Company Registration In Pakistan as a foreign national is a structured process governed by the Securities and Exchange Commission of Pakistan (SECP). Pakistan encourages foreign investment, and there are provisions in place to ensure that foreign nationals can establish and operate businesses in the country. The procedure for foreign nationals is similar to that of local entrepreneurs, but with a few additional steps to comply with legal, regulatory, and security requirements.
1. Choose the Business Structure
The first step for a foreign national in incorporating a company in Pakistan is deciding on the business structure. The most common options include:
Private Limited Company (Pvt. Ltd.): This is the most popular choice for foreign investors due to its limited liability and flexibility in ownership structure.
Public Limited Company: A company that offers shares to the public and is suitable for large-scale investments.
Branch or Liaison Office: Foreign companies may choose to open a branch or liaison office in Pakistan. This option is primarily for companies that want to explore the market or engage in activities like marketing, promotion, and export facilitation without having a full-fledged business setup.
Single Member Company (SMC): This structure allows a foreign national to be the sole owner and director of the company.
Most foreign investors prefer establishing a Private Limited Company due to its simplicity, scalability, and protections under Pakistani law.
2. Reserve the Company Name
Once the business structure is chosen, the next step is to reserve a company name with the SECP. The name must adhere to certain guidelines set by the SECP:
It should not be indistinguishable or like a generally enlisted organization.
It must avoid the use of words that could suggest government affiliation, royal patronage, or religious significance unless proper approval is obtained.
The company name can be reserved by submitting an online application via SECP’s e-Services portal. This step is essential for foreign nationals, as the name will be reserved for 90 days, providing sufficient time to complete the incorporation process.
3. Prepare Incorporation Documents
To incorporate a company, foreign nationals must prepare the following documents:
Memorandum of Association (MOA): This document outlines the company’s objectives, scope of operations, and business activities.
Articles of Association (AOA): The AOA defines the internal structure of the company, including the roles and duties of directors, shareholders, and other officials.
Other required documents include:
Copies of Passports of foreign shareholders and directors.
National Tax Number (NTN) if the foreign national has already registered in Pakistan.
Proof of the company’s registered office address in Pakistan.
Form 29 detailing the particulars of directors and officers of the company.
4. Appoint a Local Representative
Foreign nationals may be required to appoint a local representative or director as part of the incorporation process. This individual can act as a liaison between the company and local authorities, helping to fulfill regulatory requirements. While this is not mandatory for all company types, it is a common practice for foreign investors to have a local contact to facilitate operations.
5. File the Incorporation Application with SECP
After preparing the necessary documents, foreign nationals must submit their incorporation application online through the SECP e-Services portal. This includes submitting the MOA, AOA, and details of the directors and shareholders, along with the payment of the required registration fee.
Once the SECP reviews and approves the application, a Certificate of Incorporation is issued, confirming the company’s legal existence in Pakistan.
6. Register with the Federal Board of Revenue (FBR)
After obtaining the Certificate of Incorporation, the next step to Company Registration In Pakistan with the Federal Board of Revenue (FBR). This includes obtaining a National Tax Number (NTN) and, if applicable, registering for sales tax. The company must submit the incorporation certificate, the NTN application, and other required documents to the FBR.
The NTN is essential for tax compliance, and foreign nationals must ensure that their company fulfills all legal and tax obligations.
7. Obtain Security Clearance
For certain sectors or sensitive areas, foreign nationals may be required to obtain security clearance from the Ministry of Interior or related authorities. This is especially relevant for businesses operating in sectors like defense, telecommunications, and real estate. Security clearance ensures that foreign nationals meet the legal and security requirements for doing business in Pakistan.
8. Open a Corporate Bank Account
Foreign nationals must also open a corporate bank account in Pakistan. To do so, they will need to present the incorporation certificate. A local bank account is essential for conducting financial transactions and paying taxes.
9. Compliance with Regulatory Requirements
Once the company is registered, foreign nationals must ensure ongoing compliance with Pakistani laws. This includes:
Holding Annual General Meetings (AGMs).
Filing annual returns and audited financial statements with the SECP.
Complying with tax laws and submitting timely tax returns.
Conclusion
Incorporating a company in Pakistan as a foreign national is a well-defined process that requires following regulatory guidelines set by the Hamza & Hamza Law Associates. Foreign nationals must choose an appropriate business structure, prepare legal documents, and ensure compliance with tax and security regulations. The country’s laws and policies are designed to encourage foreign investment, and by adhering to these requirements, foreign entrepreneurs can establish a strong presence in Pakistan’s growing economy.
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