Mode of Entry Into Bangladesh
Mode of Entry Into Bangladesh
Mode of Entry Into Bangladesh
A foreign company intending to expand its business to Bangladesh, usually have option either to choose
Equity-based entry mode or Non-equity-based entry mode.
Incorporating a subsidiary company is considered as Equity-based entry mode and setting up a Branch or
Liaison office is called non-equity-based entry mode.
Pros Cons
Pros Cons
Protected Industries
Foreign Investment in certain industries in Bangladesh also require prior approval of the relevant
authority, upon receiving the due approval RJSC accept company registration application:
Satellite Channel
Cargo/passenger aviation
Sea-bound ship transport
Fishing in the deep sea
Bank, Insurance and other financial institution
Generation, supply and distribution of power
Exploration, extraction and supply of natural resources
Large-scale infrastructure project
Crude oil refinery (recycling/refining of lube oil used as fuel)
Medium and large industry using natural mineral as raw materials
Sea-port/Deep sea-port
VOIP/IP telephone
Industries using heavy minerals accumulated from sea beach
Restricted Industries
Foreign investment to the below industries in Bangladesh is fully restricted:
Production of nuclear energy;
Arms and ammunition and other defense equipment and machinery.
Forest plantation and mechanized extraction within the bounds of reserved forests
Security printing and mining
Compliances for a Branch Office (with revenue generating activities)
almost at the same scale of a subsidiary company
Annual Compliances
Company Affairs (Companies Act 1994)
Statutory auditing
Half-Yearly Compliances
Income Tax (Income Tax Ordinance 1984):
Filing of half-yearly TDS/withholding tax return submission u/s 75A
Quarterly Compliances
BIDA Reporting:
Un-audited quarterly financial statements
Filing of quarterly reporting to BIDA, Bangladesh Bank and Tax authority.
Monthly Compliances
Income Tax (Income Tax Ordinance & Rule 1984):
Withholding tax / tax deducted at source (TDS) on regular basis as and when payment made or create
payable
Treasury deposit of TDS
Issuance of withholding certificate
Filing of suppliers’ TDS statements under rule 18
Filing of salary TDS statement u/r 21
Day to day transaction compliances
Annual Compliances
Company Affairs (Companies Act 1994)
Statutory auditing;
Income Tax (Income Tax Ordinance 1984):
Filing of annual tax return u/s 75
Filing of annual return of salary TDS statements u/s 108
Filing of annual return of employee annual tax return submission details u/s 108A
Renewal of Business Licenses:
Renewal of Trade License
Half-Yearly Compliances
Income Tax (Income Tax Ordinance 1984):
Filing of half-yearly TDS/withholding tax return submission u/s 75A
Quarterly Compliances
BIDA Reporting:
Filing of quarterly receipt & payment reporting to BIDA, Bangladesh Bank and Tax authority.
Monthly Compliances
Income Tax (Income Tax Ordinance & Rule 1984):
Withholding tax / tax deducted at source (TDS) on regular basis as and when payment made or
create payable
Treasury deposit of TDS; Issuance of withholding certificate
Filing of suppliers’ TDS statements under rule 18
Filing of salary TDS statement u/r 21
Day to day transaction compliances
Value Added Tax/ GST (VAT & SD Act 2012):
Maintenance of VAT record – keeping on regular basis (mostly purchase records)
Withholding VAT / VAT deduction at source (VDS) when make suppliers’ payment
Treasury deposit of VDS
Issuance of VDS certificate (VAT 6.6)
Filing of monthly VAT return (VAT 9.1)
Declaration for transactions which are above BDT 200K
What are the compliances for a private limited company in
Bangladesh
Compliances for a private limited or subsidiary company in Bangladesh becoming more stringent than
ever before. Apart from the annual compliances, there are number of compliances on monthly, quarterly
and half-yearly basis as below:
Annual Compliances
Company Affairs (Companies Act 1994)
Statutory auditing; – Holding annual general meeting; – Annual RJSC return filing;
Income Tax (Income Tax Ordinance 1984):
Filing of annual tax return u/s 75;
Filing of annual return of salary TDS statements u/s 108;
Filing of annual return of employee annual tax return submission details u/s 108A;
Renewal of Tax Exemption Certificate (for tax exempted company);
Value Added Tax/ GST (VAT & SD Act 2012):
Collection of VAT clearance certificate;
Renewal of Business Licenses:
Renewal of Trade License;
Renewal of trade body membership (if any);
Renewal of Import & Export Registration Certificate (if any);
Other industry related licenses (if any);
Half-Yearly Compliances
Income Tax (Income Tax Ordinance 1984):
Filing of half-yearly TDS/withholding tax return submission u/s 75A
Quarterly Compliances
Foreign Direct Invest Reporting:
Un-audited quarterly financial statements;
Filing of quarterly F1 reporting to Bangladesh Central Bank.
Monthly Compliances
Income Tax (Income Tax Ordinance & Rule 1984):
Withholding tax / tax deducted at source (TDS) on regular basis as and when payment made or
create payable
Treasury deposit of TDS; Issuance of withholding certificate
Filing of suppliers’ TDS statements under rule 18
Filing of salary TDS statement u/r 21
Day to day transaction compliances
Value Added Tax/ GST (VAT & SD Act 2012):
Deceleration of Input-Output Co-efficient whenever the price or cost changes +/-7% from the
latest declared price/cost;
Issuance of VAT 6.3 (Tax Invoice) on regular basis;
Maintenance of VAT record keeping on regular basis;
Withholding VAT / VAT deduction at source (VDS) when make suppliers’ payment;
Treasury deposit of VDS;
Issuance of VDS certificate (VAT 6.6);
Filing of monthly VAT return (VAT 9.1);
Declaration for transactions which are above BDT 200K.
How to Register A Private Limited Company in Bangladesh
A foreign investor is eligible to register a 100% foreign owned Private Limited Company (PLC) in
Bangladesh which is commonly known as FDI company. It is the preferred business arrangement for
individual entrepreneurs who want to establish a local company in Bangladesh.
Pros Cons
No restriction in business activity, like any other local There are tighter rules and
company an FDI local company can do any business. regulations compared to Liaison
office or Liaison office.
Shareholders are not liable for the company's debts beyond
the amount of capital they have put into the company. Equity investment is not allowed to
remit back to source until
It is easy to transfer ownership through the selling of shares
or issuing of new shares to new investors.