“Incorporating is easy, until the structure you chose starts working against you.”
— Every foreigner who registered without reading the fine print
The Confusion Starts Before the Company Does
It usually begins with optimism. A plan. A product. A partner.
Then comes the very first question: “So, what kind of company should I go for?”
And suddenly, things slow down.
Not because Bangladesh makes it impossible, but because the answers don’t show up where you expect them. One website tells you it’s easy. Another says you need special approval. A consultant promises everything, then asks you what “your structure” is.
The truth? Most foreigners don’t fall behind on paperwork.
They fall behind on clarity.
This blog on Company Types & Restrictions for Foreigners in Bangladesh is your shortcut through that huge mess—no drama, no detour. Just what you can build, what you can’t, and how to pick something that holds up after the ink dries.
Can Foreigners Start Companies in Bangladesh?
Of course they can! And Bangladesh is actually more welcoming than many people think. For example, there are no restrictions on doing business or investing—even if you’re from a neighboring country—like some other countries have.
You can register a fully foreign-owned company in most sectors—or partner with a local business if you are entering a restricted one. That said, here’s what does matter:
- Directors: By law, every Private Limited Organization in Bangladesh must have at least one director who is a Bangladeshi resident. It’s not optional—it’s written into the Companies Act. You’ll need two directors in total, and one of them has to be locally based.
- Don’t know anyone in Bangladesh? That’s what nominee director services are for. You can legally appoint a local director through a licensed, professional service. Just know this: nominee directors aren’t just figureheads—they carry liability. If things go south, they’re the ones BIDA or the RJSC will chase. So choose someone trustworthy, not just someone cheap.
- Approvals & exceptions? Most sectors are good to go with full foreign ownership. But if you’re entering banking, insurance, defense, telecom, or anything “sensitive,” you’ll likely need BIDA approval before you move forward. Other relevant authority approval may be required in certain cases.
So yes, you can start a business in Bangladesh as a foreigner; just don’t make the rookie mistake of ignoring local structure rules. They don’t bend just because you’re new.
Company Types in Bangladesh for Foreigners
When you’re planning to set up a business in Bangladesh, you’ve got quite a few options to choose from as a foreign investor. Each comes with its own set of rules, benefits, and a couple of trade-offs to keep in mind. Understanding these can help in making an informed decision that aligns with your business goals.
Private Limited Company (PLC)
- Overview: A PLC is the most common and preferred business structure for foreign investors in Bangladesh.
- Ownership: Allows 100% foreign ownership.
- Liability: Shareholders’ liability is limited to their share capital.
- Requirements:
- Minimum of two shareholders and two directors.
- A registered office address in Bangladesh.
- Compliance with the Companies Act 1994.
- Best For: Businesses aiming for long-term operations and scalability.
Branch Office
- Overview: A branch office acts as an extension of a foreign parent company.
- Activities: Can undertake commercial activities, including trading and providing services.
- Approvals Needed:
- Permission from the Bangladesh Investment Development Authority (BIDA).
- Registration with the Registrar of Joint Stock Companies and Firms (RJSC).
- Limitations: Cannot engage in manufacturing activities.
- Best For: Companies looking to explore the Bangladeshi market without establishing a separate legal entity.
Liaison Office (Representative Office)
- Overview: Serves as a communication channel between the foreign parent company and Bangladeshi entities.
- Activities:
- Market research.
- Promotion of products.
- Liaison activities.
- Restrictions: Cannot undertake any commercial or revenue-generating activities.
- Approvals Needed:
- Permission from BIDA.
- Registration with the RJSC.
- Best For: Companies aiming to understand the Bangladeshi market before making significant investments.
Joint Venture (JV)
- Overview: A business arrangement where a foreign company partners with a local entity.
- Benefits:
- Combines local market knowledge with foreign expertise.
- Shared risks and resources.
- Requirements:
- A clear agreement outlining profit-sharing, management, and operational roles.
- Compliance with local laws and regulations.
Best For: Businesses looking to leverage local partnerships for market entry.
Public Limited Company (PLC)
- Overview: Suitable for large-scale operations and businesses planning to raise capital from the public.
- Ownership: Can offer shares to the general public.
- Requirements:
- Minimum of seven shareholders and three directors.
- Compliance with the Companies Act 1994.
- Listing with the stock exchange if shares are offered to the public.
- Best For: Large enterprises aiming for significant market presence and public investment.
What Foreigners Cannot Register in Bangladesh
While Bangladesh is open to foreign investment, some business structures are off-limits to foreigners and are meant only for Bangladeshi citizens or residents:
- Sole Proprietorship: This setup is mainly for locals. It requires a Bangladeshi National ID and other documents that most foreigners simply don’t have access to.
- One Person Company (OPC): OPCs are made for solo entrepreneurs—but only if they’re Bangladeshi nationals. Unfortunately, foreign nationals can’t register an OPC in Bangladesh.
- Traditional Partnership (non-registered): Yes, partnerships are possible, but the unregistered, traditional kind is quite informal. They usually don’t offer the legal protection or recognition that foreign investors would need.
Sector-Wise Investment Restrictions in Bangladesh
Bangladesh welcomes foreign investment in most sectors. However, certain industries are categorized as reserved or controlled, requiring specific approvals or prohibiting foreign participation altogether.
Open Sectors (No Prior Approval Required)
Foreign investors can fully own and operate businesses in the following sectors without prior approval:
- Information Technology (IT) and Software Services
- Export-Oriented Manufacturing
- Ready-Made Garments (RMG) and Textiles
- Infrastructure Development
- etc.
Controlled Sectors (Prior Approval Required)
Investments in these sectors are permitted but require prior approval from relevant authorities:
- Private Banking and Financial Services
- Insurance
- Power Generation, Supply, and Distribution
- Telecommunications (Mobile, Landline, VOIP)
- Media and Broadcasting (Satellite Channels, Print Media)
- Large-Scale Infrastructure Projects (Flyovers, Expressways, Economic Zones)
- etc.
Reserved Sectors (Prohibited for Foreign Investment)
Foreign investment is not permitted in the following sectors:
- Arms, Ammunition, and Defense Equipment
- Nuclear Energy
- Security Printing and Minting
- Forestation and Mechanized Extraction within Reserved Forests
Key Legal Requirements for Foreigners
To start and run a business in Bangladesh as a foreigner, there are a few must-follow requirements you will need to take care of:
- Name clearance from the RJSC
- Local address and office setup
- Two directors (at least one must be a Bangladeshi resident)
- MOA & AOA (Memorandum and Articles of Association)
- TIN from NBR
- Trade license from the city corporation
- VAT registration (if applicable)
- BIDA approval (if required by sector)
- Foreign Currency Account for capital remittance
- Regular filing of returns and annual reports
If you skip these? Your business might exist on paper but not in practice.
Common Mistakes Foreigners Make
- Choosing a structure not legally available to them
- Skipping the resident director requirement
- Delaying BIDA reporting after remitting capital
- Assuming a Liaison Office can earn revenue
- Launching without a trade license or TIN
- Thinking VAT is optional (spoiler: it isn’t)
Bangladesh doesn’t stop you from doing business, but it does expect you to follow the rules. Especially the quiet ones.
The Structure You Pick Decides the Path You Walk
In Bangladesh, you don’t register a company—you commit to a system.
One that expects you to know which format you’re allowed to use, what you’re expected to file, and who’s responsible when things go off-script.
This isn’t about avoiding mistakes. It’s about avoiding the wrong beginning.
Because the structure you pick? It doesn’t just affect your registration.
It shapes your compliance, your tax load, your growth options, and sometimes even your ability to open a bank account.
So don’t chase “easy.”
Chase accurate.
Chase legal.
Chase something that will still be standing when your third-year audit lands.
And if you are unsure—pause here. Read it again.
Get this part right.
The rest? Gets easier.
FAQ
Can a foreigner start a sole proprietorship in Bangladesh?
Not really. Sole proprietorships in Bangladesh are meant for local citizens. Even if you live here, the paperwork and proof required are tied to national identity and local documents. If you’re serious about launching your business as a foreigner, skip this option and go with something that actually works—like a Private Limited Company.
What is the best type of company structure for foreign investors in Bangladesh?
If you want a clean, reliable, and fully legal route—go for a Private Limited Company (Pvt. Ltd.). It allows full foreign ownership (in most cases), protects your personal liability, and gives you long-term control. Most global businesses you’ve heard of in Bangladesh—that’s the structure they’ve used.
Are all industries open to foreign-owned companies in Bangladesh?
Not quite. Many are, yes—especially in tech, export, education, and services. But a few areas like banking, telecom, defense, and energy come with restrictions. Some need prior approval from government bodies. If you are entering anything “sensitive” or highly regulated, double-check before investing.
Can a foreigner own 100% of a company in Bangladesh?
Yes, absolutely—in most sectors. You can fully own a Private Limited Company without needing a local partner. But if you’re entering a sector that requires local equity or government clearance, you may need to structure it as a joint venture instead.
Is there a minimum investment amount for foreign-owned companies?
There’s no legal minimum written in stone. But practically speaking, if you want to run operations smoothly—like hiring staff or applying for work permits—you’ll want to show at least $50,000 USD in capital. That also gives confidence to banks, regulators, and your own business plan.
Do foreign-owned companies need a local director in Bangladesh?
Yes. Every private limited organization here must have at least two directors, and one of them must be a Bangladeshi resident. If you don’t know someone locally, you can work with a nominee director through a licensed legal service—just make sure it’s someone accountable.
What are the tax implications for foreign-owned companies in Bangladesh?
You’ll pay tax just like any local company. Corporate tax rates vary depending on your sector and whether you’re listed or unlisted. You’ll also need a TIN, a trade license, and potentially VAT registration if your turnover hits the required threshold. Hire a local tax advisor early—it’s worth every cent.
