Company Formation in Bangladesh
To start a business in Bangladesh one must first go through the process of setting up a structured organization that falls under the authority of the government. It is a prerequisite for starting any kind of business establishment in Bangladesh.
It is most important for business owners interested in setting up a company Formation in this South Asian country to have a comprehensive awareness of the legal requirements and procedures involved in the process.
LEGAL REQUIREMENTS FOR Company Formation
Type of company Formation
Various types of businesses can be established in Bangladesh, such as a private limited company, a public limited company Formation, a partnership, a sole proprietorship, or as a branch of a foreign corporation. These are just a few of the available options.
The available possibilities include these, to name just a few. Each category is subject to a separate collection of legal requirements and regulations that are exclusive to that category but not applicable to any other category.
To start the process of forming a business, the first step is to register the company with the Registrar of Joint Stock Companies and Firms (RJSC). This is the first step in the process. To complete this process successfully you need to comply with the Companies Act 1994 and provide the required documents.
Required documents for company formation
In order to start the process of registering a corporation, certain documents need to be compiled and submitted to the RJSC authorities. Examples of these documents typically consist of memorandums and articles of association, information about directors and shareholders, and proof of the location of the registered office.
Steps involved in Company Formation
Name clearance certificate
Before starting the process of forming a company Formation, it is of utmost importance to ensure that the proposed name is not only available but also complies with the requirements set by the RJSC. An application for clearance of name needs to be submitted and approved for approval to proceed with the process.
Memorandum and articles of organization
Unlike the Memorandum of Association, which offers an overview of the firm’s goals and objectives, the Articles of Association detail the internal rules and regulations that govern the organization. In order to successfully complete the registration process from start to finish you need to collect and submit several supporting documents.
Directors and shareholders must sign a statutory declaration that confirms compliance with legal requirements and states that the company is not formed for any illegal purpose.
Register with RJSC
Once all the documents are in order, the organization can be officially registered with RJSC. Upon successful registration, a Certificate of Incorporation is issued indicating the legal existence of the company.
Taxation & Regulatory Compliance
Tax identification number (TIN)
After incorporation, the company is required to obtain a Tax Identification Number (TIN) from the National Board of Revenue (NBR) for tax purposes.
If the annual turnover of the company exceeds a certain threshold, it has to register for value added tax (VAT) with the NBR.
Comply with labor laws
Employers in Bangladesh must comply with various labor laws, including those related to wages, working hours, safety standards, and employee benefits.
Opening of bank account
After obtaining the certificate of incorporation, the company can open a bank account in its name to conduct financial transactions.
Obtaining Trade License
A trade license is required from the local government authority to legally operate a business within a particular jurisdiction.
Obtaining Import and Export Registration Certificate
For businesses engaged in import and export activities, it is mandatory to obtain an import and export registration certificate from the relevant authority.
Navigating the process of company formation in Bangladesh involves complying with legal requirements, obtaining necessary approvals and ensuring compliance with tax and regulatory obligations. By understanding the steps involved and completing all the necessary formalities, entrepreneurs can successfully establish and run their businesses in this dynamic market.
What kind of company can be established in Bangladesh?
Private limited companies, public limited companies, partnerships, sole proprietorships and branches of foreign companies are the main types of business permitted in Bangladesh.
How much time does it take to register a company in Bangladesh?
The registration process usually takes several weeks depending on various factors such as the completeness of the documents and the workload at the RJSC.
Is it necessary to have a physical office to register a company in Bangladesh?
Yes, company registration requires a registered office address in Bangladesh for receiving official correspondence.
What are the tax implications for new companies in Bangladesh?
Newly formed companies must obtain a Tax Identification Number (TIN) and register for VAT with the National Board of Revenue (NBR) to fulfill their tax obligations.
Foreign investors can establish companies in Bangladesh?
Yes, foreign investors are allowed to establish companies in Bangladesh subject to certain regulations and restrictions imposed by the government.