Legal Requirements to Start Business in BD as Foreigner

Top Legal Requirements for Foreigners to Start a Business in Bangladesh? Learn—RJSC, BIDA, VAT, tax, licenses, and compliance rules

“The man who moves a mountain begins by carrying away small stones.”

— Confucius

Bangladesh may not hand you a startup kit at the airport, but it will give you a challenge worth rising to.

If you’re a foreigner looking to start a business here, understand this: you’re not entering a fully paved path. You’re stepping into a system that blends rules with rituals, regulations with relationships, and sometimes, laws with long waits.

This isn’t a plug-and-play environment. But if you’re willing to learn the rhythm, embrace the paperwork, and invest in the human side of business, Bangladesh will open its doors.

This guide is your map to learn all the legal requirements for foreigners starting a business in Bangladesh. Let’s learn!

Choosing the Right Legal Structure in Bangladesh

Before you can even fill out a form, pick the right format. The legal path changes depending on what you choose—and what your long-term goals are.

Private Limited Company (Ltd.)

Most foreigner-friendly option
Requires 2 to 50 shareholders
Can be 100% foreign-owned
Restricts public share transfers
Must register under the Companies Act 1994
Must follow all post-incorporation compliance: tax, VAT, RJSC filings

Wholly Foreign-Owned Entity

This is typically structured as a Private Ltd. company where all shares are held by a foreign national or foreign company. You must:

Register with the RJSC
Report capital inflow to BIDA
Open local bank accounts and maintain a local office

Most digital service businesses, outsourcing firms, and e-commerce setups use this format.

Branch Office

Not a separate legal entity, but rather it’s an extension of a foreign parent company.

Must get prior BIDA approval
Requires RJSC registration
Needs permission from the Bangladesh Bank
Cannot raise capital independently
Can only carry out approved activities

Used mainly by global tech, logistics, or consulting brands.

Liaison Office

Similar to a Branch, but with zero revenue generation rights.

Can only promote business, conduct research, or act as a communication channel
No commercial activities allowed
Needs BIDA, Bangladesh Bank, and RJSC approval

Ideal for foreign entities conducting market research or scouting.

Sole Proprietorship & Partnership

These are not permitted for foreigners.

Sole Proprietorships are limited to Bangladeshi citizens
Partnerships are governed by the Partnership Act 1932, but are not friendly to 100% foreign ownership

Quick Tip: Foreigners must register either a Private Ltd. Company, a Branch, or a Liaison Office—those are your legal paths.

Legal Checklist: Core Registrations & Compliance

Step 1: Name Clearance (RJSC)

Apply online at RJSC
Fee: BDT 500 per proposed name
Valid for 30 days
Extension available at BDT 200 per request

Name must be unique, appropriate, and not too similar to existing companies.

Step 2: Pay Stamp Duty

Done via BRAC Bank or Treasury Bank
Cost depends on authorized capital (BDT 4,000–10,000 typical)

Step 3: Register with the RJSC

Documents needed:

Memorandum & Articles of Association (MOA/AOA)
Forms I, VI, IX, X, XII
Director TINs
Name clearance cert
Payment slips

Result: Certificate of Incorporation

Step 4: Make a Company Seal

Common but not legally mandatory
Cost: BDT 100–200

Step 5: Open a Bank Account

Required to:

Receive foreign capital
File VAT
Operate payroll and vendor payments

Recommended banks: HSBC, Standard Chartered, BRAC, EBL

Step 6: Get a Trade License

Issued by your local City Corporation or Union Parishad

You’ll need:

MOA/AOA
Lease agreement
TIN
Director ID/passport
Solvency letter
Application on stamp paper

Fee: BDT 1,000–20,000 depending on business type

Step 7: TIN Registration

Apply online at etaxnbr.gov.bd
Cost: Free
Instant issuance, if applied correctly

Step 8: VAT Registration (NBR)

Mandatory if:

Turnover exceeds BDT 3 million/year
You’re in eCommerce or cross-border services
You import/export
You’ll receive a BIN (Business Identification Number), which is separate from your TIN. BIN is tied to VAT activities, while TIN is for income tax.

Documents:

Trade license
Bank solvency
Office layout map
NID/Passport
RJSC documents

Step 9: Register with BIDA

Foreign investment must be registered here.

Required for:

Capital injection tracking
Profit repatriation
Special Economic Zone access
Industrial licenses

Apply via the BIDA website

Time: 15–30 business days

Fee: Based on investment amount (ranges from BDT 5,000–100,000)

Important Note: Realistically, allow 4–6 weeks, factoring in verification, office visits, or additional document clarifications.

Taxes, Repatriation & Finance Essentials

Corporate Tax (2024)

27.5% for non-publicly traded companies; 22.5% or 25% for publicly traded companies (with exceptions).
Green Industry: Lower rates apply

VAT

Standard: 15%
Reduced: 5–10% for eligible sectors (IT, EdTech, etc.)

Repatriation

Allowed under BIDA oversight
Must use Authorized Dealer Banks
Must submit audited financials, tax clearance, and BIDA certificate

Double Tax Treaties (DTA)

Bangladesh has DTA agreements with:

UK, UAE, India, Germany, Canada, Japan, and others
Use these to avoid paying corporate tax in both countries

Visa, Work Permit & Entry Rules

Investor Visa

1-year renewable
Requires BIDA recommendation
Apply through embassy and report locally

Employment Visa

For directors or staff
Requires job contract, salary > BDT 1.5 million/year
Application to be submitted to BIDA

Work Permit

Mandatory after the visa
Required for banking, salary withdrawal, and tax filing

Tourist Visas cannot be used for business setup. Doing so can lead to visa rejection or blacklist.

Annual Compliance

Whether you profit or not—compliance is mandatory:

RJSC annual return filing
Income tax filing to NBR
Monthly VAT returns
License renewal (yearly)
Payroll tax deductions
Audit if turnover exceeds thresholds

Post-Incorporation Compliance: What Comes After You Register

Most foreign entrepreneurs focus on registration and miss what comes next. But in Bangladesh, ongoing compliance is not optional. It’s the heartbeat of legal business operations.

Trade License Renewal

Renew annually with the issuing local authority
Late renewal may lead to fines or suspension

RJSC Annual Return (Form XV)

The first AGM (Annual General Meeting) must be held within 18 months of its incorporation date. After that, hold one every year and file the annual return (Form XV) within 28 days of the AGM date.
Non-compliance = penalties or strike-off.

Income Tax Filing (NBR)

Mandatory for all registered companies
File even if you make zero revenue
Must submit advance tax & withholding (TDS) correctly

VAT Returns

Monthly submission via NBR VAT Portal
Must be on time to avoid fines

Employment & Work Permits

Foreign staff must have:

Valid work permit
Salary through a legal bank
Payroll tax deductions

Repatriation Filings

Submit audited financials, tax clearance, and BIDA certificate
Required for outbound payments like dividends, royalties, or principal returns

Common Mistakes Foreign Entrepreneurs Make

Starting a company in Bangladesh isn’t hard. But misunderstanding how it actually works, that’s where most foreigners fumble.

Here’s where good intentions often meet bad assumptions:

Using a friend’s name or a casual address to speed up registration

It might seem harmless, but if your address or nominee isn’t valid or compliant, it can stall your bank setup, delay trade licenses, or trigger legal notices.

Delaying BIDA registration after receiving foreign investment

Without BIDA’s nod, your capital is just floating cash—you can’t legally repatriate profits or move funds back abroad. And no, you can’t retro-fix this cleanly once it’s missed.

Skipping VAT because you think you’re “too small” to matter

Even if you’re under the BDT 3 million threshold, if you’re importing, exporting, or selling online, VAT may still be legally required. Authorities don’t chase size—they chase structure.

Assuming the portals are plug-and-play like in the West

Online systems are evolving, but most still demand offline follow-ups, hard copies, and human verification. If you’re not prepared for that duality, expect delays.

Forgetting annual RJSC filings

Incorporation isn’t one-and-done. Every year, whether you earn or not, you must submit returns—or risk fines, blacklisting, or being struck off entirely.

Thinking Bangladesh will work like Dubai or Singapore

Here, things move through people—not just systems. It’s not slower by default; it’s relationship-first, and that’s not something automation replaces.

Quick Tip: Hire a trusted local CA, CS, or legal advisor within your first month.

In Bangladesh, they’re not just advisors. They’re your translators, troubleshooters, and sometimes—lifesavers.

Final Thought

Bangladesh isn’t a trend—it’s a test.

It tests how well you follow directions, yes. But more than that, it tests how well you hold your ground when the ground keeps shifting.

Don’t expect it to work like Singapore. Or scale like Dubai.

But if you respect the law, read the fine print, and learn the pulse of its people, Bangladesh won’t just let you do business. It’ll make you part of the equation.

Because when it comes to legal requirements for foreigners starting a business in Bangladesh, the rules aren’t the end. They’re the beginning of something deep, demanding, and worth it.

So go beyond checklists. Learn the language of the land—not just in Bangla, but in effort, integrity, and earned trust.

“In this country, patience isn’t passive. It’s a kind of power.”

FAQ

Can a foreigner legally start a business in Bangladesh?

Yes, absolutely. Bangladesh warmly welcomes foreign nationals to start businesses; and in most industries, you can even own 100% of the company. You can set up a Private Limited Company, register a Liaison Office, or open a Branch Office, depending on what fits your goals best. Just remember a fact: a few sectors might have restrictions or require teaming up with a local partner.

Can a foreigner fully own a company in Bangladesh?

Yes, they absolutely can—Bangladesh allows 100% foreign ownership in most sectors. That said, there are a few exceptions. Sectors like freight forwarding, courier services, and buying houses usually require a local partner or some level of local ownership.

What is the minimum amount of capital that foreign-owned businesses must have?

There is no official minimum capital requirement, actually.
However, a minimum investment of USD 50,000 is often recommended for practical purposes, especially for obtaining work permits and visas.

Is BIDA registration mandatory for all foreign investments?

Yes, BIDA registration is essential for:

Repatriation of profits.
Obtaining work permits.
Accessing certain tax incentives.

It’s advisable to complete BIDA registration promptly after company incorporation.

What documents are required for a foreigner to register a company in Bangladesh?

To register a company, a foreign investor typically needs:

Name Clearance Certificate from the RJSC.
Memorandum and Articles of Association (MoA & AoA) detailing the company’s objectives and regulations.
Forms I, VI, IX, X, and XII as required by the RJSC.
Passport copies and photographs of directors and shareholders.
Registered office address in Bangladesh.
Encashment Certificate from a local bank confirming the receipt of foreign investment.

Additional documents may be required, which will be based on the specific business structure and sector.

Is it mandatory to obtain BIDA approval before starting a business?

BIDA (Bangladesh Investment Development Authority) approval is essential for certain business structures and activities:

Mandatory for setting up Liaison or Branch Offices of foreign companies.
Required for foreign investments seeking to repatriate profits, access special economic zones, or obtain specific licenses.
Though not mandatory for wholly foreign-owned Private Limited Companies, but registration with BIDA is advisable for availing various incentives and facilities.

In Bangladesh, how long does it take to register a business?

To be honest, give yourself about 4 to 6 weeks to get everything in place. That includes registering with the RJSC, grabbing your trade license, getting your TIN and VAT numbers sorted, and—if you’re a foreigner—waiting for that final green light from BIDA. It might sound like a lot, but with the right support, it’s totally manageable. You’ve got this.

What is the process for repatriating profits?

To repatriate profits:

Ensure BIDA registration is complete.
Obtain an encashment certificate from your bank.
Send in your tax clearance certificates and audited financial statements.
Route the repatriation through an Authorized Dealer (AD) bank with Bangladesh Bank’s approval.

Are there any tax incentives for foreign investors?

Absolutely! Bangladesh has quite a few tax perks to make your investment more rewarding. For example:

You can enjoy tax holidays if your business operates in Export Processing Zones (EPZs).
Export-focused industries get access to reduced tax rates, which is a huge plus.
There are also special incentives for putting money into promising sectors like IT and renewable energy.