i. General
Foreign investors can setup their subsidiary companies in the form of private/public limited company in Bangladesh according to the Company Act 1994. Foreign investors may directly setup business organization or can setup business organization through joint venture with local or foreign partners.

ii. Important pointers
a) Company Name:
The name must be approved (cleared) before incorporation of the company in Bangladesh.

b) Directors:
Minimum two directors are mandatory. Directors can be either local or foreign. Directors must be at least 18 years of age and must not be bankrupt or convicted for any malpractice in the past. The law requires that a director must own qualification shares stated in the Articles of Association. A shareholder which is not a natural person (i.e. a company) can select nominee director.

c) Shareholders:
A private limited company in Bangladesh can have a minimum of 2 and maximum of 50 shareholders. A director and shareholder can be the same or a different person. The shareholder can be a person or another legal entity such as another company or trust. 100% local or foreign shareholding is allowed. New shares can be issued, or existing shares can be transferred to another person any time after the Bangladeshi company has gone through the incorporation process.

d) Authorized Capital:
One must state the authorized capital in the Memorandum of Association and Articles of Association. It is the maximum amount of share capital that the company is authorized to issue (allocate) to shareholders. Part of the authorized capital can remain unissued. There is no minimum or maximum limit for authorized capital in Bangladesh.

e) Paid-up Capital:
Minimum paid-up capital for registration of a Bangladeshi company is Taka 1. Paid-up capital (also known as share capital) can be increased any time after the incorporation of the company.

f) Registered Address:
In order to register a company in Bangladesh, you must provide a local address as the registered address of the company. The registered address must be a physical address and cannot be a P.O. Box.
Regulatory framework for setting up business in Bangladesh

• • Considerations for Foreigners
    Foreigners wishing to open a Bangladesh company must take into consideration the following points:
    • They must open a bank account in the name of the proposed company with the name clearance obtained from the Registrar of Joint Stock Companies and Firms (RJSC&F) i.e. the registrar of companies and bring in the initial paid up capital. This is a mandatory for company incorporation in Bangladesh.
    • All company incorporation formalities can be handled without visiting Bangladesh.
    • All the directors and shareholders can be foreigners.
    • There is no requirement to obtain any special Bangladesh visa if you merely want to incorporate a private limited company but have no plans to relocate to Bangladesh. It is free to operate your company from overseas as well as free to visit Bangladesh on a business visa whenever required to attend to company matters on a short-term basis.
    • If you plan to relocate to Bangladesh to operate your company, you are required to obtain a work permit.

Advantages of establishing a Branch/Liaison Office in Bangladesh:
• Foreign capital invested in Bangladesh is generally allowed to be repatriated along with profit, if any, after the payment of taxes due on them, subject to       prior approval.
• Profits and dividends earned by branch in Bangladesh are repatriable after the payment of taxes due on them subject to the prior permission of                   Bangladesh Bank.
• Liaison office cannot generate income, so corporate tax is not applicable.
• Legal formalities to start the business are very simple in comparison with limited company.

• Branch/Liaison office formation is less expensive.

Disadvantages of establishing a Branch/Liaison Office in Bangladesh:
• Branch/Liaison cannot borrow money from local sources.
• They cannot run any business not mentioned in BIDA permission letter.
• A liaison office cannot remit of any kind of amount from Bangladesh except the amount brought in from abroad (remain in foreign currency).
• High capital requirement.

Advantages of establishing Local Company in Bangladesh:

• 100% foreign ownership is allowed. Foreign investors may also setup JV (joint venture) with local or foreign partners.
• Local company provides maximum flexibility for conducting business in Bangladesh.
• A limited company can obtain loan facility from both local and international sources.
• Local company can run any business as included in Memorandum of Association which can be changed as required.
• Minimum capital requirement.

Disadvantages of establishing Local Company in Bangladesh:
• Involvement of multiple authorities.
• Increased compliance