How to Setup Healthcare Business in Bangladesh

Health care services are offered by both public and private health service providers in Bangladesh. The various levels of primary, secondary and tertiary health services offered by Bangladesh's public sector are regulated by the government administration. It begins from national level t district level, the upazilla, the union and finally ward level. The private health care industry in Bangladesh has been witnessing steady growth in employment and revenue over the last few decades. Both public and private healthcare, sector covers a wide range of areas, including health care providers, physicians, hospitals and clinics, diagnostic centers, nursing homes, pathology laboratories etc. The private healthcare sector has provided services as a supplement to the public sector. Among the private hospitals Apollo, United, Square, Ibn-Sina Hospital are prominent and this private healthcare are gaining popularity among the public because of its quality, accessibility and reliability of the service. 

The Ministry of Health & Family Welfare is engaged in providing preventive, curative and promoting services as well as emergency care. of Bangladesh has established agency named Directorate General of Health Services (DGHS). The main functions of this agency are the implementation of different health programs, management, planning & execution of different health policies through administration.

The Bangladesh government adopted a liberalized business approach to the growth of the private sector under the industrial policy of 1986 and due to hundreds of hospitals and clinics in the private sector was established in line with the open market policy. The healthcare industry being one of the most important sectors of the economy, a productive investment in this sector would lead to people being able to carry out financial economic activities and increase the overall GDP of the country.

In Bangladesh, healthcare business can be operated through forming a company:

A Company duly registered in Bangladesh may engage in any business activities as per the Object Clause of the Company, set out in the Memorandum of Association of the Company. In Bangladesh, a company can be either public or private. To form a public company minimum seven shareholders shall be required. On the other hand minimum two shareholders are necessary to incorporate a private company. Private company cannot any issue invitation to the public to subscribe for its shares, while, public company can offer general public to acquire its shares. In practice, private company is the most popular form of company to foreign and local entrepreneurs. For foreign direct investment, there is no limitation pertaining to foreign equity participation, i.e. 100 percent foreign equity is allowed. Foreign investment enjoys full protection and security in Bangladesh, like other Locally Invested Companies. The laws of Bangladesh guarantees non-discriminatory treatment between foreign and local investment, and repatriation of proceeds from sales of shares and profit.

1. A Name Clearance for the proposed Company needs to be obtained from Registrar of Joint Stock and Companies. 

2. Drafting and signing the following:

• Memorandum and Articles of Association of the company;

• Form I: Declaration On Registration Of Company;

• Form VI: Notice Of Situation Of Registered Office;

• Form IX: Consent of director to act;

• Form X: List of Personal Consenting to be Directors;

• Form XII: Particulars of the directors, manager and managing agents.

3. Opening a temporary bank account for the Proposed Company in any scheduled Bank in Bangladesh.

4. Remit the paid up capital amount from the account of each foreign shareholders to the Bank Account of the Proposed Company in Bangladesh.

5. Obtain encashment certificate for each foreign transactions from the Bank of the Proposed Company.

6. Submit all the required to the Company House. 

7. Pay the Govt Fees for the registration.

8. Obtain the registration certificate from the Company House.

a) Copy of Valid Name Clearance for the proposed company;

b) Executed copy of Memorandum and Articles of Association of the Company.

c) Executed copy of Form I: Declaration On Registration Of Company;

d) Executed copy of Form VI: Notice Of Situation Of Registered Office;

e) Executed copy of Form IX: Consent of director to act;

f) Executed copy of Form X: List of Personal Consenting to be Directors;

g) Executed copy of Form XII: Particulars of the directors, manager and managing agents;

h) Copies of National ID of shareholders and directors (for Bangladeshi Nationals);

i) Copies of TIN Certificate of shareholders and directors (for Bangladeshi Nationals);

j) Copies of passport of shareholders and directors (for Foreign Nationals);

k) Passport size photos of shareholders and directors;

l) Bank Encashment Certificate with respect to each foreign shareholder;

m) Receipt of payment of the governmental fees.

Apart from setting up the above respective format a 100% foreign owned company can also register as Branch Office to initiate healthcare business. Though, Branch office can only perform the function envisaged by the parent company by taking prior approval from Bangladesh Investment Development Authority. After setting up the respective company, some additional license or permissions may be required, depending on the expansion/scope of the business.

The additional licenses required for establishing a healthcare

industry are mentioned below:

I. Trade License;

II. TIN Certificate; 

III. VAT Registration Certificate;

IV. Registration of Industrial Investment Project;

V. Factory Layout Approval;

VI. License of Factory;

VII. Membership Certificate;

VIII. Import Registration Certificate (applicable for Import Business);

IX. Export Registration Certificate (applicable for Export Business);

X. Environment Clearance Certificate;

XI. Fire License;

XII. Registration of Trademark

XIII. Directorate General of Health Services (DGDS) Hospital License.

The process to obtain the additional licenses has been specified below:

In order to start up a business in Bangladesh, the most important requirement is acquisition of a trade license. It is compulsory for every business entity to obtain Trade License from the respective local governmental authority. In order to obtain the Trade License an application enclosed with necessary documents needs to be submitted to the concerned local governmental authority (i.e. City Corporation/Municipal Corporation/Union Parishad).

The Government of Bangladesh provides a TIN Certificate, to individual or company to track tax payments. The National Board of Revenue (NBR) is the sole authority to provide TIN Certificate. In order to obtain the TIN Certificate an online application needs to be submitted to the NBR.

Every Business in order to operate is required to have a Business Identification Number (BIN). A BIN can be obtained by VAT registration process to the National Board of Revenue. Every business entity must obtain a VAT registration certificate. In order to obtain the VAT Certificate an online application along with necessary documents needs to be submitted to the NBR.

The Industrial enterprises in Bangladesh, either local or foreign, have to be registered with the Bangladesh Investment Development Authority (BIDA). In order to Registration of Industrial Investment Project an application along with necessary documents needs to be submitted to the BIDA.

Before use, change or expansion of any houses, building or premises as factory, an approval in writing from the Department of Inspection for Factories and Establishments (DIFE) shall be taken.  In order to get the approval of the layout an application along with necessary documents needs to be submitted to the DIFE.

Each of the owners or occupiers shall have to submit an application with necessary documents to the Department of Inspection for Factories and Establishments (DIFE) for registration and license of factory within 30 (thirty) days before start of work for factories. 

After setting up the respective business, the entrepreneur needs to be a member of a local Chamber of Commerce and Industry or relevant Trade Association. The application form to be a member is available at the office of the concerned Chamber of Commerce or Trade Association.

 Import Registration Certificate and Export Registration Certificate:

An importer having Import Registration Certificate (IRC) and an Exporter having Export Registration Certificate (ERC) can Import & Export any permissible item without any value and quantity restrictions and without obtaining any permission from any authority. The Office of the Chief Controller of Imports and Exports (CCI&E) issues Import Registration Certificate and Export Registration Certificate to the desired applicant. In order to obtain the IRC or ERC an online application along with necessary documents needs to be submitted to the CCI&E.

Environment Clearance Certificate (ECC) is one of the vital approvals in order to initiate an industrial unit or project in Bangladesh. In order to obtain such Certificate, the concerned entrepreneur of the industrial unit or project need to make an application to the Department of Environment along with the necessary documents. 

Considering the environment and to ensure the safety of the establishment along with the workers engaged in the business, it is mandatory for buildings and business organizations to obtain fire license. It is issued by the Fire Service and Civil Defense (FSCD) authority operating under the Ministry of Home Affairs, Bangladesh. In order to obtain such license, the concerned entrepreneur of the industrial unit or project need to submit an application to the FSCD along with the necessary documents.

In order to protect trademark and other IP related matters, after the registration of the entity, it can apply to the Department of Patents, Designs and Trademarks (DPDT), operated under the Ministry of Industries, for registering its trademarks and/or any other Intellectual Property. An applicant in the prescribe manner has to file with necessary documents for the registration of a trademark to the Trademark Registry Wing of the DPDT.

 Directorate General of Health Services (DGDS) Hospital License 

In order to establish healthcare business it is essential to register with the concerned government authority. Under the Ministry of Health and Public Welfare, DGHS runs as the licensing and renewal process for of private hospitals, clinics, blood banks, nursing homes and diagnostic centers all over Bangladesh through an online portal.

Foreign entities or individuals who are considering investing in Bangladesh can get generous opportunities for investment under its liberalized Industrial Policy and export-oriented, private sector-led growth strategy. All sectors are open for private investment in Bangladesh except for some restricted sectors. Healthcare sector is open to 100% foreign investment. The aim of the government is to serve as a facilitator to help create an enabling environment for the expansion of private investment, both domestic and international. The policy framework for foreign investment in Bangladesh is based on 'The Foreign Private Investment (Promotion & Protection) Act 1980, which ensures legal security for foreign investment in Bangladesh against nationalization and expropriation. This also ensures non-discriminatory treatment between international and local investment and the repatriation of proceeds from the selling of shares and income.

Apart from the above Act, the following Acts also deals with the foreign investment: Foreign Exchange Regulations Act 1947, The Bangladesh Export Processing Zones Authority Act 1980, Bangladesh Private Export Processing Zone Act 1996, Bangladesh Economic Zone Act 2010, and Bangladesh Investment Development Authority Act 2016.

Employment Law: The employment law in Bangladesh is mainly governed by the Labour Act, 2006. Apart from this Statute there are other rules and regulations in regards to this issue, the Labour Rules 2015, National Labour Policy 2012, Bangladesh Labour Welfare Foundation Act 2006, Bangladesh Labour Welfare Foundation Rules 2010, National Occupational Health and Safety Policy 2013, Domestic Workers Protection and Welfare Policy 2015 and National Child Labour Elimination Policy 2010. The Labour Act of 2006 deals with employment of labour, relation between employers and employees, payment of wages and compensation for injuries to workers, leaves, benefits, formation of trade unions, settlement of industrial disputes, welfare, health, safety and working condition in the establishment etc. Maternity benefits are also provided for a female employee. It should be noted, if the company is establish in an EPZ then, Bangladesh EPZ Labour Act 2019 shall be applicable.

Contract Law: Contractual agreement is the heart of the commercial world. It sets out the duties and responsibilities between the parties relating to the subject matter of the contract. A contract binds both parties of its all agreed and stipulated clauses, for example, what would be the party’s liability in the event of committing breach of contract and how far shall it cover the losses of the opposite party. It is advisable that, to take highest care during stipulating the terms and conditions of the contract so that it expresses the real intention of the parties. Every contract in Bangladesh is governed by the Contract Act, 1872. 

A force majeure event means an unusual occurrence or situation beyond the control of the contracting parties, such as an act of God, war or a natural calamity. An effective application of the force majeure clause usually relieves the parties of their respective contractual obligations and/or liability. A force majeure provision does not completely justify the non-performance of a faction, but only suspends it for certain period. In Bangladesh, the Contract Act 1872, contains the doctrine of frustration, which is provided in Section 56 of the Act of 1872. As per this doctrine, a contract becomes void when it becomes impossible to perform due to occurrence of an event, it becomes unlawful after it was entered into.

Compliances of the business entities- The entities are required to comply with the annual filing requirements, such has updating trade license at the respective city corporation, renewal of chamber membership, renewal of IRC & ERC, filing taxes, updating the annual filings at the RJSC, reporting to Bangladesh Bank, NBR etc.

Property Law: In order to complete the registration of the lease or purchase of the land, the laws in regards to property shall also be applicable. The key statutes in these areas are Land Reform Act 2014, East Bengal Tenancy Rules 1954, The Survey Act 1875, The Non-Agricultural Tenancy Act 1949, Registration Act 1908, and Transfer of Property Act 1882.

Introduction of FMA and its services.

FM Associates (FMA), is a full-service corporate law firms, which aims to offer a comprehensive range of services to the clients rather than focusing on just one specific area of law. It is one of the largest and well reputed law firms in Bangladesh offering clients, legal advice that meets needs and expectations of both domestic and International clients. FMA provides all range of services related to Company Incorporating, Sole Proprietorship business, Partnership Business, Foreign Company Registration etc. FMA law firm has legal experts who can assure smooth legal process and assist in obtaining Certificates or License needed for Company Incorporation, such as VAT Certificate, IRC/ERC, Name Clearance, Factory/Fire/Environmental License, TIN, Trade License and other types of certificates.

In Order to set up Healthcare Business in Bangladesh, the services FMA can provide are as follows:

 FMA has an excellent and competent team who can proceed in setting up healthcare business smoothly and efficiently. The legal advisors of FMA can assist the clients through consultations and meetings and provide them guidelines on any type of business incorporation. 

 In order to incorporate any type of business, several deed, agreements and documents are required to be drafted. FMA legal team can assist the clients in preparing and drafting those documents.

 In order to establish a business entity, it is essential to select a suitable land first. FMA can provide service to the client by searching for a preferable location for business establishment for the client. Moreover, FMA can assist in drafting lease agreement, Land vetting from respective land registry office, preparation for purchase of land including registration etc.

 FMA can also assist in making necessary payments of Government fees to the concerned authority, such as BIDA or RJSC and liaise with them to obtain relevant documents for business incorporation. FMA, legal experts have good working relation with government offices; which makes it easier to obtain any certificate/license.

 In order to incorporate a business, sometimes Trademark/Copyright/Patent registration is required for getting protection against infringement, to add value to the company and to strengthen legal protection. FMA assists its clients by obtaining registration for

Trademark/Copyright/Patent from the Department of Patents, Designs and Trademarks (DPDT) and thus securing the company’s legal protection.

 FMA also provides services of obtaining or renewing any type of License, for conducting healthcare business, several licenses are required to be obtained. FMA legal team can assist in getting those licenses and if necessary, renew them at the right time.

 FMA provides services related to labour matters, such as drafting of employment agreements, solving labour related disputes, providing legal opinion on labour law etc. to the clients.

 FMA can advise and assist to satisfy the regular legal compliances to smooth the regular run of the company.

In Bangladesh Corona virus pandemic has reached its fourth stage and everyday number of infected patients is increasing. Due to the lack of testing kits, PPE and other protective gears patients were denied treatment by local level doctors who suspected them of being infected by the coronavirus. According to public health experts and activists and many reports, the strategy of refusing test for people except for returnees from COVID-19 affected countries has created a crisis for patients seeking care in general. Despite the Government decision of announcing general holiday and enforcing social distancing the number of cases are increasing rapidly. The hospitals and clinics have lacking in terms of number of ICU, ventilators, isolation ward, shortage of personal protective equipment and testing kits. Also, poor service by IEDCR, Lack of coordination and mismanagement are the reasons for increase in number of patients. Moreover, the number of deaths is more than the number of people recovered from the virus, which is alarming for the country. 

According to the World Health Organization (WHO), Bangladesh already bears financial and humanitarian costs and is projected to bear additional health costs, so there needs to be a greater emphasis on public health response funding and the need for international medical assistance underdeveloped health systems. Though primary health services have been instrumental in achieving substantial results, secondary health care in Bangladesh remains underfunded and poorly regulated.

Further, as per the reports of BMA, medical professionals in make up for 11 percent of the coronavirus cases in the country which is a matter of huge concern at the moment. With cases among healthcare professionals rising, the BMA has demanded ensure ample supply of personal protective equipment (PPEs), masks and other protective gears for healthcare professionals. They also demanded accommodation, food and necessary safety measures for healthcare workers at private clinics and hospitals in Bangladesh. 

However, The Government of Bangladesh has introduced special insurance and stimulus package for doctors and nurses of government hospitals, field administration officers, law enforcers, health and relief workers for their frontline roles in the battle against coronavirus.

The government has provided Special incentives for Covid-19 frontline workers which includes Health insurance of Tk5-10 lakh depending on rank. This Amount to be five times higher if healthcare worker is at higher risk of death or dies while providing service to the patient. Moreover, the Government is to bear treatment cost of frontline workers contracting virus while on duty. 

General rate of tax is 32.5% currently in the laws of Bangladesh. Nominal requirements for a limited company formed locally includes a number of reporting to be done to NBR, such as: Opening a TIN, Monthly Tax deduction statement, Half Yearly Withholding Tax statement, Yearly statement related to tax return submission of its employees, Yearly statement related to salary disbursed from company to its employees, Quarterly Advance tax deposition, Yearly Tax return submission, attending appeal/hearing session as required on behalf of the company, Monthly VAT return etc. FMA can advise and assist to satisfy all regulatory compliances to enable the company to run smooth and hassle free.  

The country has continued to be an attractive destination for foreign companies to do business due to its convenient business policy, lower production cost and labour wage compared to other Asian countries. Effective policy guidelines with strong implementation are required to ensure quality outcomes from both private and public health care industrial sector. In Bangladesh, A growing population with rising demands for quality health service would lead to an increase in the number of hospitals and clinics. This will encourage the foreign investors to invest in this healthcare business sector for economic profit.

In Bangladesh, the healthcare industry can be termed as one of the most important sectors due to its contribution in economic growth and reduction in mortality rate significantly. The country has made remarkable progress towards achieving the Millennium Development Goals (MDGs).The Bangladesh government adopted a liberalized business approach to the growth of the private sector and due to this hundreds of hospitals and clinics in the private sector was established in line with the open market policy. In order to proceed with Healthcare business in Bangladesh, it is important to take permission from the concerned authority or department. A Healthcare business could be done through company incorporation. To incorporate a business obtaining licensees, such as-Trade license, Fire License, Environment and factory license etc. are compulsory. License and Registration shall be done form the online portal of DGHS under the ministry of Health and Public Welfare. DGHS runs as the licensing and renewal process for of private hospitals, clinics, blood banks, nursing homes and diagnostic centers all over Bangladesh through an online portal.  Trademark and Patent Registration shall be obtained to get protection against infringement and to add value to the company. Foreign entities or individuals who are considering investing in Bangladesh can get generous opportunities for investment under its liberalized Industrial Policy and export-oriented, private sector-led growth strategy. Healthcare sector are open for private investment and the aim of the government is to serve as a facilitator to help create an enabling environment for the expansion of private investment, both domestic and international. The policy framework for foreign investment in Bangladesh is based on 'The Foreign Private Investment (Promotion & Protection) Act. 1980,’ which ensures legal security for foreign investment in Bangladesh against nationalization and expropriation. In Bangladesh Corona virus pandemic has reached its fourth stage and everyday number of infected patients are increasing. Due to the lack of testing kits, PPE and other protective gears patients were denied treatment by local level doctors who suspected them of being infected by the coronavirus.However, The Government of Bangladesh has introduced special insurance and stimulus package for doctors and nurses of government hospitals, field administration officers, law enforcers, health and relief workers for their frontline roles in the battle against coronavirus. In Bangladesh Effective policy guidelines with strong implementation are required to ensure quality outcomes from both private and public health care industrial sector. In Bangladesh, A growing population with rising demands for quality health service would lead to an increase in the number of hospitals and clinics. This will encourage the foreign investors to invest in this healthcare business sector for economic profit. In order to proceed with healthcare business, FMA legal team can be a enormous support in producing various services related to business incorporation. FMA is a full-service law firm that has an excellent and competent team, who can proceed in setting up business in this sector efficiently.