Proprietorship Business in Bangladesh

10 · 29 · 17

Proprietorship Business in Bangladesh


In general, three types of business entities can be found in Bangladesh. Limited Company, Partnership Firm, and Proprietorship Business are the three options. Around 65 percent of businesses are run as sole proprietorships. A sole proprietorship business can be started by a single entrepreneur. Small and medium-sized businesses, in general, opt for sole proprietorship.

How do I obtain a business license in Bangladesh?

If a person wishes to start a sole proprietorship business, he or she must obtain a Trades License from the local authority, which could be the City Corporation Office, Municipality Office, Upozila Council, Union Council, or the respective Government authority. To obtain a Trade License, one must first choose a good name for the Proprietorship business, then submit necessary documents and pay government fees (depending on the type of business) to the Trade License issuing authority. After reviewing all of the paperwork, the authority issues the Trade License, along with the necessary field investigation.

The following issues are considered by the authority:

  • The Proprietorship’s Name Name of the Business Owner
  • Business types include export, import, supplier, and so on.
  • Address for Business
  • Address of the owner, date of birth, and parents’ names
  • National ID cards of the owner a copy of the owner’s photograph a copy of the business’s registered address a copy of the VAT chalan a copy of the trade license a copy of the office rental deed
  • Fill out the trade license form with the signature of the owner Liability:

A sole proprietorship is not treated as a separate legal entity. The owner is personally liable for all business consequences.


The owner must pay tax on his personal income from the business under his individual head.

Upkeep and operation:

A proprietorship business has relatively low operating costs.
An annual profit and loss balance sheet and audit report are not required.
Any business decision is made solely by the owner.
Additional approvals were required:

After obtaining a Trade License for a sole proprietorship business, a TIN certificate (Taxpayers’ Identification Number) is required in order to open a bank account (business account) and conduct business transactions. Currently, the majority of businesses use VAT (Value Added Tax). To deduct VAT, a VAT Registration Certificate must be obtained. A TIN Certificate is required to deduct AIT (Advance Income Tax) at the source in order to operate the business.

If the proprietor wishes to conduct international or multinational business, he or she must obtain an Export Registration Certificate or an Import Registration Certificate. Bangladesh is now one of the world’s leading exporters of readymade garments, jute, frozen food, leather goods, and potatoes. A large number of business entities, such as sole proprietorships, partnership firms, and limited companies, are interested in engaging in international trade or export and import business in Bangladesh. When two or more entrepreneurs want to start a business in Bangladesh, they must establish either a Limited Company or a Partnership Firm.

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