Before you can hire employees, run payroll, and start work in Bangladesh, you must set up a subsidiary in the country. While it may seem simple, establishing a subsidiary can turn into a complicated process that takes months to complete. G-P offers a better alternative with our Employer of Record solution. When you work with us, you won’t have to set up a subsidiary to start work in Bangladesh, and you won’t face the constant stress of compliance.
How to Set Up a Bangladesh Subsidiary
If you choose to set up a Bangladesh subsidiary alone, you need to consider what type of structure and location works best for your company. The most common entity is a limited liability company (LLC), where the parent company has limited liability from the subsidiary. Once you choose a structure, you need to decide on a physical location. Different regions can operate under separate laws, regulations, and customs. It’s important to take these factors into account to select the best location for your business goals.
The Bangladesh subsidiary setup process includes the following steps:
- Verifying your name and printing out a clearance certificate with the Registrar of Joint Stock Companies and Firms online
- Obtaining a Memorandum of Association and Articles of Association
- Opening a bank account in Bangladesh to get encashment certificates that complete your registration
Companies can often run into trouble dealing with the banking system in Bangladesh since it wasn’t designed to handle foreign business transactions. Obtaining encashment certificates will complete your registration and prove that you exchanged foreign money for Bangladeshi Taka, the local currency. Fortunately, Bangladesh is currently modernizing its banking systems, which could make the process easier for companies looking to expand.
Bangladesh Subsidiary Laws
Once you know how to set up a Bangladesh subsidiary, it’s important to learn all of the country’s laws. If you don’t work with a global PEO such as G-P, you should employ a lawyer or another consultant who is well-versed in Bangladesh subsidiary laws. You can also train a current employee to learn all the laws or hire someone for a specific position that helps deal with compliance.
Every subsidiary structure has its own laws, including an LLC. To establish this entity, you need two shareholders and two directors that can be individuals or legal entities. They do not have to be natives of Bangladesh. Unlike other countries, Bangladesh requires a low amount of minimum paid-up share capital — $1. As a LLC, you will have to submit annual audited accounts to the Bangladesh Income Tax Authority.
The average time to set up an LLC in Bangladesh is five weeks, and it takes four weeks to set up a bank account. However, the process can take longer if any of the paperwork is wrong or any step is not completely compliant. The total costs for setting up a Bangladesh subsidiary in the first year fall around $13,000 and can be about $3,000 to $4,000 each year after.
Benefits of Setting Up a Bangladesh Subsidiary
The biggest benefit of learning Bangladesh subsidiary laws and establishing an LLC is that you can officially start working in Bangladesh. A limited liability company will bring benefits of its own, which allows a parent company and subsidiary to operate independently of one another. The parent company doesn’t have to worry about the liability of the subsidiary, and the subsidiary can establish a company culture and environment that works in Bangladesh.
However, you can achieve greater benefits through Bangladesh subsidiary outsourcing services from G-P. Instead of waiting five weeks to start working, you can let us help you start in a matter of days. As the Employer of Record, we can hire employees on your behalf, run payroll, and ensure you stay compliant. That way, you can focus on running your company.
Other Important Considerations
It’s important to plan early when you decide to establish a Bangladesh subsidiary. You’ll need a significant amount of time to travel back and forth to the country, learn new laws, and hire employees. Plus, you’ll need to budget the right amount for all the fees and travel costs involved with setting up a Bangladesh subsidiary.
Let G-P Help With Your Expansion
If you’re ready to expand to Bangladesh, you need a partner who will streamline the process. G-P can help. Contact us today to learn more about our services.