How Do I Register a Financial Services Company In Pakistan?

Registering a financial services company in Pakistan requires compliance with regulations set by the Securities and Exchange Commission of Pakistan (SECP) and other relevant authorities such as the State Bank of Pakistan (SBP) and the Federal Board of Revenue (FBR). Financial services companies include investment firms, insurance providers, microfinance institutions, lending companies, and brokerage firms. Due to the nature of the business, these companies must obtain additional licenses and approvals beyond standard Company Registration In Pakistan.

This guide outlines the step-by-step process of registering a financial services company in Pakistan.

Step 1: Define the Type of Financial Services Company

The first step is to identify the type of financial services the company will provide. The following are common types of financial services businesses in Pakistan:

• Investment and Asset Management Firms

• Microfinance and Lending Companies

• Insurance and Reinsurance Companies

• Foreign Exchange Companies

• Brokerage and Stock Market Firms

• Mutual Funds and Pension Fund Managers

Each type of financial services company requires specific licensing and regulatory compliance, primarily through SECP and SBP.

Step 2: Choose a Business Structure

Financial services companies in Pakistan are typically registered as:

• Private Limited Company (Ltd.) – Suitable for most financial service firms.

• Public Limited Company (PLC) – Required for larger firms, such as investment and insurance companies.

A Private Limited Company requires at least two directors, while a Public Limited Company requires a minimum of three directors.

Company Registration In Pakistan

Step 3: Name Reservation with SECP

The company name must comply with SECP’s naming guidelines. The process includes:

1. Checking name availability through the SECP e-Services Portal.

2. Submitting an online application for name reservation.

3. Receiving SECP approval (typically within a few days).

The name should not be misleading and must reflect the company’s financial nature.

Step 4: Draft and Submit Incorporation Documents

Company Registration In Lahore with SECP, the following documents must be prepared and submitted:

• Memorandum of Association (MoA) – Defines the company’s objectives, including the scope of financial services.

• Articles of Association (AoA) – Outlines internal governance rules.

• Form 1 – Declaration of compliance.

• Form 21 – Registered office address.

• Form 29 – Details of directors and officers.

• Copy of CNICs/Passports of directors and shareholders.

These documents are filed through the SECP e-Services Portal, and after approval, the company receives a Certificate of Incorporation.

Step 5: Obtain Necessary Financial Licenses and Approvals

Financial services companies require specific approvals and licenses based on the nature of the business:

1. Non-Banking Finance Company (NBFC) License

• Required for investment firms, leasing companies, mutual funds, and microfinance institutions.

• Obtained from SECP after submitting a detailed business plan, financial statements, and capital adequacy requirements.

2. Foreign Exchange License

• Required for companies engaged in currency exchange or remittances.

• Issued by the State Bank of Pakistan (SBP).

3. Insurance Business License

• Required for insurance providers.

• Must comply with the Insurance Ordinance, 2000, and obtain approval from SECP.

4. Securities Broker License

• Required for brokerage firms operating in stock exchanges.

• Issued by Pakistan Stock Exchange (PSX) and SECP.

Companies must meet minimum capital requirements set by SECP and maintain compliance with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.

Step 6: Register for Taxation and Compliance

After incorporation, the company must obtain:

• National Tax Number (NTN) from the Federal Board of Revenue (FBR).

• Sales Tax Registration (STRN) if applicable.

• Professional Tax Registration (if required by provincial authorities).

• Registration with Employees’ Old-Age Benefits Institution (EOBI) for staff benefits.

Step 7: Open a Corporate Bank Account

A corporate bank account is required for transactions. The bank may require additional documentation, such as:

• Certificate of Incorporation.

• Memorandum & Articles of Association.

• Board Resolution authorizing bank account opening.

Financial services companies often require minimum capital deposits to meet regulatory requirements.

Company Registration In Pakistan

Step 8: Maintain Compliance and Reporting

Financial services companies must comply with SECP, SBP, and FBR regulations on an ongoing basis. This includes:

• Filing Annual Returns with SECP.

• Submitting Financial Statements (audited if required).

• Compliance with AML/CTF Regulations.

• Adhering to licensing conditions and regulatory updates.

Failure to comply can result in penalties, suspension of licenses, or deregistration.

Conclusion

Registering a financial services company in Pakistan with Hamza & Hamza Law Associates is a multi-step process involving SECP incorporation, obtaining specialized financial licenses, tax registration, and compliance with strict regulatory requirements. The process varies based on the type of financial services being offered. Ensuring proper licensing and adherence to financial laws and AML regulations is crucial for smooth business operations.