Nowadays, Pakistan is facing an economic downturn but it might not last long because there are many foreign investors who want to invest in Pakistan but are confused about how to register a company in Pakistan. Even, the people of Pakistan do not know that exact procedure of registering a company. So, do not worry at all. Here, you can easily find the details of different types of companies in Pakistan and how to register them.
Types of Legal Entities in Pakistan:
1. Private Limited Company
Minimum No. of Shareholders: 2
Minimum Capital Required: PKR 100,000
Standard Time of Incorporation: 6 Weeks
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2. Single Member Company
Minimum No. of Shareholders: 1
Minimum Capital Required: PKR 100,000
Standard Time of Incorporation: 4 Weeks
3. Public Listed Company
- (Listed)
Minimum No. of Shareholders: 3
Minimum Capital Required: PKR 200 Million
Standard Time of Incorporation: 6 Weeks
Listed in Stock Exchange: Yes; subscribed by 500 applicants
- (Unlisted)
Minimum No. of Shareholders: 3
Minimum Capital Required: PKR 100,000
Standard Time of Incorporation: 6 Weeks
Listed in Stock Exchange: No
Some Alternatives to Set a Company
1. Branch Office
Minimum No. of Shareholders: 0
Minimum Capital Required: No limitations
Standard Time of Incorporation: 7 Weeks
2. Liaison Office
Minimum No. of Shareholders: 0
Minimum Capital Required: No limitations
Standard Time of Incorporation: 7 Weeks
Investment Details
Pakistan welcomes national and international investors to invest in different businesses because there are several benefits associated with it. In addition, foreign investor of any nationality can set up a foreign-owned company in Pakistan, except Israeli nationalists. Somehow, the investments in Pakistan have decreased but Pakistan still has the potential to give the investor the best of the revenues. How I can say that? It is because:
- Pakistan has got a geostrategic position
- There is a potential in GDP growth
- Less competition in the market
- You may find cheap skilled/unskilled labor
- Population is increasing
- Tax concessions and Low-interest rates loans for the investors
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Capital Requirement
There are mainly two types of capital in Pakistan, namely, paid-up capital and authorized capital. Importantly, both capital types are declared by the owner in the Article of Association at the time of registration.
Minimum Capital Requirement in Pakistan
There are two types of share capitals in Pakistan, paid-up capital and authorized capital. Here, the paid-up capital includes the sum of money that the shareholder gives to the company. Alternative to this, authorized capital is the maximum number of shares that the company can issue to its shareholders. Note that, both the capitals must be declared in the Articles of Association when you register your company.
How to Register a Company in Pakistan?
Step 1: Approval of Company Name:
In this step, the owner needs to decide the suitable name for his/her company that sets them apart from other competitors in the market. Also, the company name should not include any prohibited word/s.
Step 2: Documents Submission:
The required set of documents is submitted to the Securities and Exchange Commission of Pakistan (SECP).
Find Documentation Details: SECP- HOW TO REGISTER YOUR COMPANY IN PAKISTAN
Step 3: Certificate of Incorporation:
SECP takes some time to verify and validate the documents. The digital signature is allotted to the company by the SECP or the National Institutional Facilitation Technologies (NIFT). Later on, the SECP investigates more about the business idea and finally, issue the certificate of Incorporation.
Step 4: Deposit the Shares:
Once the company is registered and the certificate of Incorporation is given to the company. Then it’s time for the shareholders to deposit the amount relative to the holding shares, to the company’s account.
Step 5: Registration for Income, Taxes, and Sales:
It is the last step of the process but it starts your business activities, legally. So, you need to register your company with the Federal Board of Revenue (FBR) and get the National Tax Number (NTN). Just like, every citizen of Pakistan has their CNIC for their identity; likewise, NTN is the identity of the company. Further, the company might register itself for a Sales Tax number, if applicable.
Note: Normally, it takes 4-6 weeks for the whole procedure. Additionally, these steps can be followed to register any company but Public Limited Company requires more documents.
Our Mashwarah:
Our Mashwarah is to invest more in businesses of Pakistan and grow with them. Ultimately, it would improve our GDP and our image in the world.
The article includes the latest details but these details might change according to the new laws of Pakistan, so keep visiting Mashwarah to know more about new laws of how to register a company in Pakistan.
