Holding Company in Bangladesh | Aeenx Legal & Advisory

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Holding Company
in Bangladesh

Complete holding company incorporation under the Companies Act, 1994 via the Registrar of Joint Stock Companies and Firms (RJSC). Centrally control multiple subsidiaries, protect assets, and optimize group tax structures — with full foreign direct investment (FDI) protection.

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100%

Foreign Ownership Allowed

7–10

Working Days (Foreign Investors)

50%+

Min. Voting Control Required

Holding Company BD

OFFICIAL GUIDE

Holding Company

in Bangladesh

RJSC · BIDA · Group Structuring

Name Clearance (RJSC)

MOA & AOA Drafting

Incorporation Certificate

Post-Incorporation Compliance

AEENX GLOBAL

Overview

What is a Holding Company?

Definition & Legal Status

A holding company is a legal entity — typically incorporated as a private limited company — that does not conduct trading operations itself but instead owns and controls a controlling interest (more than 50% of voting shares) in one or more subsidiary companies. Under the Companies Act, 1994, a company is classified as a holding company of another only if that other company is its subsidiary.

In Bangladesh, control may be established either through voting control (directly or indirectly holding more than 50% of voting securities) or through board control (the power to appoint or remove a majority of directors of the subsidiary). The holding company is registered with the RJSC as an ordinary private limited company — there is no separate "holding company" registration category. Aeenx structures your holding entity from day one.

Why Set Up a Holding Company in Bangladesh?

Bangladesh's rapid economic growth, combined with its open FDI framework, makes it an ideal jurisdiction for a regional holding structure. A Bangladesh-based holding company can own and manage subsidiaries across multiple sectors — manufacturing, IT, garments, logistics, and services — under a single corporate group umbrella, simplifying governance and group-wide decision-making.

The Foreign Private Investment (Promotion and Protection) Act, 1980 guarantees full repatriation of dividends and capital for foreign investors. With 43 Double Taxation Treaties (DTTs) and a competitive corporate tax rate of 27.5% for unlisted private companies, holding structures in Bangladesh provide meaningful tax planning flexibility for multinational groups.

The Bangladesh Investment Development Authority (BIDA) provides One-Stop Service (OSS) support for registration, work permits, and investment facilitation — enabling smooth group-level management of foreign employees across subsidiaries.

Advantages

Key Advantages of a Holding Company Structure

A well-structured holding company provides legal, financial, and operational benefits that operating companies alone cannot deliver.

Advantage	Holding Company Benefit	Without Holding Structure
Liability Protection	Each subsidiary's debts ring-fenced	One entity's losses can affect the whole group
Asset Protection	IP, property & assets held centrally, shielded from subsidiary creditors	Assets exposed to operational risk in each entity
Intercompany Transactions	Centralized management fees, royalties & loans at arm's length	Ad hoc intercompany dealings with higher tax risk
Dividend Flow	Dividends pooled at holding level for strategic reinvestment	Fragmented profits across standalone entities
Corporate Governance	Unified board oversight of entire group	Each entity governed independently — no group coherence
DTT Optimization	Reduced withholding tax on dividends via Bangladesh's 43 DTTs	Full 20% WHT on dividends remitted abroad
Succession Planning	Group ownership transferred at holding level in a single transaction	Separate transfer required for each operating entity
Sector Diversification	Operate in multiple sectors under one group umbrella	Each sector requires separate regulatory management
FDI Entry Vehicle	Single holding entity manages all Bangladesh investments	Multiple direct foreign investments require separate compliance

Source: Companies Act 1994, BIDA Guidelines, NBR Income Tax Act 2023. Structure benefits are subject to proper legal and tax planning.

Eligibility

Who Can Incorporate a Holding Company?

A holding company in Bangladesh is incorporated as a private limited company under the Companies Act, 1994 — with the same open, investor-friendly framework that applies to all local incorporations.

Basic Incorporation Requirements

Minimum 2 shareholders and 2 directors required (both may be foreign nationals)

All directors and shareholders must be above 18 years of age

A valid local (Bangladesh) registered office address is mandatory — P.O. Box not accepted

No statutory minimum paid-up capital (technically BDT 1 is sufficient); for companies employing foreign nationals a minimum investment of USD 100,000 is recommended to meet regulatory standards

For foreign shareholders: a temporary bank account must be opened in Bangladesh to transfer paid-up capital and obtain an Encashment Certificate before RJSC filing

Maximum 50 shareholders for a private limited holding company

Control Requirements & FDI Rules

Voting control test: the holding company must directly or indirectly hold more than 50% of voting securities in the subsidiary company

Board control test: the holding company has the power to appoint or remove a majority of the directors of the subsidiary

100% foreign ownership permitted in most sectors — manufacturing, IT, garments, pharmaceuticals, logistics, hospitality, and most services

Up to 49% foreign ownership: print and electronic media, private commercial banks, insurance (requires Bangladesh Bank approval)

Reserved (no FDI): arms and ammunition, nuclear energy, security printing, and reserved forest areas

Transfer Pricing Note: Under Chapter XI of the Income Tax Act, 2023, all intercompany transactions between the holding company and its subsidiaries where at least one party is a non-resident must be conducted at arm's-length prices and are subject to Bangladesh's transfer pricing regulations, aligned with OECD guidelines.

Documents

Required Documents

Prepare these documents before initiating registration. Our advisory team will verify everything before RJSC submission.

Directors & Shareholders

National ID (NID) — for Bangladeshi directors & shareholders

Valid Passport — for foreign nationals (with visa copy)

TIN Certificate (all directors required to hold e-TIN)

Signed Form IX — Consent to act as Director

Subscriber sheet with shareholding details

Constitutional Documents

Memorandum of Association (MOA) — must clearly state holding company objects

Articles of Association (AOA) — internal governance, shareholding rules

Form XII — Particulars of Directors & Officers

Declaration on Registration (Form I / Section 25 declaration)

Registered Office Address Proof (Form VI)

For Foreign Shareholders

Certificate of Incorporation of the parent company (notarized & apostilled)

Board Resolution authorizing holding company formation in Bangladesh

Encashment Certificate from bank (foreign capital transfer proof)

Parent company's MOA / AOA (notarized)

Bank account certificate from temporary account (Bangladesh)

IRC / ERC certificate (if subsidiaries conduct import/export activities)

Process

Step-by-Step Incorporation Process

Obtain Name Clearance from RJSC

Create an account on the roc.gov.bd portal. Submit a proposed company name and pay BDT 600 to a designated bank. Name clearance is typically granted within 1 working day and is valid for 1 month (extendable). Names containing "Holding" must reflect a genuine investment/holding purpose; avoid names resembling existing companies or restricted terms.

Draft MOA & AOA with Holding Objects

The Memorandum of Association (MOA) must clearly articulate investment and holding objects — including ownership of shares in other companies, receipt of dividends, and provision of management or financial services to subsidiaries. The Articles of Association (AOA) governs internal rules on shareholding, board appointments, and dividend policy. Aeenx drafts legally sound MOA/AOA tailored to group holding structures.

Upload Documents & Pay Registration Fees

Upload Form IX (Director Consent), Form XII (Director Particulars), signed MOA/AOA, and all supporting documents to the RJSC online portal. Pay the government registration fee and stamp duty based on authorized capital to the designated RJSC bank accounts. The fee is calculated on a sliding scale depending on stated authorized capital.

RJSC Review & Certificate of Incorporation

RJSC officials verify the application for compliance with the Companies Act, 1994. Upon successful verification, RJSC issues the Certificate of Incorporation electronically within 3–4 working days, together with digitally certified MOA/AOA and Form XII. The holding company is now a separate legal entity.

Post-Incorporation Registrations & Subsidiary Acquisition

Obtain a Trade License from the local City Corporation or Municipality. Register for e-TIN (NBR) and e-BIN/VAT if applicable. Open a corporate bank account. Proceed to acquire or incorporate subsidiary companies by holding more than 50% of their voting shares — at which point the holding company relationship is formally established under the Companies Act, 1994.

Obtain Name Clearance & Prepare Documents

Apply for name clearance at roc.gov.bd. Simultaneously prepare notarized and apostilled copies of the overseas parent company's Certificate of Incorporation, MOA/AOA, and Board Resolution authorizing the establishment of a holding company in Bangladesh, along with passports of all foreign directors and shareholders.

Open a Temporary Bank Account & Transfer Capital

Foreign shareholders must open a temporary bank account in the proposed company's name with a scheduled bank in Bangladesh. Transfer the paid-up capital as a foreign currency remittance. The bank issues an Encashment Certificate confirming conversion to BDT — this document is mandatory for RJSC submission. This step generally requires a physical bank visit and cannot be completed remotely.

Draft MOA/AOA & Upload via RJSC Portal

Draft and execute the MOA (with holding/investment objects clearly stated) and AOA. Upload all documents through the RJSC online portal — including Form IX, Form XII, Encashment Certificate, parent company documents, and Board Resolution. Pay the government registration fee and stamp duty via bank challan or online payment.

Receive Certificate of Incorporation

RJSC issues the Certificate of Incorporation after verifying all documents. For companies with foreign shareholders, this typically takes 7–10 working days. A certified copy of the Incorporation Certificate must then be furnished to the bank to convert the temporary account to a regular corporate current account in the holding company's name.

BIDA Registration, Compliance & Subsidiary Formation

Register with BIDA via its OSS portal to access investment facilitation services, work permits for foreign employees across the group (20:1 local-to-expat ratio for industrial projects), and regulatory clearances. Obtain Trade License, e-TIN, and VAT/e-BIN registration. Begin incorporating or acquiring subsidiaries — ensuring each subsidiary transaction complies with Bangladesh Bank foreign exchange regulations.

Tax Structure

Corporate Tax Rates for Holding Companies

Under the Income Tax Act, 2023 — Assessment Year 2025–26

Entity / Income Type	Tax Rate	Condition	Notes
Holding Company (Unlisted Private Ltd.)	27.5%	Standard rate FY2025–26	Applicable to all unlisted private companies
Publicly Listed Holding Company	22.5%	DSE / CSE listed	Must meet bank transaction conditions
Dividends Received from Subsidiary	20% WHT	WHT treated as minimum tax for recipient	Tax-paid dividends may enjoy exemption under Sixth Schedule
WHT on Dividends to Foreign Parent	20%	To non-resident holding company	Reducible under applicable DTT (43 treaties signed)
Capital Gains on Share Disposal	15%	On disposal of subsidiary shares	Separate from corporate income tax; pre-payment required before RJSC transfer registration
Management Fees / Royalties to Parent	Requires BIDA approval	Capped at 10% of pre-tax profits	Subject to transfer pricing arm's-length rules
Tax Loss Carry-Forward	Up to 6 years	Business losses only	No carry-back permitted; cannot offset capital gains
Holding Company Tax Regime	Not applicable	No special group-relief or fiscal unity	No consolidated group tax return in Bangladesh; each entity taxed separately

Source: NBR Income Tax Act 2023, Finance Ordinance 2025. There is no holding company regime or group fiscal unity in Bangladesh — each entity in the group files separately. Rates subject to annual Finance Act revision.

Compliance Risk

Key Compliance Obligations & Risks

A holding company must independently meet all statutory obligations regardless of subsidiary compliance. Aeenx ensures ongoing group compliance from day one.

Annual

AGM & Annual Return

Every holding company must hold an Annual General Meeting and file an annual return with RJSC within the prescribed deadline under the Companies Act, 1994, independently of its subsidiaries

30 Nov

Income Tax Return Deadline

Corporate income tax return must be filed by 30 November each year. Penalty: 10% of last assessed tax (min. BDT 1,000) for late filing; 50% surcharge for continued non-compliance

Arm's Length

Transfer Pricing Compliance

All cross-border intercompany transactions — management fees, royalties, loans, and service charges — between the holding company and non-resident related parties must be documented at arm's-length prices under Chapter XI of the Income Tax Act, 2023

20% CGT

Capital Gains on Share Transfer

Capital Gains Tax of 15% applies on disposal of shares in subsidiaries. Under the Income Tax Act, 2023, CGT must be paid to NBR before RJSC registers any share transfer — failure to pre-pay renders the transfer invalid

Why Aeenx

Why Choose Aeenx for Holding Company Incorporation?

100% Compliant Incorporation

All registrations strictly follow the Companies Act, 1994, NBR Income Tax Act, 2023, and BIDA guidelines. MOA objects are correctly drafted for a holding structure from day one — preventing costly amendments later.

7–10 Day Turnaround

Fast-tracked processing for both local and foreign-shareholder incorporations — with complete document preparation and portal submission handled by us, including holding-specific MOA/AOA drafting.

Group Structuring Expertise

Our legal and tax advisors guide holding-subsidiary structures, DTT optimization, transfer pricing documentation, intercompany agreements, and profit repatriation planning.

End-to-End Service

From MOA/AOA drafting to RJSC filing, bank account opening support, TIN/VAT registration, Trade License, BIDA OSS registration, and subsequent subsidiary incorporation or acquisition — all in one package.

Ongoing Group Compliance

Annual RJSC returns and AGM minutes for the holding company and each subsidiary, corporate income tax returns, monthly VAT filings, transfer pricing documentation, TDS/VDS, and director KYC updates — all handled on schedule.

Capital Gains & Exit Advisory

We guide you through share transfers in and out of the group — including pre-payment of CGT before RJSC registration as required by the Income Tax Act, 2023 — ensuring smooth, penalty-free ownership restructuring.

FAQ

Frequently Asked Questions

What is a holding company under the Companies Act, 1994 of Bangladesh?

Under the Companies Act, 1994, a company is deemed a holding company of another when that other company is its subsidiary. Control is established either through voting control — directly or indirectly holding more than 50% of voting securities — or through board control, meaning the power to appoint or remove a majority of the subsidiary's directors. A holding company is incorporated as an ordinary private limited company via RJSC; there is no separate "holding company" registration category in Bangladesh.

Can a foreign company set up a holding company in Bangladesh with 100% ownership?

Yes. Under the Foreign Private Investment (Promotion and Protection) Act, 1980, foreign investors may hold 100% of shares in a Bangladesh holding company in most sectors, with no requirement for a local joint venture partner. Restricted sectors include print and electronic media (maximum 49%), private commercial banks, and a small set of fully reserved sectors such as arms manufacturing and nuclear energy. The holding company itself can then own controlling stakes in multiple Bangladeshi subsidiaries across permitted sectors.

Is there a special holding company tax regime in Bangladesh?

No. Bangladesh does not have a dedicated holding company tax regime, group relief, or consolidated group tax return mechanism. Each entity in the corporate group — the holding company and each subsidiary — files its own separate income tax return with the National Board of Revenue (NBR). Dividends received by the holding company from its subsidiaries attract a 20% withholding tax, which is treated as the minimum tax for the recipient company. Tax-paid dividends may enjoy an exemption under the Sixth Schedule of the Income Tax Act, 2023, if a separate account is maintained. Intercompany transactions with non-resident related parties are subject to arm's-length transfer pricing rules under Chapter XI of the Act.

How long does it take to incorporate a holding company in Bangladesh?

For a holding company with local shareholders, RJSC incorporation typically takes 3 to 4 working days from complete document submission. For companies with foreign shareholders, the process generally takes 7 to 10 working days, as an additional step is required — opening a temporary bank account in Bangladesh and remitting paid-up capital from abroad to obtain an Encashment Certificate before RJSC filing. The total timeline can extend to 20 to 30 working days if banking processes experience delays, or if RJSC raises documentation queries.

Can a holding company in Bangladesh repatriate dividends received from its subsidiaries?

Yes. The Foreign Private Investment (Promotion and Protection) Act, 1980 guarantees the right to freely repatriate dividends, profits, and capital invested. When the Bangladesh holding company pays dividends to its foreign parent or non-resident shareholders, a withholding tax of 20% applies, which may be reduced under an applicable Double Taxation Treaty (DTT). Bangladesh has signed DTTs with 43 countries. Royalty fees, management fees, and technical service fees remitted upward to a foreign parent require BIDA approval and are capped at 10% of pre-tax profits.

What are the transfer pricing obligations for a holding company in Bangladesh?

Under Chapter XI (Sections 108–117) of the Income Tax Act, 2023, all international transactions between a Bangladesh holding company and its associated enterprises — where at least one party is a non-resident — must be conducted at arm's-length prices. The legislation broadly defines associated enterprises: one entity holding 25% or more voting power in another, or a loan from one enterprise constituting over 50% of the other's total asset book value. Bangladesh recognizes five OECD transfer pricing methods: comparable uncontrolled price, resale price, cost plus, profit split, and transactional net margin. Regional benchmarks are also permitted. Non-compliance with transfer pricing rules exposes the holding company to adjustments by NBR and potential penalties.

Ready to Set Up Your
Holding Company in Bangladesh?

Let Aeenx's certified legal and tax professionals handle your holding company incorporation and group structuring — accurately, swiftly, and fully compliant with RJSC, NBR, and BIDA requirements.