There are numerous benefits to investing in Pakistan. Low competition, a large population, and a rapidly expanding economy are some of its top advantages. This post will teach you about the various legal entities that are open to international investors. Detailed guidelines for company registration in Pakistan will also be provided.
Continually evolving according to Pakistani legislation and modifications is the information provided. Accordingly, we update our articles. The employer of record service might be preferable if hiring employees in Pakistan is your main priority.
Various Legal Entities In Pakistan
Pakistan is becoming increasingly popular among foreign investors as a market to enter. For instance, Pakistan saw an increase in foreign investment of USD 152.7 in March 2018. Moreover, by 2020, experts expected it to rise by 17.2 percent.
Here are several legal entities from which to pick if you intend to invest in Pakistan.
1. Private Limited Company
Pakistani law and framework fully permits the owners of the Private limited companies (LLCs) with 100% foreign ownership to establish companies in Pakistan. However, a person requires at least two shareholders as the bare minimum to register this type of organization. Any foreigner, except for citizens of Israel, may own stock in this type of firm.
According to rules and regulations, owners must have 100,000 ($823) as the minimum capital. Take notice that your projected expenses will determine the real minimum money you need to invest.
Another prerequisite is that Pakistan must serve as the location of the company’s registered address. In Pakistan, a person can establish a limited liability company in as little as six weeks. Additionally, the Board of Investment must approve the registration. Additionally, you also need clearance from the Ministry of the Interior.
2. Single Member Company
Apart from Israeli citizens, foreign investors can also establish a single shareholder corporation in Pakistan.
Like a limited liability company, you can establish a single-member corporation in Pakistan with a minimum capital requirement of PKR 100,000 ($823). Ensure that the company’s registered address is in Pakistan and that the average period for incorporation is four weeks.
3. Third-Person Limited Company
A public limited business typically offers shares to the general public, and claims with restricted liability are those. Anyone can buy the shares. However, a person can even use a public offering or stock market trading to achieve it.
How To Register A Business In Pakistan
The steps to register a public limited company are as follows. However, they might ask for extra paperwork from you.
Step 1: Endorsement Of The Company Name
Choosing a name for the business is the first stage in registering a company in Pakistan. Developing a unique business name that will set you apart from the competition in your sector is crucial.
You must abide by the limitations and rules. Make sure, for instance, that no offensive terms are present in the name of your business.
Step 2: Document Submission
You must submit the incorporation documentation to Pakistan’s Securities and Exchange Commission once the company name has been approved (SECP).
Step 3: Corporate Certificate
The SECP assesses the documents after they are submitted and they verify their legitimacy. The National Institutional Facilitation Technologies (NIFT) issues digital signatures, which can be obtained via the SECP.
They also issue the certificate of incorporation. There can be a requirement for a company presentation; however, where the business began will determine this.
Step 4: Shares Deposit
Shareholders must deposit their corresponding number of shares to the company’s bank account upon registration.
Step 5: Registration Of Income, Sales, And Professional Taxes
The Federal Board of Revenue (FBR) registration and issuing a national tax number are the final steps in registering a company in Pakistan (NTN). If necessary, you can also register a sales tax registration number.
Visit our website to learn more about the process of firm registration verification in Pakistan.
Alternatives Of Company Registration In Pakistan
Here are the top 2 alternatives to company registration in Pakistan.
Division Office
A branch office is a good substitute for company registration if your business wishes to be present in Pakistan without creating a separate legal organization. It is possible to set up branches in Pakistan to carry out a contract. A branch office, however, is not permitted to engage in any type of trading or commercial activity. Therefore, your contract governs your actions, and the agreement limits your options.
The parent firm wholly owns the branch office in the nation of origin. It does not need minimum capital because it is not a limited liability corporation.
It takes seven weeks to complete the registration process. If the Board of Investment approves, the permit’s duration can range from one to five years (BOI).
Liaison Office
You can establish a liaison office in Pakistan wholly owned by foreigners if you wish to advertise your items there. Along with promoting your products, you might also assist with technical matters, look into potential joint ventures, and promote Pakistani exports.
This type, however, is prohibited from engaging in commercial or trade activities and is not required to have a minimum amount of capital.
A liaison office can only operate under the terms of the assignment or contract. Even though the contract specifies that you can only offer technical support and product marketing, you aren’t allowed to participate in additional activities like export promotion.
As a result, it is comparable to a branch office. As a result, there won’t be any ownership since it will only exist in the country of origin. A liaison office in Pakistan typically takes seven (7) weeks to set up. Your permit’s validity period will range from 1 to 5 years once it has been approved. The Board of Investment (BOI) must also provide its approval.
Contact us at CMA Law Associates if you are considering investing in Pakistan. We will take care of the company registration process on your behalf. To get started, just send us the following:
- Names, residences, and the number of shares each shareholder owns
- Capitalization of shares
- Copy of the stockholders’ passports
- A suggested name for the business
Please get in touch with us, and one of our consultants will be happy to help you register your business in Pakistan.