This article covers everything
you need to know when it comes to registering a company in Pakistan. It will
provide you with the information required to register the right corporate
entity and getting your business running.
Registering a company in Pakistan
can be quite a daunting task. While it is easy if you know the right people,
for most of us, it is something that needs to be done by professionals. There
are however various aspects of the process that one should understand to
register a company successfully.
Securities & Exchange Commission of Pakistan
The Securities & Exchange
Commission of Pakistan was set up in 1999 with the primary goal of
regulating the corporate sector and capital market. Therefore, the SECP
oversees and undertakes all the company registration processes in Pakistan.
Other primary objectives include:
·
Supervision and regulation
of insurance companies
·
Supervision and regulation
of non-banking finances and private pensions
·
Oversight of external
service providers in the corporate and financial sector
· Licensing companies for housing finance
Types of Companies You Can Register
Under the parameters laid down by
the Companies Act (2017), a person can register three types of legal companies
in Pakistan:
Single Member Company
Private Limited Company
Public Limited Company
Single Member Company
As the name suggests, a single
member company (SMC) is formed by an individual member. A company is an SMC if
it complies with the requirements laid out in the First Schedule, Part II,
Section 4 of the Companies Act. These requirements include:
·
The company shall not
invite the public to subscribe to any shares in the company;
·
it shall not register any
share(s) in the name of two or more persons to hold one or more shares jointly;
and
·
the number of members of
the company shall be limited to one.
Please note that all foreign
nationals, except for Israeli nationals, are also eligible to set up an SMC in
Pakistan.
Private Limited Company
SECP regulation requires that two
or more persons can set up a private limited company for lawful purposes. This
may be of different types, however, the method of incorporation is primarily
the same in all. The Companies Act has listed the requirements of the
incorporation of a private limited company:
·
A company that restricts
the right to transfer its shares;
·
limits the number of its
members to fifty, not including persons who are in the employment of the
company; and
·
prohibits any invitation
to the public to subscribe for the shares (if any) or debentures or redeemable
capital of the company.
Again, all foreign nationals
(except for Israeli nationals) may set up a private limited company in
Pakistan.
Public Limited Company
A public limited company can, for
lawful purposes, be set up by three or more persons in Pakistan. The partners
will have to subscribe their names to a Memorandum of Association and, as with
private and single limited companies, the public limited company must comply
with the requirements of the Companies Act. One thing to keep in mind is that
such a company is set up for the general public, and its shares are offered
with limited liability. These shares are made available through a public
offering or through the stock market.
There are two different types of
public limited companies: listed and unlisted. The difference between these is
that the former offers its share to the public and anyone can acquire them. On
the other hand, an unlisted company does not offer its share to the general
public.
Registering a Company in Pakistan
Now that we know the different
types of companies that are eligible, let us take a look at the process of
registering a company.
Registering a Company Name
The first step is registering the
company’s name. You should consult section 10 of the Companies Act (2017)
before deciding a company name as it has a list of prohibited terms.
Once you have decided on a unique
name for your company or firm, you can create an online account with SECP and
check the availability of the name. If it is available, you can reserve it for
your company through the following steps:
·
Log in to e-services on
the SECP website.
·
Pakistani nationals need a
valid CNIC, and foreign nationals need a valid passport.
·
Select the ‘Fast Track
Registration Services (FTRS)’ for same-day registration services.
·
Provide the required
information on the online form and submit it.
·
You will receive a
security code on your phone or email as selected by you.
·
A PIN will be generated
once the security code is verified.
·
The challan form will be
generated, which can be deposited in the selected branches of MCB or UBL (or
the fee can be deposited online via your credit or debit card).
·
If there is no prohibited
word in the company name, you will receive a confirmation within a day that the
company name has been reserved on your credentials.
If, for some reason, the system
is not working, SECP also offers offline services where a person may submit an
application with three proposed names of the company at the registrar’s office.
The offline process takes 3 to 5 days to complete, after which the person will
be licensed to use the approved name in official documents for company
incorporation.
Company Incorporation
You will require the following
documents for registering a company in Pakistan:
·
Articles of Association
(rules and regulations that govern the company) and Memorandum of Association
(contains information for company incorporation)
·
CNIC copies of the
directors, CEO, nominee or copy of passport in case of foreign nationals
·
If you are planning to set
up a specialized business, you will require a NOC or letter of intent from the
concerned authority.
·
If you intend to set up a
foreign company incorporation, you will be required to provide details of the
directors, their nationality, the company profile, a certified copy of the
company’s charter, along with a Memorandum of Association and Articles of
Association.
·
The authorization of
subscribers for filing documents
·
Registration fee slip
·
The company incorporation
fee is Rs.1800 for online submission if the nominal capital is not more than
Rs, 100,000. If you submit the company incorporation offline, you will be
charged Rs. 3500.
Registering a Company for Income and Sales Tax
You cannot register a company in
Pakistan if you do not have a National Tax Number (NTN). Application for an NTN
is submitted at the Regional Tax Office of the Federal Bureau of Revenue (FBR).
Given below are the documents you will need for acquiring an NTN number:
·
Duly filled out NTN form
·
Proof of registration
·
Memorandum and Articles of
Association
·
Valid bank account number
·
Copies of valid CNICs of
directors
·
A business address
Certificate of Incorporation
Once you have compiled all the
documents and have submitted the required fees, you will submit the documents
to SECP, which will vet the information and then give the requisite approval.
Simultaneously, the National Institution of Facilitation Centre (NIFC) will
generate and grant a seal to the company.
Once SECP has verified and
approved your documents, you will be issued a Certificate of Incorporation,
which is a formal and legal approval to commence business in Pakistan. The
shareholders will be required to transfer the amount corresponding to their
shares in the company’s bank account.
SECP has greatly streamlined the entire process, and the submission of a registration fee online is a giant leap as registering a company can now be completely done digitally.
