One of Bangladesh’s most lucrative and rapidly expanding industries is real estate. The emergence of numerous new real estate companies and the creation of new projects have contributed to the sector’s rapid expansion in recent decades. The 1970s marked the beginning of everything. It is an essential industry with major economic drivers. The real estate sector produces the most jobs, followed by those in farming and manufacturing.
Bangladesh is one of the most populous countries in the world despite being a small country in terms of geographical size. There is a rising demand for homes, offices, and other commercial property due to the country’s rapidly developing urban population. In addition to generating significant economic growth, real estate can assist in addressing the housing shortage triggered by a shortage of resources. Several new projects are in the works, and there are several investment prospects in this industry, so the sector’s future appears promising.
Thus choosing to work in this field will be a wise career move. To start a real estate business, you must, however, possess the necessary knowledge and expertise. This article goes into great detail about how to establish a profitable real estate business in Bangladesh.
What is Real Estate?
Real estate is regarded as the property plus any fixed, whether organic or man-made, structures, such as a house, or amenities that are connected to it. It means creating, purchasing, and leasing property in terms of business.
Due to Bangladesh’s rapid infrastructural and housing industry growth, the real estate business initially continued to expand at a steady rate. The next several years will see it flourish much further and play a bigger role in Bangladesh’s progress toward becoming a prosperous country.
Guide to Start a Real Estate Business in Bangladesh
The real estate sector in Bangladesh is a profitable sector that’s developing significantly. It also brings about enormous economic fortune in addition to dealing with housing needs. While choosing to work in this sector is a smart move, one must have the necessary skills and knowledge.
Establishing a real estate development company and opening a business in the industry can be done in a number of different ways. The business structure can be a sole proprietorship, partnership, or private limited company. For international investors, however, the first two methods are not applicable.
- Sole Proprietorship Business: Under a sole proprietorship, the proprietor and the company are not treated as independent legal bodies in Bangladesh; as a result, the individual will be exclusively responsible for any consequences that develop during the course of operation.
- Partnership Business: Similar to a sole proprietorship, the participants in collaboration are jointly and severally accountable for all obligations that the company incurs.
- Private Limited Company: A private limited company is a distinct legal entity, as opposed to a sole proprietorship or a partnership, and its investors or associates are not responsible for its debts.
Sole Proprietorship Business
By submitting an application to the relevant City Corporation/local government, the owner of a sole proprietorship must choose a name for the company and receive a trading license. The essential condition for a proprietorship is a trade license.
Commercial trade licenses must be applied for by businesses operating in the corporate sector, and industrial trade licenses must be applied for by businesses operating in the manufacturing industry.
Partnership Business
It is not required to file a partnership business with RJSC, but doing so is highly advised because, in the absence of such registration, associates will not be able to bring legal action against one another in the event of forgery, embezzlement, or other legal issues.
One needs to finish these three processes in order to register the business with the Registrar of Joint Stock Companies and Firms of Bangladesh (RJSC).
Issuing the Partnership Name
The Registrar of Joint Stock Companies and Firms must be contacted in order to receive a Name Clearance for the Partnership Business’s chosen name (RJSC).
Arranging a Partnership Deed
The Partnership Deed must be prepared on a stamp paper in compliance with the Stamp Act, including the signatures of each partner, followed by being verified.
Registering Partnership with RJSC
The partnership agreement must be submitted to RJSC in addition to the completed form. Registration confirmation will be issued after the paperwork has been reviewed by RJSC authorities.
Upon the completion of the paperwork, the registration certificate from RJSC is typically obtained in two weeks.
Private Limited Company
In order to conduct business in Bangladesh as a private limited company, one needs to register the business with RJSC. The procedures to do that are shown below.
Step-1:
The first step is to request a name clearance from RJSC for the intended name of the company.
Step-2:
Composing and completing the subsequent documents:
- The Company’s Memorandum and Articles of Association
- Form IX: Consent of the director to act
- Form XII: Particulars of the directors, managers, and managing agents
Step-3:
Step 3 involves establishing a bank account for the Bangladeshi company and transferring the foreign shareholders’ share capital (not required for local shareholders)
Step-4:
The bank issues an encashment certificate for the international transaction (not required for local shareholders)
Step-5:
The completed documentation, the encashment certificate, and the fees and taxes for establishing the business must all be presented to the RJSC.
Step-6:
RJSC will certify the registration documents and examine the documentation. After receiving the required paperwork, the certificates are typically issued by RJSC in 3 to 4 weeks.
Registration of a Real Estate Developer
The real estate developer must obtain registration from the government in order to undertake real estate business throughout Bangladesh. He must register with the relevant authority in order to undertake real estate business in a certain area.
Step-1:
All real estate developers must submit an application to the government or appropriate authority in the manner specified by the regulations for licensing, in addition to a duplicate of each of the following relevant documentation:
- Trade License
- TIN ( Tax Identification Number)
- VAT registration number
- Experience in project creation and execution
- Certificate of Qualification of Technical Persons (Certificate of Educational Qualification of Architects, Engineers, and Planners and Certificate of Membership of the concerned professional body)
- Certificate of Incorporation, including Memorandum of Association and Articles of Association
- Copy of registration of membership in the Real Estate and Housing Association of Bangladesh (REHAB), or Land Developers Association
Step-2:
The application is approved by the government or, as the case may be, the authority within 60 days of validating and categorizing the data collected by the authority, if it is satisfactory then-
- If the applicant is able to meet the requirements set forth for the execution of the real estate development venture, he shall have permission for the implementation within that time and it will be communicated in drafting to the claimant.
- If the applicant fails to meet the requirements set forth for the implementation, the application will be refused with a written explanation and notification to the applicant.
Step-3:
If the application is approved, the Government or, where appropriate, the Authority shall give a Registration Certificate to the candidate for 5 years, according to the collection of fees and expenses, within 30 days after the date of informing the applicant in writing. It may be renewed annually.
Step-4:
The responsible authority must keep and publish a list of authorized developers in the appropriate format.
Step-5:
The developer’s registration may be extended, revoked, or modified in accordance with the established procedures.
Summary
In Bangladesh, real estate investment stands out as a safe and profitable option. The local market demand for real estate is continuously expanding, presenting the tremendous potential for investors. With urbanization on the rise and increasing demand for housing, the real estate market is flourishing, with property prices steadily increasing. Additionally, the government’s initiatives to attract foreign investment in the real estate sector further reinforce its growth potential. Hence, investing in real estate in Bangladesh could yield significant returns in the long term.
Real estate plays a significant role in the economy of our nation. Construction of residential and commercial infrastructure, the development of unused land, aiding in the expansion of other businesses, luring in local and foreign investment, and job creation are all ways that this sector directly contributes to the GDP. Since it began, the real estate industry has experienced consistent expansion. Considering the nation’s overall socioeconomic development, it becomes sensitive to infer that the real estate sector is expanding and diversifying along with it. Lastly, the health of the Bangladeshi real estate market as a whole indicates optimism regarding an improved future for all those working in this sector.
Frequently Asked Questions (FAQs)
How long ago did Bangladesh’s real estate market begin?
Only five companies were involved in the real estate market when it started its journey in the 1970s, shortly after Bangladesh became a nation.
How much of our country’s GDP is contributed by the real estate industry?
The contribution of Bangladesh’s real estate sector to the country’s GDP is about 12%.
How extensive is Bangladesh’s real estate market right now?
Our country’s whole real estate market is currently worth 6000 crores BDT.
How many people in Bangladesh are employed by the real estate industry and the sectors that it supports?
About 2 million people across the nation have food on their tables thanks to the real estate industry and related companies. Together with the sector’s rapid expansion, the number is rising.
