The DIFE Factory and Establishment Licence: Who Needs It, the Three Forms, the Fee Classes and the Annual Renewal

In this guide: Factory or establishment: the s.2(7) test · The three forms and the LIMA sequence · Fee classes and the challan · What the inspector looks at, on the visit and after · Penalties and prosecutions · Changes of ownership, address and headcount

The short answer

Count your workers and ask whether anything is manufactured. Five or more workers and a manufacturing process make the premises a factory: you file the Form-75 notice fifteen days before work starts, get the layout plan approved on Form-76 before machinery goes in, and apply for the licence on Form-77 through lima.dife.gov.bd with the challan, the trade licence, the lease or deed, the building approval and the engineer’s drawings. The Deputy Inspector General’s office reviews the file, an inspector visits (s.319(6) requires an on-the-spot inspection before any approval, grant or renewal), and the licence downloads from the portal. Workers without manufacturing (a shop, office, bank, agency) go through the same portal for establishment registration at a far lower fee. The licence is annual; renewal is a shorter form with last year’s licence, the renewal challan, the updated trade licence, the worker list and the fire and environmental certificates. Use the estimator below for the fee class, then keep the four things an inspector asks for on the renewal visit: appointment letters and service books, the worker register, the working-hours notice, and the half-yearly and annual returns.

Factory or establishment: the s.2(7) test

The Labour Act defines a factory (s.2(7)) as any premises, including its precincts, where five or more workers ordinarily work on any day of the year and in any part of which a manufacturing process is carried on, mines excepted. Three points follow. The count is of workers, not employees: managers and supervisors who are not workers under s.2(65) do not count towards five. “Ordinarily work on any day” means the usual number, not a peak; a workshop that hires six casuals once a year is not a factory, one that normally has six is. “Manufacturing process” is wide: making, altering, repairing, finishing, packing, washing, printing, generating power. A bakery, a garment unit, a printing press, a workshop that repairs vehicles, a water bottling line and a software company’s server room (no) all turn on the definition. An establishment (s.2(31)) is wider still: any shop, commercial establishment, industrial establishment, transport or premises where workers are employed to carry on an industry, trade or business. Section 1(4) excludes government offices, non-profit educational, health and hostel institutions, shops at fairs for religious or charitable purposes, agricultural farms with fewer than five workers, domestic work and family-run establishments without wage workers. In practice DIFE licenses under separate fee classes: factories; shops and commercial establishments; banks, insurers and finance companies; and contracting agencies (which also pay a security deposit). A company with an office and a factory holds both.

The three forms and the LIMA sequence

On the LIMA portal the owner opens an account, completes Form-77 and uploads the documents, receives a tracking number, pays the treasury challan (code 1-3143-0000-1854 in DIFE’s own charter; one firm quotes an older code), and the file goes to the Deputy Inspector General of the division, who sends an inspector. Section 319(6) makes the visit mandatory: the Chief Inspector acts in all cases of design approval, grant and renewal of licence only after on-the-spot inspection. After the DIG’s approval the licence downloads from the portal. The charters give 45 days for approval and licence and 20 for renewal; law firms quote fifteen working days for a complete file in Dhaka, which is optimistic outside the garment sector. Section 326 is reported to contain a deemed-approval period for layout plans that the office does not answer; we have not read the current text and do not rely on it.

Fee classes and the challan

The schedule is by number of workers only; the horsepower element of the old Factories Rules 1979 is gone. Shops and commercial establishments start at about Tk 100 (one to five staff, renewal Tk 50) and climb by staff band; banks and insurers start at Tk 5,000; contracting agencies pay Tk 20,000 and lodge a Tk 2,00,000 security deposit. All fees carry 15% VAT paid on a separate challan. These figures come from practitioner tables of the Labour Rules schedule as amended in 2022; we could not read the gazette text at the date above and the portal’s demand note governs. Two renewal points differ between sources: one says renew by 31 December, another says the licence runs twelve months from issue; the DIFE charter is silent, so read the expiry date on your own licence. Late renewal is reported to carry a surcharge of 25% within three months, 50% within six and 100% after that, on the renewal fee.

What the inspector looks at, on the visit and after

Section 319 gives inspectors power to enter, examine registers and records, take statements, seize documents and prosecute in the Labour Court. On the licensing visit the questions are physical: the layout as approved, exits and stairs, machine guarding, ventilation and lighting, drinking water and washrooms by headcount, first aid, canteen and rest room thresholds, fire equipment. On every visit after that the questions are documentary, and these are the records a factory must be able to produce: appointment letters and identity cards (s.5, Form-6), service books (Form-7), the register of workers (s.9, Form-8), the notice of working hours displayed (s.111(8), r.105), the list of holidays (s.118), the half-yearly return on Form-80 by 15 July and the annual return on Form-81 by 15 February (s.333, r.362), and the abstract of the Act and Rules displayed in Bangla (s.337, r.364). Headcount triggers more: a safety committee from fifty workers (s.90A, r.81), a welfare officer from five hundred (r.79), and under the Labour (Amendment) Act 2026 a provident fund where a hundred or more workers are employed and two-thirds of them demand it. Our guides on service rules and appointment letters cover the paper; the licensing point is that the renewal inspector reads the same file.

Penalties and prosecutions

Operating a factory without the notice, approval or licence is an offence under the Act, prosecuted by the inspector in the Labour Court (s.319, s.313 cognizance on complaint). The residual penalty section, s.307, carried a fine of up to Tk 25,000; the Labour (Amendment) Act 2026 is reported to have raised it to Tk 25,000 to 50,000 and up to three months’ imprisonment, and to have raised most other fines in Chapter XIX. Breach of the Rules themselves (s.352 of the Act, in some prints s.353) is up to three months or Tk 1,000. Giving false information in a notice or return, or failing to give a notice, falls under s.303: up to six months, Tk 5,000, or both (figures to be read against the amended Act). The practical sanctions matter more than the fines: DIFE can refuse renewal, the fire and environment offices ask for the DIFE licence, buyers’ audits in garments and footwear treat a lapsed licence as a critical finding, and an injury on unlicensed premises is argued in the compensation claim. Nothing in the 2025 Ordinance or the 2026 Act changed the licensing provisions themselves (ss.325–326); the amendments bear on unions, committees, benefits and penalties, which our employer’s guide to the Act covers.

Changes of ownership, address and headcount

The licence is specific to the premises and the occupier. A change of owner or occupier is notified and the licence re-issued in the new name; moving the factory means a new Form-75 notice, a new layout approval and a new licence at the new address, and the old licence is surrendered. Expanding into an adjoining floor or shed is an amendment to the layout approval before the work, not after it. Crossing a worker band moves the fee class at the next renewal, and crossing fifty, a hundred or five hundred workers brings the committee, fund and officer obligations above. A new manager must be notified within seven days. Closing the factory is a notice to the Chief Inspector too, with the final settlement of workers that our closing a business guide sets out; the licence is not renewed and the file closes. The licence does not travel with the land, so a buyer of a factory building applies afresh and should price the forty-five days into completion.