Registering a Private Limited Company in Bangladesh with Foreign Shareholders

Bangladesh has become an increasingly attractive destination for foreign investment, offering a strong legal and economic framework for business growth. Among the available business structures, the private limited company in Bangladesh remains the most popular and advantageous for both local and foreign entrepreneurs.

This guide by Kazi Law Chamber provides a detailed insight into the company registration process, including all legal, procedural, and regulatory requirements for private limited company registration in Bangladesh with foreign shareholders. It also covers essential details such as private limited company registration fees in Bangladesh and practical steps for registering or incorporating a company in Bangladesh of a Private Limited Company. Whether you are planning to register a private limited company or seeking expert advice on company registration in Bangladesh. This resource ensures you have the right guidance from start to finish.

Legal Structure and Shareholder Liability

A private limited company in Bangladesh is recognized as a separate legal entity, independent from its owners. This structure safeguards shareholders by limiting their liability to the amount of capital they have committed during the company registration process in Bangladesh. Although Bangladesh has introduced One Person Companies (OPCs), these are exclusively available to Bangladeshi nationals and are therefore not an option for foreign investors looking to register a private limited company in the country.

Regulatory Authority – RJSC

The Registrar of Joint Stock Companies and Firms (RJSC) is the key government authority in Bangladesh responsible for company registration, statutory filings, and maintaining official corporate records. All applications for company incorporation in Bangladesh, amendments, share transfers, and company closure, including winding-up and strike-off procedures, must be processed through the RJSC.

Company Name Clearance

The first step toward incorporation is obtaining name clearance from the RJSC. The proposed name of the company must be unique and not resemble any existing registered entities in Bangladesh. This approval is mandatory before preparing incorporation documents.

Directors – Eligibility and Requirements

A minimum of two directors is required to register a private limited company. Directors may be foreign or local individuals, and must:

• Be at least 18 years old
• Not be bankrupt
• Not having been convicted of a criminal offense
• Hold the qualification shares if required by the Articles of Association.

Corporate shareholders may nominate individuals to act as nominee directors.

Shareholding Structure

A private limited company must have a minimum of 2 shareholders, with a maximum of 50. Shareholders may be individuals or legal entities, and 100% foreign ownership is permitted in most sectors. After incorporation, shares may be freely transferred or newly issued, subject to compliance with the company’s Articles and RJSC regulations.

Authorized and Paid-Up Capital

The authorized capital refers to the maximum amount of share capital that the company is legally allowed to issue. This amount must be declared in the Memorandum of Association (MoA). There is no statutory minimum or maximum for authorized capital in Bangladesh.

The minimum paid-up capital required at the time of incorporation is BDT 1. However, foreign investors are typically required to remit a higher amount (often at least USD 50,000) to satisfy visa or regulatory conditions. Paid-up capital may be increased at any time after incorporation.

Government Fees

The government fees for company registration are calculated based on the declared authorized capital. These include:

• Registration fees;
• Stamp duty;
• Filing fees;
• Certified copy fees.

Registered Office Address

A company must provide a local physical address as its registered office. This address must be a residential or commercial property located within Bangladesh. P.O. Box addresses are not accepted under RJSC rules.

Memorandum and Articles of Association

Two essential legal documents govern the company’s objectives and internal governance:

• The Memorandum of Association (MoA) outlines the company’s primary business objectives. The object clause must be under 1,000 words and typically organized into seven clauses. If the company intends to change its line of business in the future, court permission is required to amend the MoA.
• The Articles of Association (AoA) regulate the company’s internal operations, including rules on director appointments, shareholder meetings, and profit distribution. In joint venture companies, the AoA should include any special terms agreed upon by the partners to avoid disputes and ensure smooth operation.

Bank Account Opening Requirements

For foreign shareholders, opening a local bank account in the name of the proposed company is a mandatory step before incorporation. This account must match the company name approved by RJSC.

However, foreign investors often face challenges due to stringent KYC requirements and unfamiliarity among banks regarding foreign ownership structures. Banks may ask for incorporation documents that are only available after registration, leading to procedural delays. To address this, the proposed directors must pass a resolution authorizing the opening and operation of the company’s bank account. 

Initial Capital Injection and Encashment Certificate

Once the bank account is opened, foreign shareholders must remit the initial paid-up capital into the company account. The receiving bank will issue an Encashment Certificate, which serves as proof of inward foreign remittance. This document must be submitted to RJSC during the incorporation process.

Remote Incorporation Options

Most steps in the company registration process can be completed remotely, and physical presence of directors or shareholders is generally not required, except potentially during the bank account opening phase, where banks may require in-person identity verification as part of their KYC protocols.

Local Shareholder or Director Requirement

There is no requirement to appoint a local shareholder or director for most sectors in Bangladesh. Foreigners can fully own and manage the company, subject to sector-specific restrictions that may apply in defence, telecommunication, or regulated services.

Visa and Work Permit Guidelines

Foreign investors are allowed to operate their company from overseas with a business visa, and are not required to obtain a work permit unless they plan to relocate to Bangladesh. In case of relocation, a work permit is mandatory, and an equity investment of at least USD 50,000 must be remitted into the company.

Required Documents for Incorporation

To register a private limited company with foreign shareholders in Bangladesh, specific documents and information must be provided to the Registrar of Joint Stock Companies and Firms (RJSC). These documents establish the legal identity and structure of the company, along with verifying shareholder details and confirming capital injection. The required documentation includes:

• Name Clearance Certificate: Issued by the RJSC after approval of the proposed company name.
• Memorandum of Association (MoA) and Articles of Association (AoA): The object clause of the MoA must remain within 1,000 words and 7 clauses as per RJSC guidelines.
• Shareholder and Director Information: This includes full name, address, parents' names, passport copies, and a recent photograph of each shareholder or director.
• Registered Address: A local physical address is mandatory and may be a residential, commercial, or industrial property. P.O. boxes are not permitted.
• Signed Form IX and Subscriber Page: Scanned copies must be uploaded to the RJSC portal.
• Encashment Certificate: Issued by the bank to confirm that the foreign remittance has been successfully received and converted into Bangladeshi Taka.

Please note that banks may request additional documentation for account opening purposes, depending on their internal compliance protocols.

Company Registration Procedure in Bangladesh

The company incorporation process in Bangladesh is partially digitized, requiring a combination of online submissions and offline bank payments and verifications. There are five sequential steps involved in the registration of a private limited company with foreign participation:

Step 1: Name Clearance

The first step in the incorporation process is obtaining name clearance from the RJSC. This ensures that the proposed company name is unique, non-objectionable, and not infringing on existing trademarks. Applicants must:

1. Visit and create an online account.
2. Submit the name clearance application.
3. Pay a Taka 200 fee to the designated bank using the system-generated payment slip;
4. Log in again to download the clearance certificate once the payment is verified.

To avoid delays, ensure the proposed name is:

• Not identical or confusingly similar to existing names;
• Free from obscenities or prohibited words;
• Not already reserved by another applicant.

Tip: The RJSC website may not function optimally on all browsers and may be temporarily inaccessible during national holidays. Alternative browsers or retrying at a later time may help.

The approved name remains valid for 60 days. If more time is needed, a new application must be filed to extend the reservation.

Step 2: Bank Account Opening and Capital Remittance

After name clearance, the next step is to open a corporate bank account in the name of the proposed company with a scheduled commercial bank in Bangladesh. The account must bear the same name as stated in the RJSC clearance.

Once the account is opened, foreign shareholders must remit the paid-up capital, i.e., the subscribed equity, from abroad into this account. This capital injection demonstrates financial commitment and must occur before the incorporation application is filed with the RJSC.

Upon successful remittance, the receiving bank will issue an Encashment Certificate, confirming that the foreign currency has been converted into Bangladeshi Taka and deposited into the company’s account. This certificate is compulsory for incorporation and will be cross-verified by the RJSC during the registration process.

Step 3: Online Submission and Document Upload

The next step is to upload the incorporation application to the RJSC online portal. The applicant must:

• Input all required company and shareholder information.
• Upload scanned copies of:
• Form IX (Consent of Director to Act);
• Subscriber Page (signed by all shareholders);
• Encashment Certificate;
• Generate a bank payment slip to pay the applicable government registration fees and stamp duties.

Once the fees are paid, RJSC will begin scrutinizing the application, verifying uploaded documents, and checking compliance with statutory requirements.

Step 4: Verification of Encashment Certificate

RJSC officials will then verify the Encashment Certificate by issuing a verification letter to the issuing bank. The bank must respond directly to RJSC, confirming the authenticity and accuracy of the certificate.

This is a critical compliance step, as RJSC will not proceed with issuing the incorporation documents unless the bank formally confirms receipt and encashment of the foreign remittance.

Step 5: Certificate of Incorporation

Upon successful verification, RJSC will issue the following digitally signed incorporation documents:

• Certificate of Incorporation;
• Memorandum of Association (MoA) and Articles of Association (AoA);
• Form XII (List of Directors).

These documents are emailed directly to the registered email address associated with the applicant's RJSC account. The incorporation date is the date mentioned on the Certificate of Incorporation, and from that point onward, the company is a legally recognized entity in Bangladesh.

Processing Delays and Nationality-Specific Reviews

In some rare instances, RJSC may delay processing if the directors or shareholders are of certain nationalities. This typically triggers a case-by-case review, and RJSC may request additional information or background checks. Such delays are uncommon but should be anticipated when dealing with restricted or high-risk jurisdictions.

Post-Registration Formalities

Upon successful incorporation of a private limited company in Bangladesh, the Registrar of Joint Stock Companies and Firms (RJSC) will issue essential documents via email. These documents include the Certificate of Incorporation, which confirms the legal establishment of the company along with its registration number, name, and date of incorporation. In addition, RJSC provides Form XII, which lists the company’s directors, and certified copies of the Memorandum and Articles of Association, which define the scope of business and internal governance of the company.

After registration, the company must prepare a number of operational instruments to commence its business formally. Share certificates must be issued to each shareholder, duly signed and sealed by an authorized director, signifying ownership of shares. The company must also establish and maintain several statutory registers, including the Register of Members, Register of Directors, and Register of Share Transfers, all of which are mandatory under the Companies Act, 1994. Additionally, a rubber stamp bearing the company’s name should be created, as it is often required for banking transactions, official correspondence, and signing legal documents.

Securing Business Premises

Before applying for any operational licenses, the company must secure a physical address for its operations in Bangladesh. This address must be a commercial or industrial space, either rented or owned in the name of the company. The lease deed or ownership document will serve as proof of address for license applications. It is important to ensure that the property is located in a commercially approved zone, as trade licenses cannot be issued for residential properties.

Application for Trade License and TIN

Once the company has an operational address. It must apply for a Trade License from the local City Corporation or Municipality under which the business premises fall. This license legally authorizes the company to carry on business within that jurisdiction. To apply, the company must submit its Certificate of Incorporation, MoA and AoA, Form XII, proof of office address, photographs of directors, and other documents as required by the local authority. The license is subject to annual renewal, with fees varying based on business size and category.

Simultaneously, the company must obtain a Tax Identification Number (TIN) from the National Board of Revenue (NBR). A TIN is essential for filing tax returns, opening a permanent bank account, and applying for VAT registration. The TIN application can be completed online through the NBR’s e-services portal. The process is usually straightforward, and certificates are issued within a few business days.

Other Licenses Based on Business Activities

Depending on the nature of the company’s business, additional licenses may be required. Companies engaged in import-export activities must obtain an Import Registration Certificate (IRC) and/or an Export Registration Certificate (ERC) from the Office of the Chief Controller of Imports and Exports (CCI&E). These certificates are mandatory for customs clearance and cross-border trade.

For companies supplying taxable goods or services, VAT registration is compulsory. Upon successful registration with NBR, a Business Identification Number (BIN) is issued. This BIN is used for filing VAT returns and maintaining compliance with VAT laws.

In certain cases, companies may need to obtain a Fire License from the Fire Service and Civil Defence Authority to ensure that the premises meet fire safety standards. Similarly, for manufacturing entities, an Environmental Clearance Certificate (ECC) is required from the Department of Environment to confirm that the business complies with environmental regulations.

Sector-specific businesses, such as those in telecommunications, pharmaceuticals, education, energy, and financial services, must secure regulatory approval from the relevant ministries or authorities before commencing operations. These include licenses from BTRC, Bangladesh Bank, the Ministry of Health, and others, depending on the nature of the company’s activities.

At Kazi Law Chamber, we assist clients not only in obtaining these licenses but also in preparing supporting documentation, liaising with relevant authorities, and ensuring full legal compliance in every step of their post-incorporation journey.