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Trade Licence

Table of Contents

A Trade Licence is considered the primary licence required for companies after incorporation. While its basic purpose is to facilitate the collection of local government taxes, a Trade Licence also serves as proof of a business’s existence and is a fundamental requirement for commencing operations in Bangladesh.

Regulatory Framework and Issuing Authority
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Local Government bodies, e.g., City Corporations, Paurashavas (Municipalities), and Union Parishads, issue the Trade Licence. It is typically issued under the respective local government’s taxation rules, which are often framed under broader local government legislation (such as specific Acts or Ordinances governing City Corporations, Paurashavas, and Union Parishads).

Required Documents for New Trade Licence
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Applicants must prepare a comprehensive set of documents, typically including:

  • Completed application form (original)
  • National ID card (attested copy)
  • Rent agreement or proof of ownership (attested copy)
  • Holding tax payment receipt (attested copy)
  • Three recent passport-size photographs (attested)
  • No Objection Certificate (NOC) from the local community or authority, if applicable
  • Memorandum and Articles of Association (attested copies, for limited companies)
  • Certificate of Incorporation (attested copy, for limited companies)
  • Work permit from the Bangladesh Investment Development Authority (BIDA) (attested copies, for foreign investors/employees)
  • Partnership agreement (attested copy, for partnership firms)
  • Tax Identification Number (TIN) certificate (attested copy, for limited companies and other taxpayers)

For certain types of businesses, additional specific documents may be required. It is advisable to check with the relevant issuing authority for a complete list.

Step-by-Step Application Process
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graph TD; A["Collect Application Form from City Corporation/Paurashava/Union Parishad Office"] --> B["Submit Filled Form with All Required Documents to Taxation Officer"]; B --> C["Sanitary Inspector Conducts Site Inspection (if applicable)"]; C --> D["Licensing Supervisor Verifies Compliance with Regulations"]; D --> E["Deposit Scheduled Fees at Designated Bank/Office"]; E --> F["Receive Trade Licence"];

1. Application Submission
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Applicants must obtain the prescribed application form from the relevant local government office (City Corporation, Paurashava, or Union Parishad). The completed form, along with all supporting documents, should be submitted to the Taxation Officer or designated official at the issuing office.

2. Inspection and Verification
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The submitted application and documents are reviewed. A Sanitary Inspector may conduct a physical inspection of the business premises to ensure compliance with health, safety, and environmental standards, particularly for businesses like restaurants, factories, or clinics. Subsequently, a Licensing Supervisor or relevant official verifies that all documentary and procedural requirements are satisfied.

3. Fee Payment and Licence Issuance
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Upon successful verification and inspection (where applicable), the applicant is instructed to pay the scheduled fees. Once the payment is confirmed, the Trade Licence is issued by the City Corporation, Paurashava, or Union Parishad office.

Fee Schedule:

  • Application form fee: Typically around BDT 10–50 (subject to change by the local authority).
  • Licence fee: Varies significantly from BDT 100 to BDT 40,000 or more, depending on the nature and size of the business. For limited companies, this fee is often based on the paid-up capital. Detailed fee schedules are available from the respective issuing offices.

Official Timeline: Generally 3–7 working days, but this can be optimistic.
Actual Timeline: May vary considerably depending on the specific local government office, completeness of the application, inspection requirements, and current workload.

Renewal of Trade Licence
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Trade licences must be renewed annually to remain valid. The renewal process is generally more straightforward than obtaining a new licence but requires timely submission of necessary documents and payment of renewal fees.

Required Documents for Renewal
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Typically, the following documents are required for renewal:

  • Original Trade Licence book (issued at the time of initial registration or last renewal)
  • Challan book or payment receipts from the previous year (issued at initial registration/renewal)
  • Up-to-date rent receipt or proof of continued legal occupancy/ownership of the premises (attested copy)
  • Up-to-date Tax Identification Number (TIN) certificate (attested copy, particularly for companies)
  • Up-to-date Fire licence (attested copy, where applicable, e.g., for companies and factories)
  • Up-to-date Environmental clearance certificate (attested copy, where applicable, e.g., for companies and factories)
  • Any other documents specified by the issuing authority.

Renewal Process
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  1. Application and Fee Deposit: The applicant usually needs to submit a renewal application (sometimes a simple prescribed form or letter) and deposit the renewal fee at the designated bank or directly at the issuing office. A payment receipt or challan will be provided.
  2. Document Submission: The payment receipt, along with the other required documents (such as the original trade licence), is submitted to the relevant section of the City Corporation, Paurashava, or Union Parishad.
  3. Processing and Endorsement: The authorities verify the payment and documents. Upon satisfaction, the renewal is typically endorsed in the original trade licence book or a new renewal certificate/slip is issued.
  4. Completion: The renewal is registered, and the licence’s validity is extended for the next financial year (or as per the local government’s cycle).

Renewal Fee Schedule:

  • Similar to the initial licence fee, ranging from BDT 100 to BDT 40,000 (or more), varying by business type, paid-up capital (for companies), and any revisions by the local government.

Official Timeline: Usually 1–3 working days.
Actual Timeline: May vary depending on the local office. It is advisable to initiate the renewal process well before the expiry date.

Compliance and Practical Considerations
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Businesses, especially manufacturing firms and those in regulated sectors, must ensure ongoing compliance with all local laws and regulations. This includes maintaining up-to-date fire safety measures, environmental clearances, and any other sector-specific permits.

Failure to obtain or renew a Trade Licence, or non-compliance with the conditions stipulated therein or with inspection requirements, can lead to penalties, fines, or even the suspension of business operations.

For foreign-invested companies or companies employing foreign nationals, additional documentation—such as valid work permits from BIDA for foreign employees and necessary approvals related to foreign investment—may be scrutinised during the application or renewal process.

Firms are strongly encouraged to consult with the relevant local government authorities or seek professional legal advice to ensure all specific requirements are comprehensively met and to navigate the process efficiently.

Key Contact

For tailored guidance on obtaining or renewing a trade licence for your business in Bangladesh, please contact: