How to Start a Business in Bangladesh: The 2026 Legal Roadmap

How to start a business in Bangladesh: the 2026 overview

How to start a business in Bangladesh is no longer a question with a vague answer of "it depends on the office". In 2026 the route is a defined sequence: choose the vehicle, clear the name, incorporate with the Registrar of Joint Stock Companies and Firms, take the trade licence, register for income tax and VAT, open the bank account and bring in capital, register the project with Invest Bangladesh where foreign money is involved, obtain any sector licence, hire lawfully, and then run a compliance calendar that starts on day one. Each stage unlocks the next, and most delays come from doing them out of order.

This is TRW's hub roadmap. It keeps each stage short, because we have already published a detailed guide on almost every step, and links to that guide rather than repeating it. The value here is the sequence, the dependencies between stages, the realistic timeline and the cost summary table, all updated for the 2026 changes: the BanglaBiz Business Starter Package, the RJSC's move to an electronic registration system, and the Invest Bangladesh Act 2026 (Act No. 104 of 2026), which replaced BIDA with a single investment authority.

Summary: Most founders start a business in Bangladesh through a private limited company or a one person company registered with the RJSC, followed by a trade licence, e-TIN, BIN and a bank account. Foreign investors add capital remittance through an authorised dealer bank and registration with Invest Bangladesh. With documents ready, the core set-up can be completed in one to three weeks; sector licences and work permits add more.

Key point: Since February 2026, the BanglaBiz Business Starter Package lets an investor apply for name clearance, temporary bank account opening, company incorporation, e-TIN and trade licence in one application, with registration targeted within three working days. Since 20 August 2026, Invest Bangladesh is the authority for investment registration, incentives and work permits.

At a glance

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Table of Contents

How to start a business in Bangladesh: the ten-stage roadmap

The legal set-up of a Bangladeshi business runs through ten stages. Stages one to three create the legal person. Stages four to six give it a licence to trade, a tax identity and a bank account. Stage seven applies to foreign investors and to industrial projects that want incentives. Stages eight to ten turn a registered entity into an operating business that can hold sector permissions, employ people and stay in good standing. Domestic founders running a small trading or services business may complete stages one to six and ten only; a foreign-owned manufacturer will touch every stage.

The stages are sequential for a reason. A bank will ask for the certificate of incorporation, memorandum and articles before opening a corporate account. The trade licence application asks for the tax number. VAT registration asks for the trade licence. A foreign investor's shares are issued only after capital has arrived, and its work permits depend on investment registration. Starting a later stage before the earlier one is complete usually means filing twice.

What changed in 2026

Three developments shape how to start a business in Bangladesh this year. First, BanglaBiz 2.0, launched on 1 February 2026, introduced a Business Starter Package that bundles five approvals in one application: name clearance, temporary bank account opening, company incorporation, e-TIN and trade licence, with registration targeted within three working days.[4] Second, the RJSC is moving to an electronic Business Registration System modelled on Singapore's, with real-time verification of national identity, e-TIN and mobile numbers, and model or pre-approved memorandum and articles; the developer's handover is due by 15 January 2027.[5] Third, the Invest Bangladesh Act 2026 came into force on 20 August 2026.[6]

For background on the corporate statutes behind these stages, see our overview of corporate law and business formation in Bangladesh and our guide to company law in Bangladesh.

Stage 1: choose the right business vehicle

The vehicle is the first real decision in how to start a business in Bangladesh. It decides liability, tax, who can own the business and how much paperwork follows. It is also the hardest decision to reverse: converting a proprietorship into a company means transferring assets, contracts, licences and employees to a new legal person. Our full comparison of types of companies in Bangladesh covers every option; the short version follows.

Sole proprietorship

A sole proprietorship is the individual trading under a business name. There is no separate legal person and no registration with the RJSC; the trade licence is the main formal step, followed by the owner's TIN and, where the activity or turnover requires it, a BIN. The owner is personally liable for every business debt and is taxed at individual rates. It suits a small local shop, consultancy or online seller testing the market. It does not suit a business that wants outside investors, bank finance on its own balance sheet or foreign ownership.

Partnership firm

A partnership is two or more people carrying on business under a partnership deed. Registration of the firm with the RJSC is optional, but an unregistered firm is at a real disadvantage when it needs to sue on its contracts, so we recommend registration in almost every case. Partners remain jointly and severally liable for the firm's debts. Partnerships are common in family trading businesses, but the unlimited liability and the difficulty of admitting investors push most growing businesses towards a company.

Private limited company

The private limited company is the default vehicle for serious domestic and foreign businesses. Under the Companies Act 1994 its articles must restrict share transfers, prohibit public invitations to subscribe for shares, and limit members to fifty, excluding employees; it needs at least two shareholders and two directors.[1] Shareholders' liability is limited to unpaid share capital, there is no general statutory minimum capital, and in most sectors a foreign investor may own 100 per cent. Our guide to private limited company registration covers the documents in detail.

One person company and foreign-office options

A one person company (OPC), introduced into the Companies Act in 2020, lets one natural person own a limited company with a named nominee; it requires paid-up capital of between Tk 25 lakh and Tk 5 crore and the suffix "OPC", and a company cannot be its shareholder.[1] See our guide to the one person company. A foreign company that does not want a subsidiary may instead open a branch, liaison or representative office with investment authority approval and register it with the RJSC as a foreign company; our guide to foreign company registration explains the trade-offs.

How to decide

Three questions settle most cases. Will anyone other than the founder ever own a share? If yes, use a private limited company. Will a foreign person or company own any part of it, or will it need to remit dividends abroad? If yes, use a company and plan the capital route at stage six. Does the activity need a sector licence that is only issued to companies, as most regulated activities are? If yes, a proprietorship is not an option. Choosing a company from the start costs a little more and avoids a forced restructuring later.

Stage 2: clear the company name

Every company begins with name clearance from the RJSC. The application is made online, one name per application, and the RJSC fee schedule sets the fee at Tk 500 per proposed name, with Tk 200 for a time extension.[2] Section 11 of the Companies Act bars names that are identical with or too similar to an existing company's name and names the government considers undesirable, and the suffix must match the entity: "Limited" for a private company, "PLC" for a public company and "OPC" for a one person company.[1]

Name clearance is valid for a limited period, so prepare the memorandum, articles and subscriber details before you apply rather than after. Search the trademark register as well as the RJSC index: a cleared company name gives no protection against a registered trademark owner. Our guide to company name clearance in Bangladesh covers refusal grounds, validity and what to do when a name is rejected.

Stage 3: incorporate with the RJSC

Incorporation turns the cleared name into a company. The filing comprises the memorandum and articles of association, the declaration of compliance, particulars of the first directors and their consents, the registered office address and the subscribers' details, with national identity or passport documents for each individual. Foreign corporate subscribers need board resolutions and constitutional documents, usually notarised and legalised. The RJSC charges a filing fee of Tk 200 per document and a capital-based registration fee that is nil up to Tk 10 lakh of authorised capital, Tk 80 for each further lakh up to Tk 50 lakh, and Tk 130 for each lakh above that.[2]

Stamp duty is usually the largest government cost for a small company. Under the Stamp Act schedule as substituted in 2022, the articles attract Tk 10,000 up to Tk 40 lakh of nominal capital, Tk 30,000 above Tk 40 lakh up to Tk 12 crore and Tk 50,000 above Tk 12 crore, and a memorandum filed with articles attracts Tk 2,000.[3] Authorised capital therefore drives cost; paid-up capital does not. Set authorised capital at the level you genuinely expect to issue in the next few years. Our breakdown of company registration fees in Bangladesh works through complete examples.

BanglaBiz, eBRS and realistic timing

Founders now have two filing routes. The RJSC's own online system remains available, and the BanglaBiz Business Starter Package bundles incorporation with name clearance, the temporary bank account, e-TIN and trade licence in one application.[4] The RJSC's electronic Business Registration System aims at registration within a few hours of official verification once fully operational, with officials manually re-verifying name clearances during the first six months.[5] Our step-by-step guide to company registration in Bangladesh in 2026 covers both routes.

In practice the time is spent before filing, not after. Collecting identity documents, legalising foreign board resolutions and agreeing the articles take longer than the RJSC's processing. A domestic company with two local shareholders can be incorporated within days; a foreign-owned company should allow for document legalisation abroad.

Directors and the proof of return requirement

One requirement catches founders out. Proof of submission of an income tax return (PSR) is required for becoming a director or sponsor shareholder of a company.[9] A local individual who has never filed a return should obtain a TIN and file before the incorporation documents are lodged, or the filing will stall at the RJSC stage.

Stage 4: obtain the trade licence

A trade licence is required for every place of business and is issued by the city corporation, paurashava or union parishad where the business operates. It is renewed each fiscal year, and the fee depends on the category of business, the authorised capital of a company and the local authority, with by signboard tax and VAT. A new trade licence requires a TIN, while renewal in a city corporation or paurashava area requires proof of submission of the return.[9]

The licence is premises-specific. A company with a head office in Dhaka and a warehouse in Gazipur needs a licence for each, from different authorities. A registered office at a serviced address that is not where the business operates may satisfy the RJSC but will not satisfy an inspector. Our guides to the trade licence fee in Bangladesh and trade licence registration set out the fee schedule and the application in full.

Stage 5: register for income tax and VAT

Every company must register as an income tax assessee and obtain an e-TIN. Registration is made online through the National Board of Revenue's e-TIN system, no fee is payable, and the certificate can be printed or saved as soon as the application is complete.[10] Use a company email address and a mobile number the company controls; an e-TIN tied to an employee's personal phone becomes a problem when that employee leaves.

The Business Identification Number (BIN) is the VAT registration or turnover tax enlistment, issued through the NBR's online VAT system. Importers, exporters and suppliers of most taxable services need one regardless of turnover, and the BIN is also needed to register on customs systems, to bid for tenders and to renew most sector licences. VAT returns are monthly again: the VAT and Supplementary Duty (Amendment) Ordinance 2026, gazetted on 14 October 2026, requires returns within 15 days after each tax period.[13]

Withholding obligations start with the first payment of rent, salary or contractor fees, not with the first profit. Our guide to company tax registration in Bangladesh covers the e-TIN, BIN, withholding identity and first returns, and our guide to VAT registration for companies covers the BIN application.

Stage 6: open the bank account and bring in capital

Banking is where many plans for how to start a business in Bangladesh first slip. A corporate bank account needs the certificate of incorporation, the memorandum and articles, a board resolution naming the signatories, the trade licence and e-TIN, and identity documents for directors and beneficial owners. Banks apply their own know-your-customer checks, and many ask for the trade licence before activation, which is why the Starter Package includes temporary bank account opening.[4]

The foreign investor's capital route

For a foreign shareholder, the bank account is where exchange control begins. A foreign investor may open a temporary non-resident taka account to receive capital remittances before incorporation, without prior Bangladesh Bank permission; the remitted capital supports an encashment certificate, and once the company is registered a new account is opened and the funds transferred into it.[7] No prior Bangladesh Bank permission is needed to issue shares to a non-resident, but the remittance must be received first, and the authorised dealer bank must notify Bangladesh Bank within 14 days of the issue once the RJSC formalities are complete.[8]

Get this step right and repatriation later is straightforward: net cash dividends can be remitted without prior Bangladesh Bank approval.[8] Get it wrong, by paying for shares from a director's personal account or in cash, and the investment may not be recognised as foreign capital at all. Our guide on how to invest in Bangladesh and our note on foreign exchange regulations cover the detail.

Stage 7: register with Invest Bangladesh (foreign and industrial projects)

For a foreign investor, how to start a business in Bangladesh now runs through a new authority. The Invest Bangladesh Act 2026 (Act No. 104 of 2026) is dated 16 July 2026 and came into force on 20 August 2026 under S.R.O. No. 307-Act/2026.[6] It establishes the Invest Bangladesh Authority and, under section 6, gives it functions that include approving incentives and facilities for domestic and foreign capital, recommending visas and granting work permits for foreign personnel, and arranging for clearances, certificates and permits to be delivered through a single digital platform.[6] Section 20 allows registrations, permits and allotments to be suspended or cancelled for breach.[6]

Registration of the project is the legal hook for incentives, import entitlements and work permits. The fee schedule published by BIDA ran from Tk 5,000 for projects up to Tk 100 million to Tk 100,000 for projects above Tk 1,000 million, plus 15 per cent VAT, and was the same for local, foreign and joint-venture industries.[7] Check whether Invest Bangladesh has reissued the schedule before filing. Projects inside an export processing zone register with BEPZA instead.

Work permits

Every foreign national who works in the business needs a work permit and the correct visa. Under the published ratios, an industrial project may employ one foreign national for every 10 local employees at the initial stage and one for every 20 during operation; branch, liaison and representative offices one for every five.[7] Plan the first expatriate hires against those ratios before the business plan assumes them. Our guides to foreign investment law in Bangladesh, investment approvals and the Bangladesh investor visa cover sector caps, approvals and immigration.

Stage 8: obtain sector licences and premises permits

Most businesses need more than the core set. An importer or exporter needs an import or export registration certificate from the Office of the Chief Controller of Imports and Exports before its first shipment. A factory needs a factory licence from the Department of Inspection for Factories and Establishments, fire safety clearance and, depending on its environmental category, an environmental clearance. Regulated activities, including banking, payments, insurance, telecoms, healthcare, education, travel and recruitment, need a licence from the sector regulator, often with minimum capital and fit-and-proper tests for directors.

Sequence matters again. Several regulators want to see the company, its paid-up capital in a Bangladeshi bank and its tax numbers before they will accept an application, and some controlled sectors need a ministry no-objection before investment registration. Map every licence the business plan depends on before incorporation, because the regulator's requirements may dictate the objects clause, the capital or the shareholding. Our master map of business licences in Bangladesh lists each licence, its authority and its renewal cycle, with links to our guides on import and export licensing, the factory licence and the fire licence.

Stage 9: set up employment lawfully

The Bangladesh Labour Act 2006 applies from the first hire. Section 5 prohibits appointing a worker without an appointment letter and requires a photo identity card for every worker; service rules are permitted but take effect only once approved by the Department of Inspection for Factories and Establishments.[14] Registers of workers, attendance, wages and leave must be maintained from the start, and wages paid within the statutory period.

Two obligations surprise new companies. First, the workers' participation and welfare fund regime applies to a company whose paid-up capital is at least Tk 1 crore, or whose fixed assets are worth at least Tk 2 crore, on the last day of an accounting year, and requires 5 per cent of net profit to be paid into the funds.[14] Second, salaries are subject to withholding tax, so payroll needs the tax identity in place before the first pay run. Draft employment contracts that distinguish workers from managerial staff, because the Act's protections apply differently to each.

The Labour Act was amended in 2026. Our guides to labour law compliance in Bangladesh, employment contracts and employment law for expatriates cover registers, deadlines and the amended penalties.

Stage 10: run the tax and compliance calendar

The final stage of how to start a business in Bangladesh never ends: compliance begins in the first month. The income year runs from 1 July to 30 June for most companies; advance tax instalments fall due on 15 September, 15 December, 15 March and 15 June; and the company return is due by the fifteenth day of the ninth month after the income year ends, which for a 30 June year end is 15 March.[11] Late filing within the rest of the tax year attracts additional tax of 2 per cent, with a minimum of Tk 25,000, while filing early can earn a rebate.[11]

The standard corporate income tax rate for a non-listed company is 27.5 per cent, reduced to 25 per cent if all transactions are made by bank transfer.[12] That condition is worth building into the finance function from day one: a business that pays suppliers and staff in cash forfeits the lower rate. Monthly VAT returns, quarterly withholding tax returns and monthly deposits of tax deducted at source run alongside.

RJSC filings

On the corporate side, a company must hold its annual general meeting each calendar year, with the first within 18 months of incorporation; file the annual return with the RJSC within 21 days of the meeting; and file its audited balance sheet within 30 days.[1] Changes of directors, registered office and shareholding must be notified within short statutory periods. The RJSC charges Tk 200 per document filed on time and Tk 500 a day, capped at Tk 1,000 per document, for late filing.[2] Appoint an auditor at incorporation, not in the month before the first meeting.

Our tax compliance checklist for companies and our guide to annual return filing in Bangladesh set out the full calendars, penalties and filings.

Step-by-step checklist: how to start a business in Bangladesh

The checklist below is the order TRW follows when setting up a new client entity. It condenses the ten stages into eight working steps, combining stages that are filed together through BanglaBiz.

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How to start a business in Bangladesh: timeline and cost summary

The table below summarises the authority, indicative timing and government cost of each stage for a typical private limited company. Times are TRW's working estimates for a complete, accurate filing and assume documents are ready; they are not statutory deadlines. Costs are government fees only and exclude professional fees, legalisation abroad and sector licence fees. The incorporation figures follow the RJSC fee schedule and the Stamp Act bands; VAT is added to RJSC service fees but not to stamp duty.[2] [3]

Two points on reading the table. First, the core stages from name clearance to e-TIN can run in parallel through the Business Starter Package, which is why a domestic company can often be trading within one to three weeks.[4] Second, the long pole for a foreign-owned business is usually not the RJSC but document legalisation abroad, the inward remittance and the sector licence. Budget the project plan around those, not around the incorporation date.

Indicative timeline by type of founder

A local founder setting up a services company with two shareholders, documents ready and a PSR on file, should expect name clearance and incorporation within the first week, the trade licence, e-TIN and BIN in the second, and a working bank account by the end of the third. A foreign-owned trading or services subsidiary should allow four to eight weeks, mainly for legalisation, remittance and the encashment certificate. A foreign-owned manufacturer that needs investment registration, a factory licence, environmental clearance and work permits should plan in months, not weeks, and start the sector licence work in parallel with incorporation.

Common mistakes that delay a launch

The same errors recur across the businesses we set up. Each is avoidable with a few days of preparation.

Setting authorised capital without a plan

Authorised capital drives the registration fee, the stamp duty and the trade licence category. Setting it too high wastes money at incorporation; setting it too low means an increase, a special resolution, further stamp duty and fresh RJSC filings when the first investor arrives. Choose a figure that covers the capital you expect to issue in the medium term.

Ignoring the director PSR rule

A local director who has never filed a return blocks the incorporation. Check every proposed director and sponsor shareholder before filing.[9]

Paying foreign capital through the wrong channel

Capital that arrives as a director's personal transfer, through an unofficial channel or in cash does not create a documented foreign investment. Without the inward remittance trail, repatriation of sale proceeds and dividends becomes difficult. Route every taka of foreign equity through an authorised dealer bank in the company's or the temporary account's name.[8]

Forgetting the second premises

Each place of business needs its own licence, and factories, warehouses and outlets may need separate fire, environmental and VAT registrations. Map every location before signing leases.

Treating compliance as a year-end task

Withholding tax deposits, VAT returns and labour registers start in the first month. Penalties for missed early filings often exceed the cost of the original set-up. Assign an owner for each recurring filing before the first invoice goes out.

These mistakes share a cause: treating how to start a business in Bangladesh as a single registration rather than a sequence. A short legal plan before stage one, covering vehicle, capital, licences and compliance owners, saves more time than any shortcut at the filing stage. TRW's corporate and commercial advisory practice prepares that plan as part of every set-up mandate.

What to watch in 2026 and 2027

The legal route for how to start a business in Bangladesh will keep shifting over the next year, mostly in the founder's favour. The RJSC's electronic registration system is due for full handover by 15 January 2027 and promises fully online registration, including automated name clearance and pre-approved model articles.[5] Invest Bangladesh is building out the single digital platform the 2026 Act requires, and the procedures, timelines and fee schedules made under the Act will replace BIDA-era practice as they are issued.[6]

On tax, the return to monthly VAT returns in October 2026 shows how quickly filing cycles can change; check the current position at each budget and each ordinance.[13] On corporate law, a replacement for the Companies Act 1994 is under discussion, and any new statute is likely to change filing, director and dormant-company rules. Foreign investors planning a 2027 entry should also follow Invest Bangladesh's incentive notifications and Bangladesh Bank's exchange-control circulars. For cross-border structures, our branch and foreign company establishment practice tracks these changes.

The principle does not change: knowing how to start a business in Bangladesh is mostly about sequence. Choose the vehicle with the end state in mind, fund it through the right channel, register what the business plan depends on, and run the compliance calendar from the first month.

Frequently asked questions

How long does it take to start a business in Bangladesh?

With documents ready, a domestic private limited company can usually be incorporated, licensed, tax-registered and banked within one to three weeks. The BanglaBiz Business Starter Package targets registration within three working days.[4] Foreign-owned businesses should allow longer for legalisation and capital remittance, and regulated businesses for sector licences.

What is the cheapest way to start a business in Bangladesh?

A sole proprietorship needs only a trade licence and the owner's tax registration, so it is the cheapest to set up. It carries unlimited personal liability and cannot take outside investors, so most founders who plan to grow choose a private limited company, whose government cost at Tk 10 lakh of authorised capital is roughly Tk 16,000.[2] [3]

Is there a minimum capital to register a company in Bangladesh?

There is no general statutory minimum for a private limited company. A one person company must have paid-up capital of Tk 25 lakh to Tk 5 crore.[1] Sector regulators and, for some foreign-office routes, investment rules set their own minimums.

Can a foreigner own 100 per cent of a company in Bangladesh?

Yes, in most manufacturing and services sectors. Some sectors are reserved, capped or need a ministry no-objection, so check the sector position before incorporation. Shares may be issued to a non-resident without prior Bangladesh Bank permission once the remittance has been received.[8]

Do I need to register with Invest Bangladesh?

Registration is required for industrial projects and is the route to incentives, import entitlements and work permits for foreign-invested businesses. Since 20 August 2026 the Invest Bangladesh Act 2026 governs the authority and its single digital platform.[6] Businesses in export processing zones register with BEPZA instead.

What documents do I need to register a company?

The name clearance, memorandum and articles, declaration of compliance, directors' particulars and consents, registered office address and identity documents for each subscriber and director. Corporate subscribers need board resolutions and constitutional documents, which are usually notarised and legalised if issued abroad. Local directors also need proof of return submission.[9]

Is a trade licence required for an online business?

Yes. A trade licence is needed for each place from which the business operates, including a home office or warehouse used by an online seller. A new licence requires a TIN, and renewal in city corporation and paurashava areas requires proof of return submission.[9]

Is e-TIN registration free for a company?

Yes. The e-TIN is obtained online through the NBR system without a fee, and the certificate can be printed or saved immediately after completion.[10] VAT registration for a BIN follows separately.

When is a new company's first tax return due?

For a company with a 30 June year end, the return is due by 15 March following the end of the income year, the fifteenth day of the ninth month. Advance tax instalments are due on 15 September, 15 December, 15 March and 15 June where the company is liable.[11]

How many foreign employees can a new business hire?

Under the published ratios, an industrial project may employ one foreign national for every 10 local employees at the initial stage and one for every 20 during operation, and branch, liaison and representative offices one for every five. Each needs a work permit and the correct visa.[7]