Company Formation in Bangladesh

Is Business Company Formation Service Important in Bangladesh?

There are numerous additional ways to launch a business in Bangladesh, but the most popular and practical ones are either registering a branch office (for foreign entities only) or forming a private limited company (for both domestic and foreign businesses). Below is a list of the steps involved in registering a private limited business.

Private Limited Companies: What Are They?

A private company is one whose articles of association restrict the transfer of shares, cap the number of members at fifty, and forbid inviting the public to subscribe for the company’s shares or debentures, according to section 2(q) of the Companies Act of 1994.

These traits of a Private Limited Company are listed in the Companies Act of 1994:

1. The ability to transfer shares is restricted [s. 2(q)]

2. The bare minimum is two (two) members [section 5]

3. The maximum number of members, excluding those who are employed by the Company, is 50 (fifty) [s. 2(q)]

4. It must have two directors or more [section 90 (2)]

5. It is against the law to invite the public to subscribe for the Company’s shares or debentures [s. 2(q)]

6. It is not required to comply with the statutory meeting or report requirements [s. 83(12)].

7. A Private Company can start doing business as soon as it registers with the RJSC, subject to securing other licenses listed below in the post-registration portion of this Report.

Is It Possible to Company Formation in Bangladesh?

The Companies Act of 1994 deals with the statutory requirements of Company formation rather than provide a step-by-step guide on how to set up a company. It is handled by the RJSC, the competent body, which has full instructions on its official website about the process of setting up a company, from name clearance to incorporation.

The following stages are listed in detail for registering a private company formation by shares in Bangladesh:-

STEP 1: Obtain a Name Clarification Letter for the Formation of a Private Limited Company in Bangladesh.

Application for name clearance to RJSC with the supporting documentation listed below

  1. An application form
  2. Name proposal

STEP 2: DOCUMENTATION | Forming a Bangladeshi Private Limited Company

  1. The creation of the Memorandum of Articles, Articles of Association, and other necessary documents, as well as a resolution by the Board of Directors to establish a new company in Bangladesh;
  2. acquiring and completing the required forms to register the company with RJSC:
  3. Form I: Statement of the Company’s Registration;
  4. Notice of Registered Office Situation, Form VI;
  5. Form X: A list of individuals who have consented to serve as directors; Form IX: A director’s authorization to act;
  6. Directors, manager, and managing agent information can be found on Form XII.

STEP 3: BANK ACCOUNT FORMALITIES | Establishing a Private Limited Company in Bangladesh

  1. Directors must create a temporary bank account with any listed bank in the name of the proposed company, with the understanding that the account would be regularized after the company has been properly registered with Company House. Directors must also contribute capital to the bank account.
  2. a bank’s encashment certificate stating that the required capital contribution amount has been properly transferred to the proposed organization’s temporary bank account.

STEP 4: DOCUMENT SUBMITTAL TO RJSC | Bangladeshi Private Limited Company Incorporation

Application to RJSC with the legally binding documents mentioned above.

Case in point  

The Companies Act of 1994 doesn’t go into great depth about the idea of “investment in kind.” In actuality, nevertheless, a shareholder or prospective shareholder in a company with a Bangladeshi incorporation makes a large investment by purchasing machinery and other equipment for the company. Although CA 1994 does not apply, the following measures are taken when making such an investment in kind:

  1. The involved business must have a valid RJSC registration.
  2. Investors who are interested must complete the necessary Form (s)
  3. There must be a vendor’s agreement between the interested investors.
  4. The completed Form(s) and Vendor Agreement must be sent to RJSC.
  5. Following that, the RJSC will record the investment and check to see if the correct procedure was followed.

The 5 Benefits of a Limited Company

  1. If it comes inside an industry that is exempt from taxes.
  2. Depending on the type of firm, foreign technical personnel may be tax-free for the first three years.
  3. Possess greater flexibility and a variety of commercial capacities
  4. Option to grant shares and equity to the new shareholder under various conditions.
  5. The Shareholder’s liability is only for their paid-up capital contribution.

Negative aspects of a Limited Company

  1. Sometimes it costs a lot for a small business corporation to prepare an annual audit report.
  2. Unlined Sole Proprietorship or Partnership Firm Additional Compliance Requirement
  3. Dividend tax is also included in the tax calculation under the company’s head.

The Taxation of Businesses for Company Formation

If a business doesn’t make a profit after deducting its expenses from its revenue, it is not required to pay corporate tax. These are the conditions that apply to this:

  1. Annually file an income tax return (often due on January 15 of the year following the financial year-end, usually (July-June)
  2. Be sure to use checks to deposit paid-up capital into the business’s bank account.

Make sure the debit-credit balances in your bank statements are appropriately stated in item 

iii. Minimum tax is typically due at a rate of.06 percent of gross revenue.

Corporate Tax Rate in Bangladesh

Publicly traded companies (listed companies on stock market)


Non-publicly traded companies (private companies limited by shares)


Publicly traded banks, insurance, and financial institutions other than merchant banks


Non-publicly traded bank, insurance, and financial institutions


Publicly Traded mobile network operators


Non-publicly Traded mobile network operators


Publicly Traded cigarette manufacturers


Non-publicly Traded cigarette manufacturers


Additionally, depending on the type of business and region, there are various tax exemption possibilities for corporations.

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