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Foreign Direct Investment (FDI) & Business Setup in Bangladesh
Bangladesh has emerged as one of South Asia’s fastest-growing investment destinations, offering a large consumer market, competitive labor costs, strategic geographic location, and investor-friendly policies. Foreign investors are permitted to establish wholly foreign-owned companies, joint ventures, subsidiaries, branch offices, liaison offices, and representative offices in most sectors of the economy, subject to applicable laws and sector-specific regulations.
At The Legal Era, we assist foreign investors, multinational corporations, startups, and overseas entrepreneurs in establishing and operating businesses in Bangladesh with comprehensive legal and regulatory support.
Why Invest in 🇧🇩 Bangladesh
Bangladesh offers significant opportunities for foreign investors across manufacturing, technology, infrastructure, energy, pharmaceuticals, textiles, fintech, logistics, and consumer sectors. The country provides:
✔️Competitive operational and labor costs
✔️Strategic access to South Asian and ASEAN markets
✔️Growing middle-class consumer base
✔️ Investment incentives and tax benefits in selected sectors
✔️100% foreign ownership in many industries
✔️Repatriation facilities for capital, profits, and dividends subject to regulatory compliance
✔️Expanding infrastructure and special economic zones
The Government of Bangladesh actively encourages both domestic and foreign investment through policy reforms and investment facilitation initiatives.
Business Structures Available for Foreign Investors
Foreign investors may establish businesses in Bangladesh through various legal structures, including:
Private Limited Company
The most common business structure in Bangladesh. It provides limited liability protection and operational flexibility for both local and foreign shareholders.
Public Limited Company
Suitable for large-scale investments and businesses intending to raise capital from the public or seek stock exchange listing.
Branch Office
Foreign companies may establish branch offices in Bangladesh for conducting approved commercial activities, subject to approval from the Bangladesh Investment Development Authority (BIDA).
Liaison/Representative Office
These offices are generally restricted to non-commercial and promotional activities such as market research, coordination, and communication with local stakeholders.
Joint Venture
Foreign investors may collaborate with local partners for strategic, regulatory, or commercial advantages.
Role of RJSC in Company Incorporation
The Registrar of Joint Stock Companies and Firms (RJSC) is the principal corporate regulatory authority responsible for company registration and corporate record management in Bangladesh under the Companies Act, 1994.
RJSC performs several essential functions, including:
✅Company incorporation and registration
✅Issuance of name clearance certificates
✅Registration of Memorandum and Articles of Association
✅Maintenance of statutory corporate records
✅Registration of share transfers, new share allocation and amendments
✅Filing and preservation of annual returns and corporate documents
✅Registration of partnerships, societies, and trade organizations
Any company intending to operate in Bangladesh must generally be incorporated with RJSC before commencing operations. The incorporation process usually involves:
1. Obtaining name clearance from RJSC
2. Drafting Memorandum and Articles of Association
3. Opening a temporary bank account for foreign capital remittance
4. Filing incorporation documents with RJSC
5. Obtaining Certificate of Incorporation
Role of BIDA in Foreign Investment Facilitation
The Bangladesh Investment Development Authority (BIDA) is the apex investment promotion agency of Bangladesh operating under the Prime Minister’s Office. BIDA is responsible for promoting, facilitating, and regulating private investment in Bangladesh. BIDA plays a central role in assisting foreign investors before, during, and after investment establishment.
Major Functions of BIDA
✔️Investment promotion and facilitation
✔️Registration and approval of industrial projects
✔️Approval of branch, liaison, and representative offices
✔️Visa recommendations and work permits for foreign nationals
✔️Approval of foreign borrowing and supplier credit
✔️Approval of royalty, technical know-how, and technical assistance agreements
✔️Facilitation of utility connections and regulatory approvals
✔️Policy advocacy and investment support services
✔️Aftercare services for existing investors
BIDA also operates a One Stop Service (OSS) platform intended to simplify and streamline regulatory approvals for investors.
Typical Business Setup Process in Bangladesh
The business establishment process in Bangladesh may vary depending on the nature of the investment and industry sector. However, a standard incorporation and operational setup generally includes:
Step 1: Preliminary Structuring & Legal Consultation
➡️ Selection of suitable business structure
➡️ Shareholding and investment planning
➡️ Regulatory assessment
➡️ Due diligence and compliance review
Step 2: Name Clearance from RJSC
Application is submitted to RJSC to reserve and approve the proposed company name.
Step 3: Drafting Constitutional Documents
Memorandum of Association (MOA)
Articles of Association (AOA)
Shareholding structure and governance documents
Various Forms
Step 4: Foreign Capital Remittance
Foreign investors remit initial capital through authorized banking channels and obtain encashment documentation where applicable.
Step 5: Company Incorporation with RJSC
Submission of incorporation documents to RJSC for issuance of:
Certificate of Incorporation
Certified constitutional documents
Step 6: BIDA Registration & Approvals
Depending on the nature of the investment, applications may be made to BIDA for:
✔️Industrial registration
✔️Branch office approval
✔️Work permits
✔️Foreign loan approvals
✔️Technical service agreements
Step 7: Post-Incorporation Compliance
Obtaining:
✔️Trade License
✔️Tax Identification Number (TIN)
✔️ VAT Registration
✔️Import Registration Certificate (IRC)
✔️Export Registration Certificate (ERC)
✔️Environmental clearances (if applicable)
✔️Sector-specific licenses and permits
Step 8: Operational & Employment Compliance
✔️Employment agreements
✔️ Regulatory filings
✔️Foreign employee permissions
✔️Corporate governance compliance
Legal & Regulatory Assistance We Provide
The Legal Era provides comprehensive legal assistance for local and foreign investors in relation to:
* Foreign direct investment structuring
* Company incorporation and registration
* Joint venture agreements
* Coordinating and due diligence on renting land for Factory set up
* Shareholder agreements
* Branch and liaison office setup
* BIDA approvals and regulatory compliance
* Work permits and immigration support
* Commercial licensing
* Foreign investment compliance
* Corporate governance and secretarial services
* Mergers, acquisitions, and restructuring
* Ongoing legal advisory and compliance management
We work closely with entrepreneurs, multinational corporations, overseas investors, and international businesses to ensure smooth market entry and legally compliant operations in Bangladesh.
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