Before you can hire employees, run payroll, and start operations in Bangladesh, you’ll need to set up a subsidiary in the country or partner with an EOR like G-P. While it may seem simple, establishing a subsidiary can turn into a complicated process that takes months to complete.
How to establish a Bangladesh subsidiary
If you choose to set up a Bangladesh subsidiary, you need to define what type of structure and location works best for your company. The most common entity is a limited liability company (LLC). Once you choose a structure, the next step is to decide on a physical location for your office. Different regions can operate under separate laws, regulations, and customs. It’s important to take these factors into account while selecting the best location for your business goals.
The Bangladesh subsidiary setup process typically includes the following steps:
- Verifying your name and printing out a clearance certificate with the Registrar of Joint Stock Companies and Firms
- Adopting articles of association
- Opening a bank account
- Obtaining encashment certificates
Setting up an LLC in Bangladesh and opening a bank account might take a few weeks or even months.
Bangladesh subsidiary laws
Every subsidiary structure has its own rules and regulations, including an LLC. To establish this entity, companies need 2 shareholders and at least 1 director that can be individuals or a legal entity. Directors do not have to be nationals of Bangladesh, however, in practice, you might need at least 1 local legal representative for incorporation purposes. As an LLC, companies have to submit annual audited accounts to the Bangladesh Income Tax Authority.
Benefits of establishing a Bangladesh subsidiary
A limited liability company allows a parent company and subsidiary to operate independently from one another. The parent company doesn’t have to worry about the liability arising from the operation of the subsidiary, and the subsidiary can build a company culture that works best in Bangladesh.
Other important considerations
It’s important to plan early if you decide to establish a Bangladesh subsidiary. You’ll not only need a significant amount of time to complete the setup process, but you’ll also have to acquire extensive knowledge on the country’s employment laws. Plus, you’ll need to budget a substantial amount of resources to cover all the fees and costs involved with setting up a Bangladesh subsidiary.
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