How to Register a Business in the US from Bangladesh

Step 1: Benefits of starting your US business from Bangladesh

Starting a US business from Bangladesh offers numerous advantages that can significantly elevate your entrepreneurial pursuits. With access to a larger and more diverse market, your business stands to benefit from the extensive consumer base and higher purchasing power in the United States. This can translate into increased sales and greater profit margins. Additionally, the US economy is well-known for its robust infrastructure, advanced technology, and extensive business networks, all of which can provide a solid foundation for growth and innovation. Setting up a business that taps into these resources can elevate your enterprise to new heights.

Moreover, conducting a business in the US from Bangladesh allows you to leverage cost efficiencies. Bangladesh offers a pool of skilled labor at relatively lower wages compared to the US, enabling you to maximize productivity while minimizing operational costs. This competitive edge can significantly boost your profit margins. Additionally, with advancements in digital technology, coordinating activities between the two countries has become easier than ever. Effective communication tools and project management software can ensure that your business operations run smoothly, despite the geographical distance. Ultimately, starting a US business from Bangladesh can provide a unique blend of market opportunity, operational efficiency, and innovative potential.

Step 2: How to start your US business from Bangladesh

Starting a US business from Bangladesh involves several steps to ensure compliance with both countries' regulations. First, decide on the type of business entity you want to form, such as an LLC (Limited Liability Company) or C-Corporation. LLCs are popular for their flexibility and fewer compliance requirements, while C-Corporations may be suitable if you plan on seeking venture capital. Once you have decided, choose a state where you intend to establish your business; Delaware, Wyoming, and Nevada are often recommended due to their favorable business environments.

Next, you will need to register your business. This involves filing the necessary formation documents, such as the Articles of Organization for an LLC or Articles of Incorporation for a C-Corporation, with the appropriate state agency. You will also need to appoint a Registered Agent with a physical address in the state of incorporation. Following the registration, apply for an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for federal tax purposes. Finally, ensure you adhere to any state-specific requirements, such as obtaining business licenses or permits, and consider consulting with a legal or business advisor familiar with cross-border business setup.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Bangladesh

Understanding Compliance Requirements for Running a US Business in Bangladesh

When establishing a US business in Bangladesh, it's essential to understand the compliance requirements. Navigating the legal and regulatory environment ensures that your business operates smoothly and avoids potential legal challenges. Below are key considerations:

1. Business Registration

Businesses must be registered with the Registrar of Joint Stock Companies and Firms (RJSC) in Bangladesh. This includes reserving the company name, preparing requisite documents, and submitting them for approval.

2. Taxation Laws

• Corporate Tax: The corporate income tax rate varies based on the industry and type of business structure.
• Value Added Tax (VAT): A standard 15% VAT applies to most goods and services. Registration for VAT is mandatory.
• Withholding Tax: Businesses need to comply with withholding tax regulations on specific transactions such as payments to suppliers or salaries.

3. Employment and Labor Laws

Employing workers in Bangladesh requires adherence to the Bangladesh Labor Act, which governs employment contracts, employee rights, working conditions, wages, and termination procedures. Key aspects include:

1. Ensuring minimum wage compliance
2. Providing statutory benefits such as provident funds and gratuity
3. Maintaining health and safety standards at the workplace

4. Foreign Exchange Regulations

The Bangladesh Bank regulates forex transactions. Businesses must ensure compliance with guidelines related to currency exchanges, repatriation of profits, and foreign investments.

5. Intellectual Property Rights

Protecting intellectual property (IP) in Bangladesh requires registration with relevant authorities. This includes trademarks, patents, and copyrights. IP rights enforcement is crucial to safeguard your business interests.

6. Environmental Regulations

For businesses involved in activities that impact the environment, obtaining necessary environmental clearances from the Department of Environment is mandatory. Compliance with environmental laws helps in maintaining sustainability.

7. Anti- Bribery and Corruption Laws

Bangladesh has strict laws against bribery and corruption. Businesses must implement policies and training to ensure adherence to these laws, including the Anti-Corruption Commission Act.

8. Local Business Practices

Understanding the local business culture and practices is vital. Networking with local business associations and chambers of commerce can provide valuable insights and assist in smoother operations.

In summary, adhering to these compliance requirements is critical for operating a US business successfully in Bangladesh. Consulting with local legal and business experts can further ensure that all regulatory obligations are met.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Bangladesh

Understanding Tax Obligations for Running a U.S. Business in Bangladesh

Operating a U.S. business in Bangladesh brings with it a number of unique tax considerations. It is important for business owners to understand these obligations to ensure compliance with both U.S. and Bangladeshi tax laws. Below are some of the key factors to consider when dealing with taxes in this context:

Types of Taxes in Bangladesh

In Bangladesh, the primary taxes businesses need to be aware of include:

1. Corporate Income Tax: This is levied on the net income or profit of corporations operating in Bangladesh. The rates and regulations can vary depending on the type of business entity.
2. Value Added Tax (VAT): VAT is imposed on goods and services at each stage of production and distribution. It is crucial to understand the specific rates applicable to your products or services.
3. Withholding Tax: Certain payments such as dividends, interest, and royalties are subject to withholding tax. Understanding the rates and requirements for these is essential.
4. Import Duties: If your business involves importing goods, import duties will be applied. The rates and regulations can vary significantly based on the classification of goods.

Double Taxation Avoidance Agreement (DTAA)

Bangladesh and the United States have a Double Taxation Avoidance Agreement in place. This agreement helps to ensure that income is not taxed twice by both countries. Key provisions to be aware of include:

• Residency: Determining tax residency status to understand where and how taxes should be paid.
• Tax Credits: Mechanisms to provide tax relief to avoid double taxation on the same income.

Compliance and Reporting Requirements

Adhering to compliance and reporting standards is crucial for operating your business smoothly. Key considerations include:

1. Annual Tax Filing: Businesses need to file annual tax returns in Bangladesh. The tax year in Bangladesh runs from July 1st to June 30th.
2. Record Keeping: Maintaining accurate financial records is vital for tax assessments and audits. Ensure all transactions are well-documented.
3. Local Regulations: Stay updated with local tax regulations and amendments to avoid non-compliance penalties.

Professional Assistance

Given the complexity of tax obligations for a U.S. business operating in Bangladesh, it is often beneficial to seek professional assistance. Tax advisors and legal professionals with expertise in both U.S. and Bangladeshi tax laws can provide invaluable guidance and help ensure compliance with all relevant regulations.

Understanding these tax considerations thoroughly can help your business operate smoothly and avoid potential legal and financial pitfalls.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country