Bangladesh is a favorable place to start a business. It offers great potential for any business with its gigantic population and people’s extensive demand for various products and services.
If you want to take advantage of this potential, earn a big revenue, and contribute to the economy of the country, start a business that is suitable for you. But how to start a business in Bangladesh?
There are many formalities and requirements to start and set up a business in Bangladesh. Among them, legal affairs are the most important thing to care about. You have to carefully follow and fulfill the associated laws and legal requirements first.
Check these 10 legal tips below to ensure a smooth start of your business in Bangladesh:
You have to select the correct type of legal entity or business structure as it is related to liability, taxes, and governance. In Bangladesh, you can choose from options like sole proprietorship, partnership, private limited company, etc.
Here, a sole proprietorship is the easiest to form but it doesn’t offer personal liability protection. A private limited company provides limited liability and is ideal for growing businesses. The last one is popular due to the separation of personal and business assets, and better legal protection.
Your company registration in Bangladesh with the Registrar of Joint Stock Companies and Firms (RJSC) is an obligatory legal requirement. Remember, any business in Bangladesh must register with RJSC to legally operate in Bangladesh.
File essential documents like the Memorandum of Association (MoA), Articles of Association (AoA), etc. The RJSC registration will ensure your company’s legal recognition and protect your business name from being used by others.
You have to obtain a trade license. It is also a compulsory document issued by the local authorities (City Corporation or Union Parishad) that allows your business to legally operate in Bangladesh.
Apply with proof of business ownership, identification, and other documents such as a rental agreement or ownership deed for the business premises to obtain it. You have to renew this license annually, and a failure to renew it timely will result in fines and legal action.
You have to obtain a Taxpayer Identification Number (TIN) certificate from the National Board of Revenue (NBR). This unique number is essential for paying taxes. It is also a legal requirement for company operations, including opening a corporate bank account, applying for loans, etc.
You also have to file tax returns annually using this number and a failure to comply with tax regulations can lead to penalties.
If your business generates annual revenue over BDT 30 lakh, you must register for Value Added Tax (VAT) with the NBR. VAT registration is compulsory for your business if you sell taxable goods or services.
You have to submit monthly VAT returns, collect VAT from customers, and maintain proper documentation. Non-compliance with VAT regulations can result in fines, legal penalties, or even your business closure.
Secure your intellectual property rights with trademarks, patents, and copyrights. Register your business name, logo, inventions, or works from the Department of Patents, Designs, and Trademarks (DPDT).
If you register your business name, logo, inventions, or works, no one else can copy or use these unique business assets. Also, you can take action against an offender.
Comply with the Bangladesh Labor Act, 2006 if your business has employees. This act covers contracts, wages, working hours, leave policies, health and safety regulations, and termination conditions.
Make sure to offer proper employment contracts to all employees outlining their roles, responsibilities, and remuneration. Don’t fail to comply with labor laws to avoid legal disputes or penalties.
If you want to start a manufacturing industry that may affect the environment, obtain an Environmental Clearance Certificate (ECC) from the Department of Environment (DoE). This clearance will certify that your business activities won’t harm the environment and comply with environmental laws.
If you fail to comply with environmental laws it can lead to fines, legal penalties, or shutdowns. So, obtain an Environmental Clearance Certificate and renew it timely.
Ensure that all your business contracts, including partnership contracts, employee agreements, and supplier contracts, are nicely drafted to avoid future misunderstandings, conflicts, or legal disputes.
Drafted all contracts with professional assistance to ensure compliance with local laws, protect your business, and so on.
If your business involves foreign investment or international trade, you should comply with the Foreign Exchange Regulation Act, 1947, and Bangladesh Investment Development Authority (BIDA) guidelines.
These regulations govern foreign ownership, capital repatriation, joint ventures, and other aspects of foreign involvement in business.
If you can successfully start a business in Bangladesh it can be rewarding for you. Follow the above-mentioned legal tips to ensure legal compliance completely and start your business smoothly in Bangladesh with a solid foundation.
It will be wise to get assistance from a professional law firm. Find the best law firm in Bangladesh to ensure that all legal requirements are fulfilled properly.
