Company Formation In Bangladesh: Taxes & Benefits
Let’s find out the different kinds of company formation in Bangladesh.
A unitary parliaments constitutional republic governs Bangladesh. The country belongs to the UN, Commonwealth of Nations, WTO, World Bank, IMF, OIC, ICAO, and a number of other organizations.
The Companies Act of 1994 and the Securities and Exchange Commission Act of 1993 govern Bangladesh’s legal system.
The Registration of Joint-Stock firms and corporations (RJSC), also known as the Company House of Bangladesh, is the entity in charge of all company-related activities in Bangladesh.
5 types of company formation in Bangladesh
In Bangladesh, there are 5 different types of company formation. If you want to register a business in Bangladesh, you can do so by selecting one of the options listed below:
- Private Limited Company
- Public Limited Company
- Branch of a Foreign Company
- Representative office
- Subsidiary Company
Benefits of new company formation in Bangladesh
A lot of foreign investors are considering starting a new business in Bangladesh. Bangladesh has a business market that is expanding and offers many advantages over other nations.
- Political and economic stability;
- Rapid economic growth;
- Favorable tax policies for businesses registered in Bangladesh;
- Favorable government policies supporting foreign investments are just a few of the factors that contribute to this.
- Affordable labor costs;
- Total foreign possession;
- There are no minimum share capital requirements;
- Possibility to buy real estate under the company’s name;
- Corporate strategy connectivity to the South East Asian market (China and Bangladesh, for instance, agreed to sign a duty-free agreement to allow Bangladesh-registered businesses to find the Chinese market without incurring additional costs); double taxation agreements with more than 30 nations.
Business in Bangladesh: Tax Rates
Tax rates that are expected to apply when starting or expanding a new company in Bangladesh. You must pay these taxes each year if you want to do business in Bangladesh.
Taxes | Rates |
Corporate tax rate | 25% |
Capital gains tax | 15% |
Dividends | 20% |
Value Added Tax (VAT) | 15% |
13,613 new businesses registration in Bangladesh in the recently concluded fiscal year, demonstrating business confidence in the country’s economy despite the protracted coronavirus pandemic.
Information from the Office of the Joint Stock Company Registrar and Firms show that this is the most firms that have registered in a single year (RJSC).
In comparison with a year ago, once 11,110 businesses were incorporated, the number of new companies registered is up 22.5%.
Important Notes For Foreign Investors
- The approved capital of the company determines how much it will cost to register the company, in general.
- Shelf businesses are not allowed; the company must have a physical location in Bangladesh.
- Gains and investments may be fully repatriated under Bangladeshi currency laws.
- Foreign nationals may work alongside locals at a ratio of 20:1, provided they have the required work permits.
- Foreign direct investment is permitted at 100%, with very few exceptions.
- Executives may be domestic or international.
- Depending on the industry and type of the company, the typical corporate income tax ranges from 25% to 45%. For some industries and regions, the tax break is available for 5-7 years.
FAQs
- What is the price to register a business in Bangladesh?
Ans: In Bangladesh, registering a company will set you back $3990. The total price includes the creation of all necessary legal documentation, company registration, deposit of all applicable taxes and fees, as well as the provision of a legal address for the business (a year). - How long does it take in Bangladesh to register a business?
Ans: The process to register a company in Bangladesh typically takes six weeks. - Is a local address required in Bangladesh to register a business?
Ans: Yes, in order to complete the required company formation in Bangladesh and registration process, you must have a registered local address in Bangladesh. - Is a local registered agent required in Bangladesh to register a business?
Ans: Yes, a local registered representative is required in this jurisdiction to complete the company enrollment process. - In Bangladesh, how do I register a business name
Ans: The first step in registering a company name is to file the necessary paperwork. Law and Trust assists with document preparation and compilation to ensure all necessary paperwork complies with RJSC’s (the Bangladeshi Company House’s) guidelines for the approval of company names.
