How to Incorporate a Company in Pakistan with Foreign Directors?

Foreign directors can incorporate a Private Limited Company, Public Limited Company, or Branch Office. A Private Limited Company is the most common choice due to its flexibility and lower compliance requirements, while Public Limited Companies are suitable for larger enterprises.

For a Private Limited Company, at least two directors are required, and they can be foreign nationals. SECP mandates that one director be physically present in Pakistan or appoint a local representative for ease in communication and regulatory compliance.

Foreign directors do not require a visa for the initial registration of the company. However, they need a valid Business Visa or Investor Visa if they plan to manage the company physically in Pakistan. These visas are issued by the Pakistani government to support foreign investments.

The required documents include:
Copies of foreign directors’ passports (attested and notarized)
Company’s Memorandum and Articles of Association
Directors’ resolution for appointment
Proof of registered office in Pakistan
National Tax Number (NTN) registration for tax purposes
Additional documentation may be needed for foreign nationals, depending on the specific circumstances and company type.

The incorporation process typically takes 2 to 3 weeks, assuming all documentation is complete and verified. SECP’s online registration system (eServices) can expedite the process, though foreign ownership may add a few additional verification steps.

Yes, once the company is registered, a local Pakistani bank account is required to conduct business activities. To open the account, foreign directors will need to provide the company registration certificate, NTN, and proof of the company’s registered address.

Foreign directors may be subject to Withholding Tax on income earned in Pakistan and Corporate Income Tax if they own shares in a Pakistani company. Pakistan has tax treaties with various countries to avoid double taxation, so it’s advisable for foreign directors to consult a tax professional for specific guidance.

Foreign directors must apply for an NTN from the Federal Board of Revenue (FBR) for tax compliance. This is necessary for all directors, regardless of nationality. Applications can be submitted online through the FBR portal, where directors need to provide their identification and proof of company registration.

Yes, Pakistan allows 100% foreign ownership in most sectors, enabling foreign companies or individuals to fully own a business in Pakistan. However, certain sectors, such as media, defense, and finance, may have specific restrictions or require joint ventures with local partners.

Yes, some sectors like media, defense, and real estate development have restrictions or require government approval for foreign ownership. It is essential for foreign directors to check with SECP or consult a legal expert regarding any sector-specific requirements.

There is no minimum capital requirement for incorporating a Private Limited Company in Pakistan. However, for some industries, like banking and finance, specific minimum capital requirements apply. Capital investment can also impact the issuance of an Investor Visa for foreign directors.

Yes, foreign directors do not need to be physically present to incorporate a company in Pakistan. They can appoint a local representative to handle the process or complete the registration through SECP’s online portal. However, they will need a valid visa for any in-country activities post-registration.

Generally, foreign directors do not need an NOC from the Pakistani government for company incorporation. However, depending on the sector, additional government approvals may be required. It is recommended to check with SECP or a legal expert if NOC or specific licenses are needed.

Yes, foreign directors can repatriate profits from a Pakistani company, provided the company complies with tax regulations and State Bank of Pakistan (SBP) requirements. This includes remitting dividends or profits after taxes have been duly paid.

Pakistan offers various incentives for foreign-owned companies, such as tax exemptions, special economic zones (SEZs), and access to business-friendly financing. These incentives vary by sector and location, designed to promote foreign investment in key industries.

Foreign directors can track the status of company incorporation through the SECP eServices portal. After submitting an application, SECP updates the portal with processing stages, allowing directors to stay informed of the registration progress.

The SECP oversees the incorporation, regulation, and compliance of all companies in Pakistan, including those with foreign directors. SECP ensures that the company meets legal requirements, verifies documents, and handles the issuance of the Certificate of Incorporation.

Company registration is a one-time process, but annual compliance requirements, such as filing tax returns, annual returns, and financial statements with SECP, are mandatory. Directors should ensure timely filings to maintain good standing with SECP and avoid penalties.

While it’s not mandatory, legal assistance can be beneficial for foreign directors unfamiliar with Pakistani laws. A corporate lawyer can help ensure compliance with SECP, FBR, and SBP requirements, making the incorporation process smoother and more efficient.