Liaison Office in Bangladesh: Permission, Conditions, Tax and Closure in 2026

Liaison office in Bangladesh: what the structure is and when it fits

A liaison office in Bangladesh is often the cheapest and fastest way for a foreign company to put people on the ground: a small team that meets suppliers, follows up orders, gathers market intelligence and represents the parent without trading in its own right. It is also one of the most misunderstood structures in Bangladeshi law. The permission letter that creates the office is a list of conditions, and an office that issues an invoice, signs a sales contract or takes local money can lose its licence, its bank's cooperation and its tax position at once.

This guide sets out the 2026 position for liaison, representative and branch offices of foreign companies: who now grants permission after BIDA was merged into Invest Bangladesh, what the office may and may not do, the documents and fees, the US$50,000 inward remittance, Bangladesh Bank reporting and the designated bank, filing with the Registrar of Joint Stock Companies and Firms (RJSC), tax and VAT, renewal, and how to close the office and send the remaining money home.

Summary: Foreign companies open liaison, representative and branch offices with permission from Invest Bangladesh, which took over BIDA's functions in August 2026. The application fee is Tk 25,000 and the published service time is 16 working days, subject to an inter-ministerial committee. Within two months the office must bring in at least US$50,000; within 30 days it must report to Bangladesh Bank through its bank and apply to RJSC for a certificate of filing. A liaison office cannot earn local income; a branch may, within approved activities, and may remit post-tax profit after paying 20 per cent branch profit tax. Initial permission usually runs for three years.

Key point: Invest Bangladesh began operating on 23 August 2026, and its FAQ describes the same branch, liaison and representative office route that BIDA ran: online application, physical submission of attested documents, a US$50,000 remittance and filings with Bangladesh Bank and RJSC. Existing permissions were not reset by the merger, but every new application, renewal and closure now goes to the new authority.

At a glance

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Table of Contents

Liaison office in Bangladesh: what the structure is and when it fits

A liaison office in Bangladesh is not a separate company. It is a place of business of the foreign parent, operating under a government permission that defines what it may do. The same is true of a representative office and a branch office. Bangladesh Bank groups all three, together with project offices and the offices of joint ventures, consortia and associations, under a single policy framework for foreign commercial offices.[5] Because none of them is a separate legal person, every contract, liability and tax obligation of the office ultimately belongs to the parent.

The distinction that matters is income. The 2023 BIDA guidelines on foreign commercial offices, as summarised by JETRO, prohibit a liaison or representative office from earning income in Bangladesh and from directly buying or selling goods or services or carrying out value-adding activity. Its running costs and salaries must be met by bank transfers from abroad.[8] A branch, by contrast, may carry on a defined list of commercial activities and, with the right waivers, earn and remit profit.

Liaison office or representative office?

In Bangladesh the labels "liaison office" and "representative office" are used together in the statute, on the permission service and in Bangladesh Bank's framework, and the same conditions apply to both.[5] [6] Some foreign groups prefer "representative office" for brand reasons; the choice of name does not change what the office may do. Foreign bank representative offices are the exception: their functions are set by Bangladesh Bank.[8]

When a liaison office is the right choice

A liaison office suits a parent that wants to test the market, supervise sourcing and quality control, coordinate with local distributors and importers, or support a regional sales team that contracts from abroad. It suits buying offices of foreign retailers, technical support teams for equipment sold offshore, and companies preparing for a later investment. It does not suit a business that needs to invoice Bangladeshi customers, bid for local contracts or hold local revenue. Those businesses need a branch office or a locally incorporated subsidiary from the start.

The official record behind the structure

Four layers of official material govern the office. The permission service and FAQ of Invest Bangladesh set out the application route.[1] Section 18B of the Foreign Exchange Regulation Act 1947 imposes the reporting duty.[6] Bangladesh Bank's foreign-office portal lists the policy instruments, including the Guidelines for Foreign Exchange Transactions 2018 and the 2023 BIDA guidelines.[5] Part X of the Companies Act 1994 deals with foreign companies that establish a place of business in Bangladesh.[7] Each layer does a different job, and compliance with one does not satisfy the others.

Who grants permission in 2026: from BIDA to Invest Bangladesh

Until August 2026 the permission came from the Commercial Wing of the Bangladesh Investment Development Authority. In July 2026 Parliament passed the Invest Bangladesh Act 2026, which merged the investment promotion agencies into a single statutory body and repealed, among others, the BIDA Act 2016 and the One Stop Service Act 2018.[13] The Act was brought into force by gazette notification on 20 August 2026.[12] Invest Bangladesh began operating on 23 August 2026, combining BIDA, the Bangladesh Economic Zones Authority and the Public-Private Partnership Authority under the Prime Minister's Office, and announced that existing investor services would continue and that BanglaBiz would remain the single digital platform.[11]

What changed and what did not

The assets, records, contracts and liabilities of the merged bodies passed to Invest Bangladesh.[12] For a foreign office, the practical route is unchanged. The Invest Bangladesh FAQ describes the same sequence: apply online, upload documents, submit them physically, rent premises, open a bank account, bring in US$50,000 within two months, report to Bangladesh Bank and file with RJSC within 30 days.[1] The legacy BIDA service pages remain online and still publish the fees and document lists.[2]

Practical points during the transition

• Address board resolutions, powers of attorney and covering letters to Invest Bangladesh, not BIDA.
• Expect the detailed operating rules to remain those of the 2023 BIDA guidelines until replacement guidance is issued, and check for any new form or fee notice before filing.[5]
• Read references to "BIDA" in an existing permission letter as references to the successor authority, and keep the original letter on file for the bank, RJSC and renewal.
• Bangladesh Bank's portal still names the BIDA Act 2016 and the 2023 guidelines as the framework, so the bank will continue to test compliance against the conditions in the letter.[5]

Our analysis of the Invest Bangladesh Act 2026 framework covers the merger in detail, and our map of investment approvals in Bangladesh explains how the office permission sits alongside other approvals.

Permitted and prohibited activities of a liaison office in Bangladesh

The permission letter limits the office to the activities approved in it, and any new activity requires an amendment.[9] For a liaison office, the approved scope is narrow and should be written into internal job descriptions, delegation policies and email signatures.

What a liaison or representative office may do

• Coordinate between the foreign parent and Bangladeshi suppliers, exporters, importers or distributors.[8]
• Collect, analyse and distribute business information within the approved scope.[8]
• Carry out other activities specifically approved by the authority or the inter-ministerial committee.[8]

What it may not do

• Earn income in Bangladesh, issue sales invoices or receive payment from local customers.[8] [9]
• Buy or sell goods or services directly, or carry out value-adding activity.[8]
• Fund itself locally: rent, salaries and all other costs must be paid from inward remittances from the parent.[8] [9]
• Remit money abroad, other than the unspent balance of funds it received from abroad.[8]
• Open a second office or change its address without prior approval.[9]

There is one narrow exception on local receipts. Bangladesh Bank allows liaison and representative offices to apply for permission to credit their local currency account with proceeds from the sale of scrap or sample products.[5] Anything wider is a breach.

The commercial risk of drifting into trade

The most common failure is gradual. Staff start by introducing buyers, then negotiate prices, then sign purchase orders "for convenience". Each step looks small, but together they turn a cost centre into a trading presence. The consequences are a breach of the permission conditions, questions at renewal and closure, and a risk that the tax authority treats the parent as carrying on business through a permanent establishment in Bangladesh. Contracts should be negotiated and concluded by the parent offshore, and local staff should have no authority to bind it on price or terms.

Branch office versus liaison office

A branch is the alternative when the business needs local revenue. Under the 2023 guidelines as summarised by JETRO, a branch may act as sales agent for the parent, represent a foreign commercial bank, provide technical or financial support between the parent and Bangladeshi companies, provide professional and consulting services, act as contractor or sub-contractor within the parent's business, promote sales of the parent's goods and services, act as agent for foreign airlines and shipping lines and, subject to approval, engage in import and export.[8] A branch engaged in import or export also needs import and export registration certificates.[1]

Eligibility tests for a branch

The branch route carries financial tests that a liaison office does not. JETRO's summary of the 2023 guidelines states that the parent should have made profits in each of the past three financial years and have a minimum net worth of US$100,000, or show accumulated profits and a net worth of US$1 million at the time of application; where neither test is met, a subsidiary or holding company may apply under separate conditions such as a US$1 million solvency certificate.[8] Branch and liaison offices of sole proprietorships are generally discouraged.[9]

Earning and remitting income: the condition 7 and 8 waivers

Permission to open a branch office does not by itself let it keep local income or send profit home. Bangladesh Bank explains that a branch may apply for a waiver of condition 7 of its permission letter once it starts generating income, and that authorised dealer banks may remit branch profits, subject to Bangladesh Bank's post-facto checks, once condition 8 has been waived.[5] In practice the waiver applications need the contracts or income sources that justify them.

Time limits on a branch

JETRO reports that branches producing goods or services must move into a locally incorporated structure within ten years of the establishment permit, and that renewals beyond ten years are not approved.[8] A long-term business should plan for incorporation from the start; our guide to joint ventures in Bangladesh covers the company route with a local partner.

Applying for permission: documents, attestation and fees

The same service covers branch, liaison and representative offices. The applicant applies through the One Stop Service platform, pays the fee online and then submits hard copies of the documents to the Commercial Wing.[2] The Invest Bangladesh FAQ describes the same online-then-physical sequence.[1]

Documents the parent must provide

• A board resolution of the parent approving the opening of the office in Bangladesh; for a project office, the project details and a copy of the agreement with the EPC contractor.[2]
• The audited accounts of the parent for its last financial year.[2]
• A proposed organogram showing expatriate and local posts.[2]
• A detailed description of the parent's activities and the names and nationalities of its directors or owners.[2]
• The memorandum and articles of association (or equivalent constitution) and the certificate of incorporation.[2]
• A letter of authorisation from management for the person submitting the application.[2]
• A description of the activities planned for the proposed office and its future plans, with any other supporting documents.[2]

Attestation and translation

Documents must be attested by the Bangladesh mission in the parent's country, by that country's mission in Bangladesh or by the country's apex business chamber.[2] Do not assume that an apostille or a local notarisation alone will be accepted. Documents not in English should be translated, and the office name must match the foreign company's name.[9] Attestation is usually the longest part of the timetable, so start it as soon as the board resolution is signed.

Fees, timing and the inter-ministerial committee

The government fee for opening is Tk 25,000, paid online, and the published service time is 16 working days, subject to approval by the inter-ministerial committee.[2] VAT at 15 per cent is added to the fee.[9] Approval of the office and of work permits also depends on security clearance from the Ministry of Home Affairs, and without it the office and work permits will not be renewed.[9] Treat 16 working days as a floor rather than a promise; typical establishment timelines run to several weeks once attestation, committee review and banking are included.[14]

Conditions of the permission letter

The permission letter for a liaison office in Bangladesh is a compliance document, not a certificate to file away. Its conditions are tested by the bank on every transaction and by the authority at renewal and closure. The core conditions reported in practice are these.[9]

• Bring in at least US$50,000 or its equivalent as an inward remittance within two months of the permission.
• Open an account with a scheduled bank and operate it in line with Bangladesh Bank's foreign exchange guidelines.
• Submit quarterly returns of income and expenditure from foreign remittances, with supporting documents, to the authority, the bank, the National Board of Revenue and Bangladesh Bank.
• Obtain prior approval before changing the office address, and apply for an amendment before adding any activity.
• Obtain work permits for every foreign national employed.
• Deduct and deposit tax at source on rent, salaries and payments for goods, services and contract work, and obtain a TIN and BIN.
• Operate only for the period stated in the approval letter.

The US$50,000 inward remittance

The Invest Bangladesh FAQ confirms that foreign exchange of US$50,000 or more must be brought in within two months of approval.[1] This is not share capital; it is working money for the office, and it should arrive from the parent through normal banking channels into the office's own account. Keep the encashment certificate safe: it is needed for Bangladesh Bank reporting, RJSC and visa recommendations for expatriate staff. JETRO notes that foreign-invested entities employing expatriates submit a US$50,000 encashment certificate with the visa recommendation request.[8]

Expatriate staff and work permits

The employer applies for each work permit online and must submit the application, with a copy of the appropriate visa, within 15 days of the expatriate's arrival.[1] JETRO reports the 2023 ratios as one foreign employee to five local employees at start-up and one to ten in normal operations for non-manufacturing entities, with work permits valid for one year and renewable for up to two years at a time.[8] Foreign employees may remit 80 per cent of their monthly salary, after admissible expenses, through an authorised dealer.[1] Our guide to employment law for expatriates in Bangladesh covers contracts and immigration.

Bank accounts and Bangladesh Bank reporting

Section 18B(1) of the Foreign Exchange Regulation Act 1947 requires a company not incorporated in Bangladesh, other than a banking company, to report to Bangladesh Bank within 30 days of obtaining permission to establish a branch, liaison or representative office or other place of business for trading, commercial or industrial activity.[6] The statute still refers to the "Board of Investment or similar competent authority", which now reads as Invest Bangladesh. The report is made through the office's bank, not directly.[1] [9]

The nominated authorised dealer

After permission, the office may open foreign currency and local currency accounts in its own name with an authorised dealer bank. Once it has met the conditions in its permission letter within the stated time, it reports to Bangladesh Bank's Foreign Exchange Investment Department.[5] Each office has one nominated authorised dealer, which handles all inward and outward remittances and reports them to Bangladesh Bank. Additional local currency accounts at other banks need a no-objection certificate from the nominated dealer.[5]

Ongoing reporting

Renewals of permission and changes of office address must also be reported to the Foreign Exchange Investment Department.[5] If a branch takes a working capital loan from its parent, repayment needs prior approval.[5] A liaison office has a simpler banking life than a branch, but its account will be scrutinised for any local receipt that looks like income. For inbound transfers more generally, see our guide to receiving foreign currency in Bangladesh.

Filing with RJSC as a foreign company

Permission and banking are not the end of the process. Part X of the Companies Act 1994 applies to companies incorporated outside Bangladesh that establish a place of business in the country, and section 379 requires them to file documents with the Registrar.[7] The Invest Bangladesh FAQ states that the office must apply to RJSC within 30 days of receiving permission for a certificate of filing under section 379.[1] Filing does not create a new company; it records the foreign company's presence.

What is filed

• Certified copies of the charter, memorandum and articles of association or other constitutional documents, with certified translations where needed.[14]
• The full address of the registered or principal office abroad.[14]
• A list of directors and of the secretary, if any.[14]
• The name and address of a person resident in Bangladesh authorised to accept service of process and notices on behalf of the company.[14]
• The full address of the office in Bangladesh, together with the permission and Bangladesh Bank documents.[14]

Continuing obligations under Part X

Part X also deals with accounts of foreign companies, the duty to state the company's name and country of incorporation, service of notices, notice when a place of business closes, penalties and the effect of non-compliance on contracts.[7] Changes to directors, the authorised person or the address should be reported to RJSC as well as to the authority and the bank. Choose the person authorised to accept service carefully, because notices delivered to that person reach the company. Our step-by-step guide to foreign company registration in Bangladesh covers the RJSC forms and online submission.

Step-by-step: setting up a liaison office in Bangladesh

The sequence below applies to branch, liaison and representative offices. The time limits run from the date of the permission letter.[1] [2]

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Keep a one-page activity map that shows who signs which contracts, which payments go into which account and which tasks are reserved to the parent offshore. It is the simplest protection against drift.

Tax and VAT for liaison and branch offices

An office that earns nothing still has tax obligations. The permission letter requires payment of duty, income tax, VAT and other taxes, and the office must obtain a TIN and a BIN to deduct and deposit tax at source.[9] The Invest Bangladesh FAQ lists a TIN certificate, a trade licence and VAT registration (e-BIN) from the National Board of Revenue among the setup steps.[1]

Liaison office tax position

A liaison office in Bangladesh has no taxable business income of its own if it stays within its permission, but it acts as a withholding agent. It must deduct tax at source from office rent, salaries and payments for goods, services and contract work, and deposit it under the Income Tax Act 2023.[9] Expatriate staff pay Bangladeshi income tax and file returns, and an income tax clearance certificate is required when their work permits are cancelled.[9] Rates are covered in our guide to withholding tax in Bangladesh.

Branch office tax and branch profit tax

A branch is taxed in Bangladesh on income received or deemed received there, or arising there, at the rate for an unlisted company applied to net income. When after-tax profit is remitted to head office, a branch profit tax of 20 per cent of the remittance applies, and the authorised dealer will not make the remittance until it is paid.[10] The Invest Bangladesh FAQ confirms that branches of foreign companies may remit post-tax profits to their head offices through an authorised dealer.[1] See our guide to corporate income tax in Bangladesh for current rates.

VAT

Register for VAT and keep the e-BIN current even if the office makes no taxable supplies, because landlords, suppliers and the bank will ask for it, and VAT is added to government service fees such as the permission fee.[1] [9] A branch that makes taxable supplies has full VAT compliance obligations. Our guide to VAT registration in Bangladesh explains the process.

Renewal, extension and changes

Initial approval is for three years.[1] The office may operate only for the period stated in its approval letter, and an application to extend must be made at least two months before the current permission expires.[3] [9] The extension fee is Tk 10,000, paid online, and the service time is 16 working days, subject to inter-ministerial committee approval.[3]

What is reviewed at renewal

Renewal is where past compliance is tested. Expect questions on whether the US$50,000 arrived on time, whether quarterly returns were filed, whether withholding tax was deposited, whether work permits were current and whether the office stayed within its approved activities. Security clearance matters too: without it, neither the office nor the work permits will be renewed.[9] Prepare a renewal file throughout the term rather than in the last two months.

Name change, address change and waiver of conditions

Waivers of permission conditions, such as the income and remittance waivers a branch needs, are sought from the permitting authority.[5] A change of address requires prior approval, and any new activity requires an amendment of the permission.[9] Renewals and address changes must also be reported to Bangladesh Bank, and changes to the particulars filed with RJSC should be updated there as well.[5]

Comparing a liaison office with the alternatives

The table compares the main structures available to a foreign company. On a phone, scroll it sideways.

Where the parent expects local revenue within two or three years, it is often cheaper to incorporate a subsidiary at the outset than to open a liaison office, convert it to a branch and then incorporate. Our branch and foreign company establishment practice advises on that choice.

Closing a liaison office in Bangladesh and repatriating funds

Closure takes planning. The closure permission carries no fee, the service time is 16 working days subject to the inter-ministerial committee, and the application is submitted in person.[4] A notice must be published in a recognised national newspaper at least three months before the office closes.[4]

Documents for closure

• A copy of the published notice, the office permission and the parent's board resolution approving closure.[4]
• An up-to-date audit report, income tax clearance certificate and bank statement.[4]
• A certificate that all dues have been settled and a no-objection certificate from the landlord.[4]
• Evidence that the work permits of all expatriates have been cancelled.[4]
• A declaration that the parent will bear all liabilities, including organisational and individual taxes and any future financial dues.[4]

Sending the balance home

After closure permission, the office must report to Bangladesh Bank within the time stated in the letter, and any residual balance may be sent to the head office only with Bangladesh Bank's prior permission.[5] For a liaison office, the remittable amount is limited to unspent funds received from abroad.[8] Finally, give notice to RJSC that the place of business has closed.[7] Our guide to capital repatriation from Bangladesh explains how documentary gaps delay exit.

Common mistakes to avoid

• Trading through a liaison office: issuing invoices or accepting local payments breaches the permission and invites tax exposure.
• Missing the 30-day and two-month clocks: late Bangladesh Bank reporting, RJSC filing or remittance weakens the file at renewal.
• Unattested documents: an apostille alone may not satisfy the attestation requirement.
• Using several banks freely: all cross-border flows must go through the nominated dealer.
• Ignoring withholding tax: rent and salaries trigger deduction at source from the first month.
• Late renewal: an application inside the last two months risks a gap in permission.
• Closing without a plan: the three-month notice, tax clearance and work-permit cancellations must be sequenced before funds can leave.

What to watch in late 2026 and 2027

Three developments will shape foreign commercial offices over the coming year. First, Invest Bangladesh is building its organisation in phases, and replacement guidance for foreign commercial offices, under the new Act rather than the repealed BIDA Act, may follow.[12] [13] Second, the BanglaBiz platform is meant to become the single digital route for licences and permits, which may change how applications are submitted.[11] Third, Bangladesh Bank continues to revise its foreign exchange circulars, so the nominated dealer's checklist for remittances can change between renewals.[5] Our Bangla guide to branch and liaison offices covers the same rules for Bangla-speaking teams.

If you are deciding between a liaison office, a branch and a subsidiary, or need to regularise an office that has drifted into trading, contact TRW to discuss the structure and the filings.

Frequently asked questions

Who grants permission for a liaison office in Bangladesh in 2026?

Invest Bangladesh, which began operating on 23 August 2026 and took over the functions of BIDA. Its FAQ describes the same online application and physical submission route.[1] [11]

Can a liaison office earn income in Bangladesh?

No. A liaison or representative office may not earn local income or directly buy or sell goods or services. Its costs must be funded by remittances from abroad.[8]

What is the difference between a liaison office and a representative office?

In practice none. Both labels are used together in the statute, on the permission service and in Bangladesh Bank's framework, and the same conditions apply.[5] [6]

How much is the permission fee?

Tk 25,000 for opening, paid online, with VAT added. Extension costs Tk 10,000 and closure permission is free.[2] [3] [4] [9]

How much money must be brought into Bangladesh?

At least US$50,000 or its equivalent within two months of permission, through the banking channel.[1]

Does a liaison office need to register with RJSC?

Yes. It must apply to RJSC within 30 days of permission for a certificate of filing under section 379 of the Companies Act 1994.[1] [7]

What must be reported to Bangladesh Bank?

Under section 18B of the Foreign Exchange Regulation Act 1947, the office must report to Bangladesh Bank within 30 days of permission, through its bank. Renewals and address changes must also be reported.[5] [6]

How long is the permission valid?

Initial approval is for three years. An extension must be sought at least two months before expiry.[1] [3]

Does a liaison office pay tax?

It has no business income if it stays within its permission, but it must obtain a TIN and BIN, deduct and deposit tax at source on rent, salaries and payments, and ensure expatriate staff pay income tax.[9]

How is a liaison office closed?

Publish a newspaper notice at least three months ahead, apply in person with tax clearance, audit report, dues settlement and work-permit cancellations, then remit the unspent balance with Bangladesh Bank's prior permission.[4] [5]