Trade License in Bangladesh: A Comprehensive Overview
1. Introduction
A Trade License is an official document issued by the local government authority (City Corporation, Municipality, or Union Parishad) that allows a business entity to legally operate in Bangladesh. It is mandatory for all types of businesses — whether small shops, service providers, or large companies — to obtain a valid trade license before starting commercial activities.
The purpose of a trade license is to:
Ensure that businesses operate legally.
Maintain government records of commercial activities.
Collect revenue for local government services.
2. Governing Authorities
Trade licenses in Bangladesh are issued by different authorities depending on the location of the business:
City Corporation → for businesses within metropolitan cities (e.g., Dhaka North/South, Chattogram, Khulna).
Municipality (Paurashava) → for businesses in district towns.
Union Parishad → for businesses in rural areas.
3. Who Needs a Trade License?
Any person or organization engaged in business activities such as:
Retail shops and wholesale traders.
Factories and manufacturing units.
Service providers (consultancy firms, restaurants, IT companies, contractors).
E-commerce and online businesses.
Import-export companies.
4. Types of Trade License
The license type depends on the business category:
Commercial Trade License – For shops, showrooms, service firms, etc.
General Trade License – For small-scale businesses.
Industrial Trade License – For factories, manufacturing units, and industries.
Special Trade License – For specific sectors like contractors, food businesses, and healthcare.
5. Documents Required for Trade License
The following documents are generally required (may vary by authority and business type):
Completed Application Form from the respective authority.
National ID Card (NID) or passport of the business owner.
Passport-size photographs of the owner/applicant.
TIN Certificate (Taxpayer Identification Number).
VAT/BIN Certificate (if applicable).
Rental agreement / ownership deed of the business premises.
No Objection Certificate (NOC) from the building owner (if rented).
Holding Tax payment receipt from City Corporation/Municipality.
Fire License (for restaurants, hotels, and large businesses).
Environmental Clearance Certificate (ECC) (for industries).
Company registration documents (for limited companies).
6. Trade License Application Process
The application procedure usually follows these steps:
Collect Application Form
Available from the local City Corporation/Municipality/Union Parishad office.
Fill and Submit Form
Submit with required documents and fees.
Inspection
Local authority representatives may visit the business premises for verification.
Approval & Payment
After verification, fees and charges are paid at the designated counter/bank.
Issuance of Trade License
A Trade License Certificate is issued, typically valid for 1 year.
7. Trade License Fees
The fees vary depending on the business type, size, and location. Examples:
Small shops/retailers: BDT 1,000 – 3,000 annually.
Restaurants, contractors, service providers: BDT 5,000 – 10,000 annually.
Large industries/companies: BDT 10,000 – 50,000 or more.
Additionally, businesses must pay signboard tax and other local charges.
8. Renewal of Trade License
Trade licenses are valid for one year and must be renewed annually.
Renewal requires:
Application form.
Previous year’s Trade License.
Tax payment receipt.
Updated rental/holding tax documents.
Renewal fees are generally the same as the initial fees.
9. Importance of Trade License
Legal Requirement: Operating without a trade license is illegal.
Banking & Business Operations: Required for opening a business bank account.
Tax Compliance: Mandatory for VAT, TIN, and income tax filing.
Government Tenders & Contracts: A valid license is necessary to participate.
Business Credibility: Builds trust with clients, suppliers, and partners.
10. Penalties for Non-Compliance
Failure to obtain or renew a trade license may lead to:
Monetary fines.
Business closure by authorities.
Legal action in case of repeated violations.
11. Digital Initiatives
To modernize and simplify the process, some authorities (like Dhaka North and Dhaka South City Corporations) have introduced:
Online application and renewal systems.
Digital payment gateways for license fees.
Plans to integrate with NBR’s e-TIN and VAT systems.
✅ Summary
A Trade License is a mandatory legal document for all businesses in Bangladesh, issued by local government authorities. It ensures lawful business operation, enables tax compliance, and enhances business credibility. The process involves application submission, inspection, and fee payment, followed by annual renewals. With recent digitalization initiatives, obtaining and renewing trade licenses is becoming faster and more transparent.