Regulatory Compliance for Foreign Businesses in Bangladesh: A 2025 Guide

Author: SRCO Business Insights | June 30, 2025

Foreign businesses seeking to operate in Bangladesh must navigate a complex and dynamic regulatory environment. Whether you’re setting up a liaison office, a branch, or a wholly owned subsidiary, regulatory compliance in Bangladesh is crucial for maintaining business continuity, mitigating risk, and protecting your reputation.

This blog offers a comprehensive guide to the key compliance requirements that foreign businesses must meet in 2025, covering company registration, licensing, taxation, labor laws, reporting standards, and other relevant aspects.

1. Entity Registration with BIDA

All foreign companies must register with the Bangladesh Investment Development Authority (BIDA) to operate legally in the country. BIDA is the primary government agency facilitating foreign investment.

Steps:

• Apply through the BIDA One Stop Service (OSS) Portal.
• Provide company documents (MoA, AoA, board resolution, etc.)
• Await security clearance (especially for liaison and branch offices)
• Receive a BIDA approval certificate.

Note: For 100% foreign-owned companies, a minimum capital requirement of USD 50,000 applies (subject to industry type).

2. Trade License and Local Permits

After BIDA registration, businesses must obtain:

• Trade License from the local City Corporation or Municipality
• TIN (Taxpayer Identification Number) and VAT Registration
• Import Registration Certificate (IRC) and Export Registration Certificate (ERC) (if applicable)

Different sectors may also require sector-specific licenses from:

• Bangladesh Bank
• Bangladesh Telecommunication Regulatory Commission (BTRC)
• Bangladesh Energy Regulatory Commission (BERC), etc.

3. Bangladesh Bank Registration for Capital Inflows

To bring capital into Bangladesh or repatriate profits, businesses must:

• Open a foreign currency account in a local bank
• Register their equity investment with the Bangladesh Bank through an Authorized Dealer (AD) bank.
• Comply with foreign exchange regulations under the Foreign Exchange Regulation Act of 1947

4. Annual Tax Compliance and Audit Requirements

Foreign companies are required to comply with the Bangladesh Income Tax Ordinance 1984 and the Value Added Tax Act 2012.

Key Tax Compliance Obligations:

• Obtain TIN from NBR (National Board of Revenue)
• Submit annual income tax returns.
• Withhold tax on salaries, rent, and contractor payments.
• Pay a corporate tax rate of 15%–25%, depending on the industry.
• Submit VAT returns monthly (if applicable)
• Maintain proper books of accounts and get annual audits done by a certified Chartered Accountant.

5. Labor Law Compliance

Foreign businesses must comply with the Bangladesh Labour Act, 2006, covering:

• Employee appointment letters and ID cards
• Provident fund, gratuity, and bonuses
• Minimum wages and leave policies
• Health and safety standards
• Termination and severance procedures

Additionally, employers must:

• Submit a monthly employee list to the labor office
• Obtain a work permit for each foreign employee from BIDA.

6. Environmental & Social Compliance (If Applicable)

Businesses in sectors like manufacturing, textiles, chemicals, or energy must:

• Obtain Environmental Clearance Certificate (ECC) from DoE
• Follow social compliance standards (especially for export-oriented industries)
• Conduct Environmental Impact Assessments (EIA) for large-scale projects.

7. Company Secretarial and Reporting Requirements

Under the Companies Act 1994, foreign entities registered as companies must:

• Hold annual general meetings (AGMs)
• File annual returns with the Registrar of Joint Stock Companies and Firms (RJSC)
• Notify RJSC of any changes to the company’s structure, directors, or shareholding.
• Maintain proper statutory registers and share certificates.

8. Sector-Specific Compliance

Some industries have unique compliance obligations:

Sector Regulatory Body Key Compliance

Banking/Finance Bangladesh Bank Licensing, KYC/AML, capital reserve

Telecom BTRC Equipment import permits, license fees

Pharmaceuticals DGDA Product registration, GMP standards

Garments BGMEA, DoE Factory compliance, fire safety

9. Repatriation of Profits & Exit Strategy

Repatriation of profits, dividends, and disinvestment proceeds requires:

• Proper documentation
• Approval from the AD bank
• Compliance with Bangladesh Bank foreign exchange guidelines

In the event of an exit, companies must follow a formal winding-up procedure through the RJSC or relevant licensing authorities.

Conclusion

Regulatory compliance for foreign businesses in Bangladesh is a multilayered process involving multiple agencies. Staying compliant not only prevents legal complications but also ensures a positive reputation and long-term success in the local market.

To avoid penalties and delays, it’s advisable to work with local legal and business advisory firms familiar with BIDA processes, tax systems, and labor law requirements.

FAQs

Q1: Can a foreigner open a 100% foreign-owned company in Bangladesh?

Yes, with BIDA approval and necessary capital investment, 100% foreign ownership is allowed in most sectors.

Q2: How long does it take to register a company in Bangladesh?

Typically, it takes 4 to 6 weeks, depending on the document’s readiness, sector, and required approvals.

Q3: Do I need a local partner?

No, unless you’re entering a restricted or sensitive sector, where joint ventures may be encouraged.

 

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