How to Form A Joint Venture Company in Bangladesh

This is a guide showing the step by step procedure as to how to form a joint
venture company in Bangladesh, prepared by the lawyers of the leading Law Firm
in Dhaka, Bangladesh. In the recent past Bangladesh has been a hotspot centre
for the foreign investors due to the country’s rapidly growing economy and cheap
labour prices, which is why the understand of the procedure as to how to
incorporate a joint venture company in Bangladesh or procedure of forming a
joint venture company in Bangladesh has gained alot of significance and
importance. Many foreign investors are tying up with the local partners to form a
joint venture company in Bangladesh and establish a limited liability company.
These helps them to use the local resources more efficiently as their local partners
are more familiar to the business mind set of the local market.

Followings are the Step by Step Procedure in regards to forming a joint venture
company in Bangladesh, the below procedure also stipulates the procedure in case
of a foreign shareholder in Bangladesh.

Step 1 | Draft and Execute A Joint Venture Agreement

The formation of the joint venture company is initiated by entering into a joint
venture agreement between the local and the foreign investor and obtaining a
name clearance certificate from the Company House for the name which the
investors prefers. The joint venture agreement determines the business scopes,
the name of the company, shareholding ration, governing laws and jurisdictions,
liabilities, board of directors and other important matters which the parties intends
to be of crucial value. Once the terms and conditions of the agreement is agreed,
the same is usually printed on BDT 300 non judicial stamp paper and
subsequently signed by the parties/ their authorized representatives.
Step 2 | Obtain Name Clearance

You may chose the name of the company and see for yourself whether the same
name is available in the name directory of RJSC (Registrar of Joint Stock
Companies). After Signing up on the online name clearance portal, you can book
a name and pay the fess through bank challan to the designated bank.

Step 3 | Draft the Memorandum of Association (MOA) and Articles of

Association (AOA)

For the purpose of drafting a suitable MOA and AOA in compliance to the laws
of Bangladesh and in alignment to the previously executed joint venture
agreement in Bangladesh, it would be better if you could hire a lawyer or a law
firm in Bangladesh to assist you. These documents needs to be legally compliant
while reflecting the intentions of the parties on it in a comprehensive manner,
therefore, hiring a law firm in Bangladesh could be viable option.

Step 4 | Draft and Execute Form XII, IX

Drafting of the Form XII and Form IX shall be dependable on the structure given
RJSC, information that reflects on the MOA and AOA shall be inserted in the
form as per required.

Step 5 | Open the Proposed Company Bank Account (optional, only

applicable in case of foreign partner)

Before, submitting the documents to the RJSC, the joint venture company is
required to open up a temporary bank account, in any of the authorized bank of
Bangladesh, in its name, by submitting the signed draft articles and memorandum
of association, name clearance certificate, filled up bank form and other required
documents. Once the temporary bank account is opened, the foreign investor is
required to send the share capital amount from its foreign bank account to this
temporary bank account. After, the share capital amount is received by the bank,
it shall issue a encashment certificate which shall state that such share capital is
transfers by the foreign investor. It is then required to submit the encashment
certificate, along with the draft articles and memorandum of association, name
clearance, the signed forms and the personal information of the shareholders and
the directors to the RJSC.

Step 6 | File the Documents to RJSC

After the submission, the RJSC shall verify the documents and provide the
certified incorporation documents of the joint venture company.