What You Need to Know Before Setting Up Your Liaison Office
Foreign firms can build a liaison office in Bangladesh to help facilitate and promote their parent company’s business activity, as well as to serve as a communication link between the foreign parent company and Indian companies.
Definition Of The Liaison Office And Its Working Process
Liaison offices that are unable to engage in commercial, industrial activity rely on private, inward remittances from their overseas parent firm to stay afloat. The following activities are permissible for a liaison office setup:
A foreign company’s Liaison Office can only perform a few tasks, such as maintaining liaison/ coordination between principal and local agents, personal contracts, and other electronic media, and compiling services.
Key Facts About Liaison Office:
1. Through correspondences, personal contracts, and also other electronic means, maintain liaison/coordination between primary and local agents, distributors/exporters’ institutions
2. As specified in the approval letter, collect, assemble, analyze, and also disseminate business information pertaining to its sphere of activities.
3. In Bangladesh, a Liaison/Representative office will have no local source of income. The parent firm will be responsible for all setup and also operations expenditures, including compensation for expatriates and local workers of the Liaison or Representative office.
4. Remittances from Bangladesh sources will not be allow, except for the amount brought in from abroad (the unspent portion).
A Step-by-Step Guide for Setting Up a Liaison Office in Bangladesh
Step 1: Get permission from BIDA
The Bangladesh Investment Development Authority (BIDA) must approve the opening of a Liaison Office. What steps must be taken now to obtain BIDA’s approval?
Required Documents:
The following documents must be provided to BIDA in four copies:
1. Apply using the appropriate form, which must be completely filled out, signed, and also seale.
2. primary Company’s Memorandum of Association and also Articles of Association;
3. Certificate of Incorporation of the Principal Company;
4. Nationalities and names of the key Company’s directors/promoters;
5. A board resolution authorizing the establishment of a Liaison Office in Bangladesh;
6. The primary company’s audited accounting from the previous financial year;
On the planned office’s company letterhead, also make a list of activities.
There Is A Cost To Permission
A charge of BDT 25,000 (twenty-five thousand take only) must be paid to BIDA in order to obtain approval to open a Liaison Office. Deposits can be made at any Bangladesh Bank or Sonali Bank branch.
Important: It typically takes 1 month for the application to be approve.
Time Of Validity Of The License
The license/permission granted by BIDA for a branch Office will be valid for 3 (three) years. You must apply for renewal or extension at least 2 (two) months prior to the current term’s expiration. The renewal will be done through BIDA once more.
Step 2: Open A Bank Account
You must open a bank account in a Bangladeshi bank after receiving permission from BIDA.
Step 3: Approval By The Bangladesh Bank
Following the modification, the branch office must report to the Central Bank of Bangladesh after receiving approval from BIDA. Such a report must be submit within 30 days of approval.
Important: Bangladesh recently amended the Foreign Exchange Regulations Act 1947.
Step 4: RJSC Registration
After the branch office has been clear by both Bangladesh Bank and BIDA, it must be register with RJSC.
RJSC Documents Must Be Submit:
1. Letters of approval from BIDA and the Bangladesh Bank
2. Certified copies of the Memorandum and Articles of Association are also require.
3. Full address of the company’s registered or primary office
4. Along with a list of directors and also secretaries (if applicable).
5. The complete address of the company’s Bangladesh office
The establishment of a branch Office in Bangladesh will be finish once this is accomplished.
The Final Word
In comparison to establishing a branch office or a limited company in Bangladesh, setting up a liaison office is easier and more straightforward. This article described how to establish a liaison/representative office in Bangladesh. In addition, this post covered the cost of establishing a liaison office as well as the documentation required.