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create new trade license for your business easy 6 steps
Starting a business is an exciting journey, and one of the first and most crucial steps is obtaining a trade license in Bangladesh. This legal document is a fundamental requirement for any business, regardless of its size or nature. It serves as an official permission from the local government to operate your business within a specific area.
What is an e-trade license ?
An e-trade license is a permit issued by the local government authorities in Bangladesh, such as Dhaka south city corporation, Dhaka north city corporation , Municipalities (Pourashavas), or Union Parishads. It's a non-transferable document that allows a specific individual or organization to conduct a particular business activity within a designated jurisdiction.
The legal framework for trade licenses is primarily based on the Local Government (City Corporation) Act 2009 and the Municipal Taxation Rules, 1986. Operating a business without a valid e-trade license is illegal and can lead to penalties, fines, and even forced closure.
Why is a Trade License So Important?
A trade license is more than just a piece of paper; it’s the foundation of a legally compliant and credible business. Here’s why you need one:
- Legal Compliance: It ensures your business operates within the legal framework of the country, protecting you from potential legal issues and penalties.
- Enhanced Credibility: A trade license adds legitimacy to your business in the eyes of customers, suppliers, and partners. It builds trust and demonstrates that your business is serious and reliable.
- Access to Financial Services: Banks and financial institutions often require a valid trade license as a prerequisite for opening a corporate bank account, securing business loans, or accessing other financial support.
- Business Opportunities: Many business-to-business (B2B) transactions, including government contracts and tenders, require a valid trade license. It also enables you to engage in import and export activities.
- Tax Compliance: A trade license is a key document required for obtaining a Tax Identification Number (TIN) and a Value Added Tax (VAT) registration, which are essential for fulfilling your tax obligations.
Trade License Bd Application Process
The process of getting a trade license can vary slightly depending on your business type and location, but it generally follows these steps:
- Determine Jurisdiction First, identify the correct authority for your business. This will be the City Corporation (e.g., Dhaka North or South), Municipality, or Union Parishad that has jurisdiction over your business's physical location.
- Collect the Application Form You can obtain the prescribed application form from the relevant local government office or, in some cases, download it from their official website. Some City Corporations, like Dhaka's, offer online application systems for a more streamlined process.
Prepare Required Documents Gather all the necessary documents. The list of required documents can vary, but typically includes:
- Application Form
- Copy of the entrepreneur's National ID card or passport
- Recent passport-sized photographs of the entrepreneur
- Proof of business address (rent receipt or ownership deed)
- Holding tax payment receipt
- Tax Identification Number (TIN) certificate
- In case of a limited company, a copy of the Memorandum and Articles of Association and the Certificate of Incorporation
- For a partnership firm, a copy of the partnership agreement
- A bank solvency certificate
- In some cases, specific businesses (like factories or restaurants) may need additional clearances like a Fire License or an Environmental Clearance Certificate.
Submission and Verification
Submit the filled-in application form along with all the supporting documents to the designated office. The authority may conduct a physical inspection of your business premises to verify the information provided.
Fee Payment and Issuance
Once your application and documents are verified and approved, you will be instructed to pay the scheduled fees. The cost varies widely based on the nature, type, and size of your business. After payment, your trade license will be issued. The entire process can take anywhere from a few days to a few weeks, depending on the specific office and the completeness of your application.
Trade License Renew Online
A trade license is typically valid for one fiscal year and must be renewed annually. The renewal process is generally simpler, requiring you to submit your old license, the renewal trade license application form, and proof of payment for the trade license fees
Type of Trade License
- Proprietorship
- Partnership
- Limited Company
