How to Start Exporting Goods from Bangladesh: Rules and Resources

Bangladesh, with its strategic location in South Asia, a growing economy, and an increasing number of industries, is well-positioned for export activities. As one of the fastest-growing economies in the region, the country offers numerous opportunities for entrepreneurs looking to expand their business globally. Whether you are a manufacturer, wholesaler, or entrepreneur looking to start exporting goods from Bangladesh, understanding the rules, resources, and processes involved is crucial.

This article will walk you through the steps to start exporting goods from Bangladesh, the legal requirements, and the resources available to ensure smooth international transactions.

1. Why Bangladesh is a Great Location for Exporting Goods

Before diving into the process of exporting, it’s important to understand why Bangladesh is an attractive option for export businesses.

Strategic Location

Bangladesh is strategically located at the crossroads of South Asia, with access to major shipping routes in the Bay of Bengal. The country shares borders with India and Myanmar, and it is in close proximity to key international markets such as China, the Middle East, and Europe. This geographic advantage makes it an ideal base for businesses to access both regional and global markets.

Strong Export Sectors

Bangladesh is one of the largest exporters of textiles and garments, including clothing and apparel, and is known for its competitive manufacturing costs. Additionally, sectors such as agricultural products (like jute, rice, and vegetables), leather goods, pharmaceuticals, and seafood are also thriving. These industries provide ample opportunities for exporting goods across the globe.

Government Support for Exporters

The government of Bangladesh offers various incentives and support mechanisms to boost exports, including tax exemptions, rebates on customs duties, and special export processing zones (EPZs). These initiatives make Bangladesh a more attractive place for both domestic and foreign entrepreneurs to start exporting.

2. Steps to Start Exporting Goods from Bangladesh

Starting an export business from Bangladesh involves a series of steps that ensure legal compliance and efficient operations. Here’s a breakdown of the key steps:

Step 1: Choose Your Export Product

The first step to exporting is determining the product you wish to export. Consider factors like market demand, profitability, competition, and Bangladesh’s export strengths. The most commonly exported products from Bangladesh include textiles, clothing, footwear, agricultural products, and seafood.

Step 2: Register Your Business

Before you can export goods, you need to legally register your business in Bangladesh. This involves selecting the right business structure (Private Limited Company, Sole Proprietorship, etc.) and registering it with the Registrar of Joint Stock Companies and Firms (RJSC). The registration process requires submitting various documents, such as a Memorandum of Association (MOA) and Articles of Association (AOA), along with proof of business address.

Once registered, you can obtain a Trade License from the local City Corporation or Municipality, which is essential for operating your business legally in Bangladesh.

Step 3: Obtain an Export Registration Certificate (ERC)

To legally export goods from Bangladesh, you must obtain an Export Registration Certificate (ERC) from the Export Promotion Bureau (EPB). The EPB is the government agency that oversees the promotion of exports from Bangladesh.

The application for an ERC requires the following documents:

• A copy of the business registration certificate

• A copy of the trade license

• Passport-sized photographs of the business owner(s) or director(s)

• TIN (Taxpayer Identification Number)

• Bank account details for exporting transactions

The ERC is mandatory for businesses involved in the export of goods and allows the exporter to legally access export-related facilities and incentives.

Step 4: Register for VAT and Customs

Most businesses that engage in export will need to be registered for Value Added Tax (VAT) with the National Board of Revenue (NBR) if their annual turnover exceeds a specific threshold (BDT 36 lakh). VAT registration is crucial for claiming VAT refunds on raw materials used in manufacturing export goods.

In addition to VAT registration, you also need to register with Bangladesh Customs for export procedures. Customs registration allows you to clear goods for export and ensures that your business complies with national and international regulations on customs duties.

Step 5: Obtain the Necessary Export Licenses and Permits

Depending on the type of goods you wish to export, you may require additional licenses or permits. For instance:

• Agricultural Exports: Exporting agricultural products may require permits from the Ministry of Agriculture and certifications related to food safety, hygiene, and quality control.

• Pharmaceuticals and Medical Products: The Directorate General of Drug Administration (DGDA) regulates the export of pharmaceutical products and ensures compliance with international standards.

• Textiles and Garments: Exporting textiles or garments may require compliance with international trade regulations and certification of product quality.

Ensuring that you obtain the appropriate licenses for your products will help avoid legal issues down the road.

Step 6: Set Up Logistics and Shipping

Efficient logistics are key to a successful export business. You will need to choose reliable shipping methods to transport your goods to international markets. In Bangladesh, you can utilize the country’s key seaports, such as the Port of Chittagong or Mongla Port, for containerized shipments.

To streamline shipping, you may want to partner with a freight forwarder or a logistics provider who will manage the transportation of your goods, including documentation, packaging, and insurance.

Additionally, businesses must comply with international standards for packaging and labeling, ensuring that products meet the regulations of the destination countries.

Step 7: Understanding Export Documentation

There is a range of documentation required to facilitate smooth export transactions. Some of the essential documents include:

• Commercial Invoice: A detailed bill listing the goods being exported and their value.

• Bill of Lading: A receipt of goods shipped, issued by the shipping company.

• Export Declaration Form: Required by customs to verify the nature of the goods being exported.

• Certificate of Origin: A document stating the origin of the goods, which may be required by certain countries to determine tariff rates.

• Insurance Certificate: Covers risks of loss or damage during transit.

Ensuring that all documentation is accurate and complete is critical for preventing delays and penalties during the export process.

3. Costs Involved in Exporting Goods from Bangladesh

The costs of starting an export business from Bangladesh can vary based on factors such as the type of goods, scale of operations, and logistics. Some of the key costs involved in exporting include:

• Registration Fees: Registering your business and obtaining the necessary licenses (such as the ERC) involves some fees. These typically range from BDT 5,000 to BDT 10,000 (USD 60–USD 120).

• Shipping Costs: The cost of shipping depends on the size of the shipment and the destination country. Freight charges, customs duties, and insurance are some of the main components.

• Packaging and Handling: Packaging costs for export goods must adhere to international standards and may involve additional costs.

• Customs Duties and Taxes: While exports are typically exempt from VAT, businesses may still be subject to customs duties depending on the nature of the goods and destination country regulations.

It’s important to budget for these costs upfront and work with logistics partners to streamline your processes and minimize expenses.

4. Resources for Exporters in Bangladesh

Bangladesh offers a variety of resources to help exporters succeed:

• Export Promotion Bureau (EPB): Provides support to businesses in promoting exports, including guidance on regulations, trade fairs, and marketing assistance.

• Bangladesh Customs: Ensures compliance with customs laws and regulations, facilitating smooth export transactions.

• National Board of Revenue (NBR): Administers tax policies and offers assistance on VAT refunds and export-related tax incentives.

• Freight Forwarders: Partnering with a reliable freight forwarder can help ensure your goods reach their destination efficiently and cost-effectively.

5. How B2B Hub Can Help

Starting an export business in Bangladesh involves several steps, from registering your company to navigating customs and logistics. B2B Hub offers comprehensive support for company formation in Bangladesh, helping you establish your business and ensure compliance with all local laws.

B2B Hub offers comprehensive company formation and corporate services in any jurisdiction of your choice. For inquiries, please contact us at +44 770 018 3107, visit our website at b2bhub.ltd, or send us an email at reg@b2bhub.ltd. Let us assist you in getting your business ready for export and making the process as smooth as possible.