How to Register a Liaison Office or Branch Office in Bangladesh
To foreign businesses, Bangladesh’s rapid economic growth, vast emerging market, and favourable location make the country’s market increasingly appealing. Many foreign companies wanting to enter Bangladesh often choose to set up a Liaison Office or a Branch Office as a more convenient alternative to setting up a subsidiary.
If you intend to set up business operations in Bangladesh, you should begin by understanding the registration process, as it is a crucial step. This article explains the steps, requirements, and procedures for registering a Liaison Office or Branch Office in Bangladesh.
What is a Liaison Office?
A Liaison Office provides a virtual representation of the sponsoring company, covering partner, client, or administrative communication in Bangladesh.
Permitted Actions:
- Undertaking commercial activities with prior approval.
- Rendering services as per the approval granted by the Bangladesh Investment Development Authority (BIDA).
- Generating revenue from permitted activities
Note: Liaison Offices are prohibited from carrying out business and generating local income. They are expected to operate on the cash sent to them by their parents' offshore company.
What is a Branch Office?
A branch office represents a foreign parent company and possesses a wider range of functions than a Liaison Office.
Branch offices get the following activities permitted:
- Commercial activities with prior approval;
- Revenue-generating services within the scope of the approved Services by Bangladesh Investment Development Authority (BIDA);
Note that a branch office is not a legal entity and, therefore, functions under the parent company’s title and liability.
The Bangladesh Investment Development Authority (BIDA)
BIDA is the key authority that permits the operation of Liaison Offices and Branch Offices within the territories of Bangladesh. Without approval and permits from BIDA, the offices would be operating illegally.
How to register a branch office or a Liaison Office in Bangladesh
The first step is to submit the application prepared by BIDA in the required format. The document needs to be validated by a representative of the foreign parent company with signing authority, and as such.
Documents required:
- Application form (with details of the parent company and proposed office).
- Memorandum & Articles of Association (MOA & AOA) of the parent company.
- Certificate of Incorporation of the parent company.
- Board Resolution authorising the establishment of the office in Bangladesh.
- Audited financial statements of the parent company (last 2–3 years).
- Company profile and details of business activities.
- Passport copies of directors and authorised representatives.
- Proposed office address in Bangladesh.
All documents need to be notarised and verified by the Bangladesh embassy/high commission in the parent company’s country.
Step 2. Payment of Fees
Applicants will need to deposit in the bank a specific government charge (generally between three hundred and five hundred US dollars for the type of office) and pay the designated bank in Bangladesh. A copy of the deposit slip - referred to as a challan - is then furnished to BIDA.
Step 3. BIDA’s Assessment
BIDA evaluates the application and the associated documents in addition to other compliance requirements. If the requirements are all satisfied, BIDA will issue the approval letter, which is valid for three years and is renewable, subject to application.
Step 4. Compliance Post Approval
After approval has been obtained, the office should be registered with the following organisations/units at a minimum in the Bangladesh office.
(i) Bangladesh Bank (for remittance of funds).
(ii) City Corporation (for a Trade License).
(iii) National Board of Revenue (NBR) for a Taxpayer Identification Number (TIN) and, if required,
Step 5. Bangladesh Branch Opening
Formal commencement of operations in Bangladesh can be done after the completion of all the processes referred to in the rest of the documents.
Timeframe for Registration
The speed of approvals and accuracy in documents will determine how the rest of the registration will be done, generally taking between 6 and 8 weeks.
Renewal of Approval
Liaison and Branch Offices extensions are often approved for a period of 3 years or less. Before expiration, the office must submit a renewal request along with the prescribed documents and the fee to BIDA.
Taxation Policies
Liaison Office: Since it is unable to produce local income, it is not subject to corporate tax. Nevertheless, it is required to submit tax returns each year.
Branch Office: Compared to the local firms, it is subject to corporate tax for the income that is earned within the borders of Bangladesh.
Benefits of establishing a Liaison or Branch Office in Bangladesh
- ✅ Improved and easier contact with local stakeholders.
- ✅ Maintaining a high international growth strategy.
- ✅ Entry to a more strategically situated investment market.
- ✅ Testing market potential at a lower investment.
Conclusion
It is much easier, and often, more advantageous for foreign businesses wanting to establish a foothold in South Asia and build strategic business relationships to register Branch or Liaison Offices in Bangladesh. Although various complex steps must be followed and many rules and regulations must be adhered to, it is possible to make the process much quicker and simpler, with the help of a professional.
If you are seeking to expand business to Bangladesh, get in touch with a specialised business and corporate law firm the justice corner for more efficient compliance and operational regulations.