Opening a Branch in Bangladesh

How foreign investors can open a branch in Bangladesh and what their options are.The process of opening a branch in Bangladesh for a foreign company requires certain criteria. Bangladesh allows companies to open branches for specific purposes and there are certain conditions that must be met before they can open a branch.

We can help you to open a branch office in Bangladesh

 

As a branch is a part of the parent company, there is no separate legal  entity established. The parent company is responsible for the branch office’s obligations and activities.

The main difference between a branch and a liaison/representative office is that a branch can engage in commercial activities with a prior approval from the Bangladesh Investment Development Authority (BIDA). A branch can, for example:

  1. Collect payments for the parent organization
  2. Earn income from local sources
  3. Payments from Bangladesh will need prior approval from the BIDA
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A branch office in Bangladesh can only be established after receiving approval from BIDA. The following documents need to be submitted to BIDA in order to get an approval from BIDA.

 Documents

The following documents/papers are required for an application to open a branch office, according to BIDA guidelines.

1.The application must be in the prescribed form and signed by the authorized person for setting up the branch  office.

  1. Certificate of Incorporation and Memorandum & Articles of Association of the principal/parent company.
  2. Identify the directors and promoters of the principal company. (Attested by Bangladesh Embassy concerned)
  3. Company’s audited financial statements for the most recent financial year. (Attested by Bangladesh Embassy concerned)
  4. Resolution of the company’s board of directors regarding the opening of an office in Bangladesh. (Attested by the concerned Bangladesh Embassy)
  5. An organogram of the office showing the positions occupied by expats and locals.
  6. Information about the activities to be carried out by the proposed office in Bangladesh as a branch/liaison/representative.
  7. Lastly, any additional documents BIDA may request after the initial review.

Before submitting any documents that are not in English, you must translate them.

 Inspecting

When the documents are received, they will be thoroughly examined by the Inter-Ministerial Committee  of BIDA. If the committee is satisfied, it will approve or request additional information. As a result, meticulous preparation of the documents is essential.

 Duration

It typically takes one month for a submission to be approved. However, BIDA may require physical representation of the documents, which may lengthen the process.

 Governmental approval costs

Government costs for getting approval from BIDA are USD 300.

After receiving approval from BIDA, the next step is to open a bank account in Bangladesh. A remittance of US$ 50,000 must also be made within 2 (two) months after the BIDA’s letter of permission is issued, even though there is no minimum paid up capital.

Records

A bank account must be opened with the following documents:

  • Permission letter from the BIDA.
  • Draft Articles of Association.
  • Passport of foreign nationals opening bank accounts (if necessary) and
  • NID

The Bangladeshi Parliament has amended the Foreign Exchange Regulation Act 1947 recently. There is no longer a requirement for Bangladesh Bank approval for 18B transactions. According to the amendment, the branch office should also report to CBB after receiving approval from BIDA. After the approval, the report should be sent within 30 (thirty) days.

After obtaining approval from Bangladesh Bank and BIDA, the final step is to  register the branch office with the RJSC.

 Documentation:
  • The approval letter from the BIDA and the Bangladesh Bank.
  • The certificate of incorporation and the articles of incorporation.
  • The full address of the company’s registered or principal office.
  • Directors and secretaries of the company .
  • Lastly, details of a Bangladeshi who may be responsible for processing and accepting documents on behalf of the company

A trade license Trade licenses are obtained by submitting an application to the concerned city corporation. The following documents and information need to be submitted with the application:

Documentation
  • Documents such as the AOA and MOA should be photocopied.
  • Photo of the Managing Director or Chairman.
  • Number of the branch office.
  • Additionally, the lease for the office must be signed as well.
  • Business nature.
 Timing

usually takes 3 to 4 working days to obtain. To learn more about how to obtain a trade license in Bangladesh.

 Costs

Obtaining a trade license from the government costs USD 100 (one hundred dollars).

A Business Identification Number (BIN) is essential to carry out business operations in Bangladesh once a branch office has been established. To obtain a Business Identification Number, a VAT registration certificate must be obtained from  the National Board of Revenue (NBR). VAT registration is free of charge.

 Documentation
  • Documentation of TIN
  • Licence for trade
  • Registration certificate for imports & exports
  • A passport-sized photo is also required
  • Affidavit of Agreement
  • Document proving bank solvency
  • In addition, BOI registration is required
  • Statutes and Bylaws
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Registration of Branch Office in Bangladesh

The registration of a branch office of already incorporated foreign businesses is the most feasible and cost-effective option that foreign investors have, as it does not involve the hassle of incorporating a company which is 100% foreign owned, but rather the registration of a branch office of an already incorporated foreign company.

Because foreign investors have been increasingly interested in Bangladesh, it has been possible for them to establish a branch office for the parent company and conduct all the business that a Bangladeshi company can. The following procedure explains how to incorporate a  branch office in Bangladesh.

The establishment of a branch office in Bangladesh is a development that runs a similar business and activity as the parent company, outside of Bangladesh, by obtaining approval from Bangladesh Investment Development Authority (BIDA) to establish and operate the branch office.

Validity Period of Approval

It is typical to approve the establishment of a branch for three years and then to extend it/renew it thereafter. Normally, you need to apply for a renewal or extension two (two) months before the current term has expired.

Offices in Special Economic Zones

BIDA has granted a permission to foreign companies for setting up a branch office in Special Economic Zone.The permission is subject to the following conditions:-

  • These offices are located in sectors where 100% foreign direct investment is permitted.
  • The companies act, part XI, governs such units.
  • They are self-contained units.

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