Want to setup a company in Bangladesh? This article will educate you on the tax laws for a LLC which is the most common company structure in Bangladesh.

Bangladesh taxes corporate income in a worldwide basis. The predominant rate for offshore income, from our research, and these things do change, is 35%. The country does not have major incentives to bring in earned profits from outside the country. Taxes are very high in Bangladesh. The standard corporate tax rate is 35%. Publicly traded companies are taxed at a 25% flat rate. Financial services companies are taxed at 42.5%, or 40% if they are publicly traded. Mobile phone operators and cigarrete manufacturers are taxed at a 45% rate. Companies employing non-residents without prior approval of the BOI are subject to an additional tax of 50% of the tax payable. This ranks Bangladesh as 168th when compared to corporate tax rate worldwide.

The valued added tax rate in BD is 15.00%, which ranks Bangladesh as 80th overall in terms of VAT globally. Social Security contributions are not mandatory. However, companies of a certain size need to pay 5 percent of their profits into a Workers Profit Participation Fund. No contribution from employees is required. The overall complexity of the tax system is high. This is measured by average time to comply with a country's labor tax requirements is as it is 302hours. Contributing to this is the number of yearly labor tax payments, which is 17 in BD.

Thin capitalization restrictions aren't in effect. This refers to any sort of laws on a business and the debt-to-asset ratios. Dividends received from a resident company are taxed at a 20%. Those received from a foreign entity are subject to Corporate Income Tax at the standard rate. Dividends are a distribution of a portion of company profits, passed by by the board of directors, to a class of its shareholders. Dividends can be one of the following stock, cash, or property. Capital Gains are usually taxed at a flat rate of 15%. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 20%. Which means that the tax authorities expects relevant legal entities to withhold 20% of payments on interests remitted abroad. The dividends withholding tax rate is 20%. Which means that the taxman expects LLC's to automatically withhold 20% of money remitted abroad on dividend payments. The royalties withholding tax rate 20%. This should be interpreted usually that the taxman expects companies to pay tax on at least 20% of money remitted abroad on royalty payments. Withholding taxes may be reduced under a tax treaty.

There is a tax on net wealth in Bangladesh. There are no known inheritance taxes in BD. There is a stamp duty on transfers of real property. There are not many well known credits for innovation that include tax incentives in Bangladesh.

The above is not tax or legal advice for your individual circumstances. Incorporations.io can point you to an accountant in Bangladesh who can answer all your questions. Click incorporate now if you are in a hurry, or press the free consultation button above.