The business registration process in Pakistan can feel like some task, with countless hurdles and legal requirements standing in the way. But things have improved in recent years as Pakistan has made significant strides in improving its Ease of Doing Business ranking. The government has made it much easier to register a company with SECP’s online portal, which allows you to complete the entire process digitally in just a few days reducing unnecessary paperwork and bureaucratic delays.
However, before starting, it’s important to understand the different types of businesses you can set up in Pakistan including Sole Proprietorship, Private Limited Company, Limited Liability Partnership, or Public Limited Strutcre.
Each business type has different legal requirements, tax rules, and compliance needs, so choose the right structure upfront to keep your business running smoothly.
In this guide, we’ll share a step-by-step process of officially registering a company in Pakistan. Let’s get started!
Why Does the Company Registration Matter so Much in Pakistan?
Company registration is a fundamental step for businesses in Pakistan offering legal protection, financial benefits, and growth opportunities. Here is what perks you get when legally start your business in Pakistan:
- Limits your Liability: Registration completely separates your assets from the business. It works as a separate entity; which means the risk of bankruptcy may never affect your wealth.
- Access to Funding: Registered companies can open corporate bank accounts, apply for loans, and attract investors more easily.
- Tax benefits: Registered companies can benefit from various tax benefits and incentives. Also, registered businesses become eligible for government programs.
- Credibility: The legally-owned business enhances its credibility among clients and suppliers helping further to establish a strong brand presence.
- Intellectual Property Protection: A registered company can protect its brand name, logo, products, and other intellectual properties by registering trademarks with IPO Pakistan.
Step-by-Step Process to Register a Company in Pakistan
Follow these steps to smoothly register your company and start operations without unnecessary delays.
1. Choose a Business Structure
Many Pakistanis are not aware of the different legal options available to register a business. Selecting the right legal structure is essential for your venture’s success and compliance. You can choose from the following options:
- Limited Liability Company: LLC is a popular choice for many entrepreneurs due to its flexibility and limited liability protection. It protects owners’ assets, making it a secure option for medium and large businesses. The legal structure combines elements of both partnerships and corporations.
- Private Limited Company: Two or more members can register their business into a private limited company. It is established under the rules of the Companies Act of Pakistan 2017. By law, the type of company is not allowed to offer shares or other financial debentures to the public.
- Public Limited Company: It is listed on the Pakistan Stock Exchange and enables the general public to buy and sell the stocks. It requires at least three members. Moreover, the company faces strict regulatory requirements. The legal entity is suitable for large enterprises planning to secure investments.
- Single Member Company: As the name suggests, the company is established by a single owner. Its shares or stocks cannot be registered to two or more members. The legal structure incorporates your business without involving partners and unlocks the benefits of being a corporate entity.
Based on your business model, founding members, and available funds, you will decide the right company type. You can start small and grow bigger because the Companies Act of Pakistan allows you to move your business to a higher legal entity anytime.
Also Read: The Detailed Comparison of Public Limited and Private Limited Company
2. Choose a Company Name
The second step is to register a company name with the Securities and Exchange Commission of Pakistan (SECP). It is a fundamental step that sets the foundation for your business’s legal entity in Pakistan.
The process of name reservation involves applying through the SECP’s e-services portal (you can also search for name availability at the portal).
Add three proposed names in order of preference. They should not be deceptive, offensive, identical, or similar to existing companies. SECP will check these names for availability and compliance with the regulations. Moreover, you will have to make a payment of PKR 200 either online or offline through chosen banks.
Remember, the best business name reflects the nature of your business so choose the name that is easy to pronounce, remember, and comply with SECP company name selection guidelines.
3. Prepare Required Documents and Apply
The next step is to prepare the documents to officially apply for company registration. You will need to file the following documents.
- A Memorandum of Association (MOA) outlines the company’s objectives and scope of activities. It is an important document and must be drafted with care.
- Article of Association (AOA) defines the company’s purpose and operations. Both MOA and AOA form the company’s constitution and define the responsibilities of the directors, the kind of business to be handled, and how shareholders exert authority over the board of directors.
- Form 1 is the declaration of compliance with the requirements of the Companies Ordinance 1984.
- Form 21 notifies the location of the registered office of the company.
- Form 29 includes the particulars of Directors and officers.
- With all these documents, you will also provide scanned versions of directors’ CNICs and receipt of bank deposit.
The registration fee for a private limited or a single-member company is PKR1800 if submitted online through eZfile Digital and PKR3500 if applied conventionally at one of the SECP addresses across the country.
You can download the forms from the SECP website.
4. Get a Digital Signature Certificate
Digital signature certificates can speed up the process. allowing the members to sign company registration documents electronically, without visiting the registrar’s office. You can obtain the digital signature certificate from NIFT, after getting your Company Name Reservation Certificate.
5. Obtain a Certificate of Incorporation
Once you have submitted all the documents and payment for company registration in Pakistan. SECP will evaluate and verify the validity of all the submitted documents and details to issue a certificate of incorporation.
You might receive an email if an objection arises. In that case, make the required corrections and submit the form again through the eZfile Portal. The regulatory authority will take seven more days to complete the process. If there is no objection, you will receive a confirmation email regarding the successful incorporation of your company.
You can pick up the certificate of incorporation by showing a payment receipt from the nearest SECP center. Or it will be delivered to your registered address within seven working days.
6. Registration for Taxes (NTN)
Obtaining an NTN or National Tax Number is a crucial step for any business starting in Pakistan. NTN is necessary for tax registration and compliance, allowing your business to legally operate and benefit from tax-related services. You need to:
- Visit the FBR’s official IRIS portal
- Fill out your personal and business information, including CNIC, business address, and contact details
- Now select the appropriate taxpayer type and type of registration (individual, a company, or an association of persons (AOP))
- Once the form is filled and submitted, you will receive your NTN and registration number.
This registration process legitimizes your business and ensures compliance with Pakistani tax laws making you eligible to file returns and manage your tax obligations efficiently. Moreover, now you can open a business bank account, apply for loans, and engage in business transactions after obtaining NTN.
7. Open a Corporate Bank Account
After receiving the NTN number, you can open a business bank account to manage your company’s finances. To continue the process, first, choose the right bank for your business needs. Consider the bank’s reputation, the range of services offered, charges, online banking facilities, and their offerings.
To apply for a corporate bank account, you will need the following documents:
- Company’s registration certificate from the SECP.
- National Tax Number
- Company’s memorandum of association
- Article of Association
- Identification documents of the directors and authorized signatories
- Some banks may require a resolution from the Board of Directors authorizing the opening of the account.
After account formation, all the members and shareholders can deposit the capital of their shares to the company’s bank account.
8. Apply for Business Permits and Licenses
After the initial process of registering your company with SECP, now your company needs to get some necessary business permits and licenses, including:
- General Business License: You will need a general business license to operate a business in Pakistan. You need to submit an application to the local municipal authority with details of the business location, ownership, and nature of activities.
- Trade License: Trading businesses need a trade license that is obtained from the relevant trade authority. The license verifies that the business complies with all trading regulations.
- Health and Safety Permit: Some businesses like the food and beverage industry, need a health and safety permit from the local health department. The permit ensures that the business meets health and safety standards.
- Environmental Permit: Businesses that deal in environment-impacting tasks will require this permit from the Environmental Protection Agency. It certifies that the business adheres to environmental regulations.
- Fire Safety Certificate: The certificate is issued by the local fire department and ensures that the premises are equipped with necessary fire safety measures.
Common Challenges When Registering a Company in Pakistan
| Business Registration Challenges | Solutions |
|---|---|
| SECP might take longer than expected to approve a company name, especially if the name is similar to an existing one. | To avoid delays, ensure your proposed name is unique and consider having backup options. |
| Registering a business in Pakistan often requires a substantial amount of documentation. It can be overwhelming and time-consuming. | Arrange and attest your documents in advance. If you are facing some problems in document preparation, seek professional assistance or legal experts to streamline the process. |
| The regulatory framework in Pakistan can be complex and time-consuming to navigate. It involves compliance with various laws, regulations, and government agencies. | Engage with legal experts who specialize in business registration to ensure compliance with all relevant laws and regulations. |
| The registration process in Pakistan may face delays due to bureaucratic procedures, inefficient systems, etc. | Maintain communication with relevant stakeholders, follow up on the progress, and ensure that all the required documents are submitted on time. |
FAQs
Can a foreigner register a company in Pakistan?
Yes, foreigners can register a company in Pakistan. In addition to all the above-mentioned documents, they need to provide attested copies of their passport and proof of address.
How to check if a company is registered in Pakistan?
SECP is an efficient and free state-owned tool for company searches. Visit the link and write the company name in the search bar to check the business’s registration.
Can I convert my sole proprietorship into a private limited company?
Yes, you can convert your sole proprietorship into a private limited company. You can also convert a Private Limited into a Public Limited company. It requires additional legal contracts and agreements to convert your business.
Register Your Company in Pakistan Today – Take the First Step to Success
Ready to Launch Your Business Hassle-Free? With the right steps, it’s a smooth and worthwhile process.
If you need expert assistance to handle the paperwork, legal requirements, or tax registration for your company, The expert consultants of Pak Tax Calculator are here to help. Get professional corporate consultation today!
