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Setting up a Business in Bangladesh

Table of Contents

Choosing the right legal structure is a fundamental step when establishing a business in Bangladesh. The options available depend on whether the founders are local entrepreneurs or foreign investors. This page provides a brief overview and links to detailed guides for each structure.

Options for Local Entrepreneurs
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Bangladeshi citizens or entities typically choose from the following structures:

1. Sole Proprietorship
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The simplest structure, owned and run by one individual, with no legal distinction between the owner and the business.

2. Partnership Firm
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A business formed by two or more individuals or entities who agree to share profits or losses. Registration is optional but recommended.

3. Company:
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A separate legal entity from its shareholders registered under the Companies Act, 1994.

Sole Proprietorship and Partnership Firm are considered as unincorporated entities where there is no limitation on the liability of the business owner.

For a side-by-side comparison of these local structures, see our Comparison Guide for Local Entrepreneurs.

Options for Foreign Investors
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Foreign individuals or entities looking to establish a presence in Bangladesh generally consider these options:

1. Liaison Office
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Acts as a communication channel for the foreign parent company; cannot conduct commercial activities or earn income in Bangladesh.

2. Branch Office
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Can conduct business activities specified in its approval from the Bangladesh Investment Development Authority (BIDA), effectively acting as an extension of the foreign parent company.

3. Project Office
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A temporary setup established solely to execute a specific contract awarded to the foreign parent company.

4. Private Limited Company (Subsidiary)
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A separate legal entity incorporated in Bangladesh under the Companies Act, 1994, with foreign shareholding (up to 100% allowed in most sectors). This is the most common structure for long-term commercial operations.

Liaison Office, Branch Office and Project Office are not incorporated entities in Bangladesh and all liabilities of such office will be considered as the liability of Parent company outside Bangladesh.

For a detailed comparison of entry options for foreign investors, please refer to our Comparison Guide for Foreign Investment Structures.

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: