I Have a Company!
Company Formation - Part I
Six months and four attorneys later I FINALLY have my company registration documents!! Now I will be able to register with the Board of Investment, open bank accounts, and apply for my work permit and investor visa. I was originally told that this process should take one month, and perhaps it would have if I had originally hired a competent attorney and knew in advance all of the documents that were required.
Just in case any of you out there want to set up your own Bangladeshi company, I have written the steps and my lessons learned below which will hopefully save you the time and trouble that I had to go through!
How to Set Up a Company in Bangladesh (as a Foreigner):
Find a good attorney. This was actually harder than it sounds. My first attorney tried to charge me ten times the average legal rate. (I knew I was in trouble when the rate sheet he brought out was in dollars, not Taka.) My second attorney was always late and never returned my calls. Finally, I found Fatema and Nawshad at Jamiruddin & Jurists (http://www.jamiruddin.com). I would highly recommend them. They are fluent in English, extremely intelligent, and pleasant to work with (plus they return my calls!) The only problem I had with them is that they outsourced the company creation to another firm. They still reviewed all of the documents, but the other firm prepared them and handled the actual filing. This was actually a problem because the firm they outsourced to was not very competent and the agent made many mistakes in the documents which I had to correct. I think that Fatema and Nawshad are planning to develop a corporate formation part of their practice, though, and may be doing this kind of work in-house shortly…
Decide on the structure of your company. There are only two types of company structures in Bangladesh: * company - which is like a U.S. corporation. It has shares, a board of directors, and shareholders, and can be either public or private. Profits are paid through dividends. Each company must have at least two owners and two board members. The owners can be either individuals or other companies. * proprietorship - which is like a U.S. sole proprietorship. It has only one owner and is private. Unfortunately, Bangladesh does not have the equivalent of a U.S. limited partnership or a limited liability corporation.
I was also initially very confused by the use of the word “company” here. Bangladeshis use it to mean something specific – as we would when we say “corporation” in the U.S. As far as I could tell, there is no generic English word for “company” that is used in Bangladesh. When people talk about “companies” here (they use the English word) they mean the corporate version of a company.
This level of confusion was akin to my “chocolate” crisis. In Bangladesh the English word “chocolate” is used to mean “candy”. When you go into a store in Bangladesh and say, “Apnar chocolate achay?” (do you have chocolate?) you could receive lemon drops, strawberry hard candy, or licorice, but probably will not actually receive chocolate (a la Hershey’s) because it is not really eaten here. As you can imagine, the day I learned this was VERY frustrating! The store owner brought me every type of candy in the store except for what I was looking for – actual chocolate! Anyway, I digress…
Get a cost estimate up front. It is better to do everything on a fixed rate (most firms set it up this way). Also make sure that they include the VAT (value added tax) registration and the trade license setup in the estimate, because you can’t do business in Bangladesh without these. In addition to the legal fees, there will be fees for the stamp cost and registration fee (which vary by the size of the company – a larger company pays more fees). Also, don’t pay all of the money up front; pay enough to cover the government fees up front and then the rest when the work is...
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