Practical corporate advice from Supreme Court practitioners. Always consult legal counsel before signing founder equity schedules, RJSC filings, or commercial agreements.
Branch or Liaison Office is one of the two options for foreign investors wishing to setup their presence in Bangladesh. The other option is incorporating a Bangladeshi subsidiary company. The information presented below provides details of setting up a Branch or Liaison office in Bangladesh.
Approval of  is the primary requirement for setting up a Branch or Liaison office in Bangladesh
KEY FACTS ABOUT LIAISON OFFICE IN BANGLADESH
Liaison office and Representative office are same in Bangladesh.
A Liaison/Representative Office of a foreign Company can perform very limited activities, which includes:
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.
A Liaison/Representative office will have no local source of income in Bangladesh. All setup and operational costs including salaries of the expatriates and local employees of the Liaison or Representative office will have to borne by the parent company aboard
No outward remittances of any kind from Bangladesh sources will be allowed except the amount brought in from abroad (the unspent part).
KEY FACTS ABOUT BRANCH OFFICE IN BANGLADESH
A Branch office of a foreign company can engage in commercial activities with prior approval of BIDA.
A Branch office may have local source of income from the approved field of business activities in Bangladesh and with the prior approval of BIDA.
KEY FACTS ABOUT BOTH BRANCH AND LIAISON OFFICE IN BANGLADESH
The activities of a Branch and Liaison office shall remain confined to the areas and for the period of time mentioned and approved in approval letter issued by BIDA. If the company intends to continue their Office beyond the period approval, they will have to apply for necessary renewal/ extension in the prescribed form with proper documents at least 2 (two) months before the expiry of the current term.
If the approved company intends to employ any foreign nationals(s) in their Office, work permits should be obtained from the BIDA.
An amount of foreign exchange equivalent to the sum of not less than US$ 50,000 or equivalent as estimated initial establishment cost and 6(six) months operational expenses of the Office must be brought in as inward remittance in Bangladesh within 02(two) months from the date of issuance of the BIDA permission letter. For this purpose, the Office shall have to open an account with any scheduled bank of Bangladesh as per the instructions contained in the Guidelines for Foreign Exchange transactions for receipt of remittances.
Quarterly return of incomes and expenditures out of remittances received from abroad shall have to be submitted to the BIDA, concerned Bank, National Board of Revenue and Bangladesh Bank with documentary evidences.
Any change(s) of present address shall be intimated to the BIDAÂ for necessary action and approval before the proposed change is carried out.
The permitted Office shall have to obtain clearances/ licenses from the concerned government agencies, as and where required, under the existing rules of the country
The permitted Office shall have to pay duty/income tax/VAT/revenues and other taxes payable to the government under the existing laws of Bangladesh.
Deduction of taxes at source while paying office/house rent, salaries, and bills for purchased goods, services and contract work has to be made, and subsequently deposited to the designated government accounts as per provisions of Bangladesh Income Tax Ordinance, 1984. For the purpose of deduction of taxes at source & VAT, enterprises shall have to obtain Taxpayer Identification Number (TIN) from the National Board of Revenue.
Approval of Branch and Liaison Offices and award of work permit for foreign nationals will be made on the condition of security clearance from the Ministry of Home Affairs. The Ministry of Home Affairs shall provide security clearance within 45 days of issuance of permission letter under the existing Visa policy. Otherwise it will be treated that the concerned agencies have no objection to the issuance of visa.
Expatriates working in manufacturing industry, business organizations of private sector, educational institutions, Branch and Liaison Offices etc. in Bangladesh must submit income tax clearance certificate/income tax exemption certificate under section 107 of Income Tax Ordinance, 1984.
Branch and Liaison Office under proprietorship companies will be generally discouraged
For establishing more than one Office of the permitted Branch or Liaison Offices in Bangladesh, the foreign company shall have to take separate prior permission from the Bangladesh Investment Development Authority.
