What is a Trade License and Why is it Essential for Business in Bangladesh?
Trade licenses were introduced in Bangladesh through the City Corporation [Tax] Rules, 2009. These licenses are issued on the basis of the application of the entrepreneurs. The City Corporation or City Council conducts this process. Trade licenses are issued explicitly in the name of the licensee. This license may not be used for any purpose other than business purposes. The officer in charge of the Regional Tax Office issues the renewed trade license. The prescribed fee for a trade license has to be submitted through any bank mentioned in the license form.
Type of trade license in Bangladesh
There are four main types of trade licenses in Bangladesh:
Commercial Trade License: A commercial trade license is issued to a business that engages in commercial activities such as trading, selling or buying goods, and providing services.
Industrial Trade License: This type of trade license is granted to companies that engage in industrial activities such as manufacturing, assembly, and processing of goods.
Professional Trade License: This type of trade license is issued to individuals who work in professional services such as accounting, law, consulting, and medicine.
Small and Cottage Industries Trade License: This type of trade license is issued to small and cottage industries with a small number of employees and a small scale of operations.
Trade license fees and costs
The cost of a trade license in Bangladesh is high, and it varies according to the type of business. You have to know the exact amount of money that you need to pay in order to obtain the license. Actually, the cost varies depending on the type of business, size, and location. You have to go to the city corporation or district government office to find out the exact cost of the trade license. You can also know the details of the trade license through various websites, as most of the local government offices now offer online services.
In general, the trade license fee for a new business in Bangladesh can range from BDT 500 to BDT 5,000 for small and cottage industries, and up to BDT 50,000 for larger commercial or industrial enterprises.
The trade license fee is usually renewed annually, and the fee amount can vary depending on the size and nature of the business, as well as the location and local regulations.
It is important to note that failure to obtain or renew a trade license on time can result in penalties and legal ramifications. To avoid any potential issues, it is critical that your business operates with a valid trade license and that all fees are paid on time.
Documents required for trade license
General business license
- Attested photocopy of the lease agreement, utility bill in case of own shop and photocopy of updated holding taxpayers
- 3 passport-size photos of the applicant.
- If the business is run jointly, then the non-judicial stamp of Tk. 150/300 has to be submitted to the PartnerShip.
Factory/factories in the case of a trade license
- Copy of environmental clearance.
- Design / location map with details of proposed factory / factory surroundings / installation.
- No objection letter from the owner of the proposed factory/factory side location/installation.
- Fire service clearance.
- Rules of Dhaka City Corporation – Pledge to abide by the law is signed on the stamp of 150/300 taka.
List of Documents required for obtaining a trade license (vary business to business)
An applicant needs the following documents:
- Copy of the National ID card (NID) of the entrepreneur
- Three (3) Passport size Photograph
- Copy of Passport (in case of Foreigner)
- Necessary Information to fill up the Form
- Holding Tax payment receipt
- Recent receipt (papers) or ownership proof
- 3 copies of passport-size photos of the business holder (attested)
- A non-judicial stamp of Tk. 150/- for abiding rules of the city Corporation
- Memorandum & Articles of Association (for Limited Company)
- Agreement of partnership (If he/she has a partner)
- TIN Certificate of Individual and Entity
- Certificate of Incorporation (For Limited Company)
- Statement of Bank Solvency (Full Clearance)
- Work Permit from Bangladesh Investment Development Authority (BIDA)
- License from Fire service & Civil Defence (Applicable for Industry)
License renewal is a regular process. A license is valid for one year and must be applied for within three months of its expiration. For this, you have to contact the regional office in charge of the previous trade license. The Regional Tax Officer in charge will issue the renewed license. The license renewal fee is equal to the new license fee. This fee has to be deposited in the bank mentioned in the form as before.
How much money and how long does it take?
License fees may vary depending on the type of business. This fee has to be submitted through receipts to the concerned office. License fees can range from a minimum of tk. 200 to a maximum of tk. 26,000. It can take three to seven days to get a license.
Providing false or incomplete information may result in cancel of the license. if it does not comply with the terms and conditions of the license and the rules and regulations of the City Corporation. In addition, legal action may be taken against the license holder. However, before taking any action, the recipient should be given an opportunity to show cause.
How to obtain e trade license online?
You can now apply for a trade license online. To apply, go to the official registration site and fill out the form.
Enter the URL or click the link- (http://www.etradelicense.gov.bd).
- write your Mobile or / E-mail / User ID in English.
- Enter the password in English.
- The mobile and email verification code will be sent if you click the login button.
- Enter the login verification code and click
- From here, you can learn the basics of the software at a glance.
- Please see the chart directly above the software dashboard, from which anyone can do the work.
Legal consequences of not having a trade license
The legal consequences of not having a trade license are very serious, as it is illegal to conduct business without a trade license in most countries. If you start a business without a trade license, you may be subject to criminal prosecution, financial penalties, and a potential ban on operating the business in the future. Your business can be shut down immediately, and your premises can be sealed by the local authority, if you are found to be operating without a trade license. So it is better to ensure that you are compliant with the regulations in your country before beginning any kind of commercial activity. It is true that a lot of businessmen are doing business without a trade license, but it is very risky and could have long-term negative consequences. So I recommend always obtaining the necessary trade license before commencing any kind of business activity.
Not renewing of Trade license
Renewing your trade license is an essential part of operating a business in Bangladesh. A trade license is usually valid for a specific period, after which it needs to be renewed. Failure to renew your license can have serious consequences for your business. Here are some details about not renewing your license:
- Penalties: If you fail to renew your trade license on time, you may have to pay a penalty. The penalty amount varies depending on the duration of the delay.
- Business closure: If you continue to operate your business without a valid trade license, you risk having your business shut down. The relevant authority has the power to close down any business that does not have a valid license.
- Legal consequences: Operating a business without a valid trade license is illegal. You may face legal consequences if you are caught operating your business without a valid license.
- Difficulty in obtaining loans: Not renewing your trade license can affect your creditworthiness. This can make it difficult for you to obtain loans or other forms of financing for your business.
- Reputation damage: Failure to renew your trade license can damage your business’s reputation. It can make it difficult for you to attract customers or business partners.