Company Registration In Pakistan involves several legal and procedural steps that are important for establishing a legitimate business entity. The process is streamlined by the Securities and Exchange Commission of Pakistan (SECP), the regulatory body responsible for company incorporation. Below is a detailed guide on how to register a company in Pakistan and a discussion on the costs involved.
Steps to Register a Company in Pakistan
Company Name Reservation: The first step is to choose a unique name for the company and ensure that it complies with the SECP's naming regulations. The name must not be identical or closely resemble an existing company or contain any prohibited words. The SECP eServices portal can be used to accomplish this. After applying to a name reservation, SECP will typically approve or reject the name within 1-2 days.
Prepare Required Documents: Once the name is reserved, the next step is to prepare the necessary incorporation documents. These include:
Memorandum of Association: This document outlines the objectives and scope of the company's activities.
Articles of Association: This governs the internal operations, responsibilities, and rights of the company members.
Form 1 (Declaration of Compliance): This is a statement confirming compliance with the Companies Act 2017.
You will require a minimum of two directors and subscribers for a private limited company. Only one director is required for a company with only one shareholder.
Submission of Documents to SECP: After preparing the documents, they must be submitted online through the SECP’s eServices platform. This can also be done at an SECP facilitation center. The documents will undergo verification, and SECP may request additional information or corrections if needed.
Certificate of Incorporation: Upon approval of the submitted documents, the SECP will issue a Certificate of Incorporation. Your company is recognized as a legal entity by this certificate. The whole process usually takes around 4-5 working days, provided all documents are in order.
Post-Incorporation Registrations: After receiving the Certificate of Incorporation, the next step is Company registration for taxation with the Federal Board of Revenue (FBR) by obtaining a National Tax Number (NTN). Additional registrations, such as employees' social security and sales tax registrations, may also be required, depending on the nature of your business. If you’re operating in a specific sector like manufacturing, services, or real estate, you might need to obtain specific licenses or approvals from relevant authorities.
Is It Costly?
The cost of registering a company in Pakistan depends on various factors such as the type of company, the authorized capital, and the professional services utilized. Here’s a breakdown of potential costs:
Government Fees: SECP charges a minimal fee for company registration, starting from around PKR 1,500 for name reservations. The total registration fee for a small private limited company can be as low as PKR 8,000–12,000, depending on the authorized capital.
Professional Services: If you engage a lawyer or a consultant to help with documentation and the registration process, the fees for these services can vary. Professional charges can range from PKR 20,000 to PKR 50,000 or higher depending on the complexity of the business and the reputation of the professional.
Miscellaneous Costs: Additional costs may include tax registration, opening a bank account, and acquiring sector-specific licenses. These costs can vary based on your business type and the services you seek.
Conclusion
While the process of registering a company in Pakistan is fairly straightforward, the costs involved can vary widely depending on your business type and the professional services you use. For a small company, the initial cost of registration is relatively affordable, starting from around PKR 20,000, but larger companies or those requiring specialized legal or business consultancy may face higher fees. Hamza & Hamza Law Associates can successfully and economically navigate the registration process if you plan and are aware of the regulatory requirements.
