Investing in a country like Pakistan can be fruitful for several reasons. On the surface level, the very obvious advantages include low competition, access to a big chunk of the population, and a rapidly growing economy. And your first step to successfully setting up a company in Pakistan is to have it registered.
In this blog post, we will discuss the types of legal entities and the registration process. Also, we will share the benefits of hiring company registration services in Pakistan.
Types of Legal Entities that Can Be Formed in Pakistan
Like in other countries, Pakistan has its legal framework for forming a company. Below are the types of entities that can be formed in Pakistan:
- Private Limited Company (Pvt. limited)
- Single Member Company
- Public Listed Company (Listed)
- Public Listed Company (Unlisted)
- Branch Office
- Liaison Office or Representative Office
How Much Minimum Capital is Needed to Invest in Pakistan
In Pakistan, the share capital is of two kinds. One is the paid-up capital, and the other is authorised capital. At the time of registering the company, both kinds of capital should be declared in the Articles of Association.
The first type of capital is the paid-up capital, which is the money that the business entity receives from its shareholders. Whereas, the other kind of capital i.e., authorized capital is the top limit of share capital that the business entity or company is allowed to issue to its shareholders.
Also, no minimum legal amount of capital has been deemed mandatory. But, it is considered usual to call 1 Lac PKR as the minimum capital.
Process for Registering a Company in Pakistan
Let’s now discuss the process of how to register a company registered in Pakistan.
Step 1- The Company Name Needs to be Approved
The first and foremost thing you need to do is select a name for your company. Choosing a name is important to have the company registered. One important thing about the name should be that it has to be unique. The uniqueness of the name is what sets your company apart from others, in the industry you’re competing in.
When selecting a name for your business entity, it is essential to follow the guidelines and stay under limitations. For instance, the name of the company should not have any words that have been legally restricted.
Step 2- Submitting the Documents
Once the name of the company has gotten approval, the next step is the submission of incorporation documents. Make sure that you submit the documents to the Securities and Exchange Commission of Pakistan (SECP).
Step 3- Receiving the Incorporation Certificate
Once you have submitted the documents, the SECP evaluates the documents on certain parameters. One important parameter is the validity of the documents. After checking validity, a digital signature is provided by the National Institutional Facilitation Technologies (NIFT). You can get this signature approval through the Securities and Exchange Commission of Pakistan (SECP).
Step 4- Shares Need to be Deposited
Once the registration has been done, it is the responsibility of the shareholders to deposit their share amounts. They will make the deposit in the company’s bank account. Doing so is mandatory.
Step 5- Registration of Other Things
At the point where all the formalities have been done, the final phase is to register with FBR. FBR stands for Federal Board of Revenue - which is a law enforcement agency of Pakistan, responsible for investigating tax crimes.
When registering with the FBR, your company is issued a national tax number (NTN). Also, there is the possibility that a sales tax number will also be registered while registering with the FBR.
Other Possibilities Apart from Company Registration in Pakistan
A Branch Office
As an alternative approach to registering a company in Pakistan, you can go for the branch office option. This alternative will let your multinational company maintain its presence in Pakistan. This way, you will not have to accrue a separate legal entity.
This way, your company can have its branches in Pakistan which will function on a contract basis. But, the limitation is that a branch cannot take part in a commercial or trading activity. Any activity that the branch can take part in will be determined by what’s been agreed upon in the contract. The contract will decide what activities can be carried out, and which can;t be carried out by the branch.
In this setting, your company will own 100% of the branch - wherever the company is located, in another country. This also means that a minimum capital is not necessary either.
A Liaison Office
A liaison office is ideal for a company that seeks to promote its products in Pakistan. This way, the liaison office will be fully owned in Pakistan, by your foreign company.
Apart from just promoting products, there are also other avenues open, such as the provision of technical assistance and advice. Also, with the help of a liaison office, your company can explore new opportunities for joint collaboration in Pakistan.
However, a liaison office faces more restrictions than a branch office, as it cannot take part in commercial activities. The liaison office can perform its functions only according to the clauses of the signed contract in Pakistan. Activities like export promotions and other commercial activities are completely restricted in this case.
For establishing a liaison office, your company will need the approval of the Board of Investment (BOI). Once the permit has been granted to you for establishing a liaison office in Pakistan, your permit will be valid for a minimum of 1 year to a maximum of 5 years.
Benefits of Getting Company Registration Services in Pakistan
Having to register a company in Pakistan can be a time-consuming task. Also, it requires effort and time investment to have your company registered. Also, you cannot ignore the importance of having your company registered before even thinking about starting any operations. Let’s look at the benefits of hiring company registration services in Pakistan.
1- Years of Experience and the Requisite Knowledge
When you hire professional company registration services, you get access to people with vast knowledge of company registration procedures. They understand the procedures well and know how to navigate through all the complexities of the registration process.
This way, they can ensure the business is registered correctly and is in compliance with all the laws.
2- Precious Time is Saved
Company registration can turn into a cumbersome and time-taking task of you’re not well aware of the requirements. By hiring a company registration services provider, you can focus on other tasks that matter, and thus save time.
3- Be Safe from Making Costly Mistakes
If you plan to register a company on your own without the requisite knowledge, you may make costly mistakes. But, with a professional registration services provider by your side, you have peace of mind. You can rest assured your company will be registered correctly in the first attempt.
