Legal Services | Regulatory Compliances in Bangladesh
To conduct business activities in any sector, it is necessary to establish a business entity, such as a sole proprietorship, partnership, branch office, or limited liability company. Once the entity is formed or incorporated, it becomes subject to various laws and regulations that govern its operations. These regulatory laws are often established by regulatory authorities, which impose certain compliance requirements on businesses. For example, the regulatory authority for limited liability companies and partnership firms is the Registrar of Joint Stock Companies and Firms (RJSC), while the regulatory authority for branch offices is the Bangladesh Investment Development Authority (BIDA).
The general regulatory compliances for limited liability companies are:
Company Registration:
- Register with the Registrar of Joint Stock Companies and Firms (RJSC).
- Obtain Certificate of Incorporation.
Annual General Meeting (AGM):
- Hold an AGM each year.
- File meeting minutes.
Annual Return Filing:
- Submit annual return to RJSC.
- Include financial statements and shareholder information.
Tax Registration:
- Obtain Tax Identification Number (TIN) with National Board of Revenue (NBR).
- File annual tax returns.
VAT Registration:
- Register for VAT if applicable.
- File monthly/quarterly VAT returns.
Trade License:
- Obtain and renew trade license annually from local municipal authority.
Employment Regulations:
- Comply with labor laws.
- Register employees with social security/provident fund authorities.
Statutory Audit:
- Conduct annual financial audit by certified auditor.
- File audited financial statements with RJSC.
Corporate Governance:
- Adhere to corporate governance standards.
- Maintain corporate records and books of accounts.
Regulatory Updates:
- Stay updated on regulatory changes.
- Ensure ongoing compliance with new/existing regulations.
The general regulatory compliances for branch office are:
- Must submit an application to the Bangladesh Investment Development Authority (BIDA) for the extension of the branch office’s permissions no later than two months after the current permissions expire.
- must notify the Bangladesh Bank’s Central Bank through the designated dealer bank following the acquisition of the Bangladesh Investment Development Authority’s (BIDA) initial or renewal approval.
The general taxation regulatory compliances are:
- Submitting tax returns on a yearly and quarterly basis
- Completing Value Added Tax (VAT) filings on a monthly, quarterly, half-yearly, and annual basis.
The businesses’ foreign and local investors may have a general understanding of the regulatory compliances that must be followed, but it frequently seems that they are not aware of the various rules and regulations that are related to these compliances, particularly the procedures that must be followed and the paperwork that must be prepared and submitted in order to comply with these regulatory compliances. In order to avoid any non-compliances that can result in a default and subsequent penalties from the regulatory authorities, the establishments typically employ law/consultancy firms to handle such regulatory compliances.
Understanding regulatory compliances and adhering to them enables institution owners, investors, and potential investors to make well-informed business decisions free from potential legal problems down the road. Due to their ability to conduct business without hindrance and to avoid fines and non-compliances that could harm their brand or business, multinational corporations are frequently observed to maintain perfect compliance with regulatory requirements.