL ADVICE ON COMPANY MATTER AT CLP
Counsels Law Partners is one leading law chamber in Bangladesh in the field of Business formation. Certainly, CLP welcomes foreign entities and individual to take free primary legal consultation on how to register a branch office in Bangladesh. For queries or legal assistance to set up a branch office in Bangladesh, please reach us at:
Phone:+8801700920980 (WhatsApp). +8801947470606. Address: House 39, Road 126 (3rd Floor) Islam Mansion, Gulshan 1, Dhaka.