There are several benefits to investing in Pakistan. Low competition, a large population, and a fast-developing economy are just a few advantages. If you want to start a business in Pakistan, you must first register your business. The Pakistani government has made business registration simple and is working to make it even simpler for citizens.
The SECP (Security and Exchange Commission of Pakistan) is in charge of the registration procedure. To register a company in Pakistan, you must first go to the SECP office or visit the SECP website to obtain the necessary information.
You’ve come to the right spot if you’re looking for information on how to register a corporation in Pakistan.
We will offer you step-by-step guidance on how to register a company in Pakistan in this post.
Register Business With SECP
In Pakistan, one can register a variety of business entities. All company registrations in Pakistan are handled by the SECP (Securities and Exchange Commission of Pakistan). For registering a business in Pakistan, the SECP provides both online and offline services. You may search for a company’s name and see whether it’s still available.
This article will need an overview of the various legal entities available to foreign investors. We will also provide step-by-step guidance on forming a company in Pakistan the material given is subject to change when Pakistani legislation and changes are enacted.
Foreign Ownership Is Permitted in Pakistan
Pakistan, unlike many other similar economies, is highly receptive to international investors. The country has vastly opened up to foreign investment in recent years due to its bad worldwide reputation. Some items, for example, can be imported without the need for an import license.
Furthermore, in most commercial sectors, foreign investors can establish 100% foreign-owned firms. Except for Israeli citizens, stockholders can be of any country.
Pakistan’s Minimum Capital Requirement
Paid-up capital and authorized capital are the two forms of share capital in Pakistan. When you form your business, you must specify both capitals in the Articles of Association. The amount of money received by the firm from its shareholders is known as paid-up capital. On the other hand, authorized capital is the maximum amount of share capital that a business is permitted to issue to its shareholders.
In Pakistan, there are no formal minimum capital requirements for private limited businesses. As a result, it is standard practice to set the minimum capital of PKR 100,000 (USD823 dollar price may vary). However, the paid-up capital you infuse must be in line with your projected costs. For example, if you want to establish a factory for your company, you’ll need enough cash to do it.
In Pakistan, there are several different types of legal entities. Foreign investors increasingly see Pakistan as a viable investment opportunity. For example, foreign Investment in Pakistan grew by USD 152.7 in March 2018. By 2020, it is anticipated to rise by 17.2 per cent.
Here are the many legal entities you may pick from if you want to invest in Pakistan.
Private Limited Company
In Pakistan, foreign investors can form wholly foreign-owned private limited corporations (LLCs). The minimum number of shares need to form this type of business is two. Except for Israelis, any foreign national can be a stakeholder in this type of corporation.
The minimum capital required is generally regarded at PKR 100,000. However, keep in mind that the exact amount of money you’ll need relies on your projected costs. Another stipulation is that the company’s registered office address must be in Pakistan.
In Pakistan, forming a limited liability company takes six weeks on average. The Board must also approve the registration of Investment, and clearance from the Ministry of the Interior is required.
Company with a Single Member
Apart from Israeli nationals, foreign investors can form a single-member corporation in Pakistan with only one shareholder. You may form a single-member company in Pakistan with PKR 100,000 (US$ 823) of minimum capital, much as a limited liability company. The typical period for incorporation is four weeks, and you must ensure that the company’s registered address is in Pakistan.
Public Limited Company’s
A public limited company’s shares are generally available to the general public. Those are limited-liability shares. The shares are available for purchase by anybody. It might do so through a public offering or stock market trading.
Steps to Register Private/Public Limited Company in Pakistan
The Procedure for Creating a Private Limited Company in Pakistan and the method for forming a Public Limited Company is the same as for creating a little private business. They may, however, request you to provide more papers.
Step 1: Approval of the Company Name
Choosing a company/organization name is the first step in registering a business in Pakistan. It’s critical to develop a unique company name that will set you apart from the competition. You need to follow the laws and regulations. Make sure, for example, that your company’s name does not contain any banned terms.
Step 2: Document Submission
You must submit the incorporation paperwork to the SECP Securities and Exchange Commission of Pakistan once the business name has been approved.
Step 3: Certificate of Association
The SECP analyses the papers when they are submitted. They double-check their authenticity. The National Institutional Facilitation Technologies (NIFT) issues digital signatures obtained through the SECP. They are also in charge of issuing the certificate of incorporation. A corporate presentation may be required. However, it is dependent on the origins of the company.
Following registration, shareholders must deposit their shares in the company’s bank account in the appropriate amount.
Step 5: Income, Sales, and Professional Taxes Registration
Finally, the Federal Board of Revenue (FBR) must be registered, and a national tax number (NTN) issued before a business may be formed in Pakistan. If necessary, a sales tax registration number can be obtained.
Alternatives To Forming a Company in Pakistan
Branch Office
If your firm wishes to establish a presence in Pakistan without becoming a distinct legal entity, a branch office is an excellent alternative to company formation. It is possible to set up branches in Pakistan to carry out a contract. On the other hand, a branch office is not permitted to engage in any commercial or trade operations of any kind. As a result, your actions are governed by the contract you signed. The agreement restricts your activities.
The parent firm owns the branch office in the nation of origin entirely. It does not require any minimum capital because it is not a limited liability corporation. The registration procedure takes seven weeks to complete. If the (BOI) Board of Investment approves the permission, it might be valid for 1 to 5 years.
Office of Liaison
If you want to market your products in Pakistan, you can open a liaison office entirely owned by foreigners. You may give technical advice and support and explore the many options for joint collaboration and export promotion in Pakistan, in addition to product marketing. On the other hand, this kind is not permitted to participate in commercial or trading operations and is not subject to any minimum capital requirements.
A liaison office can only work within the parameters of the contract or assignment. While you are allowed to give technical support and product marketing as part of the contract, you cannot engage in export promotion or other activities. As a result, it resembles a branch office. As a result, there will be no shareholding because everything will be done in the nation of origin.
In Pakistan, establishing a liaison office takes seven (7) weeks on average. As a result, once approved, your permission will be valid for 1 to 5 years. It must also be approved by the Board of Investment (BOI).
Become a registered income and sales taxpayer
A National Tax Number is required to register a business in Pakistan. You can apply for a National Tax Number (NTN) at the FBR’s (Federal Board of Revenue) Regional Tax Office (RTO). The FBR is in charge of all tax issues in the country. The following papers are necessary to apply for a National Tax Number (NTN):
- Proof of Registration
- Articles of Association and Memorandum
- Account number in a bank.
- Copies of the directors’ national identification cards
- Proof of a business address.
You can also apply for an NTN on the FBR website. You can apply for a sales tax number (STN) through the FBR’s regional tax offices or the FBR’s official website.
Company Seal and Certificate of Incorporation
Following the submission of all papers, the SECP (Securities and Exchange Commission of Pakistan) will assess them and verify their legitimacy. The NIFT (National Institutional Facilitation Center) will provide a digital signature or a corporate seal.
To acquire this corporate seal, all of the company’s directors must sign it. If all of your paperwork is legitimate, SECP will issue you a certificate of incorporation. You will receive it in either physical or electronic form. You can begin your business once you have received SECP’s incorporation certification.
Conclusion
In today’s world, forming a business in Pakistan is simple. People had to submit applications for a company or firm registration by hand before using SECP’s e-service. It used to be challenging to register their businesses, but the new internet method has made it much more manageable. SECP has improved its efficiency, and you may now register your business.
We provided instructions for both offline and online procedures and the documents needed to start a business in Pakistan. We recommend using the online SECP (Securities and Exchange Commission of Pakistan) portal to register a corporation in Pakistan. We hope you now understand how to register a company in Pakistan.
FAQs
What is the cost of registering a company in Pakistan?
There is a registration/filing cost. If the share capital is less than Rs 100,000, the total company incorporation cost is Rs 1800 for online filing. The entire business incorporation charge for offline submission is Rs 3500.
How can I register my business in Pakistan online?
Create a digital signature by registering at eservices.secp.gov.pk.
Reserve a company name that isn’t restricted.
Fill out the form by providing information about your firm, such as its address and kind of operation.
What are the steps in forming a business?
You may register your business from the convenience of your own home or workplace.
Step 1: Fill out an online application.
Step 2: The Registrar will receive all registration paperwork.
Step 3: The certificate of business registration will be emailed to you.
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