“The law says you don’t need one. The system whispers… maybe you do.”
The Director Dilemma You Didn’t See Coming
You’re halfway through the company formation process. You’ve read up on trade licenses, maybe skimmed the top legal requirements for foreigners starting a business in BD. Things look doable.
Then someone drops the line:
“But who’s your local director?”
You pause. Because no one told you that was a thing.
So here’s the truth: you don’t legally need a Bangladeshi director to start your company. But practically? That’s another story.
Let’s break down what’s real, what’s rumor, and where a local director—or even a nominee director—actually matters.
Legally Speaking: You Don’t Need a Local Director
According to the RJSC (Registrar of Joint Stock Companies and Firms), here’s what the law says for forming a Private Limited Company in Bangladesh:
- You need at least two directors
- They can be foreign nationals
- No nationality restriction exists
- Directors must be 18+, legally sound, and not bankrupt or convicted
That’s it. No Bangladeshi national is required by law.
So, if you’re setting up a company purely with two foreign directors, you’re allowed.
In Practice? Some Things Work Better with a Local
This is where it gets interesting.
Legally, you’re covered. But when you step into a bank, apply for a loan, try to rent an office, or open a trade license—you might hit an invisible wall.
And suddenly, everyone’s asking: “Who’s your local representative?”
Here’s where a local director, nominee, or at least a signatory becomes practically helpful:
- Banks often want a local signatory for day-to-day account operations
- Landlords prefer lease agreements signed by someone they can actually meet
- Loan officers sometimes won’t proceed unless someone local is part of the structure
(See: How to Get a Loan from a BD Bank as a Foreign Entrepreneur)
Is it legally required? No.
Does it help things move faster and smoother? Almost always, yes.
When a Local Director or Nominee Is Genuinely Useful
Here’s when having a local on your board or paper makes your life easier:
- Opening a Bank Account
Most banks don’t require a local director, but they do want a resident signatory.
(Read: How to Open a Business Bank Account in BD as a Foreigner)
- Receiving Official Documents or Letters
Government bodies, tax offices, and even the RJSC may send hard copies. A local presence means fewer delays.
- Applying for Loans
Especially SME or startup-related loans. Many banks prefer to see local accountability before releasing funds.
- Leasing Office Space
Landlords want a face. A person they can call. Not just a signature from someone flying in from Dubai.
(Learn more on this topic: How to Lease or Buy Office Space in Bangladesh as a Foreigner)
- Appearing for Tax or Compliance Checks
Even if you’ve got an amazing CA firm handling filings, a local director is helpful during Taxation Essentials and audits.
Local Director vs. Nominee Director vs. Signatory—Know the Difference
Let’s clear up the confusion. These are not interchangeable roles:
| Role | What They Do | Publicly Visible? | Do You Need It? |
| Local Director | Official RJSC-listed director, involved in decision-making | Yes | Not legally, but useful |
| Nominee Director | A director in title, appointed under contract, with limited control | Yes | Optional but practical |
| Signatory | Person authorized to sign docs, not necessarily a director | No | Often required for bank ops |
The best setup? Appoint a nominee director backed by a Power of Attorney or service agreement—so you maintain full control, but still have a face on the ground.
Is It Risky to Appoint a Local Director?
Not if you do it right.
Here’s how to protect your business:
- Draft clear contracts outlining the nominee’s role
- Assign Power of Attorney for limited actions
- Avoid informal arrangements—they create legal gray zones later
(This is part of structuring smartly: See A Complete Compliance Guide for Foreign Entrepreneurs in BD)
So… Is a Local Director Really Required?
Let’s wrap this up clearly:
Legally:
You do not need a local director to register or run a company in Bangladesh.
Practically:
It can help, especially for:
- Loan applications
- Lease agreements
- Day-to-day banking
- Compliance and inspections
Some banks or landlords might not move forward unless there’s someone local tied to your company—even if only on paper.
Build What Works, Not What’s Perfect on Paper
You don’t need to appoint a local director just because someone said so.
But if you want smoother operations—especially when dealing with banks, landlords, and government officials—it’s worth considering a structured local presence. Think of it as functional trust-building, not legal handcuffing.
So before you register, ask yourself:
- Who’s handling things on the ground?
- Who’s reachable if something urgent comes up?
- And will your structure hold up when someone actually asks: “Who’s in charge here?”
The answer doesn’t have to be complicated.
It just has to work.
FAQ
Can I start a company in Bangladesh without a local director?
Yes. Legally, there’s no requirement to appoint a Bangladeshi national as director. Foreigners can fully own and direct a private limited company—as long as you meet the RJSC’s minimum two-director rule.
Then why do people say I need a local person involved?
Because it makes everything else smoother—bank accounts, trade licenses, leases, even office setup. You don’t need a local director. But having a local signatory or nominee helps avoid bottlenecks.
What’s a nominee director, and is it legal in Bangladesh?
A nominee director is someone listed as a director on your company’s RJSC records but doesn’t actually run the business. And yes—it’s totally legal, as long as there’s a private agreement or Power of Attorney in place. Many foreign entrepreneurs use this setup for official representation without giving up control.
Can my local agent act as a nominee director?
Yes, if you trust them—and they’re okay taking on the legal responsibilities. Just be sure everything’s clearly laid out in a written agreement.
Will not having a local director affect my ability to get a loan?
It might. While not a rule, most banks prefer a local face when assessing loan requests—especially for SME or startup loans.
Is appointing a local director risky?
Only if you do it informally. With the right agreements in place, it’s manageable. Don’t hand over control—hand over specific, contract-bound authority.
