A branch office in Bangladesh lets a foreign company do business in Bangladesh under its own name, without forming a new local company. This guide explains, in plain English, how to open a branch, liaison, representative or project office: who approves it, which documents you need, how long it takes, how it is taxed, and how profits go back to the head office.
What is a branch office in Bangladesh?
A branch office is an extension of a foreign parent company. It is not a separate legal entity. It uses the same name as the parent, it has no separate memorandum or board of directors, and the parent company is fully liable for everything the branch does.
In Bangladesh, a foreign company needs prior permission before it opens any office here. For offices outside economic zones, that permission comes from the Bangladesh Investment Development Authority (BIDA). Inside export processing zones, economic zones or hi-tech parks, the zone authority (BEPZA, BEZA or BHTPA) handles it.
After BIDA, the office must also report to Bangladesh Bank's Foreign Exchange Investment Department (FEID), register with the Registrar of Joint Stock Companies and Firms (RJSC), and register for tax and VAT with the National Board of Revenue (NBR).
Why foreign companies open a branch office in Bangladesh
Bangladesh has a population of more than 170 million, a fast-growing middle class, and a large pipeline of power, port, rail, telecom and infrastructure projects. Many foreign contractors, engineering firms, IT companies and equipment suppliers open a branch office in Bangladesh to win and deliver this work locally.
- Speed: a branch office in Bangladesh can start work under the parent's name, track record and financial strength.
- Credibility: government buyers and large local companies often prefer a contractor with a registered local office.
- Control: the head office keeps full control; there are no local shareholders.
- Flexible exit: when a project ends, a branch office in Bangladesh can be closed through BIDA and Bangladesh Bank without winding up a company.
Investors from China, Japan, Korea, India, Singapore, the Middle East, Europe and the USA use this route. Chinese EPC contractors in particular often start with a project office or a branch office in Bangladesh before forming a local company.
Branch office vs liaison office vs project office
BIDA grants four kinds of "B/L/R/P" office, and a branch office in Bangladesh is only one of them. Choosing the right one is the first and most important decision, because the permission letter limits what the office may do.
| Office type | Main purpose | Can earn local income? | How it is funded |
|---|---|---|---|
| Branch office | Approved commercial work: services, consultancy, technical support, trading or contracting (as listed in the permission) | Yes, in the approved fields only | Inward remittance from parent, then local income |
| Liaison office | Communication with local buyers, partners and agencies; market research; promotion | No | All costs paid by the parent through remittances |
| Representative office | Represent the parent and its products; quality checks; after-sales coordination | No | All costs paid by the parent |
| Project office | Carry out a specific government, donor-funded or development project (introduced by BIDA in 2023) | Yes, from the project contract | Project funds; validity tied to the contract |
Who can open a branch office in Bangladesh, and what is allowed?
Any company properly incorporated outside Bangladesh can apply for a branch office in Bangladesh. BIDA generally discourages applications from sole proprietorships, and it looks for a parent with a real operating history and audited accounts.
Typical permitted activities of a branch office in Bangladesh
- Providing consultancy, engineering, IT or technical services to local clients
- Executing contracts and after-sales service for the parent's products
- Import and export, or trading, where specifically approved
- Collecting payments in Bangladesh for approved work
Restrictions to keep in mind
- Only the activities written in the BIDA permission letter. New activities need an amendment.
- No change of office address without prior BIDA approval.
- A second office (for example in Chattogram) needs separate permission.
- Liaison and representative offices cannot sign sales contracts, issue invoices or earn local income.
Documents required for a branch office in Bangladesh
The application is filed online through the BIDA One Stop Service (OSS) portal. Parent-company documents must be attested by the Bangladesh mission in the parent's country (or by the relevant chamber, as BIDA accepts), and translated into English where needed. Incomplete or unattested papers are the most common reason a branch office in Bangladesh is delayed.
Parent company
- Certificate of Incorporation
- Memorandum and Articles of Association (or equivalent charter)
- Board resolution to open the office in Bangladesh, naming the authorised person
- Latest audited financial statements
- List of directors and shareholders with nationalities
Proposed Bangladesh office
- Application form and cover letter
- Details of proposed activities and business plan
- Organogram with expatriate and local posts
- Authorisation letter for the local representative
- For a project office: contract or award letter and the implementing agency's recommendation
How to set up a branch office in Bangladesh: step by step
- Choose the office type and prepare documents. Collect, attest and translate the parent documents listed above.
- Apply to BIDA online. File through BIDA OSS and pay the government fee. An inter-ministerial committee reviews the application.
- Receive the BIDA permission letter. It sets the validity period, approved activities, staff numbers and conditions.
- Open bank accounts and bring in US$ 50,000. Open accounts with one nominated authorised dealer (AD) bank and bring at least US$ 50,000 as inward remittance within two months of the permission letter, to cover set-up costs and early operating expenses. Keep the encashment certificate.
- Report to Bangladesh Bank (FEID). Within 30 days of the permission, report through your nominated bank, in line with Section 18B of the Foreign Exchange Regulation Act 1947.
- Register with RJSC under Section 379. A foreign company that establishes a place of business in Bangladesh must file its charter, address, list of directors and a local person authorised to accept notices, generally within one month of establishing the place of business.
- Get TIN, trade licence and BIN. Obtain the e-TIN from NBR, a trade licence from the city corporation, and VAT registration (BIN) on the NBR VAT portal.
- Work permits and start operations. Apply for BIDA work permits for expatriate staff, rent the office, and start business within the approved scope.
Following these eight steps in order keeps a branch office in Bangladesh compliant from day one. See also our trade licence fee chart for the city corporation licence step.
Timeline and practical costs
| Stage | Typical time | Main cost items |
|---|---|---|
| Document attestation abroad | 1–3 weeks | Notary and embassy fees in the parent's country |
| BIDA permission (incl. security clearance) | 4–8 weeks | BIDA government fee (paid on OSS) plus VAT |
| Bank account and inward remittance | 1–2 weeks | Minimum US$ 50,000 remittance (your own working funds) |
| Bangladesh Bank report and RJSC filing | 2–4 weeks | RJSC filing fees |
| TIN, trade licence, BIN | 1–2 weeks | Trade licence fee and signboard tax; TIN and BIN are free |
| Total | About 2–3 months | Plus office rent and professional fees |
In our experience, the BIDA stage takes the longest, so a complete first application is the best way to open a branch office in Bangladesh quickly. Government fees change from time to time, so we confirm the current BIDA, RJSC and city corporation fees for each client before filing.
Tax and VAT for a branch office in Bangladesh
A branch is taxed on its Bangladesh-source income in the same way as a Bangladeshi company. Under the Income Tax Act 2023 and the Finance Act 2026:
- Corporate tax: branches are taxed at the rate for a non-listed company, 27.5% for the 2026-27 tax year, or 25% if all receipts and payments meet the banking-channel conditions.
- Minimum (turnover) tax: where regular tax is lower, minimum tax on gross receipts applies, generally 1% from 2026-27.
- Withholding tax: the branch must deduct tax at source on salaries, rent, contractor and service payments, and deposit it on time under the Withholding Tax Rules 2026. Check our TDS and VDS rate chart 2026-27.
- VAT: the branch needs a BIN, charges VAT on taxable supplies (standard rate 15%), deducts VAT at source (VDS) where required, and files VAT returns on time.
- Expatriate staff: foreign employees file Bangladesh tax returns and need a tax clearance when their work permit ends.
Profit repatriation from a branch office in Bangladesh
This is the question foreign investors ask most. The current Bangladesh Bank rules (FE Circular No. 40 of 30 September 2026, which consolidates outward remittance rules) say:
- A branch can remit after-tax profit to its head office through its nominated AD bank without prior Bangladesh Bank approval. The bank checks the audited accounts and tax documents and sends them to FEID within one month after the remittance.
- Remitted branch profit may attract additional tax. Major tax guides currently report a 20% tax on profit remitted by a branch. Check whether a tax treaty with the parent's country gives relief.
- Head-office expenses can be remitted within the income-tax limits, with auditor certification.
- A liaison office can only send back the unspent part of funds it brought in. Repatriating the final balance after closure needs prior Bangladesh Bank permission.
Ongoing compliance calendar for a branch office in Bangladesh
| Obligation | Authority | When |
|---|---|---|
| VAT return (Mushak 9.1) | NBR | Monthly, by the due date |
| Withholding tax deposit and return | NBR | Monthly deposit; periodic returns |
| Income and expenditure statement | BIDA, bank, NBR, Bangladesh Bank | Quarterly |
| Audited accounts and corporate tax return | NBR | Yearly, by the company Tax Day |
| Annual filing of accounts | RJSC | Yearly |
| Trade licence renewal | City corporation | Yearly, by 30 September |
| Permission and work permit renewal | BIDA | Apply at least 2 months before expiry |
Missing these dates can block profit remittance and permission renewal, so every branch office in Bangladesh needs a clear calendar. Many foreign companies hand this to one firm. See our monthly tax, VAT and audit compliance retainer.
Branch office or subsidiary company?
A branch office in Bangladesh is quick for project work and service contracts. For long-term manufacturing or large local sales, most investors prefer a private limited company (subsidiary), which can be 100% foreign-owned.
| Point | Branch office | Subsidiary (private limited company) |
|---|---|---|
| Legal status | Part of the parent company | Separate Bangladeshi company |
| Liability | Parent fully liable | Limited to the subsidiary's capital |
| Approval | BIDA permission, renewed periodically | RJSC incorporation; BIDA registration |
| Activities | Only those in the permission letter | Any lawful activity in its objects |
| Corporate tax | Non-listed company rate | Same rate |
| Sending money home | Branch profit remittance | Dividends (tax deducted at source) |
| Best for | Projects, services, early market entry | Manufacturing, long-term growth, local sales |
Compare both routes in our company registration guide for foreign investors and our FDI company incorporation service.
Renewal and closure of a branch office
Renewal: to keep a branch office in Bangladesh running, apply to BIDA at least two months before the permission expires, with audited accounts, tax returns, encashment certificates and proof of compliance. Report the renewal to Bangladesh Bank.
Closure: BIDA must first approve the closure. After that, the office settles local debts, cancels expatriate work permits, gets tax clearance, publishes a closure notice and, with Bangladesh Bank permission, sends the remaining balance to the head office. Usual documents include three years of audited accounts, an auditor's certificate on the remittable amount, and a year of bank statements.
Frequently asked questions
How long does it take to open a branch office in Bangladesh?
Usually about two to three months in total. BIDA permission, including security clearance, typically takes four to eight weeks once a complete file is submitted. Bank, Bangladesh Bank, RJSC and tax registrations follow.
Is there a minimum capital for a branch office in Bangladesh?
There is no share capital, because a branch is not a company. But the office must bring at least US$ 50,000 as inward remittance within two months of BIDA permission.
Can a liaison office earn income in Bangladesh?
No. A liaison or representative office cannot sell, invoice or earn local income. All its expenses must be paid by the parent company through remittances.
What is the tax rate for a branch office in Bangladesh in 2026-27?
A branch is taxed at the non-listed company rate: 27.5%, or 25% if all transactions meet the banking-channel conditions under the Finance Act 2026. Minimum tax and withholding rules also apply.
Can a branch office in Bangladesh send its profit to the parent company?
Yes. Under the current Bangladesh Bank rules, the nominated bank can remit after-tax branch profit without prior Bangladesh Bank approval, then report it to FEID within one month. Tax on the remitted profit must be settled first.
How long is BIDA permission valid?
Initial permission is usually granted for up to three years and can be renewed. Apply for renewal at least two months before expiry.
Can a branch office in Bangladesh hire foreign staff?
Yes. Expatriate staff need BIDA work permits and the right visa. BIDA approves the number of foreign posts in the permission letter, and it expects local staff to be hired as the office grows.
Do I need a local partner or director?
No local partner is needed. You need a person in Bangladesh authorised to accept notices for RJSC, and a country manager approved under the permission.
Open your branch office in Bangladesh with a tax lawyer
VATax Advisory & Co. handles the whole process for foreign companies: BIDA permission, Bangladesh Bank reporting, RJSC Section 379 registration, TIN, BIN, trade licence, work permits and monthly tax and VAT compliance. We work in English, and we welcome Chinese investors on WeChat.
Sources and legal references:
- Bangladesh Investment Development Authority (BIDA): branch, liaison, representative and project office permission
- Bangladesh Bank FEID: operation of branch/liaison/representative/project offices; FE Circular No. 40 (30 September 2026)
- Foreign Exchange Regulation Act 1947, Section 18B; Companies Act 1994, Section 379
- Income Tax Act 2023; Finance Act 2026; Withholding Tax Rules 2026; VAT and Supplementary Duty Act 2012
This guide is general information, not legal advice for a specific case. Rules and fees change; contact us to confirm the current position before you apply.
