Company Formation in Pakistan

Pakistan — S & F Consulting Firm Limited,

Foreign Direct Investment in Pakistan , Doing business in Pakistan, Company Formation process in Pakistan is easier but need to follow some rules and laws of the country especially in case of foreign investor.

Foreign Company Registration in Pakistan is possible (100% Foreign Investment, Joint Venture, Virtual/ Branch/ Liason Office, Foundation), let’s see how they are doing business in Pakistan and generate revenue.

There is many opportunity of investment in different sectors. All government gives priority to foreign investment to start business in Pakistan.

Company Registration/ Formation/ incorporation in Pakistan, FDI in Pakistan,

http://www.sfconsultingbd.com/viewAsia.php?country=pakistan,

http://companysecretarybd.blogspot.com

S & F Consulting Firm Limited, Email: contact@sfconsultingbd.com, Skype: forhadhossain79

Setting up a Company
In recent years, the Government of Pakistan has substantially simplified the regulatory environment for setting up a business. Administration of investment is now concentrated with the Board of Investment (BOI) and the Security and Exchange Commission of Pakistan (SECP) in a kind of one stop shop system.

Securities and Exchange Commission of Pakistan
Securities and Exchange Commission of Pakistan (SECP) established under the Securities and Exchange Commission of Pakistan Act 1997 was operational as a body Corporate on 1st January 1999.

One of the important functions of the SEC is incorporation/registration of companies. This task has been entrusted to the Registration Department,Company Law Division which has its field offices known as Company Registration Offices (CROs) for the purpose of incorporation / registration of different type of companies.

Board of Investment
In order to streamline and co-ordinate the process of investment and to create an investor friendly culture in the country, the government established the Board of Investment (BOI) as the central investment promotion and facilitation agency.

The Board of Investment is chaired by the Head of the Government, and overseen by the Minister for Industries and Production. See the present Organizational Chart of BOI.

The main functions of the Board are to promote investment opportunities in all sectors of the economy and to provide investment facilitation services to local, foreign and Overseas Pakistani investors. The BOI acts as the focal point of contact between potential investors and all the agencies of the government concerned with investment proposals and responsible for providing infrastructure and other facilities. T o strengthen the leverage and effectiveness of the BOI and to benefit from their experience, Ministers and Secretaries of critical Economic Ministries are actively associated with all activities of the BOI.

Foreign Investment
Foreign investment is generally subject to the same rules as domestic investment, with the exception of certain sensitive areas such as defense production, banking, and broadcasting.

There is little apparent denial of national treatment for foreign firms. There is also no evidence of statutory derogation from national treatment.

For example, the Foreign Private Investment (Promotion and Protection) Act, 1976, specifically provides that foreign investment shall not be subject to more taxation on income than in investment made in similar circumstances by Pakistani citizens.

Company Registration Offices
To facilitate foreign investors and overseas Pakistanis, this commission has set up special counters with designated officers in three of his Company Registration Offices (CRO) at Karachi, Lahore and Islamabad.

They will provide you special assistance for company incorporation and other related regulatory requirements as well as information pertaining to corporate laws and functioning of the Commission.

In the eight CRO (Islamabad, Karachi, Lahore, Peshawar, Faisalabad, Multan, Sukkur and Quetta), you can besides registration of companies and monitoring of their working according to law, functions of CRO’s include providing services and guidance and also to ensure that the companies and their directors comply with the statutory requirements as provided under the Companies Ordinance, 1984 (the Ordinance).

Private Limited Companies may be formed by at least two persons by subscribing their names to the ‘Memorandum and Articles of Association’ of the company.

Forming a Company
The procedures involved in registering either a private or public company are relatively similar. However there are visible differences after incorporation Any three or more persons can, by subscribing their names to the Memorandum of Association and complying with the requirements of the Companies Ordinance, in respect of a registration, form a public company.

Registration of a Company
A foreign company (incorporated outside Pakistan) is required to deliver following documents to the concerned Registrar with 30 days of the establishment of its place of business in Pakistan:
• A certified copy of the Memorandum of Association and Articles of Association in the English language, duly authenticated by a Pakistani diplomatic consular and accompanies by the prescribed form (38)
• Address of the registered or principal office in a country of origin (Form 39)
• A list of Director, Chief Executive and Secretary of the company (Form 40)
• Particulars of the principal officer of the company in Pakistan (Form 41)
• Particulars of person(s) resident in Pakistan authorized to accept service on behalf of the foreign company (Form 42)
• Address of principal place of business in Pakistan of the foreign company (Form 43)
• Paid challan for the filing fee of each document deposited in the designated corporate branches of Habib Bank Limited
• For further information, please read :
Board of Investment, Registration — Formation of Companies
Specimen forms for various statutory returns under the Companies Ordinance, 1984

Schedule of fees
Foreign company is required to file annually with the registrar concerned annual accounts in respect of its operations within Pakistan and its global accounts together with the list of Pakistani members and debenture holders and particulars of places of business in Pakistan within the prescribed period. It is also required to give notice (Form 46) to the registrar concerned at least 30 days before it intends to cease business in Pakistan and to publish a notice of such intention at least in two daily newspapers circulating in the province in which place of business is situated.

Setting up a Branch Office
Opening of a Liaison /Branch Office of foreign firms:
• Foreign companies that intend to undertake export activities in Pakistan will be registered without any formality
• Permission to companies engaged in contractual obligations of contracts with public sector entities will be granted on production of valid documents without circulating to government departments
• For companies that wish to open their branch/ liaison or representative offices in Pakistan may apply to BOI for permission on prescribed form. The BOI will process and decide such cases within a period of 6 to 8 weeks
• Details on the required documentation, etc, are available at all offices of BOI.
• Permission for opening of branch/ liaison office may be granted by the BOI for a period of 3 to 5 years. Further extension will be granted by the BOI after reviewing and examining the past performance of foreign companies. Request for renewal or extension will be processed by the BOI with two weeks provided the requests are supported with complete documentation.
• Remittance of profits etc., may be allowed to Branch Offices subject to submission of information/documents as required in terms of Para 13, Chapter XIV of the Foreign Exchange Manual of State Bank of Pakistan. However, Liaison office may not be allowed. The application form for permission to establish a liaison/branch office by foreign companies in Pakistan can be downloaded

Required Documents
• A foreign company incorporated outside Pakistan, is required to submit the following documents to the concerned agencies within 30 days of establishing presence in Pakistan:
• A certified copy of the charter, statute or Memorandum and Articles of the company, in English or Urdu, accompanied by prescribed Form 38
• Address of the registered or principal office of the company on Form 39
• A list of Directors, the Chief Executive and Secretaries (if any) of the company on Form 40
• Particulars of the principal officer of the company in Pakistan on Form 41
• Particulars of person (s) resident in Pakistan authorized to accept services on behalf of the foreign company on Form 42
• Address of the principal place of business in Pakistan of the foreign company on Form 43 (Section 451)
• Any change or alteration in particulars stated at serial No. 1 to 6 above is required to be filed on Form 44 with the registrar concerned within 30 days of such change or alteration (section 452).

Foreign company is required to file annually with the registrar concerned annual accounts in respect of its operations within Pakistan as well as its global accounts together with the list of Pakistani members and debenture holders and particulars of places of business of the company in Pakistan within the prescribed period (Section 453).

Foreign company is required to give notice on Form 46 to the registrar concerned at least 30 days before it intends to cease to have a place of business in Pakistan and to publish a notice of such intention at least in two daily newspapers circulating in the province or provinces in which such place or places of business are situate.

Branch Office:
Branch Office is established by a foreign company to fulfill its contractual obligations with the public or private sector in Pakistan. Their activity will be restricted to the work mentioned in the agreement / contract signed. However they cannot indulge in commercial / trading activities.

Liaison Office:
Liaison Office is established by a foreign company for promotion of products(s), provision of technical advice & assistance, exploring the possibility of Joint Collaboration and export promotion. However, they can not undertake any commercial / trading activities.

The request for opening of Branch office or Liaison Office is processed and finalized within 6–8 weeks time, provided that the company fulfills all requirements and concerned quarters have no objection. The permission is issued for a period of 3–5 years, further renewable on submission of performance report with regard to Liaison Office and up to the completion of valid contract/agreement period in case of Branch Office.

PROCEDURE
Step-1 : To download Application Form and send along with six sets of following documents:
i. Application Form (duly filled in and signed with stamp)
ii. Copy of registration of the foreign company duly attested by respective Pakistani Embassy;
iii. Copy of Articles and Memorandum of Association duly attested by Respective Pakistan Mission;
iv. Copy of Resolution / Authority letter of the company to establish Branch / Liaison Office in Pakistan;
v. Copy of contract / agreement (in case of Branch Office Only)
vi. Company Profile; and
vii. Designated person authorized to act on behalf of the company

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