A Representative Office

Representative offices for foreign companies can perform very limited activities, such as coordinating with local agents, distributors, and exporters’ institutions, and collecting, compiling, analysing,, and disseminating business information related to its field of activities as mentioned in the letter of approval. There will be no local income for a representative office in  Bangladesh. Liaison or representative offices will be operated fully at the expense of the parent company abroad, including salaries and expenses for expatriates and local employees. Remittances will not be allowed from Bangladesh sources, with the exception of the part brought in  from abroad.

Following is information on how to obtain a Trade License if you operate a business within Dhaka City Corporation. Local governments in other countries have similar rules. You should contact the appropriate local government if you need more information.

Virtual Offices

We can help you to open a representative Office in Bangladesh

The setup procedure

It can be costly and time-consuming to set up a representative or branch office. Steps for registering are as follows:

  1. Investment committee approval

All documents must be physically submitted to the BoI or submitted online. All documents must be submitted according to the requirements for your request to be considered by the Inter-Ministerial  Committee. It is possible that the Committee will request more  documents or a physical presentation. The committee will provide approval if it is satisfied. In general, the Inter-Ministerial Committee meets twice a month. You can usually expect a one-month turnaround time. The approval to operate a branch or liaison office typically lasts for three years. The fee for receiving a BoI approval is Tk 25,000 to be paid to Bank of Bangladesh/Sonali  Bank.

  1. Opening of a bank account

Obtaining approval for a branch or liaison office requires opening a bank account at  any bank in Bangladesh. The foreign exchange equivalent to at least US$ 50,000 must be brought in as inward remittance to Bangladesh within two months of the issuance of the Board  of Investment permission letter. Within thirty days of obtaining permission from the BoI, contact the Bangladesh Bank.

  1. A company must register with the Registrar of Joint Stock Companies and Firms (RJSC)

Registration with the RJSC can only be done following approval from both Bangladesh Bank and BoI. You can read about the registration process here.

  1. National Board of Taxation TIN number

Bangladesh law requires the permitted office to pay duties, income tax, VAT, royalties, and other taxes to the government. Bangladesh Income Tax Ordinance, 1984, requires tax deduction at source for office/house rent, salaries, and purchase orders, as well as deposits to designated government accounts after tax has been deducted from each. Businesses are required to obtain a Taxpayer Identification Number (TIN) from the National Board of Revenue to deduct tax at source and to be subject to VAT.

  1. International employees

Under section 18(A) of the Foreign Exchange Regulation Act, 1947, you must obtain work permits from BoI prior to using foreign employees in your office. The Ministry of Home Affairs must approve foreign nationals’ work permits subject to security clearances. Currently, as a permitted visitor, the Ministry of Home Affairs is required to provide security clearance within 45 days of the approval letter issuance. It will be assumed the concerned agencies do not object to the issuance of visas if the petition is not submitted.

A foreign company may establish more than one branch or liaison office in Bangladesh, but the Board of Investment requires prior approval. When registered with the BoI in Bangladesh, a branch or representative office is considered a legal entity capable of conducting business. There is no independent legal entity established within the Foreign Company, rather it is an extension of the foreign company. It is implicitly the parent company of a branch or representative office that is responsible for the debts and liabilities of the branch or representative office. You must also get a trade license through the city corporation or municipality in order to conduct this type of business in Bangladesh.

Representatives in Bangladesh are Allowed to Undertake the Following Activities

There is no separate legal entity established in a branch, as it is part of the parent company. Any obligations and activities of the branch office are liable to the parent company.An important difference between a liaison/representative office and a branch is that with the approval of the  Bangladesh Investment Development Authority (BIDA), a branch  can engage in commercial activities.

One way a branch might operate is as follows:

  • The parent company collects payments on the company’s behalf
  • Obtain income from local sources
  • To make outgoing payments from Bangladesh, BIDA must give its prior approval

The Following Documents are Required for Application for Opening of Representative Office

  1. To establish a business, submit an application signed by the authorized person in prescribed form Branches/liaisons/representative offices – four copies.
  2. Articles of Association and Certificate of Incorporation of the corporation

principal/ parent company.

  1. Organizational chart and any relevant information on the directors and promoters.
  2. Accounts from the last financial year of the principle company.
  3. A resolution of the board of directors about opening an office in Bangladesh.
  4. Organization chart of the office showing both of their positions locals and expatriates.
  5. Description of the proposed activities

Branches, liaisons, and representatives in Bangladesh.

Registering with the RJSC

After receiving approval from both Bangladesh Bank and BIDA, the final step in setting up a Representative Office is to register it with RJSC.

Documents RJSC Requires

  • A letter of consent from Bangladesh Bank.
  • The articles of association and the memorandum of association should be certified.
  • The address of the company’s principal or registered office.
  • Names and titles of the company’s directors and secretary .
  • The name and address of the Bangladeshi representative who will be responsible for approving documents.
  • The addresses of the company’s offices in Bangladesh.
  • As a result, the Representative Office in Bangladesh will be completed.

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