Establishing a Company

[Reyed Mia (Apprentice, DIU)]

Establishing a Company

Potential investors: getting started

If you are looking towards business or investment in Bangladesh, here are some steps you may wish to consider as you get started:

Contact Netherlands Enterprise Agency, Dutch Chambers of Commerce, Fenedex and/or NCH.

Register with the Netherlands Embassy – if you are planning a visit to consider investment, let the economic team at the Embassy know by sending an email to dha-ea@minbuza.nl

Visit the Board of Investment website for foreign investors' registration details, including setting up a business (step by step), arranging for a work permit and fiscal and non-fiscal incentives.

Contact local Dutch business support organizations, such as the Dutch Bangla Chamber of Commerce & Industry in Bangladesh.

Subscribe to the Netherlands Embassy monthly economic newsflash containing recent economic news and information on business opportunities in Bangladesh.

Consult the 'Investing in Bangladesh. A Guide for New Investors' brochure for information on the commercial, economic and political environment as well as practical information on trade regulations, business travel, and starting a business in Bangladesh. The brochure includes an easy-reference overview of each step that must be taken in the registration process.

Market entry

Start-up considerations
It is advisable to undertake as much market research and planning as possible before establishing a market presence in Bangladesh. As in any new market, succeeding in Bangladesh requires due diligence and research on customers, demand, market channels, advertising, etc. Up-to-date local knowledge is crucial: before making major commitments European enterprises are advised to engage with the relevant business networks, consultants, marketing agencies and legal and accountancy advisors for advice and additional support.
Choosing the best entry strategy into Bangladesh requires careful consideration of the business' needs. Whether an enterprise chooses to set up a subsidiary, a branch/liaison office or a joint venture, there are several options available, each with different implications and advantages.

Getting your Goods to Market

Almost all goods exported from the Netherlands arrive in Bangladesh via sea or air. The main ports are Chittagong and Mongla with both having adequate warehousing facilities. Chittagong has a holding capacity of over 50,000 tons with plans to increase this further. The National Board of Revenue provides bonded warehouse facilities to 100% export oriented industries and to industries whose inputs are mainly imported.
Speedy clearance of goods is often hampered by bureaucratic customs procedures and these delays will need to be factored in to your delivery schedule.

Documentation

Exporters to Bangladesh should be diligent and precise in preparing export documentation. It is worth noting that any deviations can lead to delays and additional costs. Invoices should clearly state the goods being supplied (including specification, packing and country of origin) and correspond to the Letter of Credit.
Dutch companies can approach the Bangladesh market in several ways. Companies are always advised to seek professional legal/taxation advice before entering into a Joint Venture or similar type of agreement.

Export direct

In the case of direct exports it is advisable to have a local representative either on a commission basis or as an Agent. An Agent of a foreign company is also allowed to participate in international tenders on behalf of their foreign principle.

Set up an office

A Dutch company can establish an office for selling their products and equipment direct to the end-user or consumer. Offices can also be set up on a registered Joint Venture basis with a Bangladeshi trading company. To set-up an office, Dutch firms should first register with the Board of Investment and the Registrar of Joint Stock Companies.

Appoint a distributor

It is also possible to market your goods through distributors in Bangladesh. If you choose to employ this route, be aware of the risks in providing exclusive distribution right to your distributor.

Local agent

As a first step towards establishing a local presence, foreign businesses often enter into contractual agreements with a Bangladeshi company to act as a local distributor, supplier or agent. This strategy can help in getting to know a partner and establish trust before possibly progressing onto more involved forms of partnership. Most agency agreements have a clause, permitting both parties to give due notice if it is intended to terminate the agreement. The appointment of the right partner/agent is often fundamental to success. Usually, Dhaka-based agents should be in a position to cover the entire territory of Bangladesh.

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