When a foreign investor decides to set up a business in Bangladesh there are mainly three options:
- Liaison Office (which does not have legal personality itself)
- Branch Office (which does not have legal personality itself) and
- Locally registered company (being a separate entity with legal personality)
Foreign companies may open their Liaison Offices in Bangladesh for undertaking liaison activities on it’s parent company’s behalf. A Liaison Office, however, is not allowed to undertake any business or commercial activities for generating income in Bangladesh. All setup and operational costs including salaries of the expatriates and local employees of the Liaison Office will have to be met by the parent company abroad.
Since a Liaison Office is not eligible for generating income in Bangladesh it is also not subject to pay corporate taxes.
Just to avoid confusion, both Representative Office and Liaison Office refers to the same thing in Bangladesh.
A Branch Office is a setup as an extension of a foreign company in Bangladesh. Foreign companies may open branch offices to conduct business in Bangladesh. Unlike a Liaison Office, a Branch Office can perform broader scope of activities and have income in Bangladesh – therefore subject to pay corporate taxes as well.
Locally Registered Company
Foreign citizens can setup a whole new company in the form of private or public limited companies in Bangladesh. In most sectors 100% foreign ownership is allowed and prior approval of the government or any government agency is not required.