The Companies Act of 2017 governs company registration in Pakistan and provides information about the formation and operation of a business. The Securities and Exchange Commission of Pakistan (SECP) can register companies. SECP controls company formation, compliance and oversight, and also gives licenses to businesses. Company registration is also known as SECP company registration. SECP has Company Registration Offices in Islamabad, Karachi, Lahore, Peshawar, Quetta, Multan, Faisalabad and Gilgit.
Why is Pakistan the Ideal Hub for Regional Business Expansion?
Pakistan’s strategic location at the crossroads of South Asia, the Middle East and Central Asia provides enterprises with unprecedented access to a broad regional market. The nation’s dedication to digital transformation and trade-friendly legislation creates a dynamic environment for growth. With affordable operating expenses and an emphasis on innovation, Pakistan provides firms the tools and opportunities to compete in the global business climate.
How can You Register Your Company in Pakistan?
If you plan to register a business in Pakistan, you should be well-prepared before beginning the procedure. Making an informed selection can help you save time and money, and avoid failure.
Company registration in Pakistan reinforces your identification and increases the legitimacy of your firm. If you register your business in Pakistan, potential consumers will perceive you as a legal corporation. It also attracts private investors and sponsors. Meanwhile, a bank will not open a business account for your company if it is not registered with SECP.
Types of Legal Companies in Pakistan
- Private Limited Company
- Single Member Limited Company
- Public Limited Company
Private Limited Company
In Pakistan, private limited companies are a popular business structure. Owning a private company is legal if you follow the proper procedure of establishing your company. Foreign investors can establish a corporation in Pakistan but must have at least two shareholders. Any foreign nationality (except Israel) can establish a private corporation by following the procedure.
One key criterion for registering a Pvt Ltd company in Pakistan is that the registration address must be in Pakistan. Furthermore, creating a limited liability business takes about six weeks on average. The Pvt Ltd company registration in Pakistan must also be approved by the Board of Investment and cleared by the Ministry of the Interior.
Read More: How to Start a Print on Demand Business in Pakistan
Single Member Limited Company
Anyone can form a single-member corporation in Pakistan. A private organisation with only one director is known as a single-member company, or “SMC.” This means that only one man has the authority to restrict liability.
Since the introduction of the concept of a single-member corporation, small businesses have found it easier to obtain corporate status, which enables them to limit their owners’ liability.
A single director owns all of the shares. Still, the individual must designate two people: one will be the nominee director in case of a single member’s death or incapacity, and the other will be the alternate nominee director. The Single-Member Company is also expected to designate a company secretary.
Public Limited Company
The Corporations Ordinance of 1984 governs the registration of public limited corporations in Pakistan. Public limited firms come in two different forms.
- Listed Companies
Before a listed public business may offer its shares to the public and sell them on the stock market, it must have a minimum of seven directors. A company must fulfill the listing standards of the Pakistan Stock Exchange to be listed on it.
- Unlisted Companies
Three or more people who wish to launch a business that will sell shares to the general public can organise a public corporation. A public company may sell its stock to the general public but must adhere to specific regulatory criteria. An unlisted company must have at least three directors to be incorporated. Although shares cannot be sold on the stock exchange, an unlisted firm may issue them to the public over the counter.
Considerations for Company Registration
Consider the following points before registering a company:
- Industry/Sector of your choice
Before registering a company in Pakistan, conduct thorough market research to identify profitable industries based on area, products and delivery channels. Evaluate competition, entry and capital requirements to ensure a smooth start and scaling for a successful business venture.
- Investment Amount
After conducting market research, the next stage is to think about how much money you wish to raise. A small quantity or a large burst could be your starting point. However, it would be wise to start modestly and expand gradually. It is not advisable to push all the money at once. Before you grow, see if you can perform well.
- Type of Company
Consider the market and investment before company registration in Pakistan. There are three types: Single Member Company (SMC), Private Limited Company registration in Pakistan and Public Limited Company. However, if you wish to keep the business within your immediate family or group of friends, a private company is an excellent option. Rather, you must choose a public corporation if you intend to grow the business in the future with public funding.
- Name of the Company
Your company needs a unique name that aligns with its principal business line. Use SECP Company Name Search for a suitable name and consider factors when choosing, as copying another’s name can lead to issues.
Searching for an SECP company name may not be enough to determine if a name is a trademark in Pakistan. Other businesses with similar names may exist in different forms of business. Conducting a trademark search before choosing a name for your company is crucial to avoid losing valuable assets.
- Capital Structure
Before business registration in Pakistan, consider the company’s capital structure, which includes authorised capital (Nominal Capital) and paid-up capital (Shareholder Capital). Choose the appropriate amount for each share and ensure everyone subscribes to a specific number of shares. The authorised capital should align with business plans, with higher amounts recommended for future expansion.
- Required Licenses/Approvals
Despite being free to start a business in Pakistan, certain activities, such as banking, security services and financing, require a license from the relevant ministry/department. It’s crucial to check licensing requirements before registering a company.
- Applicable Laws
Business is a legal activity requiring expert input and legal implications. It’s crucial to check labour/employment laws and understand business laws, especially when dealing with money. A lawyer can guide you through each step of a risk-free business.
- Tax Liabilities
Tax implications for companies in Pakistan include income, sales and other financial liabilities. To avoid these, consider hiring a tax consultant to advise on your company’s bookkeeping practices, accounting and tax.
- Compliance Requirements
Evaluating your company’s compliance obligations before company registration in Pakistan is crucial, as each company may have varying requirements and specialised programmes.
What is the Price of Business Registration in Pakistan?
Name Reservation Fee: Before registering your firm, you must reserve its name with the Securities and Exchange Commission of Pakistan (SECP). The charge for online submission is PKR 200, whilst physical submission is PKR 500.
Incorporation fee: The incorporation charge is based on your company’s authorised capital:
- For authorised capital of up to PKR 100,000:
- Online submission costs PKR 1,800.
- Physical submission costs PKR 3,500.
- For every additional PKR 100,000 of permitted capital up to PKR 10 million, the fee is PKR 500 for online and physical filings.
- For authorised capital over PKR 10 million, there is a PKR 250 fee for every extra PKR 100,000.
- Additionally, a Digital Signature Certificate (DSC) is required. Obtaining a DSC is required for online registration. The pricing varies by service but normally ranges between PKR 1,000 and PKR 2,000.
Documents Required for Company Registration in Pakistan
In Pakistan, documents are required for incorporation and registration of a new business:
- Copy of CNIC of directors/subscribers
- Memorandum of Association
- Article of Association
Step-by-Step Guide for Company Registration in Pakistan
Company registration in Pakistan with SECP is critical; however, we’ve created a quick and easy step-by-step tutorial for registering your business in Pakistan. Here’s how to get started:
- Step One: Approval of the Company Name
The first step in establishing a business registration in Pakistan is choosing a company name. It is essential to come up with a distinctive name that will help you stand out from the competition. Additionally, be careful not to use another organisation’s precise name.
If the chosen name doesn’t appear in the results, it may be available for registration. File an application for name reservation using Form App-1 and submit all necessary documents within 60 days. If the name isn’t available, you can apply for the same one.
- Step Two: Application for Incorporation of Your Company
After the company name has been approved, the next step is to submit the necessary paperwork to the Securities and Exchange Commission of Pakistan (SECP).
There are two ways to send the documents to the relevant CRO. You have the option to submit the documents in hard copy or electronically. Online filing, however, is more practical and less expensive.
- Step Three: Document Submission
A firm’s incorporation requires the promoters’ identity documents, a memorandum of association and articles of association. The company’s fundamental document, which includes details about its name and primary business, is a memorandum of association. It also consists of the allowed capital, the members’ liability limit and the province’s name, where its registered office will be.
You must submit your application using Form-1, which contains all of the company’s information, including its capital structure, registered office address, promoters, directors, shareholders, CEO and a declaration.
- Step Four: Incorporation Certificate
The Articles of Association, a document that regulates the company’s internal business practices, are equally significant. It offers legal rules for how the business will operate as a whole. It covers various topics, such as the number of directors, the election process and their responsibilities.
Additionally, it specifies how shares are issued and transferred, meetings are held, books of accounts are kept, audits are conducted and dividends are paid. Above all, for this document to be considered legitimate, it must adhere to the Act.
The SECP reviews the materials upon submission and verifies their legitimacy twice. Digital signatures issued by the National Institutional Facilitation Technologies (NIFT) are accessible via the SECP. The higher authority must also issue the certificate of incorporation. A presentation for the corporation might be necessary. However, this is dependent on the company’s history.
- Step Five: Subscription Page
Above all, all promoters must sign the Memorandum of Association and the Articles of Association. A table on this separate page mentions names, family names, nationalities, residence addresses and vocations. Finally, the quantity of shares subscribed by the proposed group is disclosed.
- Step Six: Declaration
Finally, one of the promoters will sign a declaration attesting to the accuracy of the data and contents of the documents.
- Step Seven: Deposit of Shares
Last but not least, you must pay the required incorporation charge. The amount of Authorised Capital determines the incorporation fee. The cost will increase as the quantity of Authorised Capital increases. Additionally, there is a cost for submitting the forms along with the incorporation application.
After the company registration is completed, the shareholders must deposit their shares in the company’s bank account in the requisite amount.
- Step Eight: Registration of Income, Sales and Professional Taxes
The Federal Board of Revenue (FBR) must be registered and a national tax number (NTN) must be given before company registration in Pakistan. Depending on requirements, a sales tax registration number can be granted.
Business Advantages of Registering your Company in Pakistan
Pakistan is increasingly becoming a global commercial hub with distinct characteristics that make operations easier for HR leaders and decision-makers.
- Maximise profits with one of the region’s lowest operational and personnel costs.
- Obtain tax breaks and incentives in special economic zones (SEZs).
- Reach out to over 240 million consumers in a rapidly expanding market.
- With clear legislation and an increasing digital infrastructure, you can operate confidently.
- Use Pakistan’s strategic location to conduct trade throughout South Asia, Central Asia, and the Middle East.
- Create teams rapidly by utilizing the availability of talented individuals in technology, manufacturing, and other fields.
So if you want to register a company in Pakistan, follow the above guide, make sure you abide by all the regulations and enjoy the fruit of your hard work,
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