Pakistan offers a large and growing market for businesses to tap into. With a population of over 200 million people, there is a significant demand for goods and services across a range of sectors. The government has taken steps to create a corporate-friendly environment in recent years, with incentives and support available for entrepreneurs. This includes tax breaks, subsidies, and other forms of support that can help businesses to grow and thrive.
Furthermore, starting a company in Pakistan is relatively streamlined, with the government taking steps to simplify the process in recent years. This means that entrepreneurs can quickly establish their businesses and start operating in a short amount of time. This article discusses the steps you need to take to register your business and the types of companies you can establish in the country.
Types of companies
In Pakistan, there are several types of companies that one can register. The most common types are private limited companies, single-member companies, and partnerships.
Private limited company
A private limited firm is a type of corporate entity that is owned by a small group of people. This type of firm is popular in the nation because it offers limited liability protection to its owners. This means that the owners are not personally responsible for the enterprise’s debts and obligations.
To set up a private limited firm in Pakistan, the owners must first file the firm with the Securities and Exchange Commission of Pakistan. They must also obtain a National Tax Number from the Federal Board of Revenue. Once the firm is registered, the owners must file annual tax returns and comply with other regulatory requirements.
Single ownership
A single-ownership company in the country is a business owned and operated by a single individual. The owner of this enterprise has complete control over all aspects of the trade. They are solely responsible for the enterprise’s debts and liabilities. However, this type of trade structure does not offer any protection for the owner’s assets. Despite the lack of protection for personal assets, single-ownership companies have proven to be successful.
Partnership
A partnership company in Pakistan is a corporate structure in which two or more individuals share ownership and responsibility for the enterprise’s operations. Partnerships in Pakistan are subject to lower taxes than other corporate structures, making them an attractive option for those looking to minimize their tax burden.
To form a partnership company, partners must file with the Securities and Exchange Commission and obtain a National Tax Number. Partnerships must also have a partnership deed, which outlines the terms and conditions of the partnership, including the distribution of profits and losses.
Steps of registering a company
Registering a business in Pakistan can seem like a daunting task, but by following these top 10 steps, the process can be made much smoother.
Choose a corporate structure
Firstly, it is important to decide on a corporate structure, whether it be a sole proprietorship, partnership, or private limited firm. This decision will impact the legal requirements and tax obligations of the industry.
Obtain TIN
Next, it is critical to obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR) and file for Sales Tax with the relevant authorities. This is a crucial step in ensuring compliance with tax laws and avoiding penalties.
Register with SECP
It is important to file with the Securities and Exchange Commission to obtain a certificate of incorporation. This certificate is essential for opening a bank account and conducting trade transactions.
Register with EOBI
It is essential to file with the Employees’ Old-Age Benefits Institution (EOBI) and the Social Security Institution (SSI) to ensure compliance with labor laws and provide benefits to employees.
Obtain trade licenses
You must obtain any necessary licenses and permits from the relevant government departments, such as the Trade Development Authority of Pakistan (TDAP) and the Standards and Quality Control Authority.
Establish a corporate account
Open a corporate bank account and maintain proper financial records to ensure compliance with banking regulations and facilitate business transactions.
Register for trademark
It is also crucial to file for trademark and copyright protection to safeguard intellectual property rights.
Submit the documents to authorities.
Lastly, you must submit all important documents along with the registration request form to the authorities. Make sure all the papers are accurate and have no false information in them.
By following these steps, registering a business in the country can be a smooth and successful process.
Capital is required to register a company
To set up a business in the nation, a minimum paid-up capital is required. The amount varies depending on the type of corporate entity. For a private limited company, the minimum paid-up capital is PKR 100,000, while for a single-member company, it is PKR 500,000. In addition to the minimum paid-up capital, there are other costs associated with setting up a business in Pakistan. These include registration fees, legal fees, and stamp duty.
Despite the costs associated with registering a business in the country, the process is unexacting and can be completed within a few weeks.
