As per the existing laws in Bangladesh, branch serves as an extension of its parent company, meaning, there will be no separate legal entity established. Its parent company is liable for the branch office’s debts or any other obligations and activities. With a prior approval from the Bangladesh Investment Development Authority (BIDA), a branch can engage in commercial activities. For instance, a branch can collect payments on behalf of the parent company, have local sources of income and make outward payments from Bangladesh with a prior approval from the BIDA.
For better understanding, the step by step process for opening a branch office in Bangladesh is attached below through diagram.
Step 1- BIDA Approval:
The following papers/documents are required for application for opening of branch office:
- Application in prescribed form signed by the authorized person for establishment of branch/liaison/representative office -4 copies.
- Memorandum and Articles of Association and Certificate of Incorporation of the principal/parent company.
- Name and Nationality of the Directors/promoters of the principal company.
- Audited Accounts of last financial year of the principal company.
- Company’s board of director’s resolution regarding opening of office in Bangladesh.
- Proposed organogram of the office showing the posts to be occupied by both expatriates and local personnel.
- Details of activities to be performed through the proposed branch/liaison/representative office in Bangladesh.
**** Documents (item 2-5) shall have to be attested by the concern Bangladesh mission/mission of the respective country in Bangladesh.
Step 2- Bank account opening:
After obtaining the approval for opening a branch office in Bangladesh, the next step is to open an account in any Bangladeshi bank. In Bangladesh, there is a requirement for a minimum of USD 50,000 inward remittance for opening a branch office as estimated initial establishment cost and 6(six) months operational expenses of the Office must be brought in as inward remittance in Bangladesh within 02(two) months from the date of issuance of the BIDA permission letter.
Step-3- Approval from the Bangladesh Bank:
As GIIFT is into the business of providing loyalty solutions platform for Banking and non-banking sectors so reporting to the central bank of Bangladesh within thirty days of obtaining permission from Bangladesh Investment Development Authority (BIDA) is mandatory, and the central bank may provide some guidelines also to conduct business.
Step 4- Registration with the RJSC:
The Registrar of Joint Stock Companies and Firms (RJSC) is the governing authority in Bangladesh. Finally, after obtaining an approval from both Bangladesh Bank and BIDA, the last step is registration with the RJSC. For that, you need to submit the following documents:
- Approval letters from BIDA and the Central Bank of Bangladesh
- Certified copies of the Memorandum of Association and Articles of Association or other constitutional documents
- Full address of the registered or principal office of the company
- List of the directors and secretary (if any) of the company
- The name and address of a Bangladeshi who may represent the company in processing and accepting documents
- The full address of the office of the company in Bangladesh
The approval is usually provided to establish a branch or liaison office initially for a period of three years but it can also be extended. It is also possible to open several branch offices in Bangladesh; however, a separate BIDA approval is necessary for each of the offices. To get this done, the whole process for opening a branch office in Bangladesh, it may take 3 (three) months.