Bangladesh is an economically emerging and developing nation in the South Asian region. It was formerly part of Pakistan and gained independence in 1971 through a bloody struggle. The neighboring countries of Bangladesh include India to the north, east, and west, and Myanmar (formerly Burma) to the southeast.
The economy of Bangladesh stands on a number of sectors and industries such as agriculture, textile and garments, large-scale manufacturing, clothing, finance, banking, etc. At a slow but steady pace, the third independent generation of Bangladesh is competing with leading world economies.
The literacy rate in Bangladesh is more than 70% of the total population of approximately 160 million people. The biggest challenges that the Bangla economy faces are poverty, corruption, natural calamities, and political instability.
Types of business structures in Bangladesh
Bangladesh has a well-structured corporate culture that allows all levels of investors to choose a company according to their needs. Particularly the banking sector is among the best in the region. Note that Bangladesh was part of British India and most of its state departments are still run by rules made in the British era.
The table below showcases the type of legal business structures in Bangladesh:
| S# | Type of business structure | Local name | Min. paid-up capital required (USD) |
| 1. | Sole Proprietorship | Ekla Shohokari | No paid-up capital required |
| 2. | Partnership | Shomporko | No paid-up capital required |
| 3. | Limited Liability Company (LLC) | Shimantobayo Shomporko | $5,000 |
| 4. | Private Limited Company (Pvt.Ltd.) | Ghorey Baari Limited | $950 |
| 5. | Public Limited Company (PLC) | Sabeki Baari Limited | $475,000 |
| 6. | Joint Venture (JV) | Sangshaptok | No paid-up capital required |
| 7. | Cooperative | Sahakari | $50 – $5,000 (depending on the nature of business) |
Sole Proprietorship
It is owned and managed by a single owner. All liabilities are the personal responsibility of the owner in this format of business.
Partnership
A partnership is between two or more persons. Partners are personally responsible for debts and losses unless otherwise agreed.
Limited Liability Company
An LLC is a formal business structure that requires a board of directors who have limited responsibility toward debts or losses.
Private Limited Company
A Pvt. Ltd. is similar to LLC but differs in that the number of shareholders is limited. It provides the same level of protection to the owners as an LLC against debts and losses.
Public Limited Company
A PLC is the most complex business format in Bangladesh. It must be structured in a certain way as provided in the country’s law. Primarily, a PLC can raise capital through the public by offering its shares in the stock market.
Joint Venture
A JV is between two or more companies or organizations who partner for a common commercial objective. These companies may be rivals otherwise, however, for a particular monetary objective share resources, capital, experience, etc.
Cooperative
A cooperative is between companies that do not pursue a commercial goal, but create products or services for the benefit of the members of the company.
Cost of registering and incorporating a company in Bangladesh
The registration process includes costs pertaining to government fees, taxes, duties, permits, etc. The cost varies depending on the size, location, and nature of the business.
The cost of registration for each type of company is listed below:
Sole Proprietorship
No registration fee is required as it is not necessary to register a sole proprietorship business. However, if the business is registered under the Trade License Act, the cost may range from $30 to $50 (USD).
Partnership
The registration fee for a partnership business in Bangladesh is approximately $100.
Private Limited Company
The registration fee for a private limited company in Bangladesh is approximately $75 to $150.
Public Limited Company
The registration fee for a public limited company in Bangladesh is between $280 to $500.
Limited Liability Partnership
The registration fee for a limited liability partnership in Bangladesh is around $100 to $150.
Cooperative
The registration fee for a cooperative in Bangladesh may range between $10 and $50.
It is important to note that the above-mentioned registration fees are subject to change and may vary based on the laws and regulations of Bangladesh.
Operational expenses of companies in Bangladesh
The expenses incurred by a business depend on the number of employees, industry, training and development needs, government taxes, location, source of raw materials, services required, etc.
Here are some basic expense items that must be budgeted beforehand:
Labor costs
Bangladesh has a large workforce, and the cost of labor is relatively low compared to many other countries. However, the wages and salaries for workers can vary depending on their skill level, education, and experience.
The minimum daily wages also vary depending on the industry, sectors, etc. Minimum wages for various sectors are given below:
- Garments & textile sector – $2/day
- Corporate sector – $80/month
- Agriculture sector – $3/day
- Finance sector – $5/day
Rent and utilities
The cost of rent and utilities can vary depending on the location and size of the business. The cost of renting office space or commercial property can range from a few hundred to thousands of dollars.
Taxes and other fees
Businesses in Bangladesh are required to pay several types of taxes, including income tax, VAT, customs duties, and other fees. The tax rates and fees can vary depending on the nature of the business and its annual revenue.
Infrastructure costs
The cost of transportation, logistics, and other infrastructure-related expenses can vary depending on the location and accessibility of the business.
Overall, the cost of doing business in Bangladesh can be relatively lower compared to many other countries
Benefits of registering a company in Bangladesh
There are numerous advantages companies have by operating from Bangladesh. Foreign companies looking for mass production choose Bangladesh due to its extremely low labor cost. Telecom and IT sector prefer Bangladesh due to easy access to an educated and skilled workforce.
Other benefits include:
Easy company registration process
The process of registering a company in Bangladesh is relatively straightforward and can be completed within a short time. The Bangladesh government has implemented various reforms to simplify the registration process, which has made it easier for businesses to incorporate.
Low cost of doing business
The cost of doing business in Bangladesh is relatively lower compared to many other countries, and businesses can benefit from low labor and operating costs.
Growing economy
Bangladesh has one of the fastest-growing economies in the world, and it offers various investment opportunities for businesses looking to expand or start operations.
Favorable government policies
The Bangladesh government has implemented several policies to attract foreign investment and encourage business growth. For example, the government offers various tax incentives, duty-free import of capital machinery, and other benefits to businesses operating in certain sectors.
Access to a large domestic market
Bangladesh has a population of over 160 million, which offers businesses access to a large domestic market. The country has a growing middle class and a rising consumer demand for various goods and services.
Strategic location
Bangladesh is strategically located in South Asia and serves as a gateway to the fast-growing economies of the region. The country’s proximity to India and Southeast Asia offers various business opportunities for companies looking to expand their reach.
