Learn how to complete private company formation in Bangladesh. Discover the process, requirements, costs, and legal steps to register your business successfully.
Introduction
Starting a business in Bangladesh is an exciting opportunity, especially with its rapidly growing economy and favorable investment environment. Private company formation in Bangladesh is one of the most popular business structures chosen by local and foreign investors due to its flexibility, limited liability, and ease of management.
In this guide, we’ll cover everything you need to know about forming a private company — from registration steps to legal requirements — to help you get started quickly and efficiently.
Why Choose a Private Limited Company in Bangladesh
A private limited company is the most preferred business entity in Bangladesh because it provides limited liability protection to its shareholders and is suitable for small to medium-sized enterprises.
Key Advantages
Limited Liability: Owners are only responsible for their share in the company.
Separate Legal Entity: The company operates independently from its owners.
Ease of Ownership Transfer: Shares can be transferred easily.
Greater Credibility: A registered private company is more trustworthy to clients and investors.
Foreign Investment Friendly: Allows foreign investors to own up to 100% shares.
Legal Framework and Governing Authority
The Registrar of Joint Stock Companies and Firms (RJSC) is the main regulatory authority overseeing company registration in Bangladesh. The process is governed by the Companies Act, 1994, which outlines all rules and compliance requirements for private companies.
Step-by-Step Process of Private Company Formation in Bangladesh
Step 1: Name Clearance
The first step is to obtain a name clearance certificate from RJSC. This ensures your desired company name is available and not similar to any existing entity.
Apply online through the RJSC portal.
Validity: 180 days.
Step 2: Drafting of Documents
After receiving name clearance, you must prepare essential documents:
Memorandum of Association (MoA) – Defines the company’s objectives.
Articles of Association (AoA) – Outlines company operations and rules.
Form IX and XII – Provide details about directors, shareholders, and registered office.
Step 3: Bank Account and Capital Deposit
If you have foreign shareholders, open a temporary bank account and bring in the initial paid-up capital through an inward remittance. Obtain an encashment certificate as proof.
Step 4: Submission to RJSC
Submit all required documents, including the name clearance, MoA, AoA, and Forms IX/XII to the RJSC. Pay the registration fees online.
Step 5: Certificate of Incorporation
Upon approval, RJSC issues a Certificate of Incorporation, confirming your company’s legal existence.
Step 6: Post-Incorporation Formalities
After incorporation, the following tasks must be completed:
Apply for a Tax Identification Number (TIN).
Obtain a Trade License from the EOR solutions Bangladesh local authority.
Register for VAT with the National Board of Revenue (NBR).
Open a corporate bank account for business transactions.
Eligibility and Requirements
Requirement Details
Minimum Shareholders 2
Maximum Shareholders 50
Minimum Directors 2
Local Office Address Mandatory
Authorized Capital No minimum, usually BDT 1,000,000
Paid-up Capital Can start from BDT 1
Estimated Cost and Timeline
Government Fees: Around BDT 5,000–10,000 depending on capital.
Time Required: Usually 10–15 working days if all documents are complete.
Compliance After Formation
Once your company is registered, compliance doesn’t stop there. You’ll need to:
Maintain statutory records and minutes.
File annual returns with RJSC.
Renew your trade license each year.
Submit audit reports annually.
Failure to comply can result in penalties or suspension by the RJSC.
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Frequently Asked Questions (FAQs)
1. How long does it take to form a private company in Bangladesh?
Typically, it takes 10–15 business days to complete the registration, depending on the accuracy of submitted documents.
2. Can foreigners own a private company in Bangladesh?
Yes, foreign investors can own up to 100% shares of a private limited company, subject to sectoral regulations.
3. What are the annual compliance requirements?
Companies must file annual returns, renew their trade license, and submit audit reports to remain compliant.
4. Is there any minimum capital requirement?
There’s no strict minimum; however, a practical starting point is BDT 1,000,000 authorized capital.
5. Can I register my company online?
Yes, the RJSC online portal allows submission of applications and payments electronically for convenience.
Conclusion
Forming a private limited company in Bangladesh is straightforward with the right guidance and preparation. By understanding the registration process, legal framework, and compliance needs, entrepreneurs can establish a strong foundation for their business success.
Whether you’re a local entrepreneur or a foreign investor, Bangladesh offers immense opportunities to grow your business through efficient private company formation procedures.