How To Obtain A Trade License For Business In Bangladesh

In Bangladesh, there are specific laws that businesses must abide by to operate legally. Obtaining a trade license is a crucial part of these laws because conducting business without it is illegal. The City Corporation Tax Rules enacted in 2009 outline the process for issuing trade licenses, which typically depends on the type of business and validation from the City Corporation or City Council. It’s essential to note that the license is only valid for the specific business for which it is issued, and it cannot be used for any other business. The license must be renewed annually for a fixed fee, which is typically done by a regional tax officer.

Unfortunately, many people are not aware of the trade licensing process, leading to confusion and potentially falling prey to brokers who charge exorbitant fees. In this article, we will discuss the proper process for obtaining a trade license to ensure that businesses can operate legally without any confusion or unnecessary expenses.

Business Trade License In Bangladesh

Sole-proprietorship, partnership, or personal company – despite the business type, all types of business need a license to operate.

Currently, 3 types of trade licenses are provided in Bangladesh and they are described below.

Commercial Trade License
Manufacturing Trade License
General Trade License

Commercial Trade License

Commercial businesses such as retail stores or corporate businesses require a business license from an individual or a separate legal entity. To get a commercial trade license in Bangladesh, the following documents are required –

3 Copies of the passport-size photo of the business owner.
A copy of the owner’s national identity card.
The proof of business address
A holding tax payment receipt
A company incorporation certificate
A membership certificate of the Memorandum of Association and Articles of Association.
A declaration of the rules and regulations of the city corporation/municipality/union parishad on a non-judicial stamp.
A copy of the partnership agreement.
A copy of the passport if the business director is a foreigner.

Here are the steps to follow to obtain a commercial trade license:

Step 1: Collect the proper form from the city corporation. For commercial trade licenses, the “K form” is to be collected from the respective zonal office.
Step 2: Fill out the K form and arrange copies of the documents mentioned above.
Step 3: Submit the K form, required fees, and the required documents to the respective zonal office.
Step 4: A licensing supervisor will verify these documents. If everything is in order, they will issue a trade license to the applicant.
Step 5: Collect the license from the city corporation or municipality office.

Manufacturing Trade License

The manufacturing trade license is required for businesses that are involved in manufacturing businesses. Such businesses usually have factories to operate their production activities. To get a manufacturing trade license in Bangladesh, the following documents are required –

3 Copies of the passport-size photo of the business owner.
The proof of business address
A no objection certificate (NOC) from the neighborhood on a non-judicial stamp paper.
A fire safety certificate from the local authority.
A holding tax payment receipt
A company incorporation certificate
A membership certificate of the Memorandum of Association and Articles of Association.
A declaration of the rules and regulations of the city corporation/municipality/union parishad on a non-judicial stamp.
A copy of the financial or bank solvency certificate of the manufacturing company.
A copy of the partnership agreement.
TAX Clearance certificate (TIN)
Permission from Bangladesh Investment Development Authority (BIDA)
A copy of the passport if the business director is a foreigner.

Here are the steps to follow to obtain a manufacturing trade license:

Step 1: Collect the proper form from the city corporation. For manufacturing trade licenses, the “I form” is to be collected from the respective zonal office.
Step 2: Fill out the I form and submit the form to the zonal office of the nearest city corporation along with the documents mentioned above.
Step 3: A licensing supervisor will verify these documents and will visit the business entity
Step 4: After the verification is done, a predetermined fee has to be paid to determine the class under which the application was made.
Step 5: Submit the signboard fee which is 30 percent of the main licensing fee.
Step 6: The authority will issue the trade license which needs to be collected from the city corporation office.

General Trade License

This is the category of trade license that can be used for all types of businesses except commercial or manufacturing businesses. To get a general trade license in Bangladesh, the following documents are required –

3 Copies of the passport-size photo of the business owner.
A copy of the owner’s National ID Card.
A holding tax payment receipt
A company incorporation certificate (If any)
A membership certificate of the Memorandum of Association and Articles of Association.
A VAT registration certificate.
A declaration of the rules and regulations of the city corporation/municipality/union parishad on a non-judicial stamp.
A copy of the financial or bank solvency certificate of the manufacturing company.
A copy of the partnership agreement.
TAX Clearance certificate (TIN)
Permission from Bangladesh Investment Development Authority (BIDA)
A copy of the passport if the business director is a foreigner.

Here are the steps to follow to obtain a manufacturing trade license:

Step 1: Collect the required application form from the city corporation. For general trade licenses, there is no classified form system.
Step 2: Fill out the form and submit the form to the zonal or municipality office along with the documents mentioned above.
Step 3: A licensing supervisor will verify these documents. Meanwhile, deposit the required fees at the concerned office.
Step 4: If the authority finds everything in order, they’ll issue the trade license and it can be collected from the city corporation or municipal corporation office.

Trade License Fees, Duration & Renewal Process

If you want to apply for a trade license, you can get the necessary forms for just Tk 10. However, the actual licensing fee can vary depending on the type of business you have. For example, it can be anywhere from Tk 100 to Tk 40,000. If your business has a “Limited Company” in its title, the licensing fee is determined based on the company’s paid-up capital.

Once you’ve filled out the forms and paid the fee, it typically takes 3 to 4 working days to process your application and issue the license. However, this timeline may vary depending on the complexity and nature of your business.

If you need to renew your trade license, you’ll need to submit an application and pay the renewal fees. You’ll be assigned a bank where you can make the required payment. After you’ve paid, the rest of the renewal process can be completed at your local zonal office of the city corporation or municipality.