Foreign investors can either form a fully/ partially owned subsidiary or set up a branch or liaison office for operating in Bangladesh. The type of entity formed would depend on the investor’s medium and long-term strategy for penetrating the market.

 

Wholly Owned Subsidiaries

            Foreign companies are permitted to establish wholly owned subsidiaries in Bangladesh under the ‘Companies Act 1994’, for establishing either a private limited or a public limited company.

            Company registration documentation and its approval are handled by the Registrar of Joint Stock Companies and Firms (RJSC) and foreign entities can incorporate a new company complying with the requirements of the RJSC. Foreign entities can also fully acquire any existing Bangladeshi companies.

 

Joint venture

            Like wholly owned subsidiaries, foreign companies can incorporate a joint venture company with Bangladeshi partner(s). The equity ownership of the foreign company will vary depending on the amount invested by each party.

 

Limited liability by purchasing shares in an existing Bangladeshi company

            Foreign investors are free to invest in local companies (subject to limitations in certain sectors) There are no restrictions on the transfer of shares to non-residents. Foreign investors may sell their shares, irrespective of their percentage of shareholding.

            The Bangladesh government provides five to ten years of tax exemption to international investors planning on operating in certain sectors. Investments in select priority sectors such as Power enjoy tax exemption for up to 15 years.

 

Investing in the stock market

  • Foreign investors are allowed to participate in Initial Public Offerings (IPOs) without regulatory restrictions.
  • Capital gain from listed shares is tax-exempt for individual investors and a lower tax rate is applicable for company and other entities

 

Other incentives

  • Citizenship by investing a minimum of USD 500,000 or by transferring USD 1,000,000 to any recognized financial institution (non-repatriable).
  • Permanent residency by investing a minimum of USD 75,000 (non-repatriable).