Pakistan has the sixth largest population in the world as around 207 million people are living in this country according to 2017 census. The country is 23rd largest economy by purchasing power parity and 42nd largest economy by nominal gross domestic product. By 2050, Pakistan is expected to become the 18th largest economy.
Although the Pakistan’s economic has been severely hit by the COVID-19 pandemic, the economic outlook of Pakistan in medium and long term still remains positive. There is an optimistic view for economic growth primarily due to China Pakistan Economic Corridor (CPEC), overcoming the power sector crisis especially electricity, improvement in infrastructure etc.
The regulatory framework of doing business in Pakistan has significantly changed in the recent years as the World Bank included Pakistan in the world’s top 10 business environment improvers. Pakistan climbed 28 places and rose to a rank of 108 in the global ease of Doing Business rankings in 2019 from 136 the previous year. Just recently, SECP has introduced Secured Transactions Registry (STR) for registration of security interests/charges on movable assets.
Now you can start a new business in Pakistan in just 5 steps. Here is the step by step procedure:
Step 1: Obtain PIN for Company Registration
Personal Identification Number (PIN) can easily be generated using online registration process of Security and Exchange Commission of Pakistan (SECP). You will be required to provide basic information needed for the registration of their business such as 13-digit CNIC/NICOP/POC number and personal details i.e. full name, father’s/spouses name, gender, date of birth, current and permanent address, mobile number and email address etc. For safety and security you will be required to choose a password and security questions. Once the information is processed a PIN will be sent to the user on their mobile number and email address.
Step 2: Reserve name and register company
These services are also available through SECP’s online portal for user registration, name reservation, company incorporation and notification of appointment of CEO. The fee for name reservation, registration and filing are all included under one payment which can be made either online or at a bank. The payment should preferably be made online. After submission of all requisite documents and fee payment, a certificate will be issued via email. The certificate can also be collected from the SECP office. These steps by SECP have resulted in quick processing of applications to start a new business in Pakistan.
The entrepreneur can register with any Company Registration Office, irrespective of the jurisdiction.
Step 3: Make a company seal
Pursuant to Article 23 of the Companies Act, 2017 every company must have a seal upon which the name of the company shall be engraved and legible. This seal is required to open a bank account, is requested by counterparts and public agencies and will be included on share certificates.
However, the mandatory requirement for common seal has been omitted on April 30, 2020 through amendment in the Act by promulgation of Companies (Amendment) Ordinance, 2020.
Step 4: Opening a bank account
Having a bank account in the name of the company is required in order to register with the tax authorities i.e. FBR etc. A copy of the registration certificate is needed for the purpose to open a bank account.
Step 5: Register with Labour Department
Pakistan’s Shops and Establishment Ordinance 1969 requires every establishment other than one-man shops to register with the Deputy Chief Inspector (DCI) of the Labour Department in its district within two months of setting up the company. This is done to safeguard labour standards of the workers. Once this registration is complete, the DCI issues a registration certificate. This certificate shall be displayed at the company and renewed every two years upon payment of fees.
Additional Steps for Foreign Companies to start business in Pakistan
To start a new business in Pakistan, foreign companies are required to register separately with the Board of Investment (BoI). For this registration the following documents are required:
- Application form (duly filled in and signed with stamp)
- Copy of registration of company duly attested by respective Pakistan Embassy.
- A copy of Article of Memorandum of Association duly attested by Pakistan Embassy
- Copy of resolution/authority letter of the company to establish branch/liaison office in Pakistan
- Company Profile
- CV of designated person authorized to act on behalf of the company and a copy of Passport.
The BOI will examine the documents and circulate the same to all concerned quarters for NOC. Usually, BOI issues permission after completion of 7 weeks’ time period.
It may be noted that new businesses in Pakistan can be started in three forms of corporate organization and registered with SECP:
1. Partnership under Partnership Act 1932
2. Limited Liability Partnership which is registered under the Limited Liability Partnership Act, 2017.
3. Company which is registered under the Companies Act, 2017.
- A company limited by shares such as Single member company, Private company and Public company
- Company limited by guarantee such as with share capital and without share capital
- Unlimited company
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