The Liaison office set-up process is more straightforward compared to setting up a branch office or limited Company in Bangladesh. This article explains how to set up a liaison office/ representative office in Bangladesh. In addition, this article will reflect the cost and the documents required for setting up a liaison office.
Liaison Office Set-Up Process in Bangladesh 2024
Setting up a Liaison Office in Bangladesh involves a straightforward process compared to establishing a branch office or limited company. This guide explains the steps, costs, and required documents for setting up a liaison or representative office. A liaison office, unlike a branch office, cannot conduct business or income-earning activities in Bangladesh. The process begins with obtaining permission from the Bangladesh Investment Development Authority (BIDA), followed by opening a bank account and reporting to the Bangladesh Bank. Finally, the office must be registered with the Registrar of Joint Stock Companies and Firms (RJSC).
Liaison office, Branch office & Subsidiary Company
The liaison office and Branch office are almost the same. However, a liaison office cannot conduct any business or any income-earning activities in Bangladesh. But a Branch Office with proper permission can do so. If you want to know about setting up a branch please click here. On the other hand, a limited company or subsidiary company can do full-fledged business in Bangladesh. If you are interested to know how to set up a limited company or subsidiary company, please visit here.
The step-by-step process for setting up a Liaison Office in Bangladesh
Step one: Permission from BIDA
To set up a Liaison Office, permission from the Bangladesh Investment Development Authority (BIDA) is required. Now, what must be done to get permission from BIDA? The foreign investor will have to apply the prescribed form along with the documents listed below. It is to be noted that the documents must be attested by the Bangladesh Embassy/High Commission of the country of origin or the Apex Chamber of Commerce of the country of origin.
Required Documents
The documents (4 copies of each) that must be submitted to BIDA are:
- Apply in a prescribed form, duly filled in, signed and sealed,
- Memorandum of Association and Articles of Association of the principal Company;
- Incorporation Certificate of the principal Company;
- Nationalities and names of the directors/promoters of the principal Company;
- A board resolution for opening a Liaison office in Bangladesh;
- Last financial year’s audited accounts of the principal company;
- Projected organogram of the office viewing the posts to be occupied by local personnel as well as expatriates;
- List of activities on the Company letterhead of the proposed office.
Cost for Permission
To get permission from BIDA to set up a Liaison Office a fee of BDT 25,000 (twenty-five thousand take only) will have to be deposited. The deposit can be made to any branch of Bangladesh Bank or Sonali Bank.
Time
The average time needed for submission and getting approval is one month.
The period of Validity of the License
The License/ permission of BIDA for a Liaison Office will be valid for 3 (three) years. You have to apply for renewal or extension at least 2 (two) months before the expiry of the current term. Again the renewal will be done by applying to BIDA.
Step Two: Bank Account Opening
After getting approval from BIDA, a bank account must be opened in any bank in Bangladesh. The bank account is required at this stage because as an inward remittance an amount of foreign exchange equivalent to US$ 50,000 (fifty thousand dollars) or more must be brought into Bangladesh. Such must be done within 2 (2) months from the date of issuance of the BIDA permission.
Step three: Bangladesh Bank Approval
Lately, the Bangladesh Parliament has amended the Foreign Exchange Regulations Act 1947. Now the requirement of 18B Approval from Bangladesh Bank has been removed. Under the amendment, after receiving approval from BIDA, the Liaison office needs to report to the Central Bank of Bangladesh. Such a report should be made within 30 (thirty) days of the approval.
Step four: RJSC Registration
Lastly, after obtaining approval from both Bangladesh Bank and BIDA, the last step is to register the Liaison Office with the RJSC.
Documents to be submitted to RJSC
- BIDA and Bangladesh Bank approval letter
- In addition, Certified copies of the Memorandum of Association and Articles of Association
- Full address of the registered or principal office of the company
- List of the directors and secretary (if any) of the company
- The name and address of a Bangladeshi who may represent the company in processing and accepting documents
- The full address of the office of the company in Bangladesh
Once this is done, the formation of a Liaison Office in Bangladesh will be completed.
Legal Advice On Company Matters At CLP
The Barristers, Advocates, and lawyers at CLP in Gulshan, Dhaka, Bangladesh are highly experienced at dealing with company matters along the Liaison office set-up process in Bangladesh. For queries or legal assistance, please reach us at:
E-mail:info@counselslaw.com
Phone:+8801700920980 (WhatsApp). +8801947470606. Address: House 39, Road 126 (3rd Floor) Islam Mansion, Gulshan 1, Dhaka.
FAQ
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What is a liaison office?
- A liaison office is a representative office for a foreign company in Bangladesh that cannot conduct business or earn income.
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How is a liaison office different from a branch office?
- A branch office can conduct business and earn income in Bangladesh with proper permissions, while a liaison office cannot.
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What are the main steps to set up a liaison office?
- Obtain permission from BIDA, open a bank account, report to the Bangladesh Bank, and register with RJSC.
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What documents are needed for BIDA approval?
- Application form, company Memorandum and Articles of Association, incorporation certificate, directors’ details, board resolution, audited accounts, organogram, and activity list.
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How much does BIDA permission cost?
- BDT 25,000.
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How long does BIDA approval take?
- Approximately one month.
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What is the validity period of BIDA permission?
- Three years, with renewal required two months before expiry.
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What are the banking requirements after BIDA approval?
- Open a bank account and bring in at least US$ 50,000 within two months.
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Is Bangladesh Bank approval required?
- No, but the liaison office must report to the Bangladesh Bank within 30 days of BIDA approval.
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Where can I get legal help for setting up a liaison office?
- Contact CLP in Gulshan, Dhaka at info@counselslaw.com or +8801700920980.
