Statutory Framework for RMG Investment
Regulatory Compliance Matrix
| Compliance Area | Primary Statute | Regulatory Authority |
|---|---|---|
| Entity Incorporation | Companies Act 1994 | RJSC & Firm |
| Labor & Safety | Bangladesh Labour Act 2006 | DIFE / BIDA |
| Export Operations | Export Policy Order 2021-24 | Export Promotion Bureau (EPB) |
| Foreign Exchange | Foreign Exchange Regulation Act 1947 | Bangladesh Bank |
| Taxation | Income Tax Act 2023 | National Board of Revenue (NBR) |
Investment Roadmap & Licensing
Key Legal Obligations
- Factory Licensing: Under Section 9 of the Bangladesh Labour Act 2006, every factory must be registered and licensed by the Inspector General of the Department of Inspection for Factories and Establishments (DIFE).
- Foreign Capital Remittance: Pursuant to Section 18B of the Foreign Exchange Regulation Act 1947, foreign investors must report inward remittances to Bangladesh Bank through authorized dealers.
- Utilization Declaration (UD): RMG units must obtain UD from trade bodies (BGMEA/BKMEA) to avail duty-free import of raw materials under the bonded warehouse scheme as per Customs Act 2023.
- Environmental Clearance: Compliance with the Bangladesh Environment Conservation Act 1995 is mandatory for ETP (Effluent Treatment Plant) installation.
Consult Barrister Liton Asaduzzaman Sarkar
Ensure your RMG investment meets all statutory requirements and international compliance standards.
Schedule Legal ScopingFrequently Asked Questions
What is the minimum requirement for foreign shareholding in an RMG company?
Under the Companies Act 1994, there is no minimum ceiling for foreign shareholding; 100% foreign direct investment (FDI) is permitted in the RMG sector, subject to BIDA registration and Bangladesh Bank reporting under Section 18 of the Foreign Exchange Regulation Act 1947.
Are RMG workers entitled to participation in profits?
Yes. According to Section 232 of the Bangladesh Labour Act 2006, companies meeting specific capital or asset thresholds must establish a Workers' Participation Fund and a Welfare Fund, contributing 5% of net profit annually.
How is the export of RMG goods regulated?
Export is regulated by the Export Policy Order issued under the Imports and Exports (Control) Act 1950. Exporters must obtain an Export Registration Certificate (ERC) and comply with the 'Rules of Origin' to benefit from GSP facilities.
◆ Related Statutory Guides & Practice Insights
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