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Entry Options for Foreign Investors in Bangladesh

Table of Contents

Foreign investors seeking to establish a presence in Bangladesh have several structural options. The choice depends significantly on the intended scope of activities, desired level of control, liability considerations, and long-term strategic goals. The primary routes are establishing an incorporated entity (a subsidiary company) or an unincorporated entity (a branch, liaison, or project office).

Key Entry Structures
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Incorporated Subsidiary Company:
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  • This involves registering a private limited liability company under the Bangladesh Companies Act, 1994.
  • It creates a distinct legal entity separate from the foreign parent company.
  • Suitable for full-scale commercial operations, manufacturing, trading, or providing services.
  • Offers limited liability protection to the parent company.

Unincorporated Offices (Liaison, Branch, Project):
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  • These are extensions of the foreign parent company, not separate legal entities.
  • Liaison Office (LO): Primarily for market research, coordination, and promoting the parent company’s interests. Cannot engage in commercial activities or earn income.
  • Branch Office (BO): Can engage in specific commercial activities approved by the Bangladesh Investment Development Authority (BIDA). Income generated is taxable in Bangladesh.
  • Project Office (PO): A temporary setup specifically for executing a particular project awarded to the foreign parent.
  • Liabilities incurred by these offices are generally considered liabilities of the foreign parent company.

Comparing the Options
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Choosing the right structure is crucial. Factors like legal status, permitted activities, taxation, capital requirements, and liability exposure differ significantly between these options.

Key Contact

For professional assistance with entity setup or advice on the optimal business structure in Bangladesh, please reach out to our corporate advisory team: