Bangladesh, located in South Asia, is the world's 39th largest economy in terms of market exchange rates and the 29th largest in purchasing power parity, which ranks second in South Asia. Bangladesh is also one of the world's fastest-growing economies and one of the fastest-growing middle-income countries. With that said, this country is a good choice for starting a business.
Disclaimer: Be aware that this article is not a substitute for legal advice. Please always check official websites or seek legal advice before you take action.
Sole proprietorship in Bangladesh
A sole proprietorship, also referred to as a sole trade, is an unincorporated business with just one owner who pays personal income tax on profits earned from the business. It is the easiest and least expensive business structure to set up.
In the past two decades, the sole proprietorship concept has gained popularity. This is is a social mindset that is applicable in any kind of business or setting. Sole proprietorships can be beneficial for developing economies due to the government, civil society, private sector, and the public-private partnership approaches.
If you intend to start your own business in Bangladesh, the following paragraphs will help you understand the process step-by-step.
Registering a sole proprietorship in Bangladesh
Firstly, you need approval for your business name from The Registrar of Joint Stock Companies and Firms (RJSC). You should create an account on this site to start with the online business name registration. The RJSC office will check the database and issue name clearance if it does not closely match or resembles any of the already existing names. It will be valid for the next 180 days. You will have to apply for registration within this timeline. The fee for registering a business name is BDT 600.00 for each of the proposed names.
Here are the documentation requirements to complete the registration process:
- Article of Association (AOA)
- Memorandum of Association (MoA)
- The Notice on the Situation of the Registered Office and any change there may be
- Consent of the Director to act
- Evidence of Name Clearance
- A bank account
- Rent agreement for the office
- A trade license
- VAT and Tax Identification number registration
All documents should be submitted to RJSC.
Keep in mind the fees to RJSC depend on the authorized capital of the business. There could also occur other out of pocket expenses and professional fees involved.
Businesses obtain a trade license from the City Corporation, by filling an application at the nearest City Corporation. The following documents must accompany the application form:
- A certified copy of the Memorandum and Articles of Association
- A copy of the Certificate of Incorporation
- Tax Identification Number certificate
- The address and nature of business
- A copy of the lease agreement of the registered office
- 2 copies National ID or Passport
- Ownership proof
- Work Permit from Bangladesh Investment Development Authority