What are requirements for establishment of place of business by foreign Companies?

To establish a place of business in Pakistan, foreign companies must comply with several requirements under the Companies Act, 2017. These include:

1. Application of the Act: This part of the Act applies to all foreign companies incorporated outside Pakistan that establish or have established a place of business in Pakistan.
2. Documents to be Delivered to Registrar: Within thirty days of establishing a place of business in Pakistan, the foreign company must submit the following documents to the registrar:
   • A certified copy of the charter, statute, or memorandum and articles of the company, or other instrument constituting or defining the constitution of the company. If the document is not in English or Urdu, a certified translation must be provided.
   • The full address of the registered or principal office of the company.
   • A list of directors, chief executive, and secretary (if any).
   • A return showing the full present and former names, father’s name, present and former nationality, designation, and full address in Pakistan of the principal officer of the company.
   • The full present and former names and surnames, father’s name, present and former nationality, occupation, and full addresses of one or more persons resident in Pakistan authorized to accept service of process and notices on behalf of the company, along with their consent to do so.
   • The full address of the company’s principal place of business in Pakistan.
3. Alterations in Documents: If any alterations occur in the charter, statute, memorandum and articles, the address of the principal office, the directors, chief executive, or secretary, the principal officer, the persons authorized to accept service, or the principal place of business, the company must deliver a return containing the specified particulars of the alteration to the registrar within thirty days of the change.
4. Accounts of Foreign Companies: Every year, the foreign company must file with the registrar:
   • Copies of financial statements, in such form and containing such particulars as required by the Act, audited by a person, and including documents relating to every subsidiary of the company.
   • If required by the law of the country of incorporation, copies of the annual statement of financial position and profit and loss accounts filed with the public authority, and if not in English, a certified translation.
   • If not required by the country of incorporation, copies of the statement of financial position and profit and loss accounts, auditor’s report, and other documents as required by the Act.
5. Certain Obligations: The foreign company must maintain at its principal place of business in Pakistan a register of Pakistani members and debenture-holders, directors, and officers, open to inspection. It must also state the country of incorporation in every prospectus inviting subscriptions for its shares or debentures in Pakistan.
6. Publication of Name: The company must display its name and the country of incorporation at every place where it carries on business in Pakistan, in legible English or Urdu characters, and in the local vernacular language if beyond the ordinary original civil jurisdiction of a Court.
7. Penalties: Failure to comply with these requirements can result in penalties, including fines and imprisonment for the company and its officers .

These requirements ensure that foreign companies operating in Pakistan adhere to local regulations, maintain transparency, and are accountable to Pakistani authorities.