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[null,"Prepared By:","Contributors:"]
[null,"The Legal Circle"]
[]
[]
[]
["Social Enterprise Law Surveys"]
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["Report Generated: 11/19/2025"]
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["View your report results on next tab"]

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["Question","Bangladesh"]
["I. Enterprise Form"]
["What jurisdiction(s) do you practice in?","Bangladesh\n"]
["What are the most commonly used types of for-profit corporate organizational forms in your jurisdiction (e.g., corporation, limited liability company, benefit corporation, social purpose corporation, etc.) used by Enterprises operating a trade or business (rather than for investment or holding company purposes)? Please briefly describe these forms. a. Of these, which are the most common for-profit organizational forms used by Enterprises seeking financing from investors and that will have multiple owners? b. Other than organizational forms specifically designed for Social Enterprises (and discussed below under Question 4), which, if any, are the most common for-profit organizational forms used by Social Enterprises?","The most common for-profit corporate organizational forms in Bangladesh are: Sole Proprietorship, Partnership, Private Limited Company, Public Limited Company and Cooperative Society.\nEach form is different in terms of legal and business structure, registration process, tax submission process and the cost of doing business varies with each option. The registering authority also varies. It is however important to point out that Bangladesh has a unified jurisdiction and except for some local government processes, laws are uniform within the country.\nAmong the above-mentioned organizational forms, a Cooperative Society is a voluntary association of people which is formed to achieve common economic and social needs, and is not a purely for-profit vehicle.   \na. Enterprises that seek financing from investors and will have multiple owners tend to form corporations, usually a Private Limited Company.\nb. Since Bangladesh does not have any specific organizational form for Social Enterprises, the traditional for-profit organizations are the most common forms used by Social Enterprises as discussed under Question 2 hereinabove. The concept of Social Enterprises is in an evolving stage in Bangladesh.\n"]
["Do any of your jurisdiction’s traditional organizational forms require or permit the board or managers to consider, balance or prioritize interests other than shareholder value in decision making? What other interests, if any, are they required to or allowed to consider (e.g., interests of employees, customers, the environment, etc.)?","No, there is no such requirement. The key role that Boards of traditional organizational forms such as a Private Limited Company and a Public Limited Company usually play is monitoring, management and aligning of the interests of shareholders with the management and shareholder returns, subject to being compliant with the laws of the land.\nWe are however noticing a shift in the last few years in companies implementing/trying to implement ESOPs, as well as foreign investors investing in ESG KPIs. These are however by private agreements between parties and not due to the requirement of law.\n"]
["Does your jurisdiction have organizational forms specifically designed for Social Enterprises? If so: a. What type(s) of organizational forms are they? b. How do they materially differ from the most closely analogous traditional organizational form? c. What are the main benefits for founders and funders of such organizational forms? d. Are there any restrictions on the use of these organizational forms (such as profit-caps, stakeholder involvement and impact reporting)? If there are, what are they? e. Are there any material differences in timing or costs for forming a Social Enterprise versus a traditional Enterprise? f. How prevalent and well known are Social Enterprise forms?"," There is no bespoke legal form in Bangladesh for social enterprises which recognizes their joint focus on impact and sustainability or profit. However, there are a range of for-profit and non-profit options under which social enterprises can register. [Please note “social enterprise” is a loosely used term and does not have a legal definition in the jurisdiction.] \n\n The most common organizational structure of Social Enterprises in Bangladesh are as follows: \n\n \n\t Sole Proprietorship \n\t Private Limited Company \n\t Society \n\t Trust \n\t Social Voluntary Organization \n\t Microfinance Institutions \n\t NGO \n\t Department of Social Services (DSS) \n \n"]
["Are Social Enterprises permitted to be formed and operated as Nonprofits? If so: a. Are Nonprofits that are Social Enterprises treated differently under the law as compared to Nonprofits that are not Social Enterprises, whether from a corporate, tax or other perspective? b. Are there any material benefits of, and/or restrictions on, using a Nonprofit form for Social Enterprises that does not apply to Nonprofits that are not Social Enterprises? c. Is there any type of “hybrid” Nonprofit form that requires less reporting and/or allows for faster formation? If so, please describe the drawbacks of utilizing this form (i.e. fewer tax benefits). d. How prevalent is the use of Nonprofits for Social Enterprises?","Yes. A Social Enterprise in Bangladesh can be formed either as a for-profit or a nonprofit.\nSocial Enterprises [loosely used term] that organize themselves as non-profits are not given any added benefits or privileges. However, it does enjoy the same tax benefits as other Nonprofits and has the same burdens and restrictions, and there is no lesser reporting or faster formation process for Social Enterprise Nonprofits as compared to other Nonprofits. Please note that a non-profit cannot take investments; only donations and grants can be secured.\nIn terms of lesser reporting, a Trust may be considered. But the lesser reporting is often due to a lack of reporting by the board and a lack of supervision by the authority. It is however difficult to open a bank account and obtaining NGO registration for receiving foreign donations through a Trust.\nTrust is however not a ‘hybrid’ model. \nAs mentioned above, it is more prevalent for Social Enterprises in Bangladesh to organize as for- profit [since this allows the founders to raise investment] mostly operating jointly for profit and impact.   \n \n"]
["Does your jurisdiction allow for worker-owned Enterprises, such as cooperatives? If so, please describe any material benefits of, and/or restrictions on, using such forms."," Yes. A Cooperative Society in Bangladesh is a voluntary association of people which is originated and cooperated by people of a similar class or society to protect their interests and for socio-economic development collectively. It is directed and controlled by the members. \n\n The benefits/features of cooperatives are as follows: \n\n \n\t Voluntary and open membership; \n\t Democratic member control; \n\t Economic participation by members; \n\t Autonomy and independence; \n\t Cooperation among cooperatives. \n \n\n Cooperatives are usually formed as an association of people based upon their profession e.g., fishermen, farmers, shop owners, etc. However, the drawback of cooperatives is its registration from the concerned authority, as the process is bureaucratic red tape-heavy. \n"]
["Are there unique reporting requirements for Social Enterprises? If there are, please describe them. Please also discuss what government bodies Social Enterprises are required to report to.","There are no unique reporting requirements for Social Enterprises. The traditional reporting requirement of for-profit and nonprofit organizations applies to Social Enterprises depending on their organizational form.\n"]
["In your jurisdiction, has case law and jurisprudence evolved to address Social Enterprises? If there is meaningful jurisprudence around Social Enterprises, please provide some brief examples."," Since Social Enterprise is a new concept that is as yet legally unrecognized by statute, case law and jurisprudence have not evolved.\n"]
["Does your jurisdiction have any ESG requirements for Enterprises generally? If it does, please describe.","The Bangladesh Security Exchange Commission, since 2015 recognizes ‘alternative investment funds’. ‘Impact funds’ is one such type of alternative investment fund which can be directly linked to environmental impact or social impact or both. For such funds, the Fund Manager is required to disclose material risks and how they are managed which must include, among others, extra-financial risks, including ESG (environmental, social, and governance) risks, at fund and portfolio company levels, in the annual report of the fund [Rule 6(17)(c) vii. Of the BSEC (Alternative Investment) Rules 2015].\nAdditionally, in relation to industrial and manufacturing businesses, Bangladesh's environmental laws restrict the establishment of an industrial unit without taking environmental clearance from the appropriate authority. It additionally lays down the requirements on issues surrounding environment management in the industry.\nIt is to be noted that the listed corporate entities must comply with the Corporate Governance Code, 2018 to ensure a better practice regime of standard corporate governance and to enhance corporate governance in the interest of investors and the capital market.\n"]
["Does your jurisdiction have any ESG requirements specifically for Social Enterprises? If it does, please describe.","No.\n"]
["Does your jurisdiction have any ESG requirements for investors? If it does, please describe.","Please refer to our response under question no. 9.\n"]
["II. Funding"]
["Are any major investor classes (e.g., pension funds, mutual funds, etc.) required to look at ESG issues when making investment decisions in your jurisdiction? a. If they are, please describe the requirements. b. If they are not, are they permitted to consider such factors? c. What other relevant factors do investors tend to consider (aside from profit motive).","From among the major investor classes, only Impact Funds [as defined in the Bangladesh Securities and Exchange Commission (Alternative Investment) Rules, 2015] are required to look at ESG issues when making investment decisions. An impact fund has been defined as “an alternative investment fund which invests in equity and equity linked instruments of such companies, organizations, and funds which are engaged in activities with the intention to generate a measurable and beneficial social or environmental impact in addition to financial returns, as justified with internationally recognized criteria”\nThere are no government mandated requirements at the moment, however, investors are free to consider such factors, including investors such as mutual funds, VC funds, PE funds, etc. We have seen that many of the investors have their own internal ESG guidelines and mandates which they apply when making investment decisions.\nThere has been a recent trend in Bangladesh, for investors/development organizations to provide grants to companies engaged in activities that meet certain impact indicator targets of such investor/development organizations. These grants are not profit-motivated, and companies are not expected to repay/refund the fund disbursed to them.\n"]
["What kinds of philanthropic funding do Social Enterprises in your jurisdiction commonly receive (e.g., grants, charitable investment, traditional investment)?","Depending on the legal structure of the social enterprise, i.e. for-profit or non-profit, philanthropic funding may differ. In non-profits, we generally see grants and donations, while in for-profit social enterprises, we have seen a recent growth in grants from investors and development organizations, and traditional investments with impact mandates.\n"]
["How prevalent, if at all, are new for-profit impact investments in your jurisdiction (e.g. traditional instruments with impact terms, new investment instruments, aggregation with philanthropic capital, community based funding, etc.)?","As stated above, there is a recent trend in Bangladesh, where we have seen a growth in more innovative financing mechanisms for social enterprises, in addition to traditional investments with impact mandates.\nWe have seen a growth in grants and convertible loans to social enterprises which are structured as a private limited company, instead of direct equity investments. These instruments are generally based on the company meeting certain impact mandates/milestones. Traditionally, grants, especially from foreign companies/organizations can be made to non-profit organizations registered with the NGO Affairs Bureau in Bangladesh.\n"]
["What are the types of government funding and support available to Social Enterprises, if any, available in your jurisdiction (e.g., grants, investments, bonds, and guarantees)? a. How difficult is it for Social Enterprises to obtain government funding? b. Is any government funding limited to Enterprises incorporated using Social Enterprise forms?","There is no government funding specifically for social enterprises, however, there are grants and funding from the government to start-ups. The ICT Division of the Government, in 2020 set up a venture capital company to invest in start-ups and promote the start-up ecosystem locally.\n"]
["Are there any companies that are formed as a Social Enterprise listed on your jurisdiction’s leading securities exchange(s)?","No.\n"]
["To what extent are publicly traded Enterprises required to disclose ESG related factors in annual reports/public filings in your jurisdiction.","Not applicable. \n"]
["How prevalent, if at all, are impact bonds in your jurisdiction?","Currently, there are no impact bonds registered in Bangladesh. However, there is work underway to launch Bangladesh’s first impact fund, subject to approval from the regulator.\n"]
["In your jurisdiction, are there any restrictions on foreign investments or donations that are unique to Social Enterprises (whether incorporated as for profit entities or as Nonprofits)?","There aren’t any restrictions that are unique to social enterprises. Depending on whether the social enterprise is structured as a for-profit or non-profit, the general restrictions applicable on an entity of such nature shall apply. Also, depending on the sector in which the social enterprise operates there may be sector-specific restrictions as well, imposed by the regulator.\n"]
["Is “crowdfunding” legal in your jurisdiction? Are there rules under applicable securities laws that make it easier for smaller businesses or Social Enterprises to take money from investors that are not sophisticated/accredited/qualified under applicable statutes?","The term “crowdfunding” has not been defined under the laws of Bangladesh and there are no regulations that may specifically apply to “crowdfunding”.\nHowever, there are crowdfunding platforms currently operating in Bangladesh.  Since there is no express restriction on crowdfunding in Bangladesh, that is, it has not been made illegal, it is deemed that it is currently legal in Bangladesh.\n"]
["III. Tax"]
["Are there any tax exemptions that are uniquely available for Social Enterprises? a. Please describe any tax exemptions that are available and whether they are partial or full. b. Are they dependent on the Social Enterprise utilized using a specific organizational form (e.g., for profit vs. Nonprofit form)? c. Please describe any other key requirements of the available tax exemptions (e.g., restrictions on sources or uses of funds, restrictions on commercial activities, etc.).","No, there are no tax exemptions uniquely available to Social Enterprises. However, there are tax exemptions available for non-profits generally, and for certain for-profit organizations depending on their type of business, for example: IT-enabled services are tax exempt until the year 2024.\n"]
["Are individuals or other organizations able to provide tax deductible donations to for-profit Social Enterprises? If they are, please describe any restrictions applicable to tax deductible donations?","No.\n"]
["Are there any other tax benefits uniquely available for Social Enterprises? (e.g. deferrals, favorable tax rates, business deductions, etc.)","No.\n"]
["Does your jurisdiction provide for reciprocal recognition of tax-exempt status that has been granted under the law of any other jurisdictions?","No. However, Bangladesh does provide double taxation relief on the basis of agreements entered into with governments of other jurisdictions for the avoidance of double taxation and fiscal evasion.\n"]
["IV. Governmental Infrastructure"]
["Does your jurisdiction have Regulatory Sandboxes or similar policy frameworks for Social Enterprises? If it does, please describe."," Although there are no regulatory sandboxes or policy frameworks particularly for Social Enterprises. Social Enterprises [term loosely used] engage with Ministries relevant to their area of work and are particularly interested in sector-level policies or policies that influence sector operations. Please find below a table that illustrates the level of government ministries, agencies and government-linked organizations’ influence on social enterprise development: \n\n \n\t \n\t\t \n\t\t\t Name \n\t\t\t Relevance of activities to social enterprise development \n\t\t\t Existing programs and activities influencing social enterprise \n\t\t \n\t\t \n\t\t\t Prime Minister’s Office \n\t\t\t Fund and investment support covers organizations that include social enterprise. \n\t\t\t A2i- an innovation programme run by the Prime Minister’s Office. The a2i programme uses IT to improve governance and service delivery through digital centres at 5,000 local government offices and has a service innovation fund (research grant and investment readiness support) supporting public, private and academic organisations, promoting technological innovations to improve the lives of the under-served. \n\t\t \n\t\t \n\t\t\t Ministry of Industry \n\t\t\t Develops Industrial Policy. Has an SME section. Focus on CSR and corporate governance. \n\t\t\t General support to SMEs, focus on women entrepreneurs and to intermediaries \n\t\t \n\t\t \n\t\t\t Ministry of Commerce \n\t\t\t Responsible for overall trade and commerce related activities: tariff setting, trade promotion, statistics. \n\t\t\t Certain policies to shape and support the overall concept of social enterprise, i.e, SME Policy 2019. \n\t\t \n\t\t \n\t\t\t Ministry of Finance \n\t\t\t Oversees national budget and spending; analysis of spending on women, youth, environment. \n\t\t\t \n\t\t\t Certain policies to shape and support the overall concept of social enterprise, i.e, Budget Speech 2020-21, which illustrates, low- interest credit facilities to SME stakeholders. \n\t\t\t \n\t\t \n\t\t \n\t\t\t Ministry of Planning \n\t\t\t National central planning \n\t\t\t \n\t\t\t Certain policies to shape and support the overall concept of social enterprise, i.e, Millennium  Development Goals (MDG) Final Evaluation Report 2016 which dictates, promotion of gender equality and women empowerment through SME industry. \n\t\t\t \n\t\t \n\t\t \n\t\t\t SME Foundation \n\t\t\t Apex body for SME development \n\t\t\t A wide range of programmes and activities supporting SMEs, some of which are relevant for social enterprises – although none explicitly mentioning social enterprise. \n\t\t \n\t \n \n\n   \n"]
["What government operational support, resources, training or services, are available for small businesses or Social Enterprises?"," Please see below the broad categories where government support is being provided to small businesses and social enterprises in Bangladesh: \n\n \n\t \n\t\t \n\t\t\t Activity/regulation area \n\t\t\t Existing provisions/alternatives \n\t\t \n\t\t \n\t\t\t Financial support – direct financing or support to access investment \n\t\t\t Through (M)SME programmes and support \n\t\t \n\t\t \n\t\t\t Social enterprise awareness raising and promotion \n\t\t\t \n\t\t\t Growing interest amongst individuals and providing formal recognition to Social Enterprises gradually through implementing polices such as SME Policy 2019.  \n\t\t\t \n\t\t \n\t\t \n\t\t\t Tax concessions \n\t\t\t \n\t\t\t None explicitly, some through concessions to organization types or sector-level activity. E.g. \n\n\t\t\t a. Any service charge derived from operation of micro credit by a non-government organization registered with NGO Affairs Bureau. \n\n\t\t\t b. Income derived from any Small and Medium Enterprise (SME) engaged in the production of any goods and having an annual turnover of not more than taka thirty lakh is exempt from tax. \n\t\t\t \n\t\t \n\t\t \n\t\t\t Social enterprise-specific business development skills and technical skills support \n\t\t\t Through (M)SME programs and support \n\t\t \n\t \n \n\n   \n"]
["Are there different compliance requirements for different types of Social Enterprises than for traditional Enterprises? Please provide examples if there are.","No. Bangladesh does not have any different compliance requirements for different types of Social Enterprises than for traditional Enterprises. \n"]
["Is there a dedicated government agency or department that oversees Social Enterprises? If there is, please describe its mandate and effectiveness.","No.\n"]
["Is there a different bankruptcy system available for Social Enterprises?","No.\n"]
["VI. Miscellaneous"]
["What are the average time and filing fees to form an Enterprise in your jurisdiction?","Since there are many organizational forms of Enterprises in Bangladesh, each organizational form differs in its registration process, timelines and costs. Time can vary between a week to two weeks for for-profits and up to a year for non-profits. Cost is highly variable.\n"]
["What government or third-party certifications or accreditations, if any, are available for Social Enterprises that allow for access to benefits e.g. funding, beneficial tax status, etc.? Please provide examples and briefly describe them as well as the standards there are to maintain them.","No such certifications or accreditations are available.\n"]
["Please describe whether, in your opinion, startups and other entrepreneurial Enterprises generally can easily form and flourish in your jurisdiction."," Startups and other entrepreneurial Enterprises generally can be easily formed in Bangladesh. Again, it is essential to mention that there are many options to its formation and the ease of registration of such Enterprises will depend upon the chosen form.\nStudies show that the startup ecosystem in Bangladesh, starting its journey in the early 2010s has experienced a remarkable transformation and is finally coming of age. At present, the number of startups stands around 1000+ and is estimated to grow multifold in tandem with the digital ecosystem. With governmental support and various private incubator programs, Bangladesh is likely to accelerate startups activism. \n"]
["Please describe whether, in your opinion, Social Enterprises, in particular, can easily form and flourish in your jurisdiction.","Entrepreneurs, innovators, and changemakers are looking to adopt social entrepreneurship as a new approach to tackle social problems while also securing financial sustainability. Social Enterprises is considered a growing sector in Bangladesh; it is making a significant impact in the country evidenced by the successes of two of the world’s largest social enterprises, BRAC and Grameen. A study by the British Council shows that the nascent social enterprise movement in Bangladesh is led by young people, with many of the leaders aged below 35. The research also found that 90% of social enterprises are working with socially and economically disadvantaged communities and that women lead a fifth of Bangladeshi social enterprises.\nHowever, Social Enterprises in Bangladesh operate under no specific policy or government legislation, and there is no legal framework that defines or monitors the scope of social enterprises that encapsulate the dual goals of purpose and profit. Due to this limitation, forming of Social Enterprises gets tricky in Bangladesh but with the growing popularity and public engagement with Social Enterprises is indicative of government recognition of the structure in the shorter term.\n"]
["Please describe whether in your opinion there are any laws that are obstructive to the formation of Social Enterprises (i.e. that actively disfavor or penalize, or otherwise discourage their formation) in your jurisdiction (for example, are Social Enterprises subject to legislation prohibiting inclusion of Social Enterprises in government contract procurement)?","No.\n"]
["In your jurisdiction, are there any major fraud concerns or defects due to corruption or fraud that should be addressed? If there are, please briefly discuss the concerns or defects.","Such concerns would be in relation to bidding for and qualifying for government contracts and tenders, where there is a common perception of ‘influencing’ the decision-making process.\n"]
["What changes to the law do you think would be most beneficial to enabling Social Enterprises to flourish in your jurisdiction?"," Government legislation or legal framework catered particularly for Social Enterprises, granting tax benefits and comparatively relaxed reporting.\n"]
["What changes to the law do you think would be most beneficial to enhancing the social and environmental responsibility of Enterprises generally (whether or not Social Enterprises)?","Chapter 3.24 of National Environment Policy 2018 talks about carbon footprints as well as overall Environment Friendly Economic Development, Sustainable Production and Consumption. However, there should a law on the same in order to take enforcement measures. The government may also consider tax benefits for environmentally compliant enterprises/ entities.\n"]
["Is there anything else you would like to add or guidance you would like to provide? Are there any questions we should have asked but did not?","We may consider adding a section on whether Social Enterprises are eligible for easier/more favorable banking benefits e.g. when taking loan facilities.\n"]