Setting up either a Branch or Liaison Office stands as one of the two choices available to foreign investors aiming to establish themselves in Bangladesh, with the alternative being the incorporation of a Bangladeshi subsidiary company.

• Both Branch and Liaison offices are restricted to specific areas and durations as approved by BIDA. Extension requests must be submitted at least two months before the expiration date.
• Foreign nationals employed by the company must obtain work permits from BIDA.
• An inward remittance of at least US$ 50,000 or equivalent, covering initial establishment costs and six months of operational expenses, must be brought into Bangladesh within two months of receiving BIDA’s permission letter. A bank account must be opened with a scheduled bank in Bangladesh as per foreign exchange transaction guidelines.
• Quarterly reports on incomes and expenditures from remittances must be submitted to BIDA, relevant banks, the National Board of Revenue, and Bangladesh Bank with supporting documents.
• Any change of address requires prior communication and approval from BIDA.
• Clearances and licenses from relevant government agencies must be obtained as per Bangladesh’s existing laws.
• Payment of duties, income tax, VAT, and other taxes to the government must comply with Bangladesh’s existing laws.
• Taxes must be deducted at source and deposited into designated government accounts as per the Income Tax Act 2023. Taxpayer Identification Numbers (TIN) must be obtained from the National Board of Revenue.
• Approval for Branch and Liaison Offices, as well as work permits for foreign nationals, is contingent upon security clearance from the Ministry of Home Affairs, provided within 45 days of permission letter issuance under the current visa policy.
• Expatriates working in various sectors must submit income tax clearance or exemption certificates.
• Proprietorship companies establishing Branch and Liaison Offices are generally discouraged.
• Establishing multiple offices under the permitted Branch or Liaison Offices requires separate prior permission from the Bangladesh Investment Development Authority.

For foreign investors, we recommend consulting our tab on foreign investment to gain a comprehensive understanding of the legal framework in Bangladesh.

Below, we detail the process of establishing a Branch or Liaison office in Bangladesh, which begins with obtaining approval from the Bangladesh Investment Development Authority (BIDA).

Key Points about Liaison Offices in Bangladesh:

Liaison offices, synonymous with Representative offices, operate within strict limitations. They facilitate communication between the parent company and local entities and gather and disseminate business information. However, they cannot generate income locally, and all operational expenses are covered by the parent company. Outward remittances from Bangladesh are restricted.

Key Points about Branch Offices in Bangladesh:

Branch offices of foreign companies are permitted to conduct commercial activities in Bangladesh, subject to BIDA’s approval. They may generate income from approved business activities in the country, provided they adhere to regulatory requirements.

Branch/Liaison Office as a Type of Business Entity

Registering with BIDA in Bangladesh establishes a Branch or Liaison Office as a legitimate legal entity. It functions as an extension of the foreign company rather than an independent entity. In contrast to a Bangladeshi subsidiary company, the parent company of a Branch or Liaison Office assumes implicit responsibility for all debts and liabilities incurred by the Branch or Liaison Office.

Additional Information

• Name: The name of the Bangladeshi Branch or Liaison Office must match that of the foreign company.
• Constitution and Activities: The shareholders, company structure, and activities are governed by the foreign company’s Memorandum and Articles of Association. There is no separate set of Memorandum and Articles of Association for the Branch or Liaison Office.
• Office Address: A Branch or Liaison Office must maintain a physical office address within Bangladesh.

Documents Required for BIDA Approval

Typically, the following documents/information are necessary for obtaining approval for a Branch or Liaison Office in Bangladesh:

1. Application in the prescribed form, signed by the authorized representative for establishing the branch/liaison/representative office – 4 copies.
2. Memorandum and Articles of Association, along with the Certificate of Incorporation of the principal/parent company.
3. Names and nationalities of the directors/promoters of the principal company.
4. Audited Accounts from the last financial year of the principal company.
5. Resolution from the company’s board of directors regarding the establishment of an office in Bangladesh.
6. Proposed organogram of the office, outlining positions for both expatriate and local personnel.
7. Details of activities to be conducted through the proposed branch/liaison/representative office in Bangladesh.
8. Forwarding Letter.
9. Documents (items 2-5) must be attested by the respective Bangladesh mission/mission of the concerned country in Bangladesh, the respective country’s apex business chamber, or local business chambers.
10. Any non-English documents must be translated into English before submission.
11. Four copies of all documents must be submitted to BIDA.
12. BIDA may request additional documents after reviewing the above-mentioned submissions.

Government Fees:

A fee of BDT 25,000 (Twenty-five thousand) must be paid through a bank Pay Order, and the original copy of the Pay Order needs to be submitted to BIDA.

Registration Procedure and Timeline:

The registration process is now conducted online. All documents should be uploaded to BIDA’s online portal, followed by the submission of physical copies. Upon thorough scrutiny of the documents, BIDA officials will forward the application and documents to the Inter-Ministerial Committee. The Committee will review the documents and may request additional documents or a physical presentation if necessary. Upon satisfaction, the Committee provides approval. The Inter-Ministerial Committee typically convenes twice monthly, and the usual timeline for approval is one month or less. Approval is typically granted to open a branch or liaison office initially for a period of three years, with the possibility of extension.

Bank Account Opening:

Following approval for a Branch or Liaison office, a bank account must be opened in any bank in Bangladesh. Within two months of the issuance of the BIDA permission letter, an amount of foreign exchange equivalent to US$ 50,000 or more must be brought into Bangladesh as inward remittance.

Notification to Bangladesh Bank:

Subsequently, the newly approved Branch Office, Liaison Office, or Representative Office must report to Bangladesh Bank within thirty days of obtaining permission from BIDA. Bangladesh Bank does not permit the Branch Office, Liaison Office, or Representative Office to directly submit this report; instead, it must be done through the office’s bank. Therefore, the newly approved office must promptly open a bank account upon receiving approval from BIDA.

Registration with Registrar of Joint Stock Companies and Firms (RJSC):

After Obtaining Approval: Upon receiving approval from both Bangladesh Bank and BIDA, registration with the RJSC becomes necessary.

Required Documents: The following documents are necessary for this purpose:

• Approval letter from BIDA and Approval letter from Bangladesh Bank.
• Certified copy of the company’s memorandum and articles or other constitutional documents.
• Full address of the registered or principal office of the company.
• List of directors and secretary (if any) of the company.
• Name(s) and address(es) of person(s) resident in Bangladesh authorized to accept service of process and notices on behalf of the company.
• Full address of the company’s office in Bangladesh, deemed its principal place of business.

Professional Assistance: If you require professional assistance with setting up a branch office, liaison office, or foreign investment, please don’t hesitate to contact us.