Name Reservation & Selection of Entity

When reserving a name for a foreign company in Pakistan, you need to follow the guidelines set by the Securities and Exchange Commission of Pakistan (SECP). The name should be unique and not already registered by another company.  Regarding the selection of entity type, foreign companies can choose to register as a private limited company, a branch office, or a liaison office. Each entity type has its own requirements and implications. A private limited company is a separate legal entity, while a branch office is an extension of the foreign company. A liaison office is primarily for conducting market research and promoting the parent company’s products or services.

Approval from Board of Investment

A foreign company is required to obtain a permission letter from the Board of Investment with a specific validity period for opening and maintaining its branch/liaison office in Pakistan. Copy of such a permission letter is required to be furnished with the documents meant for registration. Renewal/ extension of the permission to open/maintain a branch/liaison office is also required to be obtained from the Board of Investment on the expiry of the validity period of the permission originally granted. Whenever such renewal/extension is granted, a copy must be furnished to the concerned registrar of SECP.

Pre-Incorporation Compliance

Some businesses require approvals or licensing after registration of the company. We would strongly recommend assessing your qualification as to whether you are qualified or competent to get approval from the concerned department because if after registration of the company, the same is denied that would affect the investment and energy. You can seek our guidance to assess your qualification for the licensing.

Documentation & Filing

Once we assess that you are competent to get approval from the concerned regulator, we will compile your file which include following documents.

• Principal Line of Business
• A correspondence or registered office address in Pakistan
• Name of shareholder(s), Director(s) and Chief Executive along with their notarized copies of passport or CNIC/POC/NICOP in case of Overseas Pakistani
• Detail of shares to be subscribed by each shareholder
• Authorized and Paid-Up Capital details
• Undertaking by the foreign shareholders and directors on the prescribed format
• Documents related to a foreign firm incorporation in Pakistan such as Profile of company, Detail of its directors, their nationality and country of origin, Board Resolution (Approval of investment in a local company), Articles & Memorandum of association, Certificate of Incorporation.

SECP requires that all documents/information collected regarding the foreign company should be filed with the registrar after they have been:

• Certified to be true by the public officer in the country where the company is incorporated/ Notary public of the country where the company is incorporated/ an affidavit of a responsible officer of the company in the country where the company is incorporated.
• Authenticated by a Pakistani diplomatic consular or consulate officer.

Upon submission of these documents to the SECP, the SECP shall issue a certificate of incorporation and a National Tax Number (NTN) will be issued to the company at the time of incorporation.

Obtaining Licenses & Permits

When establishing a foreign company in Pakistan, there are certain licenses and permits that may be required depending on a nature of of business activities. Some common license and permits include the following;

• Construction Industry: If you’re planning to operate in the construction sector, you may need to obtain licenses from the Pakistan Engineering Council (PEC).
• Food and Beverage Industry: If your business involves the production or sale of food and beverages, you may need to obtain licenses from the Punjab Food Authority (PFA), Sindh Food Authority (SFA), or other regional food authorities.
• Education Sector: If you’re planning to establish an educational institution, you may need to obtain licenses from the Ministry of Federal Education and Professional Training or the relevant provincial education departments.
• Media and Broadcasting Industry: Companies operating in the media and broadcasting industry may need to obtain licenses from the Pakistan Electronic Media Regulatory Authority (PEMRA) for television or radio broadcasting, or the Press Information Department (PID) for print media.
• Tourism and Hospitality Industry: If you’re planning to operate a hotel, restaurant, or travel agency, you may need to obtain licenses from the relevant tourism authorities, such as the Pakistan Tourism Development Corporation (PTDC) or the provincial tourism departments.
• Pharmaceutical Industry: If you’re planning to operate in the pharmaceutical industry, you’ll need to obtain a license from the Drug Regulatory Authority of Pakistan (DRAP). This license ensures compliance with regulations related to the manufacturing, import, export, and distribution of pharmaceutical products.
• Banking and Financial Services: Foreign companies looking to operate in the banking or financial services sector will need to obtain a license from the State Bank of Pakistan (SBP). This license ensures compliance with regulations governing banking operations and financial services.
• Telecommunications Industry: If your business falls within the telecommunications sector, you’ll need to obtain a license from the Pakistan Telecommunication Authority (PTA). This license is necessary for providing telecommunication services, including voice, data, and internet services.
• Energy Sector: Companies operating in the energy sector, such as power generation, transmission, or distribution, may need to obtain licenses from the relevant regulatory bodies, such as the National Electric Power Regulatory Authority (NEPRA) or Oil and Gas Regulatory Authority (OGRA).

Registration in FBR & NTN Certificate

Once a company is incorporated, you’ll need to register with the FBR as a foreign company. This involves submitting an application, along with the required documents, such as a copy of the certificate of incorporation and the company’s memorandum and articles of association. Upon successful registration with the FBR, you’ll be issued an NTN certificate. This certificate serves as your company’s unique identification number for tax purposes in Pakistan. Similarly, you will also need to obtain a Sales Tax Registration Number (STRN) on the name of foreign company.

Opening a Bank Account

Once you have the certificate of incorporation and NTN Certificate, you can open a business bank account in the name of your company. After opening an account, the bank will issue an Account Maintenance Certificate. Opening a bank account is mandatory as authorized capital amount is to be deposited and all the financial transactions of the company shall be done through business bank account.

Statutory & Regulatory Compliance

A foreign company must have to comply with the requirements and regulations. When it comes to statutory and regulatory compliance for a foreign company in Pakistan, there are a few key aspects to consider:

• Compliance with SECP Regulations: It’s mandatory to comply with the regulations set by the SECP. This includes adhering to corporate governance standards, ensuring proper accounting practices, and fulfilling any other regulatory requirements specific to your industry.
• Annual Filings: It’s important to stay up to date with your annual filings. This includes submitting financial statements, annual returns, and any other relevant documents to the SECP within the specified timeframes.
• Disclosure Requirements: A foreign company is required to disclose certain information to the SECP. This includes details about the company’s directors, shareholders, registered office address, and any changes to this information.
• Industry-Specific Regulations: Depending on the nature of the business, there may be industry-specific regulations that needed to comply with. For example, if you’re in the banking or financial sector, you’ll need to comply with regulations set by the State Bank of Pakistan.
• Employment Laws: If company hires employees in Pakistan, it must need to comply with the country’s employment laws and regulations. This includes adhering to minimum wage requirements, providing employee benefits, and following labor laws related to working hours, holidays, and more.
• Tax Compliance: Your foreign company will need to comply with the tax laws and regulations of Pakistan. This includes obtaining an NTN certificate from the Federal Board of Revenue (FBR) and fulfilling your tax obligations, such as filing tax returns and paying taxes on time.