Bangladesh Garment Industry Compliance Roadmap: Step-by-Step Licensing Checklist

This roadmap organises the 39 licences, registrations and approvals from our previous compliance guide into a practical sequence, from business formation to factory operation and export documentation.

The most important distinction is that a garment manufacturing factory and a garment buying house do not have identical compliance requirements. A buying house that only sources garments and coordinates orders generally does not need factory, boiler or bonded warehouse licences simply because it operates in the apparel industry.

1. How to Use This Checklist

Each item has one of three classifications:

• Mandatory – required when the stated activity or legal conditions apply.
• Conditional – required only for particular operations, facilities or transactions.
• Optional – not universally required by law; may be useful for business purposes or specific services.

A conditional requirement is not necessarily optional: once the relevant activity is undertaken, the applicable approval becomes compulsory.

Recommended implementation order:

1. Decide the business model.
2. Establish the legal entity.
3. Complete tax and financial registrations.
4. Obtain industrial and export registrations.
5. Secure building and factory approvals.
6. Complete fire, environmental and workplace safety compliance.
7. Obtain bonded warehouse facilities, if applicable.
8. Establish export documentation and banking procedures.
9. Maintain recurring compliance and renewals.

2. Phase 1 – Company Formation and Legal Identity

Start here – before renting factory premises or commencing business. This phase covers items 1–5.

Note: These are corporate formation documents and filings, not five separate operating licences. Sole proprietorships and partnerships follow different registration procedures.

Step-by-step actions:

• Decide the legal structure: private limited company, partnership or proprietorship.
• Finalise the company name.
• Obtain RJSC name clearance, if incorporating a company.
• Prepare MoA and AoA.
• Complete company incorporation.
• Obtain the Certificate of Incorporation.
• Complete the applicable director and corporate filings.
• Prepare a company document folder containing incorporation documents, directors' particulars and ownership information.

Completion gate: The legal entity must be established before proceeding with company-level registrations.

3. Phase 2 – Trade, Tax and Financial Compliance

This phase covers items 6–10.

Step-by-step actions:

• Obtain a trade licence for the principal business address.
• Obtain separate location-specific trade licences where required for additional premises.
• Apply for the company's e-TIN.
• Assess the applicable VAT registration or enlistment requirement.
• Obtain BIN where required.
• Open a corporate bank account.
• Select an Authorised Dealer (AD) bank for international trade transactions.
• Obtain a bank solvency certificate if required for subsequent applications.

Important: Trade licences are location-specific and generally need periodic renewal. Businesses operating at multiple locations typically need a separate trade licence for each one.

Completion gate: Company identity, tax identification, local business licensing and banking arrangements should be ready before applying for export and factory approvals.

4. Phase 3 – Industrial, Import and Export Registrations

This phase covers items 11–17.

Step-by-step actions:

• Determine whether the business is a direct exporter, buying agent, indenting agent or manufacturer.
• Identify whether imports will be made in the company's own name.
• Apply for BIDA project registration if the project requires or benefits from it.
• Join an appropriate chamber or trade organisation where required.
• Apply for ERC through CCI&E for applicable export activity.
• Apply for IRC if the company will undertake imports requiring registration.
• Identify the appropriate industry association: BGMEA or BKMEA.
• Complete BGMEA/BKMEA membership if required for the intended association services, UD processing or other facilities.
• Consider BGBA membership if operating a buying house.

Important distinctions:

• ERC and IRC are not interchangeable.
• A buying house that only provides sourcing and coordination services does not automatically need every manufacturer's registration.
• BIDA industrial registration is not a universal prerequisite for every local garment company.
• BGMEA, BKMEA and BGBA memberships are industry association memberships, not substitutes for statutory government licences.

Completion gate: Establish the company's intended import/export status and obtain the applicable registrations before beginning regulated trade transactions.

5. Phase 4 – Building, Structural and Factory Layout Approvals

Manufacturer-specific. This phase covers items 18–21 and 29.

Step-by-step actions:

• Select an industrially suitable factory location.
• Verify land ownership or obtain a valid lease agreement.
• Verify that the building can legally be used for industrial purposes.
• Obtain the approved architectural building plan.
• Conduct soil testing where required.
• Obtain structural design and safety documentation.
• Prepare the factory site plan.
• Prepare the machine layout.
• Prepare the production flowchart.
• Mark emergency exits and evacuation routes.
• Submit the applicable factory layout application to DIFE.
• Obtain the applicable building completion and occupancy documentation before use.

Important: Do not assume that an existing commercial building is automatically suitable for a garment factory. Its approved use, structure, access, fire safety and factory layout must be assessed. DIFE's LIMA system handles factory registration, licensing and layout-plan approvals, and its guidance also identifies structural safety and emergency arrangements as important factory obligations.

Completion gate: Building legality, structural suitability and the applicable DIFE layout approval must be addressed before factory operations begin.

6. Phase 5 – Fire, Environmental and Workplace Safety

Critical operational compliance. This phase covers items 22–28.

Step-by-step actions:

• Prepare a fire safety plan.
• Install required fire extinguishers and firefighting systems.
• Install fire detection and alarm arrangements where required.
• Ensure adequate emergency exits and evacuation routes.
• Arrange fire drills and emergency response training.
• Apply for the Fire Service licence and complete inspection.
• Determine the environmental classification and applicable clearance requirements.
• Obtain ECC if the factory's activities require it.
• Install and operate the required pollution-control equipment.
• Apply for DIFE factory registration and licence.
• Complete boiler inspection and registration, if applicable.
• Complete electrical inspection and safety certification.
• Obtain applicable generator permissions.
• Obtain groundwater extraction permission where required.

Special Environmental Clarification

This is an important point that should not be overlooked. Garment and sweater manufacturing factories covered by the relevant 1 October 2007 SRO do not require environmental clearance under the Department of Environment's published guidance. The exemption has also been reiterated for factories engaged only in cutting and sewing.

However, activities such as washing, dyeing, printing and other environmentally regulated processes must be assessed separately and may require environmental clearance and pollution-control facilities, including an ETP (Effluent Treatment Plant) where applicable.

• Cutting and sewing only: ECC exemption generally applies.
• Washing / dyeing: Clearance assessment required.
• Printing / regulated finishing: Clearance assessment required.

Confirm the precise exemption and process classification with the Department of Environment before relying on an exemption.

Completion gate: Do not commence factory production until applicable DIFE, fire, building, electrical and environmental requirements have been fulfilled.

7. Phase 6 – Bonded Warehouse and Customs Compliance

Export-oriented manufacturers. This phase covers items 30–32.

Step-by-step actions:

• Determine whether the factory qualifies for bonded warehouse facilities.
• Confirm whether the business is a direct exporter, deemed exporter or both.
• Obtain applicable ERC, trade licence, tax and VAT documents.
• Complete the required BGMEA/BKMEA membership formalities where applicable.
• Prepare factory and warehouse layout documentation.
• Prepare the machinery list and production capacity details.
• Prepare the raw material consumption and production records.
• Submit the bond licence application to the relevant Customs Bond Commissionerate.
• Complete the required general bond execution.
• Complete warehouse inspection and approval requirements.
• Maintain bond registers, inventory records and customs documentation.
• Monitor bond licence validity, renewal and audit requirements.

How Bonded Facilities Work

A bonded warehouse allows eligible export-oriented manufacturers to import qualifying raw materials and packaging materials without immediate payment of applicable import duties and taxes, subject to customs conditions.

For example, a garment manufacturer may import fabrics, yarn, sewing thread, zippers, buttons, labels and packaging materials under bond. The materials must be accounted for and used in accordance with the approved customs arrangements.

Bangladesh Customs recognises special bonded warehouse facilities for eligible 100% export-oriented woven, knitwear and sweater industries. General bonded warehouses apply to other eligible categories.

Important distinction: Items 30, 31 and 32 should not be treated as three completely independent licences. The bond licence, execution of the required general bond and warehouse approval are related stages of one customs compliance process.

8. Phase 7 – Export Registration and Documentation

For direct exporters. This phase covers items 33–39.

A. EPB registration

• Determine whether EPB enrolment is needed for the intended export services.
• Complete the relevant exporter enrolment process.
• Maintain updated company and association documents.

B. Utilization Declaration

• Identify the applicable association.
• Prepare export order and LC documentation.
• Calculate the required raw material consumption.
• Prepare the production consumption details.
• Obtain the applicable UD for bonded RMG production.
• Reconcile imported raw materials with production and exports.

C. Export banking arrangements

• Open and maintain the appropriate export banking relationship.
• Receive the buyer's master LC or execute an export contract/purchase order.
• Arrange back-to-back LC if required for procurement financing.
• Ensure the bank has the correct export documentation.
• Complete the applicable EXP declaration through the AD bank.

D. Shipment documentation

• Prepare the commercial invoice.
• Prepare the packing list.
• Arrange the Bill of Export / Shipping Bill.
• Obtain the Certificate of Origin if required.
• Obtain preferential origin documentation if the shipment qualifies.
• Complete customs clearance.
• Submit shipping documents to the bank.
• Monitor export proceeds realisation.

Important clarification: EXP, COO and preferential origin certificates are not ordinary annual business licences. They are export-transaction or shipment-related documents.

9. Buying House vs Manufacturing Factory: Separate Compliance Roadmaps

This distinction is especially important when establishing a new garment business.

A. Garment Buying House

Sourcing, merchandising, quality coordination and buyer communication.

Primary compliance checklist:

• Legal business formation (if a company).
• Head office trade licence.
• e-TIN.
• Applicable VAT registration / BIN.
• Corporate bank account.
• Chamber membership where required.
• ERC if undertaking applicable direct export activity.
• IRC if undertaking regulated imports.
• BGBA membership if desired.
• EPB enrolment if using applicable EPB services.
• Export contracts and banking documents where acting as exporter.

B. Garment Manufacturing Factory

Cutting, sewing, finishing, packing and export production.

Primary compliance checklist:

• All applicable company and trade registrations.
• Factory-specific trade licence.
• BIDA registration, where applicable.
• ERC for applicable exports.
• IRC for applicable imports.
• Appropriate BGMEA/BKMEA membership for intended services.
• Building and structural approvals.
• Soil testing, where required.
• DIFE layout approval.
• Fire licence.
• Environmental clearance, where applicable.
• DIFE factory registration and licence.
• Electrical safety certification.
• Boiler and generator approvals, if applicable.
• Groundwater permission, if applicable.
• Occupancy certificate, where required.
• Bond licence, if using bonded facilities.
• UD and export documentation, where applicable.

A buying house with its own factory: if a buying house also operates a manufacturing facility, it must meet the applicable requirements for both activities. A buying house's office trade licence does not replace the factory's licences.

10. Recommended Implementation Timeline

The following is a suggested project sequence, not a government-guaranteed processing-time estimate.

1. Stage 1 – Business setup: Complete company incorporation, tax identification, trade licence and banking arrangements.
2. Stage 2 – Business registrations: Complete applicable ERC, IRC, chamber membership, association membership and BIDA registration.
3. Stage 3 – Factory premises: Finalise land/building, structural documentation, building approvals and factory layout.
4. Stage 4 – Safety approvals: Complete fire safety, environmental assessment, electrical compliance and DIFE requirements.
5. Stage 5 – Customs and bonded facilities: Apply for the bond licence, execute the required bond and complete warehouse formalities if needed.
6. Stage 6 – Export readiness: Set up EPB services, UD processing, banking, LC arrangements and export documentation.
7. Stage 7 – Operational compliance: Maintain licences, records, inspections, renewals, audits and shipment documentation.

11. Ongoing Compliance and Renewal Calendar

Obtaining licences is only the beginning. A factory must maintain compliance throughout its operations. The following activities should be assigned to a dedicated compliance officer or administration manager.

The precise validity and renewal dates should be taken from each issued certificate and the applicable current regulations. Do not assume that all licences have an annual renewal cycle.

12. Master Compliance Checklist – All 39 Items

This is the consolidated checklist of all 39 items, grouped by phase, for use as the starting point for a factory compliance register.

Phase 1 – Company Formation:

• 1. Name Clearance – RJSC (new limited company)
• 2. Certificate of Incorporation (new limited company)
• 3. Memorandum of Association (limited company)
• 4. Articles of Association (limited company)
• 5. Form XII – Directors' Particulars (applicable corporate filing)

Phase 2 – Trade, Tax and Financial:

• 6. Factory Trade Licence (manufacturing premises)
• 7. Head Office / Buying House Trade Licence (business premises)
• 8. e-TIN Certificate (tax compliance)
• 9. VAT Registration / BIN (as required by VAT law)
• 10. Business Bank Account / Solvency Certificate (account essential; solvency conditional)

Phase 3 – Industrial and Export Registrations:

• 11. BIDA Industrial Project Registration (conditional)
• 12. Chamber of Commerce Membership (conditional / useful)
• 13. Export Registration Certificate (ERC) (applicable export activity)
• 14. Import Registration Certificate (IRC) (applicable import activity)
• 15. BGMEA Membership (association / service requirements)
• 16. BKMEA Membership (association / service requirements)
• 17. BGBA Membership (optional association membership)

Phase 4 – Building and Factory Layout:

• 18. Building Plan Approval (applicable construction)
• 19. Structural Design / Safety Certificate (applicable building)
• 20. Soil Test Report (where required)
• 21. Factory Layout Plan Approval – DIFE (applicable factory)
• 29. Building Occupancy / Completion Certificate (where required)

Phase 5 – Fire, Environmental and Safety:

• 22. Fire Licence (factory)
• 23. Environmental Clearance Certificate (depends on processes)
• 24. Factory Registration and Licence – DIFE (applicable factory)
• 25. Boiler Registration and Certificate (if boiler used)
• 26. Electrical Installation and Safety Approval (applicable installations)
• 27. Generator-related Permission (where applicable)
• 28. Deep Tube-well / Groundwater Permission (if groundwater extracted)

Phase 6 – Bonded Warehouse and Customs:

• 30. Special Bonded Warehouse Licence (if using facility)
• 31. General Bond Execution (if required by bond arrangements)
• 32. Bond Warehouse Approval / Registration (if using facility)

Phase 7 – Export Documentation:

• 33. EPB Exporter Enrolment (for applicable EPB services)
• 34. Utilization Declaration (UD) (applicable bonded RMG exports)
• 35. Back-to-Back LC Arrangement (if using financing facility)
• 36. Master LC / Export Contract (applicable export transaction)
• 37. EXP Form (applicable export transaction)
• 38. Certificate of Origin (when required)
• 39. GSP / Preferential Certificate of Origin (when eligible and claiming preference)

The classifications and applicability notes above should be verified against your company's actual activities.

13. Official Government Resources

Use these official websites when applying for or verifying registrations.

14. Building a Factory Compliance Management System

For a professional garment manufacturing business, we recommend maintaining a central compliance register with these fields:

This can eventually become a dedicated module in a garment ERP system, allowing management to monitor factory licensing, renewal deadlines and compliance documents.

One particularly important recommendation: keep separate compliance registers for the buying house and the manufacturing factory, even if both operate under the same company. This avoids confusing office-level registrations with factory-specific statutory requirements.

Red Rooks Apparel – Bangladesh Garment Manufacturing & Export

At Red Rooks Apparel, maintaining this kind of structured compliance register is especially useful as we expand production capacity, work with international buyers and prepare for factory compliance audits.

We are an export-oriented garment manufacturing company in Bangladesh, specialising in OEM, ODM, private-label and custom garment production for international buyers, with product capabilities spanning T-Shirts, Polo Shirts, Hoodies, Sweatshirts, Casual and Formal Shirts, Denim Jeans, Chino and Gabardine Pants, Cargo Pants, and Boxer Briefs.

Looking for a reliable, compliant garment manufacturer in Bangladesh? Visit Red Rooks Apparel to explore our manufacturing capabilities and discuss your next apparel production project.

Regulatory note: This roadmap is a planning checklist, not a legal determination that all 39 items are mandatory. The relevant authority should confirm the current legal requirements for the exact business structure, factory processes and location before operations begin.