The process to buy or sell a company in Bangladesh is complex and requires careful legal, financial, and operational planning. Whether you are an entrepreneur looking to acquire a profitable business or a business owner planning to sell, following a structured approach is essential to protect your investment, ensure regulatory compliance, and close the deal smoothly.
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At Dewey & LeBoeuf, our team specializes in corporate law and assists clients throughout every stage of buying or selling companies in Bangladesh, from legal due diligence to drafting contracts and securing approvals.
Why Legal Guidance is Crucial
In Bangladesh, business transactions involve multiple legal frameworks, including:
- The Companies Act 1994
- Income Tax Ordinance 1984
- Bangladesh Investment Development Authority (BIDA) regulations for foreign investors
- Sector-specific regulatory laws
Without proper legal guidance, buyers or sellers risk disputes, tax penalties, or even invalid transactions. A professional law firm can safeguard your interests and ensure a smooth, compliant transaction.
Buy a Company in Bangladesh: Step-by-Step
1. Identify the Right Company
The first step is to find a company that aligns with your strategic goals. Consider:
- Financial performance and profitability
- Market position and customer base
- Existing liabilities and debts
- Employee contracts and retention
Engage a legal advisor early to help draft confidentiality agreements and non-disclosure agreements (NDAs) before any sensitive information is shared.
2. Conduct Legal and Financial Due Diligence
Due diligence is essential to identify potential risks. It typically involves:
- Verifying corporate documents: certificate of incorporation, memorandum and articles of association, shareholder registers
- Checking licenses, permits, and regulatory compliance
- Examining contracts with suppliers, customers, and employees
- Reviewing pending litigations, claims, or disputes
- Assessing taxation records, bank statements, and financial statements
Our law firm specializes in full due diligence for Bangladeshi companies, identifying hidden risks, and ensuring that you make an informed decision.
3. Business Valuation
Valuation is a critical step before negotiation. Methods commonly used in Bangladesh include:
- Asset-based valuation – considers the total net assets of the company
- Income-based valuation – calculates present value based on expected future profits
- Market-based valuation – compares similar businesses sold recently in the market
We advise using professional valuation experts to ensure a fair price, backed by legal agreements to avoid disputes.
4. Negotiating Terms
After due diligence and valuation, negotiation begins. Key terms include:
- Purchase price and payment schedule
- Transfer of shares or assets
- Liabilities to be assumed by the buyer
- Employee retention or severance plans
- Warranties and indemnities
Our lawyers help draft negotiation letters and term sheets to protect clients’ interests and minimize exposure to legal risks.
5. Drafting the Sale and Purchase Agreement
The Sale and Purchase Agreement (SPA) is the cornerstone of a company transaction. It details:
- Parties involved
- Transaction structure (share sale or asset sale)
- Representations and warranties
- Conditions precedent for closing
- Payment terms and escrow arrangements
- Post-closing obligations
We ensure the SPA is robust, legally enforceable, and tailored to Bangladesh’s corporate and tax regulations.
6. Regulatory Approvals
Some transactions require regulatory approval depending on the sector, size, and foreign investment:
- BIDA approval – for foreign investors buying Bangladeshi companies
- Bangladesh Bank – for cross-border payment approvals
- Competition Commission – if the acquisition may impact market competition
Failing to secure regulatory approvals can invalidate the transaction. Our firm guides clients through all necessary filings and approvals.
7. Closing the Transaction
Once all terms are agreed, due diligence completed, and approvals obtained, the transaction is formally closed. Closing typically involves:
- Signing the SPA and other ancillary agreements
- Payment of consideration (via bank transfer or escrow)
- Share transfer and updating the company register with the Registrar of Joint Stock Companies and Firms (RJSC)
- Public filing of the change in ownership (if required)
8. Post-Transaction Compliance
After the sale or purchase:
- Update employee contracts and HR records
- File tax documents with the National Board of Revenue (NBR)
- Inform relevant regulatory bodies
- Address pending contracts and obligations
Our legal team ensures that all post-transaction compliance obligations are completed to avoid disputes or penalties.
Sell a Company in Bangladesh: Step-by-Step
Selling a business is equally complex and requires preparation to maximize value and reduce liability.
1. Prepare the Company for Sale
- Clean up corporate records, accounts, and contracts
- Resolve pending disputes or litigations
- Ensure all regulatory filings are current
- Identify key assets and intellectual property
2. Find Suitable Buyers
- Approach strategic investors, industry peers, or private equity firms
- Use NDAs before sharing sensitive information
- Prequalify buyers to ensure financial capability
3. Conduct Pre-Sale Due Diligence
Perform an internal review to anticipate buyer concerns and identify any risks that may affect valuation. We assist sellers in preparing accurate and complete disclosures.
4. Negotiate Sale Terms
- Decide on price, payment method, and structure
- Determine whether the sale is of shares or assets
- Define warranties, indemnities, and representations
- Plan for employee and contract transition
5. Drafting the SPA
Our lawyers draft a customized SPA to ensure a secure transaction that aligns with your business goals, protects against claims, and complies with Bangladesh law.
6. Obtain Regulatory Approvals
Certain sectors, such as banking, telecom, and energy, may require regulatory approvals before a sale can be completed. Our firm ensures all approvals are obtained efficiently.
7. Closing the Sale
- Execute SPA and related agreements
- Transfer ownership and shares
- Receive consideration
- File required updates with RJSC and NBR
8. Post-Sale Steps
- Notify employees and stakeholders
- Ensure all post-sale obligations are clearly documented
- Close bank accounts or transfer assets as required
Common Pitfalls and How Legal Services Protect You
- Incomplete due diligence – hidden liabilities can create major post-sale disputes
- Improper documentation – an invalid SPA can lead to unenforceable terms
- Regulatory non-compliance – failing to obtain necessary approvals can invalidate the transaction
- Tax exposure – without proper guidance, both buyers and sellers may face unexpected tax liabilities
Engaging a law firm ensures that all steps are properly executed and protects your investment or sale proceeds.
FAQs on Buying or Selling Companies in Bangladesh
Can foreigners buy a company in Bangladesh?
Yes, but foreign buyers must obtain BIDA approval and comply with foreign investment regulations. Legal guidance is essential for cross-border compliance.
What is the difference between an asset sale and a share sale?
Share sale: The buyer purchases company shares and acquires all assets and liabilities.
Asset sale: The buyer purchases only selected assets and assumes limited liabilities.
How long does the process take to buy/sell a company?
Typically, a straightforward transaction takes 2-3 months. Complex deals or foreign approvals can extend the timeline.
What taxes are involved in selling a company?
Capital gains tax and income tax may apply. Professional legal advice ensures correct filing and minimizes exposure.
Can I negotiate warranties and indemnities?
Yes. Warranties and indemnities protect buyers against unknown liabilities and are standard in any SPA.
Why Work with Dewey & LeBoeuf for Buying or Selling Companies
Our corporate law team in Bangladesh provides comprehensive legal services tailored to buy or sell a company:
- Full due diligence and risk assessment
- Accurate valuation support and negotiation advice
- Drafting legally enforceable Sale and Purchase Agreements
- Handling regulatory approvals from BIDA, Bangladesh Bank, and sectoral authorities
- Post-transaction compliance and documentation
By partnering with Dewey & LeBoeuf, you ensure a secure, smooth, and legally compliant transaction.
Contact us today for personalized guidance and a detailed checklist to buy or sell your company in Bangladesh.
E-mail: info@deweyleboeuf.com
Phone: +971 58 690 9684
Address: 26B Street, Mirdif, Dubai, UAE