How to Set Up Your Business in Pakistan? Don’t miss the 3 simple points!

Businessmen and investors who look for international opportunities, don’t miss the opportunity to have a business in Pakistan. WHY?

Businessmen and Investors prefer a place that is not only safe but lucrative. Emerging markets are a global attraction for doing business and making investments and Pakistan is at top of the list. Pakistan’s location and its partnership with China on the China-Pakistan Economic Corridor (CPEC) make it the best option for business investments.

Pakistan has a strategic location, a hardworking and skilled workforce, an economic outlook, business-friendly investment policies, and special economic zones. Further, manpower hiring is relatively cheap, keeping the business/production costs on the lower side. These characteristics of Pakistan’s emerging economy make it the first choice for investors to do business in Pakistan in many areas. Like many other international investors, your investment in Pakistan can also prove to be a revolutionary move.

You can do any lawful business in Pakistan, however, the following sectors have more potential than others:

• Power & Energy
• Mining & Gems
• Agriculture & Allied
• Infrastructure/construction
• IT & Telecom
• Textile
• Retail
• Automotive
• Financial Services
• Tourism
• Pharmaceuticals

However, certain businesses require a specific license to undertake business in Pakistan. A few such businesses are:

• Banking business
• Insurance business
• Leasing company
• Investment finance services
• Asset Management Services
• Modaraba Management Company
• Microfinancing business
• Housing finance
• Venture Capital Investment
• Discounting Services
• Other business the government may notify

In Pakistan, both foreign companies and foreign individuals can set up their businesses. Each has its own requirements, given below.

A Foreign company that is planning to expand its business across boundaries, may have different options. Under the Companies Act, 2017 The companies may select the most suitable business structure, keeping in view the business plan and operational needs, from amongst:

• Liaison office
• Branch office
• Subsidiary company
• Acquisitions, subject to regulatory approvals.

For setting up a liaison office or a branch office (a place of business in Pakistan) you may file a direct application to the Board of Investment. The Board of Investment may, after consultation with the relevant stakeholders, approve the application on a case-by-case basis.

However, if you want to establish a new company to start your business in Pakistan, you will have to incorporate/register a company in Pakistan. For this, you will have to submit certain documents and complete other formalities. After completing the requirements for setting up a company, you will get the certificate of incorporation.

Another option for a foreign company is to acquire a company in Pakistan. This route may require regulatory approvals from the Competition Commission.

The good news for investors is that the Pakistani government allows 100 percent repatriation of investments and dividends, without any limitations. This gives comfort to investors and business organizations for their investment ventures in Pakistan.

The process of establishing a business in Pakistan has been simplified. Recently, Pakistan’s global ranking for ease of doing business has improved by 28 places, to rank at 108^th position.  Firstly, the Board of Investment has put in place one window operation for processing applications for branch and liaison offices. Upon approval of the application for the branch or liaison office, it may undertake all the permissible activities by meeting certain requirements. Secondly, the company registration process may be completed online.

If you are an individual or a group of individuals, setting up a business in Pakistan is easy for you also. A simple way is to register a company or a Limited Liability Partnership (LLP), by completing the necessary documents. Under the law, you have the option to set up a public, private, or single-member company, besides an LLP.

Most importantly, no initial scrutiny is done before the incorporation of a company or LLP. However, if upon scrutiny, any member, director, or partner is not cleared, the authorities may require his/her replacement.

To cut it short, Pakistan is the most suitable choice amongst the emerging markets, with ease of doing business initiatives. In addition, investment in Pakistan is attractive and secure. Therefore, Pakistan has become the first-choice location for investment and business. Many foreign nationals are exploring the potential to tap the best returns and you can be one of them.

Still, if you have any queries or need assistance in starting your business in Pakistan? Contact us now and we will be happy to guide you on all matters.