Everything you need to know to set up an operating company with a bank account.
• Banks are largely subject to strict customer due diligence regulations (old FATF recommendation 5 / new FATF recommendation 10).
• Banks are fully obligated to maintain sufficient records of customer and transaction data for law enforcement (old FATF recommendation 10 / new FATF recommendation 11).
• Banks and / or other covered entities are required to report large transactions in currency or other monetary instruments to designated authorities.
• Bangladesh LLC is the preferred legal entity for entrepreneurs setting up businesses in Bangladesh. An LLC requires at least 2 shareholders and 2 directors, who can be natural or legal persons. Directors and shareholders can be of any nationality and do not need to be Bangladeshi residents. A minimum paid-up share capital of US $ 1 is also required to complete the incorporation process.
• The LLC must submit audited annual accounts to the Bangladesh Income Tax Authority
• Bangladesh PLC requires a minimum of 7 shareholders who can be natural or legal persons. A PLC must also appoint at least 3 directors who can be of any nationality and do not need to be residents of Bangladesh. This entity may be listed on the Bangladesh stock market, the Dhaka Stock Exchange. A PLC must undergo an annual accounts auditing process.
The Bangladesh Business Law allows foreign entities wishing to do business in Bangladesh to establish branches in Bnagladesh. This entity must register with the Bangladesh Board of Investment (BOI) and comply with its regulations. A branch must submit quarterly statements of remittances from its parent company to the BOI and the Bangladesh Income Tax Authority. This entity must also appoint a statutory auditor
• A Bangladeshi representative office is not considered a legal entity and is not allowed to conduct any business in Bangladesh. This entity must register with:
ECorporation tax in Bangladesh is levied at a standard rate of 35%. All legal entities must register with the National Revenue Board (NBR) and file annual tax returns before July 15 of the year following the end of the fiscal year.
• Listed companies in Bangladesh are subject to a lower corporate tax rate of 27,5%, if the distributed dividends exceed 10% of the paid-up capital of the company.
• The Value Added Tax (VAT) is applied at a standard rate of 15% on the goods and services traded. All companies must register for VAT and file monthly returns.
• A 10% withholding tax is applied on:
• A 15% withholding tax is applied on dividends paid to both resident companies and non-resident companies.
• A property transfer tax is applied at a rate of 5% of the total property value.
• The government of Bangladesh has so far signed up to 27 double tax treaties with different international jurisdictions, including China, United States, United Kingdom, Canada, Singapore, France, Germany, Among others.
Ehe business registration in Bangladesh can be hampered by tax requirements. The tcorporate tax rate is 35%. However, there are tax breaks and other tax incentives for Bangladesh.
Starting a business in Bangladesh requires several procedures, which take up to five weeks to complete. Bangladesh has a poor international business reputation.
Bangladesh's economy is the 131st freest in the world, although improvements in free trade and investment policies have led to improvements in areas related to entrepreneurial freedom.
La Bangladesh economy it witnesses widespread corruption and has been misclassified at 143rd (out of 176 countries) in Transparency International's Corruption Perception Index 2017.
• The national business registry does NOT include the identity information of the legal owner.
• Information on legal owners is not always available online (up to 10 EUR / GBP / USD)
• Companies available without registered legal property information.
• The registry of national companies does NOT include the identity information of the final beneficiary.
• Real property is not always available online (up to 10 EUR / GBP / USD)
• There is an obligation to maintain accounting data.
• There is an obligation to present annual accounts for all types of companies.
• Business accounts are not always online (up to € 10 / US $).
• No country-by-country public reporting at all.
• There is no requirement for local submission of a global country-by-country reporting file (in accordance with OECD BEPS Action 13) by large corporate groups (with a worldwide turnover of more than 750 million euros) and subsidiaries local foreign groups.
• Unilateral cross-border tax rulings (eg advance tax rulings, advance tax rulings) are NOT available in laws or regulations, or administrative practice
• The use of an annually updated Legal Entity Identifier (LEI), developed under the guidance of the Financial Stability Board, FSB, is not mandatory.
• The use of a legal entity identifier (LEI) updated annually, developed under the guidance of the Financial Stability Board, FSB, is not mandatory both for trading derivatives and for some operators and / or assets in the financial market.
• The use of an annually updated LEI for the identification of reporting financial institutions (in accordance with the Common Reporting Standard (CRS) is not mandatory.
<br>• Dividend payments: No unilateral relief for double taxation through a tax credit system.
<br>• Interest payments: No unilateral relief for double taxation through a tax credit system.
• None or restricted access to criminal / civil tax procedures.
• None or restricted access to both criminal and civil tax judgments / verdicts.
• The jurisdiction DOES NOT issue or accept the circulation of large bills / cash notes of your own currency (value over 200 EUR / GBP / USD).
• Unregistered bearer shares are available / outstanding or registered by a private custodian.
• Series LLC / Shielded Cell Companies are not available.
• Trusts with escape clauses are not prohibited.
Bangladesh is no longer on the FATF List of countries that have been identified with strategic AML deficiencies.
The latest follow-up Mutual Evaluation Report related to the implementation of anti-money laundering and terrorist financing regulations in Bangladesh was made in 2020.
Based on that assessment, Bangladesh was found to be in compliance with 9 and largely 27 of the 40 FATF recommendations. It was considered Highly Effective for 0 and Substantially Effective for 3 of the Effectiveness and Technical Compliance ratings.
Overall Non-Compliance Score for FATF Standards in percentage: 39,9%.
(100% = all indicators rated as not met / low level of effectiveness; 0% = all indicators rated as completed or highly effective).
The automatic exchange of information is extremely secret in Bangladesh.
Bangladesh is not a signatory to the Multilateral Competent Authority Agreement (MCAA), which provides the multilateral legal framework to participate in the Automatic Exchange of Information (AEOI) in accordance with the Common Reporting Standard (CRS) of the OECD.
Foster Swiss is an international company registered in Switzerland aimed at providing financial and compliance advice on a variety of topics related to company formation
and commercial banking internationally. We are specialized in the implementation of businesses in different jurisdictions, which means that we offer value-added services helping our clients in their expansion abroad.
Some of these services include:
Advice and consultancy,
visas, offices, nominated director / shareholder / secretary,
accommodation if necessary… to name a few.
Check with your assigned consultant for more information.