You have leased a shed, ordered the machines, and hired your first workers. Then an inspector walks in and asks to see your Factory License. Many first-time factory owners hear about this requirement only at that moment, and by then it is expensive to fix. This guide explains who needs the license, which documents to prepare, how the fees work, and how renewal works, so you can handle it properly before opening day.
What Is a Factory License in Bangladesh
A Factory License is the official permission to run a manufacturing unit. The Department of Inspection for Factories and Establishments (DIFE), under the Ministry of Labour and Employment, issues it. The Bangladesh Labour Act, 2006 and the Labour Rules, 2015 make it a legal requirement.
In simple terms, the license confirms that your factory meets basic safety, health, and welfare standards for its workers. People also call it a DIFE license, a labour license, or a factory registration.
Who Needs a Factory License
Any manufacturing unit that falls under the Labour Act needs one. The Act’s definition of a factory generally starts at five workers. That covers a wide range of businesses:
- Garment and textile units
- Food processing and packaging plants
- Plastic, chemical, and metal workshops
- Any new factory, and any existing factory that expands or moves
Rules can differ for specific industries, so confirm your case with DIFE or a consultant if you are unsure.
Why a Factory License Matters
Some owners treat the license as paperwork they can handle later. That is a risky habit, because the license affects much more than inspections:
- It keeps you on the right side of the law and avoids fines or closure
- Buyers, banks, and auditors often ask to see it before they work with you
- It supports a safer workplace for your people
- Other approvals depend on it. For example, a drug license for manufacturing needs factory approval along with other clearances
Factory License vs Trade License vs Fire License
These three get confused all the time, yet each one has a different job:
You usually need all three. Start with a valid trade license, because most other applications ask for it.
Factory License Requirements Before You Apply
Getting the prerequisites right saves more time than anything else. Before you apply for the Factory License, make sure you have:
- A valid trade license in the correct business name
- An approved building design and factory layout plan
- A fire license for the premises
- Environmental clearance, where your industry category requires it
- Proof that you own or lease the premises
- Company documents, if you operate as a limited company
Notice that three of these come from other offices. They usually take longer than the DIFE application itself, so start them first.
Documents Required for Factory License Registration
The exact list can vary by factory type, and DIFE may ask for more. Prepare these documents as a baseline:
- Application details submitted through the LIMA portal
- Copy of the trade license
- Factory building design with its approval letter, and the layout plan
- Copy of the fire license
- Electricity or power demand note
- Rental agreement or land ownership papers
- TIN certificate and NID copies of the owner or directors
- Memorandum and Articles of Association, for limited companies
- List of workers and employees
- Original treasury challan for the license fee
- Copy of your environmental clearance, where applicable
Step-by-Step Factory License Registration Process
Here is the full process, from the first approval to the day you hold your license:
- Get your building design and factory layout plan approved, and arrange your fire license and environmental clearance if they apply to you.
- Create an account on the DIFE Labour Inspection Management Application (LIMA) portal.
- Fill in the application form with your factory details.
- Scan and upload all the required documents.
- Submit the application and keep your tracking details safe.
- Wait while DIFE reviews your documents.
- Prepare for the physical inspection. DIFE officials visit to check safety measures, machinery layout, and worker facilities.
- Pay the license fee through a treasury challan, together with the applicable VAT.
- Receive your Factory License.
If the inspector points out problems, fix them quickly and say so in writing. Delays at this stage usually come from open safety issues, not from DIFE itself.
Factory License Fee in Bangladesh
The Factory License fee is not a single flat amount. It works in slabs, based on the number of workers in your factory. Small units pay little, and the fee climbs as the workforce grows. A 15% VAT applies on top of the fee, and you pay everything through a treasury challan.
For a sense of scale, an older published schedule listed these figures:
Larger slabs continue upward from there. Treat this table as an illustration only. DIFE has revised fee slabs before, and published guides do not always agree, so confirm the current figures on the LIMA portal before you budget. Remember that your consultant’s service fee and the cost of the prerequisites, such as the fire license, come separately.
How Long Does It Take to Get a Factory License
The DIFE stage itself usually takes a few weeks, depending on how complete your file is and how quickly the inspection happens. The prerequisites often take longer than the application. A delayed layout approval or fire license can hold up everything else.
So the smartest move is to start the prerequisite approvals early and submit a complete, consistent application the first time.
Factory License Renewal
A Factory License is valid for one year, so you must renew it every year. Published guides say the renewal deadline falls before 31 December. Do not wait for the last week. Late renewal adds a penalty on top of the normal renewal fee.
To renew, you generally need:
- A completed renewal application
- The original license from the previous year
- The original treasury challan for the renewal fee and VAT
Check your worker count before you renew. if your workforce has grown into a higher slab, your renewal fee changes. Also keep your trade license, fire license, and other approvals up to date, because they support your renewal.
Common Mistakes That Delay a Factory License
- Starting construction before the layout plan is approved
- Using different business names on the trade license, TIN, and lease papers
- Declaring the wrong number of workers, which puts you in the wrong fee slab
- Ignoring open fire-safety issues before the inspection
- Assuming a trade license is enough on its own
- Missing the renewal date and paying a late penalty
What Happens If You Run a Factory Without a License
The risks add up quickly. You may face fines and legal action under the Labour Act, and in serious cases the authorities can order the factory to stop work. Buyer audits can fail, banks may hesitate to lend, and your other approvals can stall. The cost of getting the license is small compared with the cost of a shutdown.
Why Choose Segunbagicha Consultancy
Juggling layout approvals, fire and environmental clearances, the LIMA application, and the inspection can swallow weeks of a founder’s time. Segunbagicha Consultancy manages the whole Factory License process for you, from the first document check to the final license and every renewal after it.
We also handle the supporting approvals your factory needs. Browse our complete service list to see everything we can manage under one roof.
Get Expert Help Today
Whether you are opening a new factory or catching up on a missed renewal, reach out to Segunbagicha Consultancy today.
Address: 36 Topkhana Road, Fareast Tower-2 (3rd Floor), Purana Paltan, Dhaka
Call: +880 1933-335316
WhatsApp: +880 1933-353506
Segunbagicha Consultancy — your trusted partner for business registration and compliance in Bangladesh.
Frequently Asked Questions
Q1: Is a Factory License mandatory in Bangladesh?
Yes. Factories covered by the Labour Act must hold a valid license, and running without one can lead to penalties.
Q2: How long is a Factory License valid?
It is valid for one year, so you need to renew it every year.
Q3: How much does a Factory License cost?
The fee depends on your number of workers, and 15% VAT applies on top. Check the current slabs on the LIMA portal.
Q4: Can I apply for the Factory License online?
Yes. DIFE accepts applications through its LIMA portal.
Q5: Is a physical inspection compulsory?
Yes. DIFE officials inspect the factory before they issue the license.
Q6: I already have a trade license. Do I still need a Factory License?
Yes. The two licenses serve different purposes and come from different authorities.
Q7: What if my number of workers grows?
Your fee slab may change at renewal, so update your worker count and pay the correct fee.
Q8: Does a very small workshop need a Factory License?
The Labour Act’s definition of a factory generally starts at five workers. Rules can differ by industry, so confirm your case with DIFE or a consultant.
Final Thoughts
A Factory License is not the most exciting part of building a business, but it protects your workers, your investment, and your reputation. Start the prerequisite approvals early, keep your documents consistent, and put the renewal date in your calendar. If you would rather hand the paperwork to people who do it every day, get in touch with Segunbagicha Consultancy today.
