Independent Licence Holder vs Distributor as Licence Holder: Bangladesh’s Costliest Choice

1. Key takeaways

Making a distributor the licence holder is the most expensive option in Bangladesh, and not because the fees are high. It is expensive because the cost of exit is the highest. A holder controls two things at once: the NOC that every individual import depends on, and the original registration certificate together with the no-objection letter (NOL) that a transfer of registration depends on. Put the two together and the manufacturer has handed over both market access and the route out of the market. An independent licence holder, meaning an entity that holds the registration but does not distribute, is the structural hedge against that risk.

• A distributor that holds the licence gains leverage from the system rather than from its own commercial strength.
• Every consignment needs an NOC issued by the holder, so the holder sits in the path of routine supply, not only at the point of exit.
• A transfer of registration requires three documents: the original certificate, the NOL and the manufacturer’s transfer authorisation.
• If the original certificate is withheld, operations stop, and the only remedy left is litigation, which is slow and a last resort.
• Separating the holder from the distributor keeps the certificate in a party whose income does not depend on the product’s sales.
• One source account states that each importer must hold its own DAR, which conflicts with the one-device-one-holder account. Treat that point as pending verification.

2. Legal basis

The guideline does not describe the distributor relationship at all. It attaches obligations to the manufacturer or the importer, and the commercial architecture that grows around that sentence is what determines the exit cost. The table below separates what comes from the guideline text from what comes from practitioner accounts, so that the two are not confused when a contract is being drafted.

The conflict in the last row deserves a word of explanation, because it changes the commercial model rather than a footnote. If one device may have only one holder, then appointing a second distributor is a contractual matter and the registration stays where it is. If each importer must hold its own DAR, then every additional distributor needs its own registration instrument, and the manufacturer is maintaining parallel files rather than one. The two readings lead to different contract structures and different cost bases. Until DGDA confirms the position in writing, a manufacturer should assume the stricter reading when it plans, and the looser reading only when a specific transaction has been checked.

3. Expert insights

Insight one: the distributor’s bargaining power is manufactured by the system. The NOC is issued consignment by consignment, the original certificate is kept by the holder, and the NOL must be issued by the holder. All three are structural arrangements, not advantages that a particular distributor negotiated for itself. Structure determines behaviour: replacing a difficult distributor with a more agreeable one does not change the leverage, because the leverage belongs to the position rather than to the person occupying it. A manufacturer that changes partner without changing the structure will meet the same negotiation two years later with a different name on the letterhead.

Insight two: the remedy practitioners describe is a written commitment plus no delay in honouring it. Some independent licence holders agree in writing with their clients that the certificate will be returned within 72 hours of confirmation being received. The significance of that number is not the 72 itself. What matters is that the return obligation has been written as an enforceable clause rather than left as an expectation of goodwill. A commitment without a time limit is a statement of intent; a commitment with a time limit and a defined trigger is a clause that can be relied on when the relationship has already broken down.

Insight three: separating the holder from the distributor also solves the efficiency problem of one holder serving several brands. An independent licence holder can hold registrations for several manufacturers at the same time, which spreads its fixed cost across a portfolio instead of loading it onto a single product. A distributor that holds the licence tends naturally towards selling only what it holds, which locks the product line to one sales channel. That is not dishonesty; it is the rational behaviour of an entity whose registration investment is recovered only through its own sales.

Insight four: exit cost should be priced at entry, not discovered at the end. The financial case for the independent holder appears in the year the manufacturer wants to change channel, not in the year the registration is granted. Because the certificate is a single original document in the holder’s possession, the entire migration depends on a physical handover that the manufacturer cannot compel by email. A manufacturer comparing quotes on registration fees alone will usually choose the cheaper distributor route, and will pay for that choice later through delay, negotiation or litigation.

4. Practical recommendations

GRZAN’s structure for clients in Bangladesh is precisely this separation of registration from distribution. A locally licensed partner we work with acts as the holder of the registration certificate and the DAR, while commercial sales sit with the distributor the client appoints. Four clauses are fixed in the agreement: the NOC is issued within 72 hours of a request being received; the original certificate and the NOL are returned within 72 hours of written confirmation from the manufacturer; the manufacturer has the right to replace the distributor unilaterally; and the holder does not take part in any commercial distribution. With all four in place, the manufacturer holds real control rather than nominal control.

• Appoint a holder whose revenue does not depend on selling the product, so that returning the certificate costs it nothing commercially.
• Fix the NOC turnaround in the agreement, and define the trigger as receipt of a request rather than receipt of complete information.
• Fix the return of the original certificate and the NOL against a written confirmation from the manufacturer, with the same 72-hour limit.
• Reserve the right to replace the distributor unilaterally, so that a channel decision does not require the holder’s consent.
• Obtain a written undertaking that the holder will not distribute, since a holder that also sells has an interest in keeping the certificate.
• Request a written DGDA position on the one-device-one-holder conflict before relying on either reading in a long-term contract.

5. Verification checklist

• □ The holder and the distributor are confirmed as separate legal entities
• □ The agreement sets a time limit for issuing the NOC (72 hours or less)
• □ The agreement sets a time limit for returning the original certificate and the NOL (72 hours or less)
• □ The agreement preserves the manufacturer’s right to replace the distributor unilaterally
• □ The holder has confirmed in writing that it will not take part in commercial distribution
• □ A written DGDA confirmation has been sought on the conflicting accounts of one holder per device

Regulatory information verified as of 27 October 2026.

How GRZAN can help. GRZAN provides medical device and IVD registration, quality system, authorised representative and local testing support across South Asia, including Bangladesh. Our team prepares dossiers to DGDA expectations, manages submissions and deficiency responses, and supports post-market vigilance obligations. Business enquiries: info@grzanglobal.com