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1.1.1. Main Forms of Doing Business

Bangladesh provides several business forms for investors, of which the main forms include:

  • Company (Limited Liability or Public Limited)
  • Partnership
  • Foreign Business (Branch, Representative Office or Subsidiary)

Limited Liability Company:

A Company can be formed either as a limited liability company (LLC) or a public limited liability company (PLC).

The key aspects of an LLC include:

  • Can be formed by a minimum of two shareholders and two directors
  • Can have maximum of 50 shareholders
  • The shareholders and directors can either be individuals or legal entities. They can be of any nationality and need not be resident in Bangladesh. A director and shareholder can be the same or a different person. 100% local or foreign shareholding is allowed.
  • Minimum paid up capital requirement is USD 1
  • Liability of the shareholders is limited to their contribution
  • Company must submit annual audited accounts to Bangladeshi Income Tax authority

The key aspects of a PLC include:

  • Can be formed by a minimum of seven shareholders and three directors
  • The shareholders and directors can be individuals or legal entities. They can be of any nationality and need not be resident in Bangladesh. A director and shareholder can be the same or a different person. 100% local or foreign shareholding is allowed.
  • Shares can be issued to the public
  • Minimum capital requirement is USD 1
  • Liability of the shareholders is limited to their contribution
  • Its shares can be publicly traded on the Dhaka Stock Exchange
  • Company must undergo annual accounts auditing process

Partnership:

Under the Bangladeshi law, a partnership must consist of minimum two and maximum 20 partners. The concept of Limited Partnership or Limited Liability Partnership does not exist in Bangladesh. Partnership agreement is required for obtaining a trade license and opening of a bank account. The liability of a partnership is borne by the partners.

Foreign Business:

Foreign business can conduct their operations in Bangladesh through the constitution of a Branch office or a Representative Office or a Subsidiary Company.

A subsidiary company is a LLC or PLC incorporated in Bangladesh with the parent company as its shareholder.

A Representative office is not regarded as a separate legal entity from its parent. It is only allowed to carry out market research and promote the activity of its foreign parent and is not allowed to carry out any independent commercial or production activity in Bangladesh.

Similar to the Representative office, a Branch office also does not have a legal personality separate from its principal. However, a branch office can conduct commercial activities in Bangladesh.