Understand the Jurisdictions Setup Requirement Before Proceed Your Company Incorporate in Pakistan
Pakistan may not appeal as the ideal destination to start an overseas venture, but there are many reasons why it is inviting for different kinds of businesses. Its huge population, low competition, rapidly growing economy, and the evolving political environment are some attractions that are currently attracting foreigners as well as enterprising locals to start new ventures in the country. Whether you are a foreigner or a local, the country has opened her doors for investments. If you are thinking of doing business in Pakistan, you need to know the best type of company for you. Here is a guide we have put together to help you understand the process of company incorporate in Pakistan.
Types of Legal Entities in Pakistan
If you are interested in starting a business in Pakistan, your first concern would be to know the kinds of legal entities or types of business you are allowed to register in the country, both for locals and foreigners. Just like most countries, Pakistan allows for the registration of various types of legal entities, and here is a brief look at some of them-:
Private Limited Company
Private Limited Company is the preferred investment vehicle for most foreign investors keen on investing in Pakistan. Its registration in the country requires a minimum of two shareholders, and it is legal for a foreign national to be among the shareholders, except for foreigners coming from Israel. The minimum share capital requirement for registering a private limited company in Pakistan is PKR 100,000 (USD 823). The other vital requirement is that a private limited company must have a registered office located in Pakistan.
Single Member Company
The other investment vehicle for those looking for company incorporate in Pakistan is the single-member company. Again, this is also open to all foreign nationals, except Israelis. The minimum requirements for the formation of this business entity include a share capital of PKR 100,000 and one shareholder. It must also have a registered office in Pakistan, and the incorporation process may take less than four weeks.
Public Limited Company
A public limited company is the other type of entity you are allowed to register in Pakistan. With this legal entity, the shares of the company are offered to the public and the shares come with limited liability. Anyone is allowed to acquire shares in such companies.
A representative office is an option for foreign businesses that are keen on having some presence in Pakistan but don’t want to go the full length of setting up a legal entity. However, with a representative office, the business can’t carry out any profit-generating activity in Pakistan. Representative offices are usually for research and development purposes.
A liaison office, if suitable, is for foreign-owned companies keen on promoting their products or services in Pakistan. They can also be set up to provide the parent company in another country with the various possibilities of export promotions and joint collaborations with the already established ventures in Pakistan. And just like a branch office, a liaison office is not permitted by law to engage in any profit-generating activity in Pakistan.
The Process of Company Incorporate in Pakistan
The process of incorporating a company in Pakistan follows the following steps:
Step 1: Approval of the Company Name
The first step towards registering a new company in Pakistan is to choose a suitable company name. The name has to be unique and has to follow the stipulated restrictions and guidelines. This mostly includes not having any prohibited words.
Step 2: Submission of Documents
After the approval of the company name, the next step is to submit all the documents of incorporation to Pakistan’s Securities and Exchange Commission. The documents you submit will vary based on the type of legal entity you will be registering. If you are unsure of the specific documents you need to submit, feel free to get in touch with us and we will advise you accordingly.
Step 3: Certificate of Incorporation
The Securities and Exchange Commission will evaluate the document submitted and check on their validity. If all is in order, the National Institutional Facilitation Technologies will then issue a digital signature. Only after that, you will receive the certificate of incorporation.
Step 4: Depositing of Shares
Following the successful issuance of the certificate of incorporation, you will need to deposit the minimum amount of share for the entity you want to start. Generally, you have to do it in the company’s bank account.
Step 5: Registration of Sales, Income, and Taxes
The last step of company incorporate in Pakistan is to register for tax. In Pakistan, you do it with the Federal Board of Revenue. The board issues a tax number so that the company can comply with all the applicable tax regulations.
We Can Help
If you are a foreign entity or national looking forward to starting a business in Pakistan, we can help you with the entire company registration process. We are a team of legal advisors, accounting and tax experts with great knowledge and experience on company incorporate in Pakistan. Irrespective of your desired business entity, we will help you set it up with minimal effort on your part. This is how you save time and money when registering a business in a new country like Pakistan. Contact us for more information.