FDI Legal Procedural Guide for Bangladesh

This FDI legal procedural guide is for investors and their advisers who want the full sequence on one page. Foreign direct investment in Bangladesh is not hard in principle, but it touches many agencies, and each step produces a document the next step depends on. Missing one, such as an encashment certificate or a trade license, can hold up everything after it.

We set out the legal framework first, then the procedure in the order we normally follow, then the ongoing compliance a foreign-invested company faces, and finally the points where projects usually stall. The guide focuses on a company structure; for branch and liaison offices, see the dedicated pages linked below.

Legal framework for FDI in Bangladesh

• Foreign Private Investment (Promotion and Protection) Act 1980: protection against expropriation, equal treatment and the right to repatriate.
• Bangladesh Investment Development Authority Act 2016: establishes BIDA as the investment promotion and facilitation authority.
• One Stop Service Act 2018: basis for the OSS portals of BIDA, BEZA, BEPZA and BHTPA.
• Companies Act 1994: incorporation and governance of companies through RJSC.
• Foreign Exchange Regulation Act 1947 and Bangladesh Bank's Guidelines for Foreign Exchange Transactions: inward investment, foreign loans and repatriation.
• Bangladesh Economic Zones Act 2010 and Bangladesh Export Processing Zones Authority Act 1980: zone investments.
• Income Tax Act 2023, VAT and Supplementary Duty Act 2012 and Customs Act 2023: tax, VAT and import duties.
• Import and Export (Control) Act 1950: import and export registration through CCI&E.
• Bangladesh Labour Act 2006: employment of local staff.

Before you start: sector and location checks

Most sectors are open to full foreign ownership. A small number of sectors are reserved for the state under the industrial policy, such as arms and ammunition, nuclear energy, security printing and minting, and forestry in reserved forests. Others, such as banking, insurance, telecoms, power, pharmaceuticals and broadcasting, are regulated and need sector licences or have ownership conditions. Decide early whether the project will sit inside an economic zone, EPZ or hi-tech park, because the zone authority then replaces several mainstream approvals.

Ongoing compliance after FDI setup

Setup is the beginning. A foreign-invested company carries the same compliance as a local company plus foreign exchange reporting.

• Monthly: VAT return on Mushak 9.1 by the 15th of the following month, withholding tax deposits and VDS.
• Periodic: withholding tax returns to the Taxes Circle as required.
• Annual: statutory audit, AGM, RJSC annual return, corporate income tax return and trade license renewal.
• As they arise: work permit renewals, BIDA amendment for changes in capital or shareholding, reporting of foreign loans, transfer pricing documentation for international related-party transactions.

Where FDI procedures usually stall

• Legalisation of foreign documents at Bangladesh missions, especially for multi-layer group structures.
• Bank KYC on the ultimate beneficial owner and source of funds.
• Name clearance rejections for names similar to existing companies.
• Land and premises: title verification, mutation and lease registration.
• Environmental clearance from the Department of Environment for industrial projects.
• Starting operations before VAT registration, leading to unregistered supplies.

Choosing the right vehicle under this FDI legal procedural guide

The procedure above is for a company. A branch office needs BIDA permission and can earn income but leaves the parent liable. A liaison or representative office needs the same permission but cannot earn income. A joint venture follows the company procedure with a shareholders' agreement added. Zone enterprises apply to BEZA, BEPZA or BHTPA, which issue their own permits and work permits. Each route has a dedicated page on this site with the specific documents and steps.

How the process works

1. Name clearanceApply to RJSC online for clearance of the proposed company name and keep the clearance valid until incorporation.
2. Documents and legalisationPrepare MOA, AOA and subscriber documents; foreign corporate documents are notarised and legalised by the Bangladesh mission.
3. Capital remittanceRemit share capital through an AD bank, often into an account opened for the proposed company, and obtain the encashment certificate.
4. IncorporationFile with RJSC to receive the certificate of incorporation and certified MOA and AOA.
5. Tax, VAT and trade licenseObtain the e-TIN, BIN on Mushak 2.1 and a trade license from the city corporation or local authority.
6. BIDA or zone registrationRegister the investment with BIDA through the OSS portal, or with BEZA, BEPZA or BHTPA for zone projects.
7. Operating approvalsSecure IRC/ERC from CCI&E, sector licences, fire licence, environmental clearance, then visa recommendations and work permits for expatriates.

Typical timeline: For a service company with ready documents, the core steps typically take two to three months; manufacturing projects with land, environmental and sector licences usually take longer, depending on documents and the authority's processing.

How Tax & VAT Associates helps

• A written, project-specific FDI roadmap with responsibilities and dependencies
• RJSC name clearance, incorporation and certified copies
• Capital remittance coordination and encashment certificate tracking
• e-TIN, BIN, trade license, BIDA/zone registration and IRC/ERC
• Work permits, visas and expatriate tax registration
• Post-setup accounting, tax, VAT and RJSC compliance

Frequently asked questions

Related services

Last reviewed: 6 October 2026. Bangladesh tax and regulatory rules change with each Finance Act, SRO and authority circular. This page is general guidance; confirm current requirements for your case before filing.