Wiki Investment

Bangladesh

4 Chapter Corporate Laws

4.1 Introduction
- A. OVERVIEW
  
  According to the World Bank Group, Bangladesh has maintained an impressive track record on growth and development. The economy has grown at nearly 6% per year, and human development also increased. Poverty dropped by nearly one-third, life expectancy, literacy, and per capita food intake increased. More than 15 million Bangladeshis have moved out of poverty since 1992.
- B. CHALLENGES
  
  i. Inconsistency between Companies Act, BAS and SEC Requirements:
  
  The Companies Act, 1994 provides, among others, provisions regarding preparation and publication of financial statements, disclosures and auditing. However, in many cases, the Act lacks clarity with regard to statutory requirements on disclosures in the financial statements of listed companies. Moreover some accounting requirements mentioned in the Act are incompatible with International Accounting Standards (IAS) which is required by the SEC. For example, contrary to IAS, the Companies Act requires capitalization of gains and losses arising from changes in foreign exchange rates under all circumstances. Another inconsistency is that the Companies Act does not require a consolidated balance sheet for a holding company but it is required under the IAS. Inconsistencies between IAS and the Companies Act need to be eliminated.
  
  ii. Limited or No Disclosure regarding Related Party Transactions:
  
  Related party transactions are not disclosed properly in the financial statements. It is an impediment towards achieving good CG in Bangladesh.
- C. CORPORATE LAWS
  
  A.   COMPANIES ACT OF 1994
  
  i.              TYPES OF ENTITIES
  
  a. a.Company
  
  According to Sec. 2 (1) (c) the Companies Act, 1994-“Company means a company formed and registered under this Act or an existing company”.
  
  Thus, a company is an association of persons formed under the Companies Act, 1994 with a view to achieving some common objectives. Though a company is regarded a legal person, it possesses similar rights and owes similar obligations like a natural person.
  
  b. b.Partnership
  
  Section 4 of the Partnership Act, 1932 defines the tern ‘partnership’ in the following words:
  
  “Partnership” is the relation between persons who have agreed to share the profits of a business carried on by all or any of them acting for all.”
  
  In short, a partnership is the relation between two or more persons who carry on a business enterprise in which the profits and losses are shared proportionately.
  
  The maximum number of members that can exist in partnership is 10 in case of a firm carrying on banking business and 20 in case of any other business. This restriction is placed by the Companies Act, 1994 (Sec. 4) and not the Partnership Act, 1932.
  
  c. c.Joint Venture Company
  
  It refers to an association of two or more individuals or companies engaged in a solitary business enterprise for profit without actual partnership or incorporation. It is a contractual business undertaking between two or more parties. It is similar to a partnership business, with one key difference: a partnership generally involves an on-going, long-term business relationship, whereas a joint venture is based on a single business transaction. Individuals or companies choose to enter joint ventures in order to share strengths, minimize risks, and increase competitive advantages in the marketplace.
  
  For example, a high-technology firm may contract with a manufacturer to bring its idea for a product to market; the former provides the know-how, the latter the means.
  
  d. d.Co-operative Society
  
  A co-operative society is a means for forming a legal entity to conduct business. It means a voluntary association of persons who conduct business together to promote their common economic interest. It works on the principle of self-help as well as mutual help.
  
  The main objective is to provide support to the members. Nobody joins a cooperative society to earn profit. People come forward as a group, pool their individual resources, utilise them in the best possible manner, and derive some common benefit out of it.
  
  e. e.Sole Trading Business & Sole Trader
  
  A sole trading business means a business which is wholly owned and run by a single person who receives all profits and has unlimited liability for all losses and debts. The single person who owns and runs such a business is called a ‘sole proprietor’ or ‘sole trader’. It is to be noted that to set up a sole trading business, no legal filing requirements or fees and no professional advice is needed. One just literally goes into business on one’s own and the law will recognise it as having legal form.
  
  f. f. Limited Liability
  
  It means the fact that the liabilities of the shareholders are limited to the extent of the value of shares held by them or the amount guaranteed by them. Thus, their personal or private property cannot be attached for debts of the company. This advantage attracts many people to invest their savings in the company.
  
  g. g.Unlimited Liability
  
  It means the fact that the liability of the shareholders is unlimited and their personal or private property can be utilized to meet the debts of the company. However, in this case, the shareholders’ liability extends beyond the value of shares held by them.
  
  h. h.Limited Company
  
  A limited liability company refers to the company in which the members bear limited liabilities. Here members’ liability is confined to a limited amount and they are not personally liable for the payment of all liabilities of company.
  
  For example, in the event of winding up of the company, if the assets of the company cannot meet its liabilities, then personal property of the members cannot be utilized to meet company’s liabilities.
  
  i. i. Unlimited Company
  
  An unlimited company is one in which the members’ liability is unlimited. Thus, in such companies, the members remain personally liable for the payment of all liabilities of company.
  
  For example, in the event of winding up of the company, if the assets of the company become insufficient to pay its liabilities, the personal property of the members will be utilized to meet company’s liabilities.
  
  j. j.Company limited by Shares
  
  It refers to the company which has a share capital and in which the liability of each member is limited by the Memorandum to the extent of face value of share subscribed by him.
  
  In other words, during the existence of the company or in the event of winding up, a member can be called upon to pay the amount remaining unpaid on the shares subscribed by him. Such a company is called company limited by shares. A company limited by shares may be a public company or a private company.
  
  k. k.Company Limited by Guarantee
  
  It means the company which may or may not have a share capital and the members thereof promise to pay the company’s debts up to a fixed sum in the event of liquidation of the company. Such a company may be a public company or a private company.
  
  l. l.Government Company
  
  A Company of which not less than 51% of the paid up capital is held by the Central Government of by State Government or Government singly or jointly is known as a Government Company. It includes a company subsidiary to a government company. The share capital of a government company may be wholly or partly owned by the government, but it would not make it the agent of the Government.
  
  m. m. Foreign Company
  
  It means any company incorporated outside Bangladesh but has an established place of business in Bangladesh.
  
  n. n. Private Company
  
  Sec. 2 (1) (q) of the Companies Act, 1994 provides,
  
  “Private company means a company which by its articles-
  
  Restricts the right to transfer its shares, if any,
  
  Prohibits any invitation to public to subscribe for its shares or debenture, if any,
  
  Limits the number of its members to fifty not including persons who are in its employment.”
  
  Thus, in a private company, the members cannot transfer their shares and the number of members cannot exceed 50 (minimum 2).
  
  Invitation to public to subscribe for its shares is not allowed.
  
  o. o.Public Company
  
  Sec. 2 (1) (r) of the Companies Act, 1994 speaks,
  
  “Public company means a company incorporated under this Act or under any law at any time in force before the commencement of this Act and which is not a private company.”
  
  In short, a public company is one the AOA (articles of association) of which don’t provide any restrictions on-
  
  the transfer of shares,
  
  maximum number of members and
  
  the invitation to public seeking their subscription for its shares.
  
  The minimum limit of its member is 7.
  
  p. p.Holding & Subsidiary Company
  
                When a company holds ‘majority of shares’ i.e. more than 50% of the equity shares of the another company, the former is called holding company or parent company and the latter is called subsidiary company.
  
  EXAMPLE: B is a company incorporated under the Companies Act, 1994 having share capital of TK 6 lacs divided into 6000 shares of TK 100 each. Out of the total shares, 3100 shares are held by A, another company. In this case, A is a holding company and B is the subsidiary company. The concept is illustrated with chart-
  
  q. q.Memorandum of Association (MOA)
  
  The memorandum of association (MOA) is the first and most important document of a company which informs the general public of the company name, its share capital, the address of its registered office, the objects of the company etc.
  
  r. r.Articles of Association (AOA)
  
  The articles of association are the second most important document of a company which contains rules and regulations for internal management or affairs of the company.
4.2 Regulatory Body and Affiliated Institutions
- A. REGISTRAR OF JOINT STOCK COMPANIES AND FIRMS
  
  The Registrar of Joint Stock Companies and Firms (RJSC) is the sole authority which facilitates formation of companies etc.; and keeps track of all ownership related issues as prescribed by the laws in Bangladesh.
  
  The Registrar is the authority of the Office of the Registrar of Joint Stock Companies and Firms, Bangladesh. RJSC deals with the following types of entities:
  
  ·         Private companies
  
  ·         Public companies
  
  ·         Foreign companies
  
  ·         Trade organizations
  
  ·         Societies, and
  
  ·         Partnership firms
  
  RJSC accords registration and ensures lawful administration of the entities under the provisions of applicable act as under:
  
  1.    Companies and Trade Organizations: Companies Act, 1994 (Amendment of Companies Act 1913)
  
  2.    Societies: Societies Registration Act, 1860
  
  3.    Partnership Firms: Partnership Act, 1932
  
  The RJSC offers the following services:
  
  ·         Name Clearance
  
  ·         Entity Registration
  
  ·         Return Filing
  
  ·         Issuance of Certified Copy
  
  ·         Winding Up
  
  ·         Struck Off
  
  ·         License Issue and Renewal of MLM Co
- B. BANGLADESH SECURITIES AND EXCHANGE COMMISSION
  
  The Bangladesh Securities and Exchange Commission (BSEC) was established on 8th June, 1993 as the regulator of the country’s capital market through enactment of the Securities and Exchange Commission Act 1993. Through an amendment of the Securities and Exchange Commission Act, 1993, on December 10, 2012, its name has been changed as Bangladesh Securities and Exchange Commission from previous Securities and Exchange Commission. The Commission consists of a Chairman and four Commissioners who are appointed for fulltime by the government for a period of four years and their appointment can be renewed only for further one term, but the condition is that age can not exceed 65 in position during the tenure. The Chairman acts as the Chief Executive Officer (CEO) of the Commission. The Commission has overall responsibility to formulate securities legislation and to administer as well. The Commission is a statutory body and attached to the Ministry of Finance.
  
  Mission of the BSEC is to:
  
  ·         Protect the interests of the investors in securities.
  
  ·         Develop and maintain fair, transparent and efficient securities markets.
  
  ·         Ensure proper issuance of securities and compliance with securities laws.
  
  The Commission's main functions are:
  
  ·         Regulating the business of the Stock Exchanges or any other securities market.
  
  ·         Registering and regulating the business of stock-brokers, sub-brokers, share transfer agents, merchant bankers and managers of   issues, trustee of trust deeds, registrar of an issue, underwriters, portfolio managers, investment advisers and other intermediaries in the securities market
  
  ·         Registering, monitoring and regulating of collective investment scheme including all forms of mutual funds.
  
  ·         Monitoring and regulating all authorized self-regulatory organizations in the securities market.
  
  ·         Prohibiting fraudulent and unfair trade practices relating to securities trading in any securities market.
  
  ·         Promoting investors’ education and providing training for intermediaries of the securities market.
  
  ·         Prohibiting insider trading in securities.
  
  ·         Regulating the substantial acquisition of shares and take-over of companies.
  
  ·         Undertaking investigation and inspection, inquiries and audit of any issuer or dealer of securities, the Stock Exchanges and   intermediaries and any self-regulatory organization in the securities market.
  
  ·         Conducting research and publishing information.

4.3 Minimum Requirements

A. BASIC REQUIREMENTS FOR THE ESTABLISHMENT OF A BUSINESS

1.    Place of Business

Foreign companies not registered in Bangladesh can set up a place of business in Bangladesh in the form of a Branch Office or a Liaison Office. Permission will be required from the Bangladesh Bank and the BOI in order to open up a Branch Office or a Liaison Office.

2.    Foreign Investment

As mentioned earlier, foreign investors may set up an industrial entity which is wholly owned or set up in collaboration with local investors. There is no requirement to obtain prior permission to set up such enterprises if the entrepreneurs use their own funds.

3.    Registration of Foreign Direct Investment

Although prior permission is not required, it is advised that a business entity is registered in order to benefit from various facilities and institutional support provided by the government, entrepreneurs and sponsors.

a.    EPZ or Industrial Estate If the business is to be set up in an EPZ or industrial estate, registration must take place with BEPZA or Bangladesh Small Cottage and Industry Corporation (BSCIC).

b.    Any other Businesses If the business is to be set up elsewhere, it must register with the BOI.

c.     Manufacturing Firm A manufacturing firm employing ten or more workers must also register with the Chief Inspector of Factories and Establishments.



d.    Businesses Requiring Pre -Registration Clearance A Pre- Registration Clearance is required for investment in the following areas as FDIs are discouraged in these areas:

                        (i) Ready-made garments

                        (ii) Banks

                        (iii) Insurance companies

                        (iv) Other financial institutions

4.    Environmental Regulations

All industrial and other projects that may be potentially polluting are required, in accordance with the Environment, to undertake some form of environmental impact assessment.

a.    Environmental Clearance

Environmental clearance must be obtained from the Department of Environment. The process takes 15 days for projects with low levels of potentially adverse impact and 30 days for projects with significant impact.

5.    Zonal Restrictions

There are no regional or zonal restrictions on investment.

a.    Location for Business Investors can set up businesses in any part of the country except in the areas reserved for the armed forces or             declared environmental preserves (e.g., the mangrove forests in the Sunderbans).

b.    Investment Incentives The availability of investment incentives including tariff concessions and tax-holiday periods varies according to location, with the less developed regions providing the best offers.

6.    Building and Related Permits

A foreign investor will receive assistance to acquire buildings and industrial plots depending on the nature of the business.

a.    Businesses in the Export Processing Zones (EPZ)

                        (i) Investors can rent custom-made premises within the EPZs.

(ii) Investors need to have the designs of their buildings approved by the city development authorities.

b.    Businesses outside the EPZs Investors requiring industrial plots to set up factories in areas outside of the BEPZA zones and BSCIC estates may approach the BOI for assistance. BOI requirements for providing assistance are as follows:

                        (i) The Company must be registered

(ii) The Company must have an industrial lay out plan to justify actual requirements.

B. SUMMARY OF TIME, COST AND PROCEDURES FOR STARTING A BUSINESS IN BANGLADESH – DHAKA

No.	Procedure	Time to complete	Cost to complete
1	Verify the uniqueness of the proposed company name on the website of the Registrar of Joint Stock Companies and Firms The search for the availability of a company name was computerized in 2003. After checking that the proposed company name is available for registration, the entrepreneur then applies for name clearance through the Registrar of Joint Stock Companies and Firms (RJSC) website. The status of the application can be checked online and is usually accepted or rejected within 1 working day. If accepted, the company name is reserved for 6 months. A print out of the name clearance certificate must be submitted to the RJSC, along with the other required documents for incorporation. In addition to the BRAC Bank, the name reservation fee may be paid at the following designated banks: One Bank and Mutual Bank. Agency: Registrar of Joint Stock Companies and Firms	Less than one day (online procedure)	BDT 600 (paid at a designated Bank)
2	Pay stamp duty at a designated bank Payment of stamp duty is made to the account of the Treasury at the BRAC Bank. According to the Stamp Act 1899 as amended on June 30th, 2012, for an authorized share capital of up to BDT 1,000,000, the total stamp duty fees are BDT 4,000. These include BDT 3,000 for affixing stamps on the Articles of Association, and BDT 1,000 for stamps on the Memorandum of Association. In addition, a certified copy of each document costs BDT 50. Agency: BRAC Bank	1 day	BDT 3,000 for the Articles of Association + BDT 50 for a certified copy; and BDT 1,000 for the Memorandum of Association + BDT 50 for a certified copy
3	Register at the Registrar of Joint Stock Companies and Firms To register a company, the following documents must be submitted to the registrar: (1) Name clearance certificate (2) Memorandum and Articles of association (3) Forms I (Declaration on the registration of the company); Form VI (Notice of the registered office); Form IX (Consent to act as directors); Form X (The list of persons consenting to act as directors); and Form XII (Particulars of the Directors, Managers, and Managing Agents) (4) Proof of payment (i.e. receipt from the designated bank) for Treasury Stamps The registration fees payable at a designated bank are as follows: i. For filing 6 documents (5 filled in forms and the memorandum & articles of association, the fee is BDT 200.00 per document): BDT 1,200.00 ii. For an authorized share capital of up to BDT 20,000, the fee is BDT 360. An additional fee of BDT 180 is applicable for every BDT 10,000 or part from the first BDT 20,000 up until BDT 50,000 An additional fee of BDT 45 is applicable for every BDT 10,000 or part from the first BDT 50,000 up until BDT 1,000,000 Agency: Registrar of Joint Stock Companies and Firms	Less than one day (online procedure)	BDT 4,005 registration fees + 1200 registration filing fees
4	Make a company seal Business founders can make a company seal at the Seal maker for BDT 30-50. Agency: Sealmaker	1 day	BDT 30-50
5	Obtain a Tax Identification Number In order to start business operations, every company must register for taxes at the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the National Board of Revenue (NBR) and obtain a tax identification number. Obtaining TIN number can now be done online in less than one day. Agency: National Board of Revenue	Less than one day (online procedure)	no charge
6	*Open a Bank Account In order to register for VAT, the company must first open a bank account. Agency: Bank	1 day (simultaneous procedure)	no charge
7	Apply for VAT registration For VAT purposes, companies register with the Customs, Excise, and VAT Commission under the National Board of Revenue. The company's VAT is regulated by the Customs, VAT and Excise Department of the region in which it operates. When an enterprise submits a VAT Registration application to the VAT authority an application must accomplish or enclosed the following papers & Documents: - Fill-up an application form. - Enterprise Trade License. - Bank Solvency Certificate. - Owners 02 photograph. - National ID/Passport copy of owners. - IRC/ERC if enterprise dong import and Export Business. - Article & Memorandum (if enterprise is Limited Company.) - TIN Certificate. - Location MAP of Enterprise premises. Agency: National Board of Revenue	1 day	no charge
8	Receive physical inspection of the business premises by a government agent and Obtain the VAT registration certificate As of 2010, businesses receive physical inspection by a government agent in order to verify that the company is real before obtaining their VAT registration certificates. Agency: National Board of Revenue	7 days	no charge
9	Obtain a trade license Companies obtain a trade license from the City Corporation. Recently, the City Corporation (Dhaka) was divided into 2 zones: the North Zone and the South Zone. The proposed company will have to file its application at the nearest City Corporation. The trade license filled-in application form must be accompanied by the following documents: (1) A certified copy of the memorandum and articles of association (2) A copy of the certificate of incorporation (3) Tax Identification Number certificate (5) A copy of the lease agreement of the registered office Agency: City Corporation	7 days	BDT 2,700

C. SUMMARY OF TIME, COST AND PROCEDURES FOR STARTING A BUSINESS IN BANGLADESH – CHITTAGONG

No.	Procedure	Time to complete	Cost to complete
1	Verify the uniqueness of the proposed company name on the website of the Registrar of Joint Stock Companies and Firms The search for the availability of a company name was computerized in 2003. After checking that the proposed company name is available for registration, the entrepreneur then applies for name clearance through the Registrar of Joint Stock Companies and Firms (RJSC) website. The status of the application can be checked online and is usually accepted or rejected within 1 working day. If accepted, the company name is reserved for 6 months. A print out of the name clearance certificate must be submitted to the RJSC, along with the other required documents for incorporation. Agency: Registrar of Joint Stock Companies and Firms	Less than one day (online procedure)	BDT 600 (paid at a designated Bank)
2	Pay stamp duty at a designated bank Payment of stamp duty is made to the account of the Treasury at the BRAC Bank. According to the Stamp Act 1899 as amended on June 30th, 2012, for an authorized share capital of up to BDT 1,000,000, the total stamp duty fees are BDT 4,000. These include BDT 3,000 for affixing stamps on the Articles of Association, and BDT 1,000 for stamps on the Memorandum of Association. In addition, a certified copy of each document costs BDT 50. Agency: BRAC Bank	1 day	BDT 3,000 for the Articles of Association + BDT 50 for a certified copy; and BDT 1,000 for the Memorandum of Association + BDT 50 for a certified copy
3	Register at the Registrar of Joint Stock Companies and Firms To register a company, the following documents must be submitted either online or to the registrar: (1) Name clearance certificate (2) Memorandum and Articles of association (3) Forms I (Declaration on the registration of the company); Form VI (Notice of the registered office); Form IX (Consent to act as directors); Form X (The list of persons consenting to act as directors); and Form XII (Particulars of the Directors, Managers, and Managing Agents) (4) Proof of payment (i.e. receipt from the designated bank) for Treasury Stamps The registration fees payable at a designated bank are as follows: i. For filing 6 documents (5 filled in forms and the memorandum & articles of association, the fee is BDT 200.00 per document): BDT 1,200.00 ii. For an authorized share capital of up to BDT 20,000, the fee is BDT 360. An additional fee of BDT 180 is applicable for every BDT 10,000 or part from the first BDT 20,000 up until BDT 50,000 An additional fee of BDT 45 is applicable for every BDT 10,000 or part from the first BDT 50,000 up until BDT 1,000,000 Agency: Registrar of Joint Stock Companies and Firms	Less than one day (online procedure)	BDT 4,005 registration fees + 1200 registration filing fees
4	* Make a company seal Business founders can make a company seal at the Seal maker for BDT 30-50. Agency: Sealmaker	1 day	BDT 30-50
5	Obtain a Tax identification number In order to start business operations, every company must register for taxes at the appropriate taxation authority (Deputy Commission of Taxes of Company Circle, Zonal Taxation Department) under the National Board of Revenue (NBR) and obtain a tax identification number. Obtaining TIN number can now be done online in less than one day. Agency: National Board of Revenue	Less than one day (online procedure)	no charge
6	*Open a Bank Account In order to register for VAT, the company must first open a bank account. Agency: Bank	1 day (simultaneous procedure)	no charge
7	Apply for VAT registration For VAT purposes, companies register with the Customs, Excise, and VAT Commission under the National Board of Revenue. The company's VAT is regulated by the Customs, VAT and Excise Department of the region in which it operates. When an enterprise submits a VAT Registration application to the VAT authority an application must accomplish or enclosed the following papers & Documents: - Fill-up an application form. - Enterprise Trade License. - Bank Solvency Certificate. - Owners 02 photograph. - National ID/Passport copy of owners. - IRC/ERC if enterprise dong import and Export Business. - Article & Memorandum (if enterprise is Limited Company.) - TIN Certificate. - Location MAP of Enterprise premises. Agency: National Board of Revenue	1 day	no charge
8	Receive physical inspection of the business premises by a government agent and Obtain the VAT registration certificate As of 2010, businesses receive physical inspection by a government agent in order to verify that the company is real before obtaining their VAT registration certificates. Agency: National Board of Revenue	7 days	no charge
9	Obtain a trade license Companies obtain a trade license from the City Corporation. The trade license filled-in application form must be accompanied by the following documents: (1) A certified copy of the memorandum and articles of association (2) A copy of the certificate of incorporation (3) Tax Identification Number certificate 4) Photograph of the Managing Director (5) A copy of the lease agreement of the registered office Agency: City Corporation	7 days	BDT 2,700

D. NAME CLEARANCE

This is a pre-requisite for registration of a new company (other than Foreign Company and Partnership firms) or a society or a trade organization. Promoters of a new entity (company, society or trade organization) apply for and RJSC provides name clearance for one of the proposed names upon satisfaction that it does not closely match or resembles with any of the already taken names (registered, booked or under the process of registration of the same entity type).

1. The promoters shall submit the NC Application to the designated RJSC office through the RJSC website.

2. The promoters pays NC Application fee to the designated Bank.

3. Upon receipt of an NC Application and Fees, RJSC provides name clearance for the new entity upon satisfaction that it does not closely match or resembles with any of the already taken names (registered, booked or under the process of registration of the same entity type).

The name clearance remains valid for One eighty (180) days from the date of issue.

4. The promoters need to apply for registration of the cleared name within the validity (as stated above) of name clearance.

Documents Constituting a NC Application: Online NC application
E. ENTITY REGISTRATION

The promoters of a new entity (having name clearance, where applicable) apply for registration with necessary documents, prescribed forms & schedules and fees, as appropriate to the entity type.

The promoters should:

1.    Prepare Memorandum/Articles of Association as appropriate to the entity type.

2.    Submit the registration application through website.

3.    Pay the registration fee at the designated Bank.

4.    RJSC issues a ‘Certificate of Incorporation’ upon satisfaction that the promoters-

·         Obtained name clearance of the proposed entity (not applicable for Foreign Companies and Partnership Firms) prior to the registration application.

·         Submitted the registration application within the validity period of the name clearance (not applicable for Foreign Companies and Partnership Firms.

·         Prepared and submitted the Memorandum & Articles of Association, prescribed forms and schedules etc., as applicable.

5.    Provided applicable fees.
F.Preparation and process of filing a Registration Application

PRIVATE AND PUBLIC COMPANY (Companies Act, 1994)

a.    Go to: http://www.roc.gov.bd:7781/

b.    Click on "Apply for Registration".



c. Select Entity Type.



d. Fill NC application no. and NC Letter no. (Foreign Company select office) and then click "Continue" button to get registration application page.



e. Fill up the prescribed forms properly.



f. Enter data as appropriate for your entity in prescribed format of Memorandum of Association (MOA).



g. Enter data as appropriate for your entity in prescribed format of Articles of Association (AOA)

h. Check, edit (if required) and confirm the MOA and the AOA by viewing your entered information

i.              Finally Submit the page and click ‘continue’ to get payment instruction.

Documents Constituting a Registration Application PRIVATE COMPANY (Companies Act, 1994)

a.    Memorandum & Articles of Association, original + 2 copies

b.    Filled in Form I: Declaration on Registration of Company [Section 25].

c.     Filled in Form VI: Notice of Situation of Registered Office and of Any Change therein [Section 77].

d.    Filled in Form IX: Consent of Director to act [Section 92].

e.    Filled in Form X: List of Persons Consenting to be Directors [Section 92]

f.      Filled in Form XII: Particulars of the Directors, Manager and Managing Agents and of any change therein [Section 115]

g.    Evidence of Name Clearance.

h.    Special Adhesive Stamps and Treasury Challan from Bangladesh Bank to Treasury (photocopy) of Collecting the Stamps

PUBLIC COMPANY (Companies Act, 1994)

a.    Memorandum & Articles of Association, original + 2 copies

b.    Filled in Form I: Declaration on Registration of Company [Section 25].

c.     Filled in Form VI: Notice of situation of Registered Office and of any change therein [Section 77].

d.    Filled in Form IX: Consents of Directors to Act [Section 92].

e.    Filled in Form X: List of Persons Consenting to be Directors [Section 92]

f. Filled in Form XII: Particulars of the Directors, Manager and Managing Agents and of any Change therein [Section 115].

g. Filled in Form XIV: Declaration before Commencing Business in case of Company Filing Statement in lieu of Prospectus [Section 150]

h. Filled in Form XI (if necessary): Agreement to Take Qualification Shares in Proposed Company [Section 92].

i. Evidence of Name Clearance

j. Special Adhesive Stamps and Treasury Challan from Bangladesh Bank to Treasury (photocopy) of Collecting the Stamps

FOREIGN COMPANY (Companies Act, 1994)



a. Filled in Form XXXVI - Charter or Statutes or Memorandum and Articles of the Company or Other Instrument Constituting or Defining the   Constitution of the Company.

b. Filled in Form XXXVII- Notice of the Address of the Registered or Principal Office of the Company.

c. Filled in Form XXXVIII - List of Directors and Managers [Section 379].



d. Filled in Form XXXIX- Return of Persons Authorized to Accept Service [Section 379].



e. Filled in form XLII: Notice of Situation of the Principal Place of Business in Bangladesh or of any Change therein [Section 379 (I)].

                f. Encashment Certificate Obtained From any Scheduled Bank.

       g. Permission from Board of Investment of Bangladesh.

TRADE ORGANIZATION (Companies Act, 1994)

a. Memorandum and Articles of Association, original + 2 copies.



b. Filled in Form I: Declaration on Registration of Company [Section 25].



c. Filled in Form VI: Notice of Situation of Registered Office and of any Change therein [Section 77].



d. Filled in Form IX: Consent of Director to act [Section 92].



e. Filled in Form X: List of Persons Consenting to be Directors [Section 92].



f. Filled in Form XII: Particulars of the Directors, Manager and Managing Agents and of any change therein [Section 115].



g. Government License (Trade License from the Ministry of Commerce).



h. Evidence of Name Clearance.

SOCIETY (Societies Registration Act, 1860)



a. Memorandum of Association



b. Evidence of Name Clearance.

PARTNERSHIP FIRM (Partnership Act, 1932)



a. Filled in FORM- I: Statement Containing the Particulars of the Firm for Registration.



b. Deed of Agreement on Partnership.

4.4 Foreign Investment Incentives

A. GENERAL INCENTIVES FOR FOREIGN INVESTMENT

The government has been keen in promoting foreign investment and continues in its efforts to attract such investment as a means of alleviating the economy. Furthermore, the government has liberalised the industrial and investment policies in recent years by reducing bureaucratic control over private investment.

Investment Incentives
1. Tax Exemptions	Generally 5 to 7 years. However, for power generation exemption is allowed for 15 years.
2. Duty	No import duty for export-oriented 19 industries. For other industry it is at 5% ad valorem.
3. Tax Law	i. Double taxation can be avoided in case of foreign investors on the basis of bilateral agreements. ii. Exemption of income tax up to 3 years for the expatriate employees in industries specified in the relevant schedule of Income Tax Ordinance
4. Remittance	Facilities for repatriation of invested capital, profit and dividend.
5.Exit	An investor can wind up an investment either through a decision of the AGM or EGM. Once a foreign investor completes the formalities to exit the country, he or she can repatriate the sales proceeds after securing proper authorization from the Central Bank.

B. INCENTIVES FOR EXPORT-ORIENTED BUSINESSES

Bangladesh has enabled Export Processing Zones (EPZ) to encourage and facilitate the functioning of export-oriented enterprises. Industries which fall within an EPZ benefit from fiscal, non-fiscal and infrastructure facilities. Bangladesh Export Processing Zones Authority (BEPZA) approves all projects to be located in the EPZs.

Incentives to Join EPZ

Fiscal

Non-Fiscal

Financial

Tax holiday for 10 years

100% foreign equity allowed

Secured and protected industrial area.

Concessionary tax for 5 years after completing initial 10 years

Unrestricted exit policy

Land and factory buildings for rent.

Duty-free import of machinery and raw materials

Full repatriation facilities of dividend and capital at the event of exit

Electricity, telecommunication, gas and water facilities

Avoidance of double taxation subject to DTTs

Import of raw materials allowed on Documentary Acceptable basis

Export and import permits issued in one day

Exemption of income tax on interest from borrowing capital

Intra and Inter-zone export is allowed.

Work permits organized for foreign nationals

Complete exemption from dividend tax for 3 years subject to certain conditions

Subcontracting within EPZs permitted

Recreational facilities for foreign nationals

Exemption of income tax on salaries of foreign technicians for 3 years subject to certain conditions

Back-to-back L/C for the import of raw materials in certain industries.

Contact only required with BEPZA for all operational purposes.

Duty-free import of 3 motor vehicles under certain conditions

Import of goods from the Domestic Tariff Area (DTA)

Customs clearance at plant site

Duty-free import of materials for constructing factory buildings

Option to sell 10 per cent of output to the DTA under certain conditions

Duty-free export of the goods produced in the zones

Option to relocate existing industries from abroad

Option to relocate from one zone to another

No unions or strikes

Equal rights with Bangladeshi nationals for foreign employees

4.5 References
- Websites
  
  [1] http://www.bdlawdigest.org/key-definitions-and-concepts-of-company-law/ Retrieved August 2, 2016
  
  [2] http://www.roc.gov.bd/site/page/3de99758-e1a5-4ba0-aa0d-c0077c1d98f6/Name-Clearance Retrieved August 5, 2016
  
  [3] http://www.roc.gov.bd/site/page/855dc577-3035-4ca4-b376-49c517099a3e/Entity-Registration Retrieved August 5, 2016
  
  [4] http://www.roc.gov.bd/site/page/b0796bbc-0e93-4b9a-8c0d-96667d869188/Introduction-to-RJSC Retrieved August 5,2016
  
  [5] http://www.secbd.org/about.htm Retrieved August 2, 2016
  
  [6] http://www.worldbank.org/en/country/bangladesh/overview Retrieved August 4,2016
- Babiliography
  
  [1] Amir & Amir Law Associates. Lex Mundi. A Guide to Doing Business in Bangladesh. 29 December 2011
  
  [2] World Bank Group’s Doing Business in Bangladesh 2016

Bangladesh

4 Chapter Corporate Laws

1 Chapter Basic knowledge

2 Chapter Investment Environment

3 Chapter Establishment

4 Chapter Corporate Laws

5 Chapter Accounting

6 Chapter Tax

7 Chapter Q&A