Foreign Business Registration in Bangladesh
Bangladesh is rapidly developing into a dynamic hub for entrepreneurs and investors who want to set up a locally incorporated company— a limited company. From startups to SMEs and multinational subsidiaries, Bangladesh provides an environment that supports scalability, enabling companies to adapt to market demands while benefiting from tax incentives, simplified compliance, and a growing economy.
Bangladesh offers an attractive landscape for foreign business registration, presenting multiple pathways for international companies to start their businesses here. Foreign investors can establish legal entities with varying levels of operational autonomy, capital requirements, and regulatory compliance, navigating a complex but promising economic environment that offers business growth potential, a large consumer market, and developing industrial sectors.
Foreign investors can incorporate a fully owned company, subsidiary, or a jointly owned company in Bangladesh. The most common options for foreign business registration in Bangladesh include the following:
1. Fully Owned Foreign Subsidiary
This option offers total control, as the company can be completely owned by foreigners or the parent company based in another country. It operates as a separate legal entity. The company can also choose to have partial ownership. A fully owned subsidiary can be either a Private Limited Company or a Public Limited Company. This is the most common foreign investment structure in Bangladesh, requiring minimal capital investment and limited liability. The company is treated as a separate legal entity and must comply with the Companies Act, 1994. Learn more about setting up a subsidiary company in Bangladesh. The company can undertake any legally permissible business and establish operations anywhere in Bangladesh.
2. Joint Venture
A joint venture involves a joint venture agreement with a local partner, sharing ownership, governance, resources, profits, losses, and expenses for a particular project. This structure often leads to easier market entry and better local networking. A joint venture allows foreign companies to benefit from a partner’s knowledge of the local market and regulatory environment. Learn More
3. Bangladesh Branch Office
A branch office is an essential part of the parent company with limited functionality. It requires approval from the Bangladesh Investment Development Authority (BIDA) or Bangladesh Bank (BB), where local legal representatives must be appointed. However, branch offices are not permitted to engage in manufacturing and production activities. Learn More>
4. Liaison or Representative Office
A liaison or representative office is allowed to perform local research and coordinate between the principal office and other entities in Bangladesh. However, it cannot generate revenue, as it is a temporary business presence intended for conducting market research or administrative tasks only. Learn More>
5. Public-Private Partnership (PPP)
Public-Private Partnerships (PPP) in Bangladesh involve collaboration between government entities and private sector companies to develop infrastructure, deliver services, and drive economic development. These partnerships attract both foreign and domestic private investments and are governed by the PPP Authority of Bangladesh.
6. Franchise Operations
A franchise operation is a business model where a company grants legal permission to another company to use its brand name, business model, and operational systems in exchange for fees and royalties. This model enables renowned brands to establish their presence in Bangladesh in compliance with local business regulations and investment guidelines.
7. Engagement of Agents or Distributors
Foreign companies can appoint Bangladeshi companies as exclusive agents, non-exclusive agents, or distributors governed by the Companies Act and commercial regulations. This arrangement requires clear agency or distribution agreements that must be legally complied with.
How to choose the right structure:
You should start small if you are setting up a new business. As your business grows and expands, you can always change your business structure or completely restructure your business at any stage of your business operation. You need to consider the legal requirements and needs of your business in order to choose the right structure or type of business.
However, before deciding on the company’s structure, you must always consider the following:
- What kinds of licenses and permits are required;
- How much taxes you pay;
- What are your possible personal responsibilities;
- How much control do you have over your company?
- What are your responsibilities following registration?
- What are your recurring expenses and the financial implications?
Here is our detailed guide on all types of business structures and types of everyone. Read more
Social Business, Commonly known as NGOs, charities, or non-profit organizations
If you want to start a social business, this is the structure to use! We include this option even if you do not want your non-profit or charity project to be related to your business operation. You can register an NGO (non-government organization) in the form of a NGO/INGO, society, foundation, trust, etc. Such entities may run any business operations, own property, or conduct financial activities, but they are subject to legal restrictions. NGOs cannot keep the earnings or profits from such business activities. In addition, a Trust can be registered under the Trusts Act 1882. Apart from these vehicles, co-operative societies can also conduct various financial activities.
Contact us if you are changing your business structure or need guidance on things to consider.
Why Set Up a Business in Bangladesh?
Large Consumer Market: Bangladesh has a population of over 170 million people with a high urbanization rate, creating new market opportunities for entrepreneurs.
Economic Growth & Stability: Consistent annual GDP growth, growing foreign exchange reserves, and improving infrastructure make Bangladesh an attractive investment destination.
Lower Tax Rates: Bangladesh offers lower tax rates, along with various incentives such as tax exemptions for corporate and foreign entities operating in the country.
Investment Incentives: These include duty-free imports of capital machinery, allowing 100% foreign ownership in most sectors, and double taxation avoidance agreements with many countries.
Sector Opportunities: Several industries are growing and expanding in Bangladesh, including the textile and garment industry, IT and digital services sector, pharmaceutical industry, renewable energy, shipbuilding industry, and more.
Government Support: Bangladesh offers various investment protection laws, Special Economic Zones (SEZs), Export Processing Zones (EPZs), and a simplified business registration process, all of which are designed to make the investment process smoother.
Skilled Workforce: Bangladesh boasts a large pool of educated, working-age individuals, coupled with technical training initiatives, ensuring a skilled workforce for business expansion.