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How to Register a Foreign Company in Pakistan?Branch / Liaison Office & Foreign Company Registration in Pakistan

Foreign Company Registration in Pakistan

Foreign company registration in Pakistan is no more complex as we are providing a thorough consultancy with regard to the foreign company registration and its legal and regulatory compliance. However, it requires professional attention and due care.

After commencement of CPEC, multiple international companies has registered their Branch / Liaison Offices for the purpose of investments and business. We have assisted large number of foreign companies to register their companies as a non-resident.

Policies and Regulations for Foreign Companies in Pakistan

Foreign company registration in Pakistan refers to the process by which a foreign company establishes a legal presence and conducts business operations within the territory of Pakistan. The policies, laws, and regulations that govern foreign company registration in Pakistan are designed to facilitate and encourage foreign investment while ensuring compliance with the state laws.

Here are some key policies and regulations that help foreign companies to continue their businesses in Pakistan:

The Companies Act, 2017: This act provides the legal framework for the incorporation, operation, management and dissolution of companies in Pakistan, including foreign companies.

Board of Investment (BOI): The BOI is a government agency that promotes and facilitates foreign investment in Pakistan. They provide information, assistance, and incentives for foreign companies looking to establish their presence in the country.

Ease of Doing Business: The government of Pakistan has taken several initiatives to improve the ease of doing business in the country. This includes streamlining registration processes, reducing bureaucratic hurdles, and enhancing investor protection.

Intellectual Property Rights (IPR) Protection: Pakistan has laws and regulations in place to protect intellectual property rights, including trademarks, copyrights, and patents. This provides assurance to foreign companies that their intellectual property will be safeguarded.

Taxation and Incentives: Pakistan offers various tax incentives and exemptions to foreign companies, depending on the sector and location of their operations. These incentives aim to attract foreign investment and promote economic growth.

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How to Register a Foreign Company in Pakistan?

Procedure for Registering a Foreign Company in Pakistan

Registration of a foreign company in Pakistan is a complex process because you have to meet with each requirement. Although requirements depend upon the type of a company as well as nature of the business, but here are general which are as follows;

  • Step 1
  • Step 2
  • Step 3
  • Step 4
  • Step 5
  • Step 6
  • Step 7
  • Step 8

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.

Documents Required for Registration of Foreign Company

Following documents are required for registering a foreign company in Pakistan.

  1. Passport Copies and Valid IDs: Valid passport copies of directors, shareholders and company secretary along with their valid IDs serving as proof of identity and copies of passports.
  2. No Objection Certificate (NOC): A NOC from the relevant embassy, indicating compliance with the laws of the parent country.
  3. Approval from Board of Investment: In order to register foreign company in Pakistan, you must need to obtain approval from Board of Investment (BOI).
  4. Memorandum and Articles of Association: These documents outline the company’s structure, objectives, and operational scope.
  5. Proof of Registered Address: Evidence of a physical address in Pakistan where the company’s operations will be conducted.
  6. Bank Reference Letter: A reference letter from a recognized bank verifying the company’s financial standing and credibility.
  7. Board Resolution: A formal resolution from the parent company’s board of directors authorizing company registration in Pakistan.
  8. Declaration of Compliance: A declaration by the directors and shareholders affirming their compliance with local laws.
  9. Form 29 and Form A-21: Submission of these forms to the Registrar of Companies to initiate the registration process.
  10. Company Seal and Signature Specimen: The company seal and authorized signatory’s signature specimen for legal transactions.
  11. Taxation Documents: Registration with the Federal Board of Revenue (FBR) and other tax-related documents.
  12. Appointment of Authorized Representatives: A formal document appointing individuals authorized to act on behalf of the company.

Legal Requirements for Foreign Company

Foolowing are the legal requirements for foreign company registration in Pakistan.

  1. Choosing the Right Business Structure: Considering responsibility, tax ramifications, and operational breadth while choosing between a subsidiary, branch, or representative office.
  2. Getting the Required Approvals: Obtaining the necessary approvals from the appropriate agencies, such the Board of Investment (BOI), the Securities and Exchange Commission of Pakistan (SECP), Pakistan Telecommunication Authority (PTA) and Pakistan Software Export Board (PSEB).
  3. Documentation and Filing: Putting together all necessary paperwork, such as the articles of incorporation, the memorandum of association, and all other supporting company’s legal documents.
  4. Appointment of Directors and Shareholders: Making sure that the selection of directors and shareholders complies with local laws.
  5. Capital Requirements and Bank Account Opening: Obtaining the necessary capital as well as opening a bank account for the business’s financial dealings.
  6. Tax Registration and Compliance: Registering with the Federal Board of Revenue (FBR) for taxation reasons and abiding by the FBR’s tax responsibilities.
  7. Employment Regulations: Complying with employment rules and regulations while employing both domestic and overseas workers.
  8. Intellectual Property Protection: Protecting your intellectual property by properly registering it and taking other legal precautions.

Frequently Asked Questions

What is process of a foreign company registration in Pakistan?

What is process of a foreign company registration in Pakistan?

Here is a step-by-step process of a foreign company registration in Pakistan;

Step 1: Compile the necessary papers, such as the articles of company, copies of the directors’ passports, and evidence of the registered address. The foundation for your registration application is provided by these papers.

Step 2: Obtain a certificate of no objection from the relevant embassy or consulate. This certificate streamlines the registration procedure and attests to your adherence to local legislation.

Step 3: A subsidiary, branch, or representative office are examples of appropriate corporate structures. When making this choice, take into account elements like responsibility, taxation, and operational breadth.

Step 4: Create a board resolution for the directors of the parent business. This decision specifies important operating information and approves the foreign company’s establishment in Pakistan.

Step 5: To the appropriate authorities, such as the Securities and Exchange Commission of Pakistan (SECP), submit the necessary paperwork, such as the NOC, board decision, and incorporation documents.

Step 6: Wait for the SECP to approve you after reviewing your paperwork and business plan. You’ll get a certificate of incorporation after it has been accepted.

Step 7: For tax purposes, register your business with the Federal Board of Revenue (FBR). It’s essential to fulfil your tax duties if you want to keep up compliance and trustworthiness.

Step 8: Create a Pakistani bank account for use in business financial transactions. For all transactions and operations pertaining to the business, this account acts as the focal point.

Step 9: Once all legal requirements have been satisfied, you can start doing business in Pakistan. Maintain adherence to all applicable local laws and ordinances.

What taxes do foreign companies pay?

What taxes do foreign companies pay?

A vital component of establishing and operating a foreign company in Pakistan is navigating the taxes system because foreign companies operating in Pakistan are subject to several tax obligations. A foreign company in Pakistan would have to pay the following taxes.

  1. Corporate Income Tax: Foreign companies are required to pay corporate income tax on their profits generated in Pakistan. The tax rate varies based on the nature of the business and other factors.
  2. Withholding Tax: Certain payments made by foreign companies, such as dividends, royalties, and interest, may be subject to withholding tax. The rate of withholding tax is specified by Pakistani tax laws.
  3. Sales Tax and Federal Excise Duty: If the foreign company is engaged in the supply of goods or services in Pakistan, it may be required to collect and remit sales tax or federal excise duty.

Pakistan offers various tax incentives to attract foreign investment and promote economic growth. Some common incentives include:

  1. Tax Exemptions: Certain sectors and industries may enjoy tax exemptions or reduced tax rates to encourage investment.
  2. Deductions and Depreciation Allowances: Foreign companies may be eligible for deductions and allowances on capital expenditures, research and development costs, and depreciation.
  3. Repatriation of Profits: Pakistan allows the repatriation of profits and dividends earned by foreign companies, subject to applicable tax regulations.
Can a foreigner register a company in Pakistan?

Can a foreigner register a company in Pakistan?

Yes, a foreigner can register a company in Pakistan. The process involves fulfilling certain requirements and following the necessary legal procedures. The foreigner will need to provide relevant documents, such as proof of identity, address, and business plans. It is advisable to consult with our legal experts who will guide you through the registration process and ensure compliance with all applicable laws and regulations.

Can a foreign company open a bank account in Pakistan?

Can a foreign company open a bank account in Pakistan?

Yes, a foreign company can open a bank account in Pakistan. However, there are certain requirements and procedures that need to be followed. It is necessary for the foreign company to meet the necessary criteria, such as providing relevant documents, proof of legal existence, and fulfilling all the regulatory requirements.

What approvals are necessary for foreign company registration?

What approvals are necessary for foreign company registration?

Approval from the Board of Investment (BOI) and the Securities and Exchange Commission of Pakistan (SECP) is typically required. These approvals signify compliance with legal prerequisites and grant permission to conduct business activities in Pakistan.

Can foreign companies repatriate their profits earned in Pakistan?

Can foreign companies repatriate their profits earned in Pakistan?

Yes, foreign companies can repatriate their profits and dividends earned in Pakistan, subject to applicable tax regulations and procedures.

What is withholding tax, and when is it applicable?

What is withholding tax, and when is it applicable?

Withholding tax is deducted at the source of payment and applies to payments such as dividends, interest, and royalties made to foreign companies.

How is corporate income tax calculated for foreign companies?

How is corporate income tax calculated for foreign companies?

Corporate income tax is calculated on the company’s profits generated within Pakistan. The tax rate varies depending on factors such as business activity and industry.

Why is proof of registered address necessary?

Why is proof of registered address necessary?

Proof of registered address validates the company’s physical presence in Pakistan and serves as a key element in the registration process.

What is the role of the Board Resolution in company registration?

What is the role of the Board Resolution in company registration?

The Board Resolution demonstrates formal authorization from the parent company’s directors to establish a presence in Pakistan.

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The Case Lawyer is popular among the overseas community due to its transparent mechanism as well as cost-efficiency. Firm’s majority clients are non-resident Pakistanis which are satisfy with the legal services provided by the firm and definitely dispute resolution for overseas Pakistanis.

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We have customized legal and litigation support for overseas Pakistanis as no other law firm in Pakistan is able to offer customized legal support. We have break down the entire process as follows;

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