Foreign Entity - Bangladesh
Foreign Entity under Bangladesh Law: Choosing the Right Structure for Your Business
A Foreign Entity under Bangladesh law refers to a business setup involving either a foreign or local party seeking to establish a legal presence to operate, represent, or collaborate with businesses inside Bangladesh. Depending on the type of investor—whether a local individual, local company, foreign national, or foreign corporation—the legal structure may vary. Selecting the right entity is crucial to ensure operational efficiency, legal compliance, and protection of business interests.
Entity Type Recommendation
Private Limited Company
A Private Limited Company is the most common and recommended entity type for local individuals, local entities, foreign individuals, and foreign entities engaging in full commercial operations. It ensures limited liability, corporate governance, tax compliance, and credibility with both clients and regulators.
Partnership
Local individuals wishing to operate with others without limited liability can opt for a Partnership. It allows shared responsibility with fewer formalities.
Sole Proprietorship
A Sole Proprietorship is best for local individuals operating alone and not needing limited liability. It’s easy to register and manage, though it comes with unlimited personal liability.
Branch Office
Foreign entities intending to maintain a cost center with local revenue generation must register a Branch Office. It is a legal extension of the foreign parent company and can conduct commercial operations with BIDA approval.
Liaison Office
When a foreign entity seeks only to establish presence for communication, R&D, or promotional activities without earning local revenue, a Liaison Office is the perfect fit.
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