Bangladesh Licence Holding Structure: Separating Registration From Distribution

1. Key takeaways

The recommended holding structure in Bangladesh is to separate registration from distribution. A licensed entity that does not engage in commercial distribution holds the registration certificate and the DAR, while commercial sales are handled by a distributor. The structure is designed to offset three institutional risks: the right to issue the per-batch NOC, the holding of the original registration certificate, and the right to issue the no-objection letter, or NOL. All three sit with the licence holder, and all three become leverage the moment the licence holder is also the distributor.

• One device has one licence holder, and that entity controls the three instruments that govern the commercial relationship.
• A per-batch NOC is required for every import, and only the licence holder can issue it.
• A transfer requires three documents: the original registration certificate, the NOL, and the manufacturer’s authorisation of the transfer.
• The underlying legal framework treats distribution as a separate regulated activity, which is what makes the separation structure available at all.
• Separation does not remove the leverage; it moves the leverage to a party that has no commercial motive to use it.
• Structure alone is not enough: four commitments have to be written into the agreement, or the risk is simply relocated.

2. Legal basis

The table distinguishes what rests on the guideline or the statute from what rests on practitioner accounts. The distinction matters here more than usual, because the structure is a commercial recommendation built on a legal foundation that is only partly written down.

Two features of the legal foundation deserve emphasis. First, the guideline attaches the substantive obligation to the manufacturer or the importer, which means the licence holder is acting within a framework where responsibility is already allocated to a party that may sit outside Bangladesh. Second, the statute treats distribution as a stage of its own, listed alongside manufacture and import rather than folded into sale. That second feature is the one that makes the structure possible: if distribution were not a separate stage, separating it from registration would be a purely contractual arrangement with no regulatory recognition behind it.

3. Expert insights

Insight one: the law lists distribution as an independent stage, and that is the legal foundation for separation. Among the activities named in the title and purpose of the parent statute, distribution sits alongside manufacture and import. The consequence is that a distribution licence is a separate certificate, and the licence holder does not have to hold it. Once the law allows the two functions to sit in different entities, the commercial argument for separating them follows, because there is no regulatory reason to keep them together.

Insight two: separation addresses the concentration of leverage. Where licensing and distribution sit in the same entity, the licence holder simultaneously holds the NOC, which controls supply, the original certificate, which controls transfer, and the NOL, which controls exit. Three instruments in one hand put the distributor in an overwhelmingly strong negotiating position, and the manufacturer discovers the extent of that position only when it wants to change something. A separated structure does not eliminate the instruments; it places them with a party that does not distribute, and therefore has no commercial motive to use them as leverage.

Insight three: the agreement terms matter more than the structure itself. Structure is the skeleton and terms are the substance. What we require to be written into the agreement is four executable commitments: a deadline for issuing the NOC, a deadline for returning the certificate and the NOL, the manufacturer’s right to replace the distributor, and the licence holder’s undertaking not to engage in distribution. Building the structure without writing the terms amounts to moving the risk to a different address and leaving it there.

Insight four: each of the three instruments maps onto a different commercial situation. The NOC governs the ordinary course of business, because without it goods do not move. The original certificate governs any change of counterparty, because without it a transfer cannot be completed. The NOL governs exit, because without it the manufacturer cannot move the registration to another party. A manufacturer that has addressed only the first will find that the arrangement works perfectly until the day it needs to change something, which is precisely the day the other two instruments become decisive.

Insight five: dispute resolution belongs in the agreement at signature, not at the point of deadlock. Once the relationship reaches the kind of impasse described in article 20 of this series, cross-border litigation carries a time cost that usually exceeds the value of the dispute. A clause specifying the governing law and the seat of arbitration is inexpensive to negotiate at signature and unavailable to add afterwards. In our experience it is also the clause most likely to be treated as boilerplate and left unnegotiated, which is why we raise it explicitly rather than assuming it will be covered.

4. Practical recommendations

What we deliver in Bangladesh is precisely this separated structure: a local licensed partner with whom we work holds the registration certificate and the DAR as licence holder, while the client’s distributor handles commercial sales only. Four commitments are fixed in the agreement, and both the NOC and the return of the certificate are set at 72 hours. We also recommend that the agreement include a dispute resolution clause specifying the governing law and the seat of arbitration.

• Confirm that the licence holder and the distributor are different legal entities before the first submission, not after the first shipment.
• Obtain a written undertaking from the licence holder that it will not engage in commercial distribution of the product.
• Fix the NOC issuance deadline in the agreement, with 72 hours as the recommended standard.
• Fix the deadline for returning the original certificate and the NOL, again with 72 hours as the recommended standard.
• Reserve the manufacturer’s unilateral right to replace the distributor, and state the conditions under which it may be exercised.
• Include a dispute resolution clause naming the governing law and the seat of arbitration while the relationship is still cooperative.

5. Verification checklist

• □ The licence holder and the distributor are separate entities
• □ The licence holder has undertaken not to engage in commercial distribution
• □ The NOC issuance deadline is agreed, recommended at 72 hours or less
• □ The deadline for returning the original certificate and the NOL is agreed, recommended at 72 hours or less
• □ The manufacturer’s unilateral right to replace the distributor is reserved
• □ The dispute resolution clause covers the governing law and the seat of arbitration
• □ The three transfer documents are identified in the agreement: original certificate, NOL, manufacturer authorisation

Regulatory information verified as at 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