Payroll2Bangladesh is one of Bangladesh’s leading liaison office setup service providers. Maintain liaison/ coordination between principal and local agents, distributors/exporters’ institutions through correspondences, personal contracts, and other electronic media, collect, compile, analyze, and disseminate business information related to its field of activities as mentioned in the approval letter are just a few of the activities that a foreign company’s Liaison Office can do.
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The Liaison and Representative offices in Bangladesh are the same.
A Liaison/Representative Office of a foreign company is restricted in what it can do, which includes
Compile, analyze and disseminate business information related to its field of activities as specified in its approval letter.
It is impossible for a Liaison/Representative office in Bangladesh to earn income locally. The parent company will be responsible for all setup and operating costs, including salaries for local employees as well as expatriates.
Bangladesh will not be able to send outward remittances of any kind except the amount brought in from abroad (the unspent part).
Keep in touch with local agents, distributors/exporters' institutions through correspondence, personal contracts and other electronic media.
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A Liaison Office, on the other hand, is not permitted to engage in any business or commercial activity in Bangladesh for the purpose of producing money, as it is not liable to corporate tax in Bangladesh. Branch offices of foreign companies already incorporated outside of Bangladesh must register as such.
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Bangladesh has attracted many foreign investors in recent years. Registering a branch office in Bangladesh provides the flexibility of not needing to incorporate a fully pledged company in Bangladesh. In Bangladesh, there will be no local source of income for a liaison office. The parent firm will be responsible for all setup and operations expenditures, including compensation for expatriates.
Liaison Office Incorporation Procedure in Bangladesh
Among the many ways to initiate business in Bangladesh, establishing a branch office is among the most viable options for foreign investors. As it does not require the hassle of incorporating a 100% foreign-owned company in Bangladesh. Branch offices of foreign companies already incorporated outside of Bangladesh must register as such.
Bangladesh has attracted many foreign investors in the recent years. Registering a branch office in Bangladesh provides the flexibility of not needing to incorporate a fully pledged company in Bangladesh. Create a Bangladeshi branch office and conduct all the business a Bangladeshi corporation has the right to do. Listed below is a procedure for incorporating a branch office in Bangladesh.
Requirements for Liaison Office Setup
To open a Branch office, and for foreign investors seeking to open a Branch office, permission from BIDA is required. The applicant must submit the following documents, attested by the Bangladesh Embassy or High Commission, or the Apex Chamber of Commerce, of the country of origin, in order to obtain such permission:
- The prescribed application form,
- A Memorandum of Association (MoA) and Articles of Association (AoA) for the principal company;
- Certificate of Incorporation for the principal company;
- Names and nationalities of directors of the principal company;
- Resolution by the Board to open a branch in Bangladesh;
- The audited financial accounts;
- The proposed organizational chart of the office, which shows the posts to be occupied by expatriates and locals;
- Describe the activities of the proposed office.
Liaison Office Registration Procedure
Companies and investors wishing to take advantage of Bangladesh’s liberalized FDI caps should carefully consider their investment options in the country and available avenues for setting up a business. The following outlines the functions and requirements for liaison offices in Bangladesh.
In Bangladesh, foreign companies can open a liaison office to facilitate and promote the parent company’s business activities, and act as a communications channel between the parent company and a domestic company. Those foreign affiliates unable to engage in commercial, trading, or industrial activities must depend on private, inward remittances from their parent companies. Liaison offices are permitted to carry out the following activities:
There will be no local source of income for a Liaison office in Bangladesh. The parent company aboard is liable for all setup and operational costs, including salaries of expatriates and local employees of the Liaison or Representative office.
How Effectively We set up a Liaison Office in Bangladesh?
Bangladesh Investment Development Authority (BIDA) must grant permission for setting up a Liaison Office. Foreign investors must submit an application in the prescribed form, along with the following documents, which must be attested by the Bangladeshi Embassy/High Commission of the country of origin or the Apex Chamber of Commerce of the country of origin:
- Apply in a prescribed form, duly completed, signed and sealed,
- Articles of Association and Memorandum of Association of the principal company;
- Certificate of incorporation of the principal company;
- Names of directors/promoters of the principal company;
- Resolving that a Liaison Office should be opened in Bangladesh;
- Company’s audited financial statements for last year;
- Projected organizational chart of the office, showing the posts to be occupied by both locals and expats;
- The proposed office’s activities listed on the Company letterhead.
Upon receiving the permission of the Liaison Office, a fee of BDT 25,000/- will need to be deposited by Treasury Challan at any branch of Bangladesh Bank or Sonali Bank. The Liaison Office license would be valid for three (three) years, after which the license would need to be renewed through BIDA. After getting the approval for a liaison office, a bank account must be opened in any bank in Bangladesh. The amount of foreign exchange equivalent to US$ 50,000 or more must be brought into Bangladesh within 02(two) months from the date of BIDA permission. A Liaison office must be registered with the RJSC once it has received approval from the BIDA
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The Representative Office & Liaison Office in Bangladesh operate as one business entity in Bangladesh. Its operation & scope of work is different from that of a branch office. A liaison office can carry out very limited activities as long as it maintains communication with the local agency, distributors and exporters via direct contact, electronic communication, and correspondence. As specified in their letter of approval, the liaison office sometimes collects business information, complies analytical business data, and conducts studies related to their area of responsibility. Liaison offices are not allowed to earn from local business activities. All costs related to establishment, operation, and employee management are borne by the Parent company. Get in touch with our Company lawyer for more information if you need assistance in registering your liaison office. If you need professional help with a branch office or liaison office or with foreign investment, please contact us.
Government Fees
Payment is required by bank pay order and the original of the pay order should be submitted to BIDA. The fee is BDT 25.000 (Twenty five thousand).
Timeline For Registration
After submitting an application, there is a 3- to 4-week wait. It will take another 2 weeks to complete the remaining formalities.
Validity & Renewal
For most applications, permission is granted for a period of three years, after which it can be renewed.
Cost
There is a government fee of approximately USD 300 for BIDA registration. The local government will charge an additional 100 USD to obtain a trade license.
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Frequently Asked Questions About Liaison Office Setup
Foreign companies are allowed to operate liaison offices in Bangladesh only on a limited basis, provided that none of the operations are profitable. A liaison office will only provide market analysis and representation services. The List of Approved Activities for the Bangladesh Branch Office can be viewed by clicking here.
In Bangladesh, the cost of forming a business is $3990. The entire cost covers legal document creation, business registration, payment of all taxes and fees due at the time of registration, and the company’s legal address (a year).
The Branch or Liaison Office is a legal entity registered with the BIDA in Bangladesh. Multinational business extensions are not separate legal entities. The parent company of the Branch or Liaison Office is indirectly responsible for all debts and liabilities of the Branch or Liaison Office, unlike a subsidiary of Bangladesh.
- The application process should take between 30 and 45 days.
- There is usually a meeting once a month, but sometimes two meetings are held when more applications are submitted.
- If application is rejected for lack of papers, additional time or a second meeting may be required.