SET UP A COMPANY IN BANGLADESH
Bangladesh has some of the most liberal investment incentives in Asia, with an absence of any prior approval requirements or limits on any foreign equity participation, except registration with the Bangladesh Board of Investment (BOI). The government actively seeks to attract European investors by reducing bureaucratic control over private investment and opening up many areas that were previously reserved for the public sector. The government, in order to streamline bureaucratic procedures and controls, has restructured the BOI to facilitate investment, rather than regulate it, offering investors a variety of different services and within a prescribed time period.
The Industrial Policy, 1991 (revised in 1992) has clearly emphasized importance of the role of the private sector in industrial development in Bangladesh. The role of the government has been changed from regulatory to promotional. As a result of this policy, sanctioning and other procedures for obtaining different facilities and services have been simplified. Industrial Policy ensures equal treatment for local and foreign investment.
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BOARD OF INVESTMENT:
The Board of Investment (BOI) was established by the Investment Board Act of 1989 to promote and facilitate investment in the private sector both from domestic and overseas sources with a view to contribute to the socio-economic development of Bangladesh. The Board, which is headed by the Prime Minister and includes various ministers and ministry secretaries, is vested with the necessary powers to take decisions for the speedy implementation of new industrial projects and to provide operational support services to existing projects.
The Executive Council of the BOI is entrusted with the responsibility of creating a congenial climate for industrial investment in Bangladesh by simplifying procedures and providing the necessary facilities and services to investors. Any decision by the Board of Investment is deemed as a decision of the Government and is required to be implemented by all concerned agencies.
For further information, please read the Board of Investment at a glance:
Foreign Investment with particular preference to foreign direct investment is encouraged in all industrial activities excluding those in the list of "Reserved Industries" (production of arms and ammunitions, forest plantation and mechanized extraction within the bounds of a reserved forest, production of nuclear energy and printing and minting currency notes). Such investment may be undertaken either independently or through joint ventures, either with the local private or public sector.
The policy framework for foreign investment in Bangladesh is based on Foreign Private Investment (Promotion and Protection) Act, 570 1980 which provides for:
- Non-discriminatory treatment between foreign and local investment
- Protection of foreign investment from expropriation by the state, and
- Ensuring of proceeds from sale of repatriation shares and profit.
For further information, please read Bangladesh Economy, the Foreign Investment from the Bangladesh Embassy: http://www.bangladoot.org/foreigninvestment.pdf
TYPES OF COMPANIES
There are three types of companies:
- Companies Limited by Shares
- Companies Limited by Guarantees
- Unlimited Companies:
Companies limited by shares may further be classified as Public Limited and Private Limited companies.
For further information, please read the Guidebook for European Investor in Bangladesh - Chapter V: http://www.eudelbangladesh.org
INCORPORATION OF COMPANY:
Business in Bangladesh may be carried out by a company incorporated locally or a company incorporated outside Bangladesh, but registered in Bangladesh. The Registrar of Joint Stock Companies and Firms do the incorporation or registration under the provisions of the Companies Act 1994 which safeguard the interest of the investors and provide the Directors with overall power to manage and run the company.
1. The name:
The first step in the formation of a company is to select its name and apply to the Registrar. A company shall not be registered by a name identical to the name of any existing company or nearly resembling.
For further information, here is the application for clearance of name of proposed company
2. Memorandum of Association:
The Memorandum of Association requires that a company states its name and whether it is a public limited company or a private limited company and the location of its registered office. The Memorandum requires that a company outlines clearly its main objectives; it's authorized capital, and the division of this capital into shares of fixed amount and the liability of its members.
For further information, here is the form of the Memorandum of Association:
3. Articles of Association:
The company is further required to draw up its "Articles of Association" which are the regulations that govern the internal management of affairs of the company and the conduct of its business.
For further information, here is the form of the Articles of Association: http://www.roc.gov.bd/articles.pdf
4. Registration of company and issue of capital:
A foreign company is required to deliver following documents to the Registrar for registration within one month of the establishment of the place of business:
- Three certified copies of the Memorandum of Association and Articles of Association, and if it is not written in Bengali or English Language, a certified translation, including the original one on which the special adhesive stamp is affixed along with the duly filled in form I, VI, IX, X and XII
- The clearance of name
- Address of the registered or principal office of the company
- A list of the directors and secretary, if any, of the company
- Particulars of person(s) resident in Bangladesh authorized to accept service on behalf of the company
- Address of principal place of business in Bangladesh of the foreign company
For further information, please read the Registration of a Foreign Company - Companies Act, 1994: http://www.vakilno1.com/saarclaw/bangladesh/part10.htm
To get incorporate, a company must have the necessary forms, which are available with the Office of the Registrar of Joint Stock Companies and Firms: http://www.roc.gov.bd/forms.html
To register a joint venture, 100 % foreign investment proposals in the private sector, no prior approval or no objection certificate is required. To avail of facilities and the institutional support services provided by the government., entrepreneur are advised to apply for registration to BOI in a simple prescribed form.
To register a self-financed local investment proposal including industries sanctioned, financed by financial institutions or commercial banks, the project entrepreneurs have to fill up a simple prescribed application form and submit to BOI for registration.
Any individual entrepreneur either local or foreign can set up an industry with Public Sector Corporation. A joint venture industrial unit with the public sector corporations must be registered with the BOI if the private sectors contribution is more than 50% of the project cost and in such case it is treated as private sector project.
For further information, please read the Board of Investment's Investor's Guide: http://www.boi.gov.bd/registrations_boi.php
Companies having share capital and incorporated under the Companies Act, 1994 shall have to file the following statutory returns to the Registrar each year:
- The annual list of members and summary
- Balance sheet and Profit and Loss accounts
- Consent of Auditor
- Statutory Report
- Particulars of Directors
- The consent of the Directors to act
For further information, please read Formation and Registration of a Company:
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