Trade License in Bangladesh is a certificate which declare that you can do the business that mentioned in the Trade License. There are three types of business entity in Bangladesh, those are Proprietorship, Partnership Firm and Limited Company. Trade License is mandatory for all three types of business entity. Respective areas local government authority issue trade license. It is issued for one year and needed to be renewed every year.
Authority of Trade License in Bangladesh:
The City Corporation, Powrosova and Union Porishad are eligible to issue trade license in Bangladesh.
Step by step procedure to get trade license in Bangladesh for as follows:
Step 1 | To collect Application Form from respective areas City Corporation or Municipality Office or Union Parisad Office (which applicable).
Step 2 | To fill up properly the Trade License application form.
Step 3 | Submit duly completed Application Form with required documents to the concerned office.
Step 4 | After submission of the form with required documents the Licensing Supervisor visit to verify the given information.
Step 5 | To deposit required fees at the concerned Bank.
Step 6 | Upon the satisfaction Concerned Authority they issue a Trade License to the applicant.
Documents required for trade license in Bangladesh:
National ID Card of the owner
Passport size photographs of the owner
Receipt of holding tax/ Rental Agreement
Incorporation Certificate (for Limited Company)
Memorandum of Association & Articles of Association (for Limited Company)
Partnership Agreement (for Partnership Firm)
Trade License fees in Bangladesh
Trade license fees are depends on business nature for Proprietorship and Partnership business. On the other hand the limited company it depends on paid up capital. In Dhaka City Corporation fees range from taka 500/- to taka 25,000/-. Further more you have to pay Signboard fee. In general range of Signboard fees from taka 400/- to taka 800/-. At present both City Corporation of Dhaka in general takes taka 640/- as Signboard fees. Moreover, you have to pay 15% VAT on above fees.
Let we calculate Trade License expenses a very common business (Supplier) in DCC as below:
Particulars | Amount(Taka) |
Tax | 2,000/- |
Signboard fee | 640/- |
2640/- | |
15% VAT | 396/- |
Total cost | 3,036/- |
The renewal of trade license
Trade License renewal is a regular procedure. In Bangladesh financial year of Trade License is from 1st July to 30th June. In generally Trade License renewal start from 1st July and can be renewed up to 30th September without penalty. New Trade License fee and renewal fee is same. But at the time of renewal you should pay taka 3,000/- as AIT in Dhaka & Chittagong City Corporation area.
Let we calculate Trade License renewal expenses in due time (without penalty) a very common business (Supplier) in DCC as below:
Tax : tk- 2,000/-
Signboard fee : tk-640/-
Tk-2640/-
15% VAT : tk-396/-
tk-3,036/-
Add AIT : tk-3,000/-
Total : tk-6,036/-
Let we calculate Trade License renewal expenses in after September (with penalty) a very common business (Supplier) in DCC as below:
Say apply for Trade License renewal on 15th December then expenses will be as below:
{Here penalty should be 6 months from July to December, 10% for each moth on tax ( supplier tax tk-2,000/-),ie, (2,000/- x 10% x 6 months, tk-1200/-)}
Tax : tk- 2,000/-
Penalty : tk-1,200/-
Signboard fee : tk-640/-
Tk-3,840/-
15% VAT : tk-576/-
tk-4,416/-
Add AIT : tk-3,000/-
Total : tk-7,416/-
There are two types of Trade License in Bangladesh:
- Trade License for Commercial Firm
- Trade License for Manufacturing Firm
Trade license for commercial firm:
For setting up a commercial firm you have to collect K-Form. It is available in respective zonal office. After completing the form to submit City Corporation respective office along with necessary documents. Licensing Supervisor may visit the business are for verification and upon satisfaction give Trade License approval.
Trade license for a manufacturing firm:
Form āIā has needed to get Trade License for Manufacturing unit from zonal DCC office. Upon submission of the āIā form duly filled along with required documents the license supervisor will visit the business place for verification. After verification license supervisor give advice to collect Trade License by paying required fees.