Liaison Office Setup Services: A Legal Entity To Expand Your Company

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.

  • 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, and personal contracts.

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Liaison Office Setup Services in Bangladesh

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A Liaison Office Setup, 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 setup. The parent firm will be responsible for all setup and operations expenditures, including compensation for expatriates.

Liaison Office Incorporation Procedure in Bangladesh

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.

Setup liaison Office in Dhaka

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.
Set up a Liaison Office in Bangladesh

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 Liaison Office Setup. 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 Setup, 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. 

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By Following Successful 5 Steps We Complete Our Liaison Office Setup

As Bangladesh adopts a liberal industrial policy by offering generous opportunities to foreign investors, it has become one of the emerging hubs for foreign investment. An economy that has grown at over 6% continuously over the past decade and has a large local consumer base makes it an attractive destination for investment in a variety of fields.

Bangladesh allows the incorporation of companies with 100% foreign equity, unlike some emerging economies. As a separate legal entity subject to the relevant industry regulations, a wholly-foreign-owned enterprise (WFOE) incorporated in Bangladesh may enter into commercial agreements with other parties, whether natural or artificial, within and outside Bangladesh.

Company incorporation and subsequent governance are regulated by the Companies Act 1994. The Registrar of Joint Stock Companies and Firms (RJSC) provides detailed guidelines from name clearance to incorporation under the Act. There are two types of companies that can be registered in Bangladesh, public limited companies and private limited companies.

STEP 1: Obtain Name Clearance

Before a company can be incorporated in Bangladesh, its proposed name must be approved. An application for the name clearance has to be filed to the RJSC along with the filled in application form and the proposed name.

Step 2: Documentation

Documents required for the incorporation of the company are as follows:
  1. a) Memorandum of Association (MoA), and Articles of Association (AoA)
  2. b) A foreign promoter resolving to open a business in Bangladesh,

STEP 3: Formalities Related with Bank Account

The promoters will open a temporary bank account for the proposed company with a scheduled bank, giving them instructions to regularise the account once the company has been registered with the company house. The capital contribution has to be remitted to the temporary account after the account has been established and an Encashment certificate has to be obtained from the bank confirming that the capital contribution has been received and remitted.

STEP 4: Post Registration Compliance

A Private Limited Company may need to obtain any or all of the following documents after completing the registration process:
  1. a) Investment Registrar
  2. B) A trade license from the city corporation.
  3. c) Tax Identification Number (TIN) issued by the National Board of Revenue (NBR)
  4. d) VAT Registration Certificate from the NBR
  5. e) Fire Certificate from the Bangladesh Fire Service and Civil Defense Authority (for industrial enterprises)
  6. f) Environment Clearance Certificate from the Department of Environment, in case the company is involved in an industrial project (for industrial ventures)
  7. g) Foreign employee visas, work permits, and investor visas.

STEP 5: Submission of the Documents to the Registrar

Finally, a application must be made with all the above-mentioned documents and Government fees. After perusing all documents registers the company and provides a certificate of incorporation.

We Can Help In Legal Process Of Liaison Office Setup

The Representative Office & Liaison Office Setup 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 setup.  If you need professional help with a branch office or liaison office setup 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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    To ensure the continuous networking of your business, we provide our clients with support to solve their problems. 

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FAQ About Liaison Office Setup

How your liaison office setup services helpful to us?

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.

How much does it cost to start a business in Bangladesh?

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).

Can a liaison office or a branch office be considered a legal entity?

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.

What is the timeline of a Liaison office approval in Bangladesh?

  1. The application process should take between 30 and 45 days.
  2. There is usually a meeting once a month, but sometimes two meetings are held when more applications are submitted.
  3. If application is rejected for lack of papers, additional time or a second meeting may be required.

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