Trade License Fee in Bangladesh 2026: Schedule, Signboard Tax, VAT and Renewal Costs

Trade license fee Bangladesh: what a licence really costs in 2026

The trade license fee Bangladesh businesses pay is not a single government price. It is a bill built from several lines: the licence fee fixed for the business category, a signboard tax measured in square feet, VAT on the fee, an income tax collected by the city corporation for the National Board of Revenue at renewal, and a monthly surcharge if renewal is late. For a small shop the add-ons can cost more than the licence itself; for a bank, hospital or brand showroom the category fee dominates.

This guide is about cost. It sets out the category rates in the City Corporation Model Tax Schedule 2016 for Dhaka North, Dhaka South, Chattogram and the other city corporations, explains how paurashavas and union parishads differ, and walks through signboard tax, VAT, the section 131 source tax, the 30 September renewal date, the surcharge formula and multi-year licences, with worked examples. How to apply, which documents to prepare and which authority issues the licence are covered in TRW's companion guides, which are linked rather than repeated here.

Summary: In city corporations the licence fee comes from the City Corporation Model Tax Schedule 2016, which lists ceilings for close to 300 business categories, from Tk 500 for a grocery or tea stall to Tk 50,000 for a five-star hotel in Dhaka or Chattogram. On top come signboard tax at Tk 80 per square foot, 15 per cent VAT on the licence fee, and at renewal a fixed income tax of Tk 3,000 in Dhaka North, Dhaka South and Chattogram, Tk 2,000 in other city corporations and Tk 1,000 or Tk 500 in paurashavas. Renewal after 30 September attracts a monthly surcharge.

Key point: Late renewal is expensive in a way most businesses underestimate. The 2016 schedule imposes a surcharge on every licence not renewed by 30 September of the financial year of Tk 100 per month or 10 per cent of the trade licence fee per month, whichever is higher. A company paying a Tk 5,500 licence fee that renews in December adds Tk 550 for each month of delay.

At a glance

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Table of Contents

How the trade license fee Bangladesh rules are set

Trade licence fees are local taxes. Each tier of local government levies them under its own statute and a model tax schedule issued by the Local Government Division, and the local body then applies the schedule within its area. The cost of the same business can therefore differ between Dhaka and Rajshahi, and again between a city corporation, a paurashava and a union parishad.

The City Corporation Model Tax Schedule 2016

For every city corporation the governing instrument is the City Corporation Model Tax Schedule 2016, made by the Local Government Division under section 84 of the Local Government (City Corporation) Act 2009 by SRO No. 13-Ain/2016 dated 28 January 2016 and published in the Bangladesh Gazette Extraordinary on 31 January 2016.[1] It repealed the City Corporation Model Tax Schedule 2015.[1] The 2015 schedule had triggered a business backlash: it raised trade licence charges in Dhaka by an average of 263 per cent, with some small and medium traders facing four- to six-fold increases.[2] The 2016 schedule is the result of that pushback, and its category rates remain the reference point for city corporation billing in 2026.

Ceilings, not fixed prices

Paragraph 10(4) of the schedule is drafted as a cap: a city corporation may not levy tax on the businesses, trades, professions and industries in its table at a rate higher than the amount shown.[1] The table heading is "maximum annual tax". In practice the large city corporations bill at or close to the ceilings, so the figures below are the right budgeting numbers, but a corporation can lawfully charge less and the bill generated by its system is what you actually pay.

Size classes: large, medium and small

Many categories have separate rates for large, medium and small establishments. The schedule says the size of a business is determined by its floor area, measured in square feet, and that each city corporation sends its own size classification by business class to the Local Government Division, which must approve it before it takes effect.[1] Recording the correct floor area on the application matters, because moving from "small" to "large" can double the category fee.

No published revision since 2016

We found no gazetted replacement or amendment of the 2016 trade licence rates as at October 2026. In August 2026 the Dhaka South City Corporation administrator said he had rejected proposals to increase taxes, trade licence fees and signboard fees, and pointed instead to the NBR's renewal levy as the cost businesses should lobby against.[5] Do not expect a new category tariff in 2026–27.

Paurashavas and union parishads

Outside city corporations, paurashavas apply the Paurashava Model Tax Schedule 2014, made under the Local Government (Paurashava) Act 2009 together with the Paurashava taxation and collection rules of 2013.[14] Union parishads levy trade, profession and business tax under the Local Government (Union Parishad) Act 2009 and their own schedule. Rates in both tiers are generally lower than in city corporations but vary locally, so confirm the current figure with the local tax section.

What a trade licence bill contains

Before looking at category rates, it helps to see the whole bill. A city corporation trade licence invoice typically combines the following elements, each with its own legal basis.

• Licence fee: the category rate from the model tax schedule, payable on issue and again each year at renewal.[1]
• Signboard tax: Tk 80 per square foot of the business identification signboard.[1]
• VAT: 15 per cent on the licence fee.[2] [3]
• Income tax at renewal: a fixed amount collected for the NBR under section 131 of the Income Tax Act 2023.[4]
• Surcharge: where renewal is made after 30 September.[1]
• Arrears: any unpaid fees, surcharge or VAT from earlier years, which corporations collect before renewing.[2]

Small form or processing charges may also appear; they are modest and vary by corporation. Holding tax on the premises is a separate liability, not part of the trade licence bill.

City corporation trade license fee Bangladesh schedule by category

The 2016 schedule lists close to 300 numbered categories. Some carry a single rate for every city corporation; others have two columns, one for Dhaka North, Dhaka South and Chattogram and a lower one for the other city corporations. Dhaka South alone has issued about 246,180 licences across 294 business categories, which shows how granular the system is.[6] The main groups are set out below.

Limited companies: paid-up capital bands

A limited company is classified by paid-up capital, not by activity, and the same ceiling applies in every city corporation:[1]

• Paid-up capital up to Tk 1 lakh: Tk 1,500
• Above Tk 1 lakh up to Tk 5 lakh: Tk 2,000
• Above Tk 5 lakh up to Tk 10 lakh: Tk 3,500
• Above Tk 10 lakh up to Tk 25 lakh: Tk 4,500
• Above Tk 25 lakh up to Tk 50 lakh: Tk 5,500
• Above Tk 50 lakh up to Tk 1 crore: Tk 7,500
• Above Tk 1 crore up to Tk 5 crore: Tk 10,000
• Above Tk 5 crore: Tk 12,000

The practical consequence is that a capital increase can move a company into a higher band at the next renewal. When paid-up capital changes, update the licence record so that the fee, and the licence itself, match the RJSC filings. Our guide to company registration in Bangladesh explains how paid-up capital is set at incorporation.

Banks, insurers and financial institutions

Scheduled banks and financial institutions carry a Tk 10,000 ceiling. Insurance branch offices, lending institutions' branch offices, money changers and NGO branch offices are each capped at Tk 5,000, and share brokerage branch offices at Tk 3,000.[1] Several rates are framed per branch office.

Contractors, developers, agents and traders

For contractors the ceiling in Dhaka North, Dhaka South and Chattogram is Tk 6,000 for special-class contractors, Tk 4,000 for first-class contractors and construction firms, Tk 3,000 for second class and Tk 2,000 for third class and suppliers; the corresponding rates in other city corporations are Tk 4,000, Tk 2,000, Tk 1,500 and Tk 1,000. Builders, developers and real estate businesses pay Tk 6,000 in the three large corporations and Tk 4,000 elsewhere.[1]

Among agents, clearing and forwarding agents pay Tk 2,500 (Tk 1,500 elsewhere), recruiting agents Tk 5,000 (Tk 4,000), travel agents Tk 2,000 everywhere, and importers and distributors Tk 2,000 (Tk 1,000). Exporters pay Tk 1,000 in every city corporation.[1] Businesses that import or export should treat the trade licence as the first of several registrations; see our analysis of investment approvals in Bangladesh for the wider sequence.

Manufacturers and factories

Manufacturers that are not limited companies are charged by industry. Examples include textile mills at Tk 4,500 in Dhaka and Chattogram (Tk 3,000 elsewhere), garment factories at Tk 4,000 (Tk 3,000), pharmaceutical factories at Tk 5,000 (Tk 3,000), tobacco factories at Tk 5,000 (Tk 4,000) and cold storage at Tk 3,000 (Tk 2,000).[1] A manufacturer that is incorporated as a limited company falls into the paid-up capital bands instead. Warehouses carry a Tk 10,000 ceiling and buying houses Tk 5,000.[1]

Shops, hospitality and services

Everyday retail sits at the bottom of the scale. A grocery (mudi) shop, tea stall or fruit shop is capped at Tk 500, a small retail pharmacy at Tk 1,000 and a wholesale pharmacy at Tk 2,500 in the three large corporations.[1] An air-conditioned restaurant pays Tk 2,500 in Dhaka and Chattogram (Tk 2,000 elsewhere) and a non-air-conditioned restaurant Tk 1,000 (Tk 700). A super shop or mega mall is capped at Tk 3,000 in the large corporations and Tk 2,000 elsewhere.[1]

At the top end, a five-star hotel pays Tk 50,000 in Dhaka and Chattogram and Tk 25,000 elsewhere, and a private hospital or clinic with more than 40 beds Tk 35,000 (Tk 20,000). Car showrooms carry Tk 25,000, international courier services Tk 25,000, and event management businesses, private television channels and brand furniture showrooms Tk 20,000 each.[1] Restaurant operators should also read our guide to restaurant business registration, which covers the other permits they need.

Professionals, consultants and technology businesses

Self-employed engineers, doctors and dentists pay Tk 5,000 if they are liable to income tax and Tk 2,500 if not. An advocate practising alone pays Tk 1,000 and a solicitors' firm or legal advisory firm Tk 2,000. Architecture and engineering firms are capped at Tk 5,000, consultants at Tk 3,000, software developers at Tk 5,000 and graphic design businesses at Tk 2,000.[1] A technology business incorporated as a limited company falls into the paid-up capital bands instead.

Businesses the schedule does not list

Item 295 is a residual rule. A business that does not fall within items 1 to 294 is charged Tk 1,000 if it pays income tax and Tk 500 if it does not.[1] If your activity is genuinely new, such as a niche platform service, describe it accurately and ask the licensing officer to apply the residual rate rather than forcing it into a more expensive listed category.

The table below compares common categories. On a phone, scroll it sideways.

Signboard tax and advertisement tax

Signboard tax is the line most often disputed at renewal, because it depends on a measurement rather than a fixed rate. The 2016 schedule fixes the signboard tax on the identification signboard of a profession, trade, shop or business at Tk 80 per square foot.[1]

Calculating signboard tax

Signboard tax is the most variable part of the trade license fee Bangladesh businesses budget for. Multiply the width by the height of each signboard in feet and multiply the area by Tk 80. A 6 by 4 foot shop sign is 24 square feet and attracts Tk 1,920; a 10 by 3 foot fascia is 30 square feet and attracts Tk 2,400. Where a business displays more than one identification sign, each is assessed. Because the tax grows with area, a large rooftop or wraparound sign can cost more than the licence fee itself.

Under-declared signboards are now a target

In August 2026 the Dhaka South administrator observed that the actual size of signboards at many large commercial establishments was not reflected in their tax assessments.[7] Expect closer checking, and declare the true dimensions: an assessment corrected at inspection can bring arrears with it.

Billboards and advertising are taxed separately

Signboard tax is distinct from the advertisement tax that the schedule imposes on billboards, hoardings and similar displays. On city corporation or government land, a lit billboard, hoarding, mega sign or T-sign is assessed at Tk 300 per square foot and an unlit one at Tk 150; a lit panaflex sign or roman banner at Tk 300 and an unlit one at Tk 200; a trivision sign at Tk 600; and an LED sign at Tk 20,000 per square foot.

On private land and on vehicles, the rates are Tk 150 and Tk 100 for billboards and panaflex, Tk 400 for trivision and Tk 10,000 for LED signs.[1]

VAT and source tax on the trade licence

Two national taxes ride on the local bill. Neither is a city corporation charge, so a corporation cannot waive them.

VAT at 15 per cent on the licence fee

City corporations add VAT at 15 per cent to the trade licence fee. It was imposed in 2011, though Dhaka's corporations did not begin collecting it consistently until 2015, when they also demanded the uncollected VAT for earlier years before renewing licences.[2] In Chattogram, a small trader's renewal in 2020 comprised a Tk 500 corporation fee, Tk 75 VAT and Tk 3,000 NBR tax, a total of Tk 3,575.[3] That breakdown shows the arithmetic: VAT is calculated on the licence fee, not on the income tax line.

Income tax collected at renewal: section 131

Section 131 of the Income Tax Act 2023 requires a city corporation or paurashava renewing a trade licence to collect a fixed amount of income tax:[4]

The amount is flat. A betel-nut seller and a shipbuilder pay the same Tk 3,000 in Chattogram, which is why traders' bodies have long called the levy regressive.[3] The figure rose from Tk 500 to Tk 3,000 in the three large city corporations in 2019.[3] In August 2026 the Dhaka South administrator confirmed that renewal requires the Tk 3,000 payment to the NBR, that the corporation does not keep it, and urged traders to press the government to reduce it.[5]

The section 131 tax is collected at renewal; it is not charged on a first issue. It is an advance tax that can be credited in the business's return, so keep the receipt. Our guide to withholding tax in Bangladesh explains how such credits work.

TIN and proof of return

Tax identity documents are a condition of the licence rather than a fee, but missing them stops renewal. Under the 2025–26 budget changes announced in June 2025, a taxpayer identification number is enough for a new trade licence, while renewing a trade licence in a city corporation or paurashava area stayed on the list of services that require proof of submission of a tax return (PSR).[10] File the return before the renewal window, not after. See our guide to income tax return filing.

Renewal deadlines, surcharge and late fees

Timing drives the trade license fee Bangladesh businesses actually pay. A trade licence runs for the financial year, 1 July to 30 June, and must be renewed every year unless fees have been paid in advance for several years. The renewal deadline and the surcharge are where most avoidable costs arise.

The 30 September deadline

The 2016 schedule treats 30 September of each financial year as the renewal deadline: a licence holder who fails to renew by then pays a surcharge.[1] The first quarter of the financial year is therefore a surcharge-free window. Dhaka South ran a dedicated renewal week with the Dhaka Chamber of Commerce and Industry from 16 to 20 August 2026 for the 2026–27 year, a reminder that the corporations expect most renewals in July to September.[6]

The surcharge formula

The surcharge is Tk 100 per licence per month or 10 per cent of the trade licence fee per month, whichever is higher.[1] For any licence fee up to Tk 1,000 the Tk 100 minimum applies; above Tk 1,000 the 10 per cent rate takes over. The surcharge is calculated on the licence fee, so a hotel or hospital paying Tk 35,000 to Tk 50,000 accrues Tk 3,500 to Tk 5,000 for every month of delay. Confirm how a part month is billed before relying on a mid-month payment.

Deadline extensions

The corporations sometimes extend the surcharge-free period. Dhaka North extended the window for the 2024–25 renewal from 30 September to 30 November 2024, and Dhaka's corporations granted a similar two-month extension to 30 November in 2015.[9] [2] Extensions are announced late and are not guaranteed, so plan to renew by 30 September and treat any extension as a bonus.

Paying up to five years in advance

Paragraph 10(3) of the 2016 schedule allows the trade licence fee to be collected for up to five years at once, with any difference adjusted later if the fee changes during that period.[1] Dhaka South launched five-year issue and renewal in July 2023 through a booth at the Dhaka Chamber, allowing renewal for one to five years.[8] In August 2026 its administrator said a five-year renewal facility through a single application would be introduced soon.[6] Multi-year payment removes four renewal dates and four surcharge risks. It does not remove the annual section 131 tax or the duty to update the licence when the business changes.

Worked examples: trade license fee Bangladesh in practice

The examples below apply the 2016 ceilings, the Tk 80 signboard rate, 15 per cent VAT and the section 131 tax. They are illustrations for budgeting; the corporation's system-generated bill is decisive, and form or service charges are excluded.

Example 1: private limited company in Dhaka North

A consultancy incorporated as a private limited company with paid-up capital of Tk 40 lakh has an office in Banani with a 6 by 4 foot sign.

• Licence fee (paid-up capital Tk 25 lakh to Tk 50 lakh): Tk 5,500
• VAT at 15 per cent: Tk 825
• Signboard tax (24 sq ft at Tk 80): Tk 1,920
• First-year total: Tk 8,245
• Renewal total, adding the Tk 3,000 section 131 tax: Tk 11,245

Example 2: grocery shop in another city corporation

A mudi shop in a city corporation outside Dhaka and Chattogram, with a 3 by 2 foot sign.

• Licence fee: Tk 500
• VAT: Tk 75
• Signboard tax (6 sq ft): Tk 480
• First-year total: Tk 1,055
• Renewal total, adding the Tk 2,000 section 131 tax: Tk 3,055

Two-thirds of the renewal bill is the national income tax, not the local fee.

Example 3: late renewal of the Dhaka North company

If the company in Example 1 renews in December rather than by 30 September, the surcharge is the higher of Tk 100 or 10 per cent of the Tk 5,500 fee, that is Tk 550 per month. For October, November and December the surcharge is Tk 1,650, taking the renewal bill to about Tk 12,895, an increase of almost 15 per cent for a three-month delay. For the grocery in Example 2, the Tk 100 minimum applies, adding Tk 300 for the same delay, about 10 per cent of its renewal bill.

Paying the trade license fee Bangladesh bill online

The e-trade licence has changed how fees are paid more than how much is paid. The fee is the same online and at the counter; what changes is transparency, because the system generates an itemised bill. TRW's guide to the trade licence in Bangladesh covers the application route step by step, so the points below are limited to fees.

Portals that take payment

The Local Government Division's e-Trade License portal offers registration, application and licence verification for participating local bodies.[12] Dhaka North runs an e-revenue citizen portal for holding tax, trade licence, hotel tax and related payments, and the same platform lists Dhaka South, Chattogram, Barishal, Khulna, Rajshahi and Sylhet.[13] Investors can also apply through the One Stop Service of the Bangladesh Investment Development Authority, which signed agreements with Dhaka North, Dhaka South and Chattogram City Corporations in 2025 with the aim of bringing name clearance, company registration, the trade licence, the TIN and bank account opening into a single application.[11]

Checking the e-bill before you pay

An online bill makes errors visible. Before paying, check the business category and size class, the paid-up capital band for a company, the signboard area, the VAT base, the section 131 line, any surcharge months and any arrears carried forward. Correcting the record before payment is far easier than seeking a refund afterwards.

A fee checklist for renewal season

Most overpayments and penalties come from timing and data errors rather than from the rates themselves. The sequence below keeps the trade license fee Bangladesh businesses pay at the level the schedule intends.

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Groups with many outlets should keep one register of every licence, its category, signboard area and expiry.

Mistakes that inflate the trade license fee Bangladesh bill

• Renewing after 30 September: the surcharge runs monthly and, above a Tk 1,000 licence fee, scales with the fee.[1]
• Wrong category: a business licensed under a more expensive heading pays the higher rate every year. Use the listed category that matches the actual activity, or the residual rate under item 295.
• Wrong size class: an inflated floor area can move a shop from "small" to "large".
• Stale paid-up capital: a company that increases capital without updating the licence risks arrears and a mismatch with RJSC records; one that reduces capital may be overpaying.
• Signboard errors in either direction: over-declaring wastes money each year; under-declaring invites a corrected assessment with arrears.[7]
• No return filed: renewal can stall without proof of return submission.[10]
• Ignoring arrears: unpaid fees and VAT from earlier years are collected before renewal.[2]

Where a corporation's assessment looks wrong, a written request to the revenue section, supported by the RJSC certificate, floor-plan measurements or sign dimensions, usually resolves it. Our corporate governance and compliance practice runs licence portfolios for groups with many outlets.

What to watch in 2026–27

Three developments will shape trade licence costs over the coming year. First, Dhaka South's promised five-year renewal through a single application would let businesses fix the local fee for several years and avoid surcharge risk.[6] Second, pressure is building on the flat section 131 renewal tax, which city officials and traders now describe as the main cost driver for small businesses; any change would come through the Finance Act rather than the model tax schedule.[5] Third, signboard assessments are likely to be checked more closely as corporations look for revenue without raising rates.[7]

Dhaka South alone has set a revenue target of Tk 1.5 billion for 2026–27, with trade licence fees and holding tax as its main sources.[6] To have your licence costs reviewed, or a multi-outlet renewal managed, explore our tax compliance practice or contact TRW.

Frequently asked questions

How much is the trade licence fee in Dhaka in 2026?

It depends on the category. Under the City Corporation Model Tax Schedule 2016, ceilings range from Tk 500 for a grocery or tea stall to Tk 50,000 for a five-star hotel, and limited companies pay Tk 1,500 to Tk 12,000 according to paid-up capital. Signboard tax, VAT and renewal income tax are added.[1] [4]

Which law sets trade licence fees in city corporations?

The City Corporation Model Tax Schedule 2016, made under section 84 of the Local Government (City Corporation) Act 2009 by SRO No. 13-Ain/2016 and published on 31 January 2016. It replaced the 2015 schedule.[1]

What is the signboard tax on a trade licence?

Tk 80 per square foot of the business identification signboard. A 6 by 4 foot sign therefore attracts Tk 1,920. Billboards and advertising displays are taxed separately at higher rates.[1]

Is VAT charged on the trade licence fee?

Yes. City corporations add 15 per cent VAT to the licence fee, so a Tk 500 fee carries Tk 75 VAT.[2] [3]

Why do I pay Tk 3,000 extra when renewing in Dhaka?

Section 131 of the Income Tax Act 2023 requires the city corporation to collect income tax at renewal: Tk 3,000 in Dhaka North, Dhaka South and Chattogram, Tk 2,000 in other city corporations, Tk 1,000 in district-headquarters paurashavas and Tk 500 in other paurashavas.[4] [5]

What is the deadline for renewing a trade licence?

The licence runs for the financial year from 1 July, and renewal is due by 30 September. Corporations sometimes extend the surcharge-free period, as Dhaka North did to 30 November in 2024, but extensions are not guaranteed.[1] [9]

How is the late renewal surcharge calculated?

At Tk 100 per month or 10 per cent of the trade licence fee per month, whichever is higher, from the end of September until renewal.[1]

Can I pay trade licence fees for several years at once?

The 2016 schedule allows the fee to be collected for up to five years at a time. Dhaka South introduced five-year licences in 2023 and in August 2026 said a single-application five-year renewal would follow soon.[1] [6] [8]

Are trade licence fees lower in paurashavas and union parishads?

Generally yes. Paurashavas use the Paurashava Model Tax Schedule 2014, union parishads their own schedules, and the paurashava renewal income tax is Tk 1,000 or Tk 500.[4] [14]

Does the fee change if I apply online?

No. Online portals charge the same schedule fee but generate an itemised bill that makes errors easier to spot.[12] [13]