Date: 22nd June 2026
To: TENTAC INSPECTION BD CO., LTD.
Subject: Opinion on the proposed Pad Printing Business Scheme.
1. Introduction & Scope of Review
This legal opinion has been prepared by Tokyo Consulting Firm Limited (TCF), Bangladesh Office at the request of TENTAC INSPECTION BD CO., LTD. to assess the legal feasibility of its proposed pad printing business model under the applicable laws and regulations of Bangladesh.
According to the proposed operational scheme, a garment manufacturer in Bangladesh will import packaging materials in its own name. The imported materials will subsequently be transferred to TENTAC INSPECTION BD CO., LTD. for post-printing (pad printing) using TENTAC's own machinery and production facilities. Upon completion of the printing process, the processed packaging materials will be returned to the garment manufacturer. Throughout this arrangement, ownership of the packaging materials will remain with the garment manufacturer, while TENTAC will only provide processing services in exchange for a service fee.
The commercial purpose of this arrangement is to establish local post-printing capability without requiring TENTAC to import, own or sell packaging materials, thereby meeting increasing customer demand while preventing outsourcing to third-party competitors. For the purpose of this opinion, TCF reviewed the following documents and information:
Memorandum of Association (MOA);
Existing Trade License;
Existing Business Identification Number (BIN);
Proposed business scheme provided by the client; and
Applicable laws, rules, notifications and prevailing regulatory practices in Bangladesh.
This opinion focuses on whether the proposed activities may legally be carried out under TENTAC's existing registrations and identifies the regulatory approvals required should the company decide to engage in manufacturing activities.
2. Executive Summary
After reviewing the relevant documents and applicable laws, TCF's opinion may be summarized as follows:
MOA: TENTAC's existing Memorandum of Association already contains sufficiently broad object clauses authorizing manufacturing, printing, garment accessories production, factory establishment, import, export and related industrial activities.
Accordingly, no amendment to the MOA appears necessary to undertake pad printing or other manufacturing activities.
Trade License and BIN: Although the MOA permits manufacturing, the company's existing Trade License only authorizes: Import -Export -Supply -Inspection.
Likewise, the current BIN does not identify the company as a manufacturer.
Therefore, under its current registrations, TENTAC is legally operating as a service company rather than a manufacturing company.
Manufacturing Status: Section 2(65) of the Value Added Tax and Supplementary Duty Act, 2012 defines "manufacture" broadly.
Since pad printing permanently alters the commercial identity and value of packaging materials, the proposed activity is likely to constitute manufacturing rather than a simple service.
Accordingly, TENTAC should obtain the necessary manufacturing registrations and licenses before commencing the proposed business.
Bonded Warehouse Consideration: Where customers are export-oriented garment manufacturers operating under Bonded Warehouse facilities, additional Customs and Bond regulations become applicable. If TENTAC intends to process duty-free bonded materials, it should obtain a Bond License as a Deemed Exporter. Otherwise, processing bonded materials as a non-bonded company would expose both TENTAC and its customers to substantial legal and financial risks.
3. Detailed Opinion
3.1 Authority under the Memorandum of Association
TCF reviewed the object clauses contained in the Memorandum of Association.
The MOA expressly authorizes the company to engage in, among others:
Manufacturing; Printing; Production of garment accessories; Factory establishment;
Textile processing; Import and export; Supply of industrial products.
Accordingly, from a corporate law perspective, the proposed pad printing activity falls within the company's existing corporate objects. Therefore, no amendment of the Memorandum of Association appears necessary.
3.2 Whether Pad Printing Constitutes Manufacturing
Section 2(65) of the Value Added Tax and Supplementary Duty Act, 2012 defines "manufacture" to include any process whereby the character, nature, quality, utility or commercial identity of goods is created or altered. Pad printing permanently applies logos, trademarks, product information or designs onto packaging materials.
This process changes the commercial identity and marketability of the goods.
Accordingly, TCF is of the opinion that the proposed pad printing process constitutes manufacturing within the meaning of Section 2(65) of the VAT Act.
3.3 Whether Current Trade License Permits Manufacturing
Although the MOA authorizes manufacturing, the company's existing Trade License authorizes only:
Import; Export; Supply; and Inspection.
Manufacturing activities are not included.
Likewise, the company's current BIN registration does not classify the company as a manufacturer.
Accordingly, TCF is of the opinion that TENTAC should not commence manufacturing activities under its existing Trade License and BIN.
3.4 Registrations and Licenses Required
If TENTAC intends to operate as a manufacturing company, TCF recommends obtaining the following approvals:
Lease or establish an industrial factory premises.
Obtain Industrial Registration from BIDA under the Bangladesh Investment Development Authority Act, 2016.
Obtain BIDA Recommendation for Industrial IRC.
Obtain an Industrial Import Registration Certificate (IRC) from the Chief Controller of Imports and Exports (CCI&E).
Obtain a Factory Trade License from the appropriate Local Government Authority.
Amend the Business Identification Number (BIN) to include manufacturing activities.
Obtain an Environmental Clearance Certificate from the Department of Environment.
Obtain a Fire License from the Department of Fire Service and Civil Defence.
Obtain a Factory License from the Department of Inspection for Factories and Establishments (DIFE).
3.5 Subcontract Processing Arrangement
Since ownership of the packaging materials remains with the garment factory, the proposed arrangement is essentially a contract manufacturing or job-work arrangement.
Accordingly, TCF recommends executing a comprehensive Subcontract Processing Agreement.
3.6 Tax and VAT Implications
Where TENTAC merely provides processing services:
VAT: 15% (Standard VAT rate to get VAT Rebate)
Corporate Income Tax: 3% (Under Section 97 of Income Tax Act 2023).
Applicable tax rates should be confirmed based on the relevant assessment year.
4. Bonded Warehouse Considerations
Where customers import packaging materials under Bonded Warehouse facilities, additional legal requirements apply.
4.1 Deemed Export Bond License
To provide processing services for bonded exporters, TENTAC should obtain a Bond License as a Deemed Exporter.
This would enable the company to legally provide processing services to:
Bonded manufacturers;
EPZ companies; and
Economic Zone (EZ) companies.
4.2 Typical Bond Procedure
Generally:
The overseas buyer opens a Master L/C.
The garment factory issues a Back-to-Back L/C to TENTAC.
The garment factory obtains Utilization Declaration (UD) from BGMEA or BKMEA.
Based upon the UD, TENTAC obtains Utilization Permission from the Customs Authority.
Production and record keeping must comply with the Bonded Warehouse Licensing Rules.
4.3 Tax and VAT Implications for Deemed Exporter
In terms of deemed Export TDS rate is 1% U/S 123 of the ITA 2023. VDS rate is 0%
4.4 Inter-Bond Transfer
Where bonded materials are transferred between bonded factories located outside EPZ or EZ, prior approval for Inter-Bond Transfer is generally required by the customer.
4.5 Risk of Processing Bonded Materials without Bond License
Under Rule 13(B) of the Bonded Warehouse Licensing Rules, 2024 (SRO No. 213-Law/2024), bonded goods generally cannot be transferred from a bonded warehouse to a non-bonded entity. Accordingly, if TENTAC remains a non-bonded company, processing bonded packaging materials would present significant legal and customs compliance risks.
Although certain subcontracting arrangements involving washing, printing or similar processing by non-bonded companies are reportedly practiced in Bangladesh, such practices do not comply with the applicable legal framework and may expose both parties to customs duties, penalties, recovery proceedings, suspension or cancellation of licenses, and other enforcement actions if challenged by the competent authorities.
Conclusion
Based on the documents reviewed and the applicable laws of Bangladesh, TCF is of the opinion that TENTAC INSPECTION BD CO., LTD.'s existing Memorandum of Association authorizes the proposed pad printing and related manufacturing activities; therefore, no amendment to the constitutional documents is required.
However, the company's current Trade License and BIN permit only import, export, supply, and inspection activities. As pad printing is likely to constitute "manufacturing" under Section 2(65) of the Value Added Tax and Supplementary Duty Act, 2012, TENTAC should obtain the necessary manufacturing registrations, licenses, and approvals, including updating its Trade License and BIN, before commencing operations.
If the business involves processing bonded materials, TENTAC should also obtain a Bond License as a Deemed Exporter and comply with the Bonded Warehouse Licensing Rules, 2024. Failure to do so may expose both TENTAC and its customers to legal, customs, and financial risks.
Accordingly, the proposed business model is legally feasible in Bangladesh, subject to obtaining all required regulatory registrations, licenses, and approvals before commencing manufacturing activities.
Sincerely,
____________
Fumihiro Abe
Director
Tokyo Consulting Firm Limited (TCF)
Disclaimer: This opinion is based on the information provided by the client and the laws of Bangladesh in force on the date of issuance. It is intended solely for the client's internal use and should not be treated as an official government approval.