Our updated 2026 Legal Guide to Foreign Investment, Pakistani Subsidiaries, Branch and Liaison Offices, Joint Ventures, Acquisitions, Taxation, Banking, Repatriation, Employment, Regulatory Compliance and Market Entry

Last legally reviewed: August 2026

Pakistan can be an attractive jurisdiction for foreign companies seeking access to a large domestic market, infrastructure and energy projects, technology and services opportunities, manufacturing capacity, regional supply chains, professional talent and links with markets across South Asia, Central Asia, China and the Middle East. It is also a jurisdiction in which the quality of the initial legal structuring matters enormously.

For a foreign investor, “setting up a business in Pakistan” is not one legal process. It may mean establishing a wholly foreign-owned Pakistani subsidiary, incorporating a joint venture with Pakistani shareholders, registering a branch of an overseas company, maintaining a non-commercial liaison office, purchasing shares in an existing Pakistani business, acquiring an operating company, forming a project company, appointing a distributor without establishing a permanent place of business, or entering Pakistan for the performance of a particular contract.

Those structures are legally different. They interact differently with the Securities and Exchange Commission of Pakistan (SECP), Board of Investment (BOI), Federal Board of Revenue (FBR), State Bank of Pakistan (SBP), provincial revenue authorities, immigration authorities, sector regulators, competition authorities, banks and courts.

The most important advice a foreign company can receive at the outset is therefore not merely how to register. It is what should be registered, why that vehicle should be selected, what it will legally be permitted to do, how money will enter and leave Pakistan, how liabilities will be contained, and how the investor will ultimately exit.

Pakistan’s investment policy remains comparatively liberal in principle. The Board of Investment states that sectors are generally open to foreign investment except where expressly restricted or prohibited, and foreign ownership of up to 100 per cent is permitted in many activities, subject always to sector-specific restrictions and regulatory requirements.

That openness, however, should not be confused with an absence of regulation.

A foreign investor may simultaneously encounter company law, foreign-exchange controls, tax registration, beneficial-ownership disclosure, security clearance, employment and immigration law, import controls, provincial taxation, competition law, intellectual-property protection, sector-specific licensing and contractual enforcement considerations. The legal work is therefore less about filling forms and more about making those systems fit together coherently.

This guide addresses that problem from the perspective of a foreign client deciding whether and how to establish, acquire, operate or restructure a business presence in Pakistan.

1. The First Question Is Not “How Do We Register?” but “What Are We Trying to Do in Pakistan?”

Foreign companies sometimes approach Pakistan with a proposed legal form already selected.

They may say:

“We need a branch.”

or:

“Please register a subsidiary.”

The proper legal analysis should begin one step earlier.

Counsel should first understand the underlying commercial intention. Is the foreign company entering Pakistan to perform one government or private-sector contract? Is it testing the market? Is it intending to invoice Pakistani customers? Will it maintain employees? Will inventory be held locally? Will the Pakistan operation own assets? Will intellectual property be licensed from the parent company? Will profits need to be repatriated? Will the entity bid in tenders? Does it require an industry licence? Is the investor expecting a local partner? Is an eventual sale or IPO contemplated?

Different answers point towards different structures.

A foreign company intending to execute a particular contract may find a branch office appropriate. A business wishing only to explore the market and maintain relationships may use a liaison office. A group intending to build a permanent revenue-generating business is often better served by a Pakistani subsidiary. An investor entering through an existing established company may prefer an acquisition or joint venture.

The legal vehicle should follow the commercial purpose, not the other way around.

PART I — CHOOSING THE RIGHT MARKET-ENTRY STRUCTURE

2. The Principal Ways a Foreign Investor Can Enter Pakistan

For most international clients, six broad models deserve consideration.

The source material correctly identified branch offices, liaison offices, locally incorporated companies and acquisition of shares as central entry models. Those four remain fundamental, but a sophisticated foreign-market analysis should also distinguish joint ventures and contractual market entry because they frequently solve problems that incorporation alone does not.

3. Pakistani Subsidiary: Often the Natural Choice for a Long-Term Business

A foreign company expecting to conduct sustained business in Pakistan will frequently choose to incorporate a Pakistani company limited by shares.

Under the Companies Act, 2017, two or more persons may form a private company and a single-member private company may be formed where the statutory requirements for that form are satisfied. SECP states that company incorporation and name reservation are now end-to-end digitised through eZfile, and the current procedural framework is governed by the Companies Act, 2017 and Companies Regulations, 2024.

A Pakistani subsidiary is legally distinct from its foreign parent.

That distinction provides an important commercial advantage: contracts, staff, assets, liabilities and operating risks can ordinarily be housed in the Pakistani entity rather than attaching directly to the foreign parent, subject of course to guarantees, fraud, statutory liability, tax rules, contractual assumptions of liability and circumstances in which corporate separateness may otherwise be displaced.

A subsidiary is therefore usually attractive where the investor expects to:

• undertake continuing business;
• enter contracts with numerous Pakistani customers;
• employ a substantial local workforce;
• maintain local bank accounts;
• hold local assets;
• obtain operating licences;
• import goods or machinery;
• participate in tenders;
• accommodate new investors;
• grant employee equity;
• borrow locally;
• ring-fence operational liability; or
• sell the Pakistani business separately in the future.

Foreign ownership is generally permitted in many Pakistani sectors without a mandatory Pakistani equity partner, although regulated or restricted sectors require separate analysis.

The question should consequently not be, “Can a foreign company own 100 per cent?” in the abstract. The question is, “Can a foreign investor own 100 per cent of this particular business in this particular sector under the laws governing that activity?”

4. A Pakistani Company with Foreign Shareholders Is Not a “Foreign Company” Merely Because Foreigners Own It

This distinction is critical.

A private company incorporated under Pakistani law remains a Pakistani incorporated company even if all or most of its shares are owned by foreign persons.

By contrast, Part XII of the Companies Act, 2017 regulates companies incorporated outside Pakistan which establish a place of business or liaison office in Pakistan, or conduct business in another manner contemplated by the statutory definition.

The distinction appears throughout the source material and should remain central to any international investor analysis.

This affects almost everything.

A locally incorporated subsidiary follows the domestic-company incorporation and post-incorporation framework. A branch or liaison office remains the overseas company’s presence and engages the special foreign-company registration provisions together with BOI requirements.

A foreign investor who confuses the two may end up preparing the wrong documents, approaching the wrong regulator first, misunderstanding the tax position or unnecessarily exposing the parent company.

5. Branch Office: Useful, but Much Narrower Than a Subsidiary

A branch office is an establishment of the overseas company itself.

The BOI currently describes a branch office as an establishment carrying on the same or substantially the same activities as the foreign parent. The BOI further states that a branch is ordinarily established to fulfil contractual obligations with a public or private-sector entity in Pakistan and that its activity is restricted to the work stated in the relevant agreement or contract. The BOI expressly states that a branch may not treat its permission as authority for unrestricted commercial or trading activity.

That is a very different proposition from forming a general-purpose Pakistani operating subsidiary.

The branch may nevertheless be the right answer where a foreign engineering company, consultant, contractor, technology provider or specialist service company has been awarded a specific Pakistani project and does not require a permanently independent local enterprise.

The branch structure may be especially appropriate where:

• the foreign parent itself must remain contractual counterparty;
• the project owner requires performance by the foreign contracting entity;
• Pakistan activity is limited to execution of a defined agreement;
• the investor does not wish to create separate Pakistani share capital;
• project revenues will be received by the branch within the permitted structure; and
• the group accepts direct parent-company exposure arising from branch activity.

Because the branch has no separate corporate personality equivalent to a subsidiary, the investor should carefully consider liability before choosing this route.

6. A Branch Is Not a General Trading Licence

This deserves particular emphasis.

A foreign company cannot safely assume that obtaining branch-office permission allows it to conduct whatever business happens to fall within the parent’s worldwide objects.

BOI’s current published position is that branch activity is restricted to contractual work disclosed in the agreement or contract supporting the branch application.

A company that begins with one engineering contract and later wishes to become a general Pakistani distributor, seller, retailer or service provider may therefore need to reconsider the entire structure.

That may lead to:

• modification or renewal of BOI permissions;
• conversion of office status;
• incorporation of a local subsidiary;
• additional licensing;
• tax restructuring;
• transfer or novation of contracts; or
• a combination of these steps.

The most economical structure on day one is not necessarily the most economical structure three years later.

7. Liaison Office: A Presence Without Commercial Trading

A liaison office occupies a more limited legal space.

The BOI defines it as an office established for activities such as promotion of products, technical advice and assistance, exploration of joint collaboration and export promotion. It expressly provides that no commercial activity shall be performed by the liaison office.

A liaison office may therefore suit a foreign company which wishes to:

• monitor the Pakistani market;
• communicate with prospective customers;
• maintain relationships with government or private stakeholders;
• provide non-revenue-generating liaison support;
• promote the parent’s products;
• gather market intelligence;
• facilitate exports from the parent; or
• explore potential partnerships.

It is not the appropriate vehicle for quietly carrying on ordinary revenue-generating business.

Where the office begins issuing local invoices, receiving commercial revenues, entering trading transactions or performing activities materially beyond its permitted liaison function, the investor may create regulatory, tax and foreign-exchange problems.

A liaison office should be kept genuinely within liaison activity.

8. Branch and Liaison Offices Compared

BOI’s current BLMIS guidance requires applications to be made through its Branch/Liaison Management Information System and specifies the accompanying foreign-company documents, designated representative information, corporate authority and, in branch cases, contractual documentation.

9. Joint-Venture Company

A joint venture is not a separate species of company registration under the Companies Act.

Usually, the parties incorporate a Pakistani company and divide ownership and control between a foreign investor and one or more local participants. The joint venture then operates through an ordinary company limited by shares but with a bespoke shareholders’ agreement, constitutional protections and governance arrangements.

The commercial attraction is obvious. A Pakistani partner may contribute:

• sector relationships;
• licences;
• distribution capacity;
• land;
• staff;
• government or procurement knowledge;
• local manufacturing capability;
• logistics;
• customer relationships; or
• political and cultural understanding of the market.

But joint ventures can also create some of the most difficult corporate disputes.

A foreign investor should not enter one merely because a prospective Pakistani partner states that local law “requires” local participation. In many sectors it does not.

Where a joint venture is commercially justified, the shareholders’ agreement should address matters including:

• capital commitments;
• board representation;
• reserved matters;
• veto rights;
• quorum;
• information rights;
• related-party transactions;
• dividend policy;
• appointment of chief executive and financial officers;
• banking controls;
• intellectual-property ownership;
• confidentiality;
• non-compete obligations where enforceable;
• funding default;
• dilution;
• transfer restrictions;
• pre-emption;
• tag-along and drag-along rights;
• deadlock;
• put and call options;
• valuation;
• change of control;
• breach;
• termination; and
• dispute resolution.

A company registration certificate cannot perform the work of a properly negotiated joint-venture agreement.

10. “Sister Company”, “Affiliate” and “Holding Company” Are Relationship Descriptions, Not Alternative Registration Forms

International groups frequently use the expressions “sister company”, “affiliate”, “subsidiary” and “holding company”.

These expressions may describe relationships within a corporate group, but they should not be treated as four separate Pakistani legal incorporation categories.

A subsidiary is generally a company controlled by another company within the statutory concept of subsidiary/holding relationships.

A holding company is a company which controls one or more subsidiaries within the Companies Act framework.

Two companies under common control may colloquially be described as sister companies.

“Affiliate” is a broader commercial expression often used for an entity in which another company exercises material influence or maintains a significant relationship.

The legal rights of each entity still depend upon its actual incorporation, shareholding, constitutional documents, agreements and applicable law.

A foreign group should therefore design the corporate chart first and attach labels second.

PART II — FOREIGN OWNERSHIP AND INVESTMENT POLICY

11. Can a Foreign Company Own 100 Per Cent of a Pakistani Company?

In many sectors, yes.

Pakistan’s BOI states that foreign investment is generally permitted across sectors unless an activity is prohibited or restricted, and full foreign ownership is possible in many industries. Specific sectors nevertheless remain subject to ownership limits, licensing requirements, national-security controls or regulator-specific conditions.

An investor should therefore conduct a sector check before incorporation.

That check should answer:

1. Is the activity open to private-sector investment?
2. Is foreign ownership restricted?
3. Is a local shareholder required?
4. Is regulatory pre-approval required before incorporation?
5. Is regulatory approval required only before commencing operations?
6. Are directors required to meet local-residency, qualification or fit-and-proper standards?
7. Is minimum capital prescribed?
8. Are foreign-exchange permissions relevant?
9. Are national-security clearances required?
10. Are land or infrastructure ownership rules engaged?

Only then should shareholding percentages be fixed.

12. A Local Partner May Be Commercially Useful Without Being Legally Mandatory

The absence of a legal local-partner requirement does not mean local participation is always undesirable.

A good local partner can materially improve:

• procurement;
• logistics;
• regulatory navigation;
• distribution;
• land acquisition;
• recruitment;
• government liaison;
• market credibility; and
• customer acquisition.

But the wrong partner can place the entire investment at risk.

Foreign clients should be particularly cautious where a proposed partner:

• insists upon controlling the company’s bank account;
• demands majority shares without corresponding investment;
• refuses beneficial-ownership disclosure;
• proposes nominees instead of transparent ownership;
• claims private influence over regulators;
• discourages formal contracts;
• requests blank signed instruments;
• seeks an unrestricted power of attorney;
• wishes to hold intellectual property personally;
• insists that payments be routed outside the company;
• resists independent accounting; or
• represents that legal compliance is unnecessary because of personal connections.

Pakistan offers lawful mechanisms for foreign investment. There is rarely a legitimate reason to substitute opaque nominee arrangements for proper corporate documentation.

PART III — SECURITY CLEARANCE AND FOREIGN DIRECTORS

13. Security Clearance: The Current Position Requires Nuance

Foreign investment is not governed by a single rule stating that every foreign shareholder must wait for Ministry of Interior clearance before incorporation.

The Companies Regulations, 2024 distinguish between categories.

For companies having foreign subscribers or officers other than Indian nationals or persons of Indian origin, incorporation may proceed on the basis of prescribed undertakings while the case is forwarded for security clearance. If a subscriber or officer is ultimately not cleared, the relevant person and company must take steps for replacement and, where applicable, transfer the affected shares.

Where subscribers, officers or relevant persons are Indian nationals or of Indian origin, the Regulations provide for incorporation after the required security clearance has been obtained. Security-service companies are also subject to heightened clearance requirements.

This is materially more precise than saying merely that “all foreigners require clearance”.

The practical consequences should be considered during transaction planning. A foreign group should have contingency arrangements in case a proposed director cannot remain appointed.

14. Foreign Corporate Shareholders Require an Enhanced Document Pack

Where the subscriber is itself a foreign company or body corporate, SECP may require evidence establishing its identity, constitution, authority and ownership.

The corporate package commonly involves matters such as:

• certificate of incorporation or registration;
• charter, memorandum, articles or equivalent constitutional instrument;
• board resolution approving the Pakistani investment;
• particulars of directors;
• details of authorised signatories;
• corporate profile;
• ownership information;
• passports or identification of relevant natural persons;
• beneficial-ownership information; and
• certified or apostilled supporting documents where applicable.

This is not bureaucratic trivia.

The registrar needs to establish that the overseas corporation exists, that the proposed Pakistani investment has been lawfully authorised, and that the human beings ultimately controlling the investment can be identified.

15. A Significant 2026 Development for Regulated Financial Businesses

In June 2026, the SECP announced a facilitation measure for companies with foreign sponsors or directors seeking licences in regulated financial services.

Licensing applications may now be processed on the basis of a self-declaration undertaking instead of requiring prior security clearance of foreign directors at the licensing-application stage. Appointment of the foreign directors nevertheless remains subject to clearance, and an undertaking must address replacement if clearance is denied.

SECP expressly identified capital markets, non-banking finance, insurance and other regulated financial-services businesses as beneficiaries of the reform.

This is an important distinction.

It eases the sequence of licensing. It does not abolish security clearance.

For foreign financial-sector investors, the regulatory strategy should therefore distinguish:

• incorporation;
• licence application;
• fit-and-proper requirements;
• security clearance;
• appointment of directors; and
• commencement of regulated business.

They may occur on different timelines.

PART IV — INCORPORATING A PAKISTANI SUBSIDIARY

16. SECP Incorporation Under the Companies Act, 2017

A Pakistani subsidiary is incorporated under the Companies Act, 2017 and Companies Regulations, 2024.

SECP states that the name-reservation and incorporation process for domestic companies has been digitised through the eZfile system.

At a strategic level, the incorporation process should address:

• proposed company name;
• principal line of business;
• memorandum and articles;
• authorised and paid-up capital;
• subscribers;
• directors;
• chief executive;
• registered office;
• beneficial ownership;
• foreign subscriber documentation;
• security clearance undertakings;
• regulatory licensing;
• tax registration;
• banking;
• foreign investment registration; and
• post-incorporation governance.

The certificate of incorporation should be understood as the beginning of corporate compliance, not its conclusion.

17. Choosing the Principal Line of Business

The memorandum should accurately describe the principal line of business.

The Companies Act, 2017 adopts a more flexible approach to corporate objects than earlier Pakistani company law, but businesses whose activities require a licence, approval, permission or registration remain subject to the relevant regulatory regime.

For a foreign investor, this matters because the wording of the memorandum should correspond with:

• the actual commercial plan;
• the regulatory licence;
• tax registrations;
• bank account KYC;
• import/export activity;
• foreign investment documentation; and
• agreements with counterparties.

A company should not be incorporated under a vague or convenient activity description with the expectation that regulated activity can simply be added informally later.

18. Registered Office

Every Pakistani company requires a registered-office framework compliant with the Companies Act.

Foreign promoters sometimes use temporary correspondence addresses during the incorporation phase, but the proper registered-office arrangements must then be implemented within the applicable statutory period.

The registered office is legally significant because it affects:

• service of notices;
• corporate records;
• regulatory correspondence;
• tax administration;
• provincial jurisdiction;
• litigation;
• employment administration; and
• practical banking due diligence.

A “virtual” address incapable of supporting the company’s actual regulatory obligations can create problems during KYC and inspection.

19. Directors, Chief Executive and Governance

The board should be designed as part of the investment structure, not simply populated with names needed to complete a filing.

A foreign parent should decide:

• which decisions remain with the parent;
• which are delegated to the Pakistani board;
• whether the board will include Pakistani residents;
• who can operate bank accounts;
• who can sign contracts;
• who may hire employees;
• who controls litigation;
• how budgets are approved;
• whether thresholds apply to capital expenditure;
• who may enter related-party transactions;
• who appoints auditors and advisers; and
• which decisions require shareholder approval.

For wholly owned subsidiaries, these issues are often addressed through group policies and board resolutions.

For joint ventures, they require careful provisions in the articles and shareholders’ agreement.

20. Beneficial Ownership and Corporate Transparency

Pakistan’s company-law framework increasingly emphasises identification of ultimate beneficial owners.

Foreign corporate chains should expect to disclose the natural persons who ultimately own or control the structure, including indirect ownership through intermediate companies.

SECP’s Companies Regulations, 2024 use a 25 per cent ownership or voting threshold within the UBO framework while also capturing effective control where ownership percentages alone do not disclose the real controlling person.

This means that a corporate structure consisting of three offshore holding companies does not eliminate the requirement to identify the natural person at the end of the chain.

Foreign groups should assemble the ownership chart before incorporation and keep it current.

21. The 2026 Move Toward Greater UBO Digitisation

SECP has continued strengthening beneficial-ownership transparency, including through digital initiatives announced during 2026.

For multinational groups this creates an increasingly clear expectation that:

• shareholder registers;
• UBO filings;
• parent-company records;
• bank KYC;
• regulatory filings; and
• tax declarations

should tell the same ownership story.

Inconsistency between them is itself a compliance risk.

22. Appointment of a Legal Adviser: The Current Capital Threshold Matters

Foreign investors sometimes encounter information stating that virtually every company with minimal capital must appoint a legal adviser under the Companies (Appointment of Legal Advisers) Act, 1974.

The present threshold reflected in SECP’s post-incorporation compliance guidance is paid-up capital exceeding PKR 7.5 million.

SECP’s current booklet states that such a company is required to appoint a legal adviser and file the relevant Form 9 within fifteen days of appointment together with the prescribed certificate.

That requirement should be checked against the company’s capital structure from the beginning.

The practical point is broader: foreign companies should not rely on ancient compliance summaries when current SECP guidance is available.

23. Auditor and Accounting Structure

Pakistani companies are subject to accounting, audit and financial-reporting requirements depending upon their size and classification.

The company should establish accounting systems from inception rather than waiting until the first annual filing.

A foreign parent should also decide whether Pakistani reporting will integrate with:

• IFRS group accounts;
• transfer-pricing documentation;
• management reporting;
• consolidated accounts;
• country-by-country reporting;
• inter-company reconciliation; and
• internal audit systems.

The tax and corporate accounts should not tell contradictory stories.

PART V — REGISTERING A FOREIGN COMPANY, BRANCH OR LIAISON OFFICE

24. The Statutory Foreign-Company Regime

Part XII of the Companies Act, 2017 contains the principal corporate-law regime applicable to foreign companies operating in Pakistan.

Its importance is often underestimated because foreign investors tend to focus first on BOI approval.

BOI and SECP perform different functions.

The Board of Investment governs the permission framework for branch and liaison offices.

SECP administers the Companies Act requirements applicable to the foreign company’s Pakistani presence.

Both may therefore be relevant.

25. What Is a “Foreign Company” for Companies Act Purposes?

The statutory concept broadly encompasses a company or body corporate incorporated outside Pakistan which:

• has a place of business or liaison office in Pakistan, whether directly or through an agent and whether physically or through electronic mode; or
• conducts business activity in Pakistan in another manner specified by law.

The source correctly reproduces this central statutory concept.

The phrase place of business is significant.

The Act treats a branch, management office, share-transfer or registration office, factory, mine and other fixed places of business as falling within the concept, while providing qualifications concerning ordinary brokers and agents and recognising that the mere existence of a Pakistani subsidiary does not automatically make the subsidiary’s place of business a place of business of the foreign parent.

That prevents the law from treating every foreign shareholder with a Pakistani investment as if it had itself opened a branch.

26. Section 435: The Core Registration Obligation

Section 435 of the Companies Act requires a foreign company which establishes a place of business or relevant business activity in Pakistan to file prescribed particulars with the registrar within the statutory period.

Those particulars include, in substance:

• certified constitutional documents;
• the registered or principal-office address abroad;
• particulars of directors, chief executive and secretary;
• details of the principal officer in Pakistan;
• details and consent of persons resident in Pakistan authorised to accept service; and
• the address of the principal place of business in Pakistan.

The source reproduces the section 435 documentary requirements in detail.

The thirty-day registration period should be placed into the transaction timetable from the beginning.

27. Current SECP Forms for Foreign Companies

SECP’s current foreign-company forms published in 2025 include:

• Form 2 — Registration of Documents of a Foreign Company;
• Form 5 — Registration of alterations in the documents or details of a foreign company; and
• Form 6 — Notice by a foreign company on ceasing to have any place of business in Pakistan.

Foreign-company filing should therefore be managed against the current forms and current SECP instructions, rather than relying upon historic form numbers copied from prior procedural guides.

28. Is Foreign-Company Registration Fully Digitised Through eZfile?

Not yet in the same way as ordinary Pakistani incorporation.

SECP’s Companies Regulations 2024/eZfile FAQ states that foreign-company processes are within the eZfile programme but identifies foreign-company digitisation as still being in process.

Accordingly, a foreign investor should not assume that every branch/foreign-company filing can presently be completed through precisely the same online workflow as incorporation of an ordinary Pakistani private company.

Current SECP filing instructions should be checked at the time of submission.

PART VI — BOI PERMISSION FOR BRANCH AND LIAISON OFFICES

29. BLMIS: The Current BOI Gateway

Applications for branch or liaison office permission are handled through BOI’s Branch/Liaison Management Information System (BLMIS).

BOI permits properly authorised legal firms, lawyers, chartered accountants and consultants to file on behalf of the foreign company.

This is practically useful for overseas investors because the submission can be coordinated locally while the parent company supplies properly executed foreign documents.

30. Branch-Office Documentation

Current BOI guidance identifies a branch-office package including:

• the prescribed application;
• foreign company’s certificate of incorporation/registration;
• constitutional documents;
• parent-company resolution or authority approving the Pakistan branch;
• contract agreement with the Pakistani public or private entity;
• company profile;
• passport/CNIC and CV of the authorised representative;
• relevant directors’ details;
• fees; and
• additional information requested by BOI.

The contract is particularly important.

It reinforces the proposition that a branch is commonly a project/contract execution vehicle rather than a substitute for a general operating subsidiary.

31. Liaison-Office Documentation

The liaison-office application similarly requires evidence concerning:

• the foreign company’s existence;
• its constitutional framework;
• corporate authority for opening the office;
• the company profile;
• the proposed representative;
• directors; and
• applicable fees.

The description of intended activities should be drafted carefully because the liaison office is expected to remain within its non-commercial mandate.

A company should not promise BOI that the office will merely provide liaison support while its internal business plan assumes direct Pakistani revenue.

That inconsistency creates regulatory exposure before operations even begin.

32. Apostille and Authentication: An Important Modernisation

Foreign investors frequently lose time because corporate documents have not been properly certified for use in Pakistan.

Pakistan’s corporate framework now recognises apostilled documentation in appropriate cases.

Current Companies Regulations permit relevant foreign corporate documents to be certified through recognised traditional routes or apostillised by the competent authority of a state which has acceded to the 1961 Hague Apostille Convention and is recognised by Pakistan for receipt of apostilled documents.

This significantly improves cross-border document handling for companies incorporated in qualifying jurisdictions.

Nevertheless, the correct authentication route should be checked before execution.

If the document is prepared incorrectly abroad, obtaining a fresh board resolution, notarisation, apostille or consular authentication can add weeks to the project.

33. Translation of Foreign Documents

Where constitutional or supporting documents are not in English or Urdu, certified translations are required within the applicable company-law framework.

The translation should be prepared and authenticated consistently with the Foreign Companies Regulations and current Companies Regulations requirements.

The objective is straightforward: SECP must be able to understand the foreign instrument whose legal effect it is being asked to recognise.

For jurisdictions where the corporate constitution consists of several instruments rather than a single “memorandum and articles”, counsel should identify the functional equivalents rather than forcing the foreign legal system into Pakistani terminology.

34. BOI Processing and Stakeholder Review

The BOI does not merely stamp the application.

Its BLMIS guidance provides for circulation of the case to relevant stakeholders for comments or no-objection positions.

Current BOI guidance indicates that if no stakeholder response is received within seven weeks, BOI proceeds within its published framework, although permission can subsequently be affected if adverse remarks emerge.

This means that “seven weeks” should not be communicated to a client as an unconditional guarantee of completion.

Processing time depends upon:

• completeness;
• nationality;
• business sector;
• security review;
• stakeholder response;
• quality of foreign documents;
• consistency of information; and
• any query raised during examination.

Commercial project planning should contain a regulatory contingency.

35. Permission Period and Renewal

BOI’s published materials currently contain formulations reflecting permission periods extending between one and five years, while its BLMIS SOP also describes a three-year permission model renewable for successive terms.

The practical lesson is not to assume a universal expiry date from generic guidance.

The operative permission letter issued to the particular company controls the compliance calendar.

Its expiry should be diarised immediately.

36. BOI Fees

The BOI currently publishes fees of US$3,000 for a branch office and US$2,000 for a liaison office for the initial period stated in its fee schedule, with separate charges for sub-offices and renewals. BOI presently publishes renewal rates of US$1,000 per year for a branch and US$500 per year for a liaison office.

Fees and bank details should always be reconfirmed on the official portal before remittance.

A commercial website should not hard-code banking details that may later change.

PART VII — RENEWAL, CONVERSION AND CHANGE MANAGEMENT

37. Renewal Should Begin Before Expiry

BOI’s BLMIS guidance states that renewal requests should be submitted at least three months before expiry.

A foreign group should therefore create a compliance calendar incorporating:

• BOI permission expiry;
• SECP filings;
• tax-return dates;
• accounts;
• immigration expiry dates;
• licence renewals;
• lease expiry;
• insurance;
• powers of attorney;
• bank KYC updates; and
• contract expiry.

Renewal should not begin when permission has already lapsed.

38. Branch Renewal Documents

BOI presently identifies branch renewal documents including:

• online renewal request;
• latest audited accounts;
• proof of fees;
• proceeds-realisation certificate from the relevant bank;
• SECP filing certificate;
• income-tax return;
• and any additional supporting documents required.

Its branch-office page also identifies continuing valid contract arrangements as material to branch renewal.

This is logical.

If the branch exists to perform authorised contractual obligations, renewal should demonstrate that the relevant underlying business justification continues.

39. Liaison Renewal Documents

For liaison offices, BOI refers to:

• performance/activity report;
• receipt-and-payment statement or audited accounts;
• bank proceeds-realisation documentation;
• SECP certificate;
• income-tax return;
• renewal fee; and
• additional supporting material where required.

A liaison office should be able to demonstrate that it remained within its non-commercial mandate.

If its financial records resemble those of an ordinary trading company, questions should be expected.

40. Conversion Between Liaison and Branch Status

Commercial needs change.

A company which initially entered Pakistan to explore opportunities may later win a contract. Conversely, a branch completing a project may wish to retain only a representative presence.

BOI permits applications for conversion between liaison and branch status.

Its current guidance requires the prescribed BLMIS application, board resolution, applicable fee, current permission documentation and, for liaison-to-branch conversion, relevant contract documentation.

A conversion should not be treated as a purely administrative relabelling.

Tax, banking, contractual, employment and SECP consequences should all be reviewed at the same time.

41. Change of Address and Authorised Representative

BOI also requires notification and processing of changes in office address and authorised representative.

The source contains detailed treatment of these lifecycle events, including BOI documentation and closure requirements.

These matters should be coordinated with SECP and other regulators.

Changing the address with BOI but leaving the foreign-company record, tax record and bank account unchanged creates inconsistent official records and can interfere with notices or KYC.

PART VIII — ALTERATIONS TO FOREIGN-COMPANY PARTICULARS UNDER THE COMPANIES ACT

42. Section 436: Changes Must Be Reported

Where specified particulars of the foreign company change, section 436 requires the relevant alteration to be notified to the registrar within the prescribed period.

This includes changes involving matters such as:

• constitutional documents;
• registered or principal office abroad;
• directors, chief executive or secretary;
• principal officer in Pakistan;
• persons authorised to accept service; and
• principal place of business in Pakistan.

The source records this thirty-day alteration framework.

SECP’s current Form 5 is the published form for registration of alterations in foreign-company documents or particulars.

Foreign headquarters should therefore notify Pakistani counsel whenever an overseas restructuring affects the Pakistani registration record.

43. Parent-Level Changes Can Create Pakistani Filing Obligations

A multinational may change:

• its registered office in London;
• its CEO in Dubai;
• its directors in Singapore;
• its corporate name in Germany; or
• its articles in the United States.

Those events may occur thousands of kilometres from Pakistan but still trigger Pakistani compliance obligations if the company has a registered foreign-company presence here.

This is why local counsel should remain connected to the foreign company’s company-secretarial function.

The Pakistan office cannot report a change it has never been told occurred.

PART IX — FINANCIAL REPORTING AND CORPORATE RECORDS OF FOREIGN COMPANIES

44. Annual Accounts

Foreign companies operating under Part XII are subject to financial-reporting obligations under the Companies Act.

The required filings may include global financial statements together with Pakistan-related financial information and prescribed lists or particulars.

The source correctly identifies that foreign companies are not exempt merely because their principal accounts are prepared abroad.

The Pakistan operation should coordinate with the parent’s auditors early.

Foreign accounts may require:

• appropriate certification;
• translation;
• adaptation;
• Pakistan branch statements;
• local audit input; and
• reconciliation with Pakistani tax filings.

45. Books of Account

The foreign-company regime extends accounting requirements to the Pakistani business.

Relevant books concerning money received and expended, sales and purchases, assets and liabilities of the Pakistani business must be maintained within the statutory framework.

The source records the application of section 220 to foreign companies through section 449.

A branch cannot safely operate as a mere collection of spreadsheets held exclusively at overseas headquarters.

PART X — THE CONSEQUENCES OF NON-COMPLIANCE

46. A Particularly Important Rule: Section 441 and the Right to Sue

Section 441 contains one of the most commercially important consequences of foreign-company non-compliance.

Failure to comply with the registration/alteration requirements does not necessarily invalidate the foreign company’s contracts or eliminate its liability to be sued.

But the company may be prevented from bringing a suit, claiming a set-off, making a counterclaim or instituting relevant legal proceedings until it has brought itself into compliance.

The source sets out this distinction directly.

That is a powerful reason to register correctly.

A foreign company should never discover its registration default only when a Pakistani customer has failed to pay and litigation becomes necessary.

47. Compliance Is Part of Contract Enforcement

This also demonstrates why corporate registration and litigation strategy are connected.

When reviewing a claim by an overseas corporation, Pakistani counsel should establish:

• whether the claimant is a foreign company for Part XII purposes;
• whether it established a Pakistani place of business;
• whether section 435 filings were completed;
• whether section 436 alterations were current; and
• whether any procedural disability under section 441 must first be cured.

Corporate compliance can therefore determine when commercial litigation can begin.

PART XI — FOREIGN EXCHANGE, CAPITAL AND REPATRIATION

48. Money Entering Pakistan Should Be Structured Correctly From Day One

Foreign investors usually focus on whether profits may later be repatriated.

The answer depends heavily on how the original investment was brought into Pakistan and documented.

Foreign share capital should be remitted through appropriate banking channels and recorded in a manner consistent with SBP’s foreign-exchange framework.

The designated authorised dealer bank becomes extremely important.

A poorly documented inward investment can create difficulties years later when the investor wishes to:

• receive dividends;
• sell shares;
• remit sale proceeds;
• receive repayment of shareholder debt;
• remit royalties;
• collect technical fees; or
• wind up the investment.

Foreign-exchange planning is therefore an entry issue, not an exit issue.

49. Shares Issued to Non-Residents

Pakistan’s foreign-exchange regime regulates securities held by persons resident outside Pakistan.

The State Bank’s Foreign Exchange Manual provides mechanisms under which qualifying issues and transfers of Pakistani securities to non-residents may proceed under general permission, subject to the applicable conditions, valuation, evidence of foreign-exchange remittance and reporting through an authorised dealer.

The designated bank maintains the relevant investment record.

SBP’s published framework also permits remittance of dividends net of applicable taxes and qualifying disinvestment proceeds subject to the stated evidence and valuation requirements.

The practical advice is simple:

Do not treat the share certificate as sufficient evidence of foreign investment.

The banking trail matters.

50. Repatriation of Dividends

Pakistan permits repatriation of dividends to non-resident shareholders subject to tax and foreign-exchange compliance.

The investor should ensure:

• shareholding is properly registered;
• original foreign investment is documented;
• dividend has been lawfully declared;
• tax has been withheld;
• corporate approvals are complete; and
• the authorised dealer possesses the required record.

A dividend legally declared under company law can still encounter remittance difficulties if the investment was badly documented at the banking stage.

51. Sale and Disinvestment

Foreign shareholders may also seek to sell their investment and repatriate proceeds.

For listed securities, market-value principles apply within the SBP framework.

For unlisted companies, valuation evidence may be required.

The transaction must also be examined for:

• capital gains tax;
• transfer restrictions;
• pre-emption;
• company-law procedure;
• beneficial-ownership updates;
• competition clearance;
• takeover rules if listed;
• contractual consent; and
• sector-specific regulatory approval.

A share sale is therefore a corporate, tax and foreign-exchange transaction simultaneously.

52. Foreign Shareholder Loans

Foreign investors sometimes prefer debt rather than equity.

Cross-border shareholder loans require separate foreign-exchange and tax analysis.

Issues may include:

• SBP borrowing rules;
• permitted tenor;
• interest;
• withholding tax;
• thin-capitalisation;
• transfer pricing;
• foreign currency;
• repayment;
• security;
• registration of charges; and
• whether regulatory approval is required.

A company should not simply receive foreign shareholder funds labelled “loan” and expect repayment abroad to be automatic.

53. Royalties, Franchise Fees and Technical-Service Payments

Many multinational groups intend to charge the Pakistani entity for:

• brand use;
• software;
• technical know-how;
• management support;
• franchise rights;
• intellectual property;
• engineering services; or

These arrangements engage tax and foreign-exchange rules.

SBP maintains a specific commercial-remittance framework for royalties, franchise and technical-service fees. In December 2025 it revised relevant instructions for entities in agriculture, social, infrastructure and service-sector projects, including international food chains.

Accordingly, an inter-company agreement should not be drafted solely according to the parent’s preferred transfer-pricing model.

It should also be remittable under Pakistani law.

PART XII — BANKING

54. The Bank Is a Regulatory Gatekeeper

Opening a Pakistani company does not guarantee immediate bank onboarding.

Commercial banks perform extensive KYC and AML checks, particularly where ownership is foreign or layered.

A bank may require:

• certificate of incorporation;
• memorandum and articles;
• shareholder register;
• UBO information;
• directors’ documents;
• passports;
• board resolution;
• registered-office evidence;
• tax registration;
• business plan;
• source of funds;
• parent-company documents;
• proof of business;
• contracts;
• regulatory licences; and
• sanctions screening.

Foreign groups should therefore prepare banking documentation in parallel with incorporation.

55. Bank Account Authority Must Be Carefully Controlled

For wholly owned subsidiaries and particularly joint ventures, the board resolution governing the bank account is a major control instrument.

Foreign investors should consider:

• single versus joint signatures;
• payment limits;
• online banking access;
• foreign remittance authority;
• cheque authority;
• dual approval;
• payment to related parties;
• payroll; and
• emergency controls.

A company may have sophisticated constitutional documents but still lose practical financial control if the bank mandate is careless.

PART XIII — TAXATION OF FOREIGN INVESTMENT

56. Pakistan Tax Cannot Be Reduced to a Single Corporate Rate

The standard federal income-tax rate commonly applicable to an ordinary company remains 29 per cent, while specialised classifications such as small companies and banking companies are subject to different regimes. The current Income Tax Ordinance should always be checked for the relevant tax year; FBR publishes the Ordinance updated through 30 June 2026.

But that 29 per cent figure is only the beginning.

Effective Pakistani tax exposure may also involve:

• super tax;
• minimum tax;
• withholding tax;
• advance tax;
• capital gains;
• sales tax;
• provincial sales tax on services;
• customs duties;
• payroll obligations;
• permanent-establishment taxation;
• branch attribution;
• transfer pricing; and
• treaty relief.

A client should therefore obtain a transaction-specific tax model.

57. Taxation of a Pakistani Subsidiary

A locally incorporated Pakistani company is taxed as a Pakistani company under the Income Tax Ordinance.

Relevant questions include:

• whether its income is taxable at the standard corporate rate;
• whether a special industry regime applies;
• whether minimum or alternative taxes apply;
• whether super tax is triggered;
• whether it qualifies for exemptions or tax credits;
• withholding obligations;
• provincial service taxation;
• transfer pricing; and
• taxation of distributions to foreign shareholders.

The foreign parent should model tax before deciding whether to fund the business through equity, debt, royalty arrangements or service fees.

58. Taxation of a Branch

A branch is generally part of a non-resident enterprise.

Pakistan-source income attributable to the Pakistani permanent establishment or branch is subject to Pakistani taxation under the applicable rules.

The branch structure therefore does not eliminate Pakistani income tax.

It may, depending upon circumstances and treaty provisions, produce a different overall tax result from a locally incorporated subsidiary.

This is one reason entity selection should involve both corporate and tax counsel.

59. Liaison Office and Tax

A liaison office’s non-commercial status does not justify the simple statement that it has “no tax”.

Its permitted activities may be non-revenue-generating, but tax registration, filing and permanent-establishment analysis still require attention.

BOI itself expects tax compliance information in the renewal framework.

The correct analysis is therefore:

a genuinely non-commercial liaison office may have limited taxable business income, but its tax position must still be formally assessed and complied with.

60. Withholding Taxes

Pakistan makes substantial use of withholding taxation.

Payments involving:

• contracts;
• services;
• salaries;
• rent;
• dividends;
• interest;
• royalties;
• technical fees;
• imports; and
• non-residents

may trigger withholding obligations.

A foreign investor should identify these obligations before signing contracts because the tax cost can affect pricing and net receipts.

61. Provincial Sales Tax on Services

After constitutional devolution, sales tax on many services is administered provincially rather than solely at federal level.

Depending upon location and nature of activity, the business may need to deal with authorities such as:

• Punjab Revenue Authority;
• Sindh Revenue Board;
• Khyber Pakhtunkhwa Revenue Authority; or
• Balochistan Revenue Authority.

Islamabad Capital Territory services have their own federal/territorial framework.

Foreign service companies should therefore not assume that obtaining an NTN from FBR completes indirect-tax registration.

62. Double Taxation Treaties

Pakistan maintains a substantial network of bilateral double-taxation agreements.

FBR publishes the applicable full-scope treaties and treaty-modified versions.

A treaty may affect:

• permanent establishment;
• business profits;
• dividends;
• interest;
• royalties;
• fees for technical services;
• capital gains;
• employment income; and
• tax credits.

Treaty entitlement should nevertheless be analysed carefully in light of residence, beneficial ownership, anti-avoidance provisions and the Multilateral Instrument where applicable.

A shell entity inserted only to obtain treaty benefits can invite scrutiny.

63. Transfer Pricing and Related-Party Transactions

Foreign-owned Pakistani entities frequently transact with their group companies.

Examples include:

• sale of goods;
• procurement;
• shared services;
• management fees;
• software licences;
• loans;
• intellectual-property royalties;
• cost-sharing;
• equipment leasing; and
• technical assistance.

These arrangements should be supported by:

• written inter-company agreements;
• arm’s-length pricing;
• contemporaneous transfer-pricing analysis;
• invoices;
• evidence of services actually provided; and
• appropriate tax and foreign-exchange treatment.

A management-fee invoice unsupported by genuine services may create difficulties with both tax authorities and the remitting bank.

PART XIV — IMPORTS, EXPORTS AND CUSTOMS

64. Pakistan Single Window

Businesses engaged in cross-border trade increasingly interact with the Pakistan Single Window (PSW).

PSW is an integrated digital platform through which traders can lodge standardised information and documents for import, export and transit-related regulatory requirements.

For manufacturers, distributors and trading businesses, incorporation should therefore be coordinated with:

• customs registration;
• PSW onboarding;
• tariff classification;
• import permissions;
• product standards;
• customs valuation;
• foreign-exchange arrangements; and
• sector-specific licences.

The legal existence of a company does not itself entitle it to import every product.

65. Machinery and Equipment

A foreign investor establishing manufacturing or project operations may need to import machinery.

Legal planning should address:

• tariff classification;
• duties and taxes;
• exemption or concession regimes;
• temporary import;
• project-related import permissions;
• re-export;
• equipment ownership;
• customs guarantees;
• insurance; and
• environmental or technical standards.

Where a branch imports equipment belonging to the foreign parent, the intended treatment at project completion should be determined before importation.

PART XV — SECTOR-SPECIFIC LICENSING

66. Incorporation Does Not Authorise a Regulated Business

This is one of the most important rules in Pakistani corporate practice.

An SECP certificate of incorporation proves that the company exists.

It does not prove that the company is licensed to conduct every activity described by its promoters.

Depending upon sector, additional regulation may involve bodies such as:

• SECP;
• State Bank of Pakistan;
• Pakistan Telecommunication Authority;
• Oil and Gas Regulatory Authority;
• National Electric Power Regulatory Authority;
• Drug Regulatory Authority of Pakistan;
• Pakistan Engineering Council;
• Pakistan Standards and Quality Control Authority;
• provincial environmental agencies;
• Civil Aviation Authority;
• Pakistan Electronic Media Regulatory Authority;
• provincial food authorities;
• immigration authorities;
• education regulators;
• health regulators; or
• professional councils.

The appropriate sequence differs by sector.

67. Financial Services

Banking, payment services, insurance, securities, NBFCs, asset management, lending and related businesses are heavily regulated.

A foreign financial institution should not first incorporate a generic private company and only later investigate whether its intended model is licensable.

Licensing capital, sponsor qualification, directors, governance, cybersecurity, AML/CFT, fit-and-proper tests and business plans should be examined before incorporation.

The June 2026 security-clearance facilitation for foreign-sponsored regulated companies is important precisely because financial-sector entry involves both incorporation and regulatory licensing.

68. Energy, Oil, Gas and Infrastructure

Foreign investors in electricity, petroleum, gas, mining and infrastructure may encounter:

• sector licensing;
• concessions;
• PPRA/procurement law;
• environmental approvals;
• land acquisition;
• power-purchase or concession agreements;
• security arrangements;
• customs;
• project finance;
• sovereign or government guarantees; and
• federal-provincial jurisdictional questions.

A project company established for a concession should be structured around the concession documentation itself.

69. Pharmaceuticals and Healthcare

Pharmaceutical, medical-device and healthcare businesses may require DRAP and provincial approvals in addition to ordinary corporate registration.

Foreign manufacturers should separately assess:

• product registration;
• import permits;
• manufacturing licences;
• pricing rules;
• labelling;
• advertising;
• local pharmacovigilance; and
• distributor arrangements.

70. Technology and Digital Businesses

Technology companies may appear easier to establish because they do not require factories or physical inventories.

But their legal map can include:

• software and IP licensing;
• foreign-exchange remittances;
• e-commerce taxation;
• payment processing;
• cybersecurity;
• telecom regulation;
• consumer law;
• cloud-hosting arrangements;
• employment;
• data handling; and
• cross-border service payments.

The absence of a warehouse does not mean the absence of regulation.

PART XVI — DATA PROTECTION, CYBERSECURITY AND DIGITAL OPERATIONS

71. Pakistan Still Does Not Have a Comprehensive Federal Personal Data Protection Act in Force

As at August 2026, Pakistan’s Ministry of IT & Telecommunication continues to list the Personal Data Protection Bill May 2023 as a draft instrument rather than enacted legislation.

Foreign companies should therefore avoid website statements suggesting that a comprehensive Pakistani data protection statute equivalent to the EU GDPR has already entered into force.

That does not mean personal data is legally unprotected.

Relevant obligations may arise through:

• constitutional privacy principles;
• sectoral regulation;
• telecom rules;
• banking law;
• employment confidentiality;
• contractual obligations;
• cybercrime law;
• consumer law; and
• professional duties.

Multinationals should generally apply coherent internal data-governance standards while monitoring Pakistani legislative developments.

72. Cross-Border Data Governance

Foreign companies routinely transfer:

• employee records;
• customer data;
• financial information;
• transaction data;
• health data;
• KYC information; and
• corporate records

between Pakistan and overseas headquarters.

Even without a single omnibus statute, those transfers should be governed by:

• internal privacy policies;
• access controls;
• cyber-security standards;
• contractual clauses;
• retention schedules;
• incident-response procedures; and
• applicable sector regulation.

Data compliance should therefore form part of market entry for technology, finance, healthcare, outsourcing and consumer-facing businesses.

PART XVII — EMPLOYMENT AND LABOUR LAW

73. Labour Law in Pakistan Is Significantly Provincial

Foreign groups accustomed to a unitary national labour regime need to appreciate Pakistan’s post-devolution structure.

Employment law can vary by province and territory.

The applicable framework may address:

• appointment letters;
• standing orders;
• termination;
• retrenchment;
• working hours;
• leave;
• maternity;
• minimum wage;
• workplace safety;
• industrial relations;
• trade unions;
• social security;
• old-age benefits; and
• employee compensation.

The source correctly identifies labour compliance as an independent legal workstream for a foreign employer.

An Islamabad employer and a Karachi manufacturer may not face an identical statutory regime.

74. Employment Contracts

Foreign investors should not merely copy employment templates from Dubai, London, Singapore or New York.

Pakistani employment contracts should address:

• job title;
• probation;
• remuneration;
• working hours;
• benefits;
• leave;
• confidentiality;
• intellectual property;
• data access;
• misconduct;
• termination;
• return of company property;
• restrictive covenants where legally sustainable;
• dispute resolution; and
• applicable statutory rights.

Contractual wording cannot waive mandatory labour protections.

75. Senior Executives

Senior executives may fall outside some statutory categories applicable to workers, but that does not mean their contracts should be informal.

For chief executives and senior management, particular attention should be given to:

• board authority;
• Companies Act appointment;
• signing authority;
• remuneration;
• fiduciary obligations;
• confidentiality;
• conflict of interest;
• termination;
• severance;
• intellectual property; and
• non-solicitation.

Foreign executives also require immigration analysis.

PART XVIII — WORK VISAS AND INVESTOR RESIDENCY

76. Foreign Directors and Employees Require Immigration Planning

Foreign share ownership does not by itself confer a right to work in Pakistan.

Foreign executives who will work locally should obtain the appropriate immigration status.

BOI currently states that work-visa applications are processed through Pakistan’s electronic visa framework and lists company registration, employment documentation, employer information, tax documentation and supporting materials among the requirements.

The current published work-visa framework provides entry/extension for up to two years with multiple entries, subject to government discretion, and BOI states an indicative processing period of four weeks.

Visa planning should therefore begin before the foreign executive is expected to relocate.

77. Long-Term Residency for Investors: A Significant New Development

Pakistan has also introduced a Long Term Residency (LTR) scheme under the Foreigners (Long Term Residency) Order, 2025.

BOI’s current guidance provides 5-, 7- and 10-year residency options for eligible foreign investors and families, subject to investment, clearance and other scheme conditions.

The scheme requires at least US$50,000 of investment to be materialised within one year of approval, while the different residency durations are associated with larger prescribed investment/fee levels.

LTR is not Pakistani citizenship.

But for qualifying investors expecting a substantial long-term personal presence, it can form part of the market-entry analysis alongside company incorporation.

PART XIX — INTELLECTUAL PROPERTY

78. Register the Brand Before the Market Builds Around It

Foreign companies often enter Pakistan through a distributor and postpone local trademark registration.

That is a mistake.

Before substantial market activity begins, counsel should review:

• company name;
• primary brand;
• logos;
• product names;
• domain names;
• patents;
• industrial designs;
• copyright;
• software rights;
• trade secrets; and
• licensing arrangements.

A foreign trademark registration does not automatically provide the same practical protection as a Pakistani registration.

79. Distributor and Franchise Arrangements

Where a Pakistani party is permitted to use the foreign company’s branding, the agreement should clearly establish:

• ownership;
• limited licence;
• approved uses;
• quality control;
• territory;
• marketing standards;
• social-media ownership;
• domain-name ownership;
• prohibition on local trademark registration by distributor;
• post-termination use;
• confidential know-how; and
• enforcement assistance.

It is particularly important to prevent a local distributor from registering the foreign principal’s brand in its own name.

80. Employee-Created Intellectual Property

Technology and creative businesses should also address ownership of inventions, software, designs and works created by employees and contractors.

The contract should not assume that every conceivable intellectual-property right automatically belongs to the company in every circumstance.

Specific assignment and confidentiality language is prudent.

PART XX — REAL PROPERTY AND LAND

81. Land Law Is Not Uniform Across Pakistan

Property law, revenue administration, development control and land-transfer procedure can differ materially between provinces and specialised authorities.

A foreign company purchasing or leasing land should therefore examine:

• title;
• mutation/revenue record;
• development authority approvals;
• zoning;
• land use;
• building approval;
• acquisition restrictions;
• foreign ownership restrictions;
• mortgages and charges;
• litigation;
• possession;
• access;
• utilities; and
• environmental matters.

Company incorporation does not cure a defective property title.

82. Industrial and SEZ Property

For factories and industrial investment, additional consideration may be given to:

• industrial estates;
• special economic zones;
• lease versus ownership;
• utility connections;
• customs/tax incentives;
• environmental approvals;
• road access;
• water;
• power;
• local labour; and
• conditions attached to the allotment.

Any claimed tax or customs incentive should be verified against current legislation and the particular zone’s approval.

PART XXI — ACQUISITIONS AND M&A

83. Acquiring an Existing Pakistani Business

Acquisition may be the fastest route to:

• customers;
• licences;
• employees;
• manufacturing capacity;
• land;
• distribution;
• brands;
• government contracts; or
• market share.

But the investor acquires history as well as opportunity.

A proper legal due-diligence exercise should investigate:

• incorporation;
• constitutional documents;
• share title;
• UBO;
• charges;
• borrowing;
• material contracts;
• litigation;
• tax;
• labour;
• licences;
• property;
• IP;
• environmental matters;
• data;
• related parties;
• insurance;
• regulatory enforcement;
• anti-bribery risk; and
• beneficial ownership.

The purchase agreement should then allocate identified risks through warranties, indemnities, conditions precedent, retention, escrow, price adjustments or restructuring.

84. Listed-Company Acquisitions: The Current Takeover Framework

Acquisitions of listed Pakistani companies should no longer be analysed under the superseded 2002 takeover regime.

The contemporary framework is found principally in the Securities Act, 2015 and the Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017, as amended.

SECP publishes the consolidated Takeovers Regulations updated to 24 January 2024.

SECP explains that the regime requires a mandatory public offer in prescribed takeover situations so that minority shareholders receive a fair opportunity to exit.

Any foreign acquisition of a listed Pakistani target therefore requires specialist capital-markets advice.

85. Competition Clearance

Pakistan’s Competition Act, 2010 and Competition (Merger Control) Regulations, 2016 may apply to acquisitions, mergers and combinations meeting the prescribed jurisdictional thresholds.

The merger regulations expressly apply to qualifying undertakings whether incorporated in Pakistan or not where the jurisdictional requirements are met.

An offshore acquisition can therefore have Pakistani competition consequences.

Competition clearance should be identified during transaction planning, not after closing.

PART XXII — CONTRACTING IN PAKISTAN

86. Governing Law and Jurisdiction

Foreign parties frequently propose that every Pakistan contract be governed by English, New York, Singapore or UAE law.

That may be appropriate in some transactions, but it is not automatically advantageous.

The proper clause depends upon:

• subject matter;
• location of assets;
• identity of counterparty;
• enforcement;
• mandatory Pakistani law;
• procurement rules;
• regulatory requirements;
• security;
• arbitration; and
• likely forum.

A foreign-law judgment or award must still be enforceable where the defendant’s assets actually exist.

87. Arbitration

International arbitration may be appropriate for substantial cross-border contracts.

Pakistan is a party to the New York Convention and has implemented the Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Awards) Act, 2011.

A well-drafted clause should identify:

• seat;
• institution or rules;
• number of arbitrators;
• language;
• governing law;
• interim relief;
• service;
• confidentiality where desired; and
• method of appointment.

A clause merely stating “disputes shall be settled by arbitration” can generate an expensive jurisdictional dispute before the merits are ever heard.

88. Pakistani Court Jurisdiction

Not every dispute should be arbitrated.

Pakistani courts remain relevant for:

• injunctions;
• constitutional proceedings;
• property;
• company matters;
• insolvency;
• employment;
• criminal complaints;
• public procurement;
• family issues;
• regulatory review; and

A foreign investor should know in advance where urgent interim relief could be sought if:

• assets are being removed;
• shares are being transferred;
• a bank guarantee is threatened;
• intellectual property is being misused; or
• a local partner attempts to seize company control.

89. Notices and Service

Contracts should state precise notice mechanisms.

For foreign companies registered under Part XII, the Companies Act separately requires information concerning persons in Pakistan authorised to accept service.

Section 440 addresses service upon the foreign company through the filed service arrangements.

The source explains the statutory importance of the local person authorised to receive process and notices.

A registered address should therefore be real and monitored.

PART XXIII — PUBLIC PROCUREMENT AND GOVERNMENT CONTRACTS

90. Government Business Requires a Separate Compliance Mindset

Foreign companies entering Pakistan for public projects may encounter:

• PPRA rules;
• provincial procurement law;
• tender conditions;
• bid securities;
• performance guarantees;
• tax registration;
• PEC or sector licences;
• local-content requirements;
• integrity pacts;
• dispute-resolution clauses;
• blacklisting rules;
• beneficial-ownership declarations; and
• government approvals.

The branch-versus-subsidiary choice may also be dictated by the tender or contract.

Tender eligibility should therefore be checked before the corporate structure is finalised.

PART XXIV — CONSUMER, ADVERTISING AND COMPETITION LAW

91. Consumer-Facing Businesses

Retailers, online platforms, consumer-goods companies and service businesses should consider Pakistani consumer-protection legislation and provincial regimes.

Issues can include:

• misleading advertising;
• product claims;
• pricing;
• warranties;
• refunds;
• defective goods;
• health claims;
• online terms;
• promotional competitions; and
• product safety.

An overseas marketing campaign should not simply be imported unchanged into Pakistan.

92. Competition Conduct Beyond Mergers

The Competition Act can also affect:

• price fixing;
• market allocation;
• bid rigging;
• abuse of dominance;
• misleading marketing;
• exclusive distribution; and
• restrictive arrangements.

A foreign group’s regional distribution contract may therefore require Pakistani competition review even if no corporate acquisition is contemplated.

PART XXV — ENVIRONMENTAL AND ESG COMPLIANCE

93. Environmental Approval Should Precede Construction

Industrial and infrastructure investors should examine environmental requirements early.

Depending upon project and province, an environmental impact assessment or initial environmental examination may be necessary.

The project may also encounter rules concerning:

• emissions;
• effluent;
• hazardous substances;
• waste;
• water;
• noise;
• occupational safety; and
• land use.

Environmental approval obtained after construction begins may be too late.

94. ESG, Supply Chains and Foreign Parent Standards

Multinationals increasingly operate under group-level ESG commitments that exceed local statutory minima.

Pakistani operations may therefore need systems for:

• anti-bribery;
• supplier screening;
• labour standards;
• environmental monitoring;
• sanctions;
• modern-slavery risk;
• cybersecurity;
• whistleblowing; and
• board reporting.

A strong compliance programme can also become an evidentiary asset if misconduct by an employee or local agent later creates regulatory scrutiny.

PART XXVI — ANTI-BRIBERY AND THIRD-PARTY RISK

95. “Facilitation” Is Not a Business Strategy

Foreign businesses occasionally encounter intermediaries who promise to “manage” registrations, customs, land or government contracts through personal influence.

That is a serious warning sign.

International companies may face liability not only under Pakistani anti-corruption law but under foreign legislation with extraterritorial reach, including the UK Bribery Act or US Foreign Corrupt Practices Act where applicable.

Third-party due diligence should therefore cover:

• consultants;
• agents;
• distributors;
• lobbyists;
• customs agents;
• procurement intermediaries;
• local partners; and

A written agreement should accurately describe the legitimate service being provided and remuneration should be commercially explicable.

PART XXVII — AML, KYC AND SANCTIONS

96. Foreign-Owned Companies Should Expect Enhanced KYC

Pakistan’s regulated financial system requires banks and regulated businesses to perform customer due diligence.

Foreign ownership, offshore structures, politically exposed persons, high-risk jurisdictions and complex beneficial ownership may therefore generate additional inquiries.

The company should maintain a central KYC pack containing:

• certified corporate documents;
• ownership chart;
• UBO declarations;
• directors’ documents;
• source-of-funds evidence;
• group financial information;
• business contracts;
• regulatory licences; and
• tax records.

The same pack often serves multiple banks and regulators.

PART XXVIII — CHARGES, SECURITY AND FINANCING

97. Security Over Pakistani Assets

Where a foreign company with a Pakistani place of business creates or acquires property subject to a registrable charge, the Companies Act provisions concerning registration of charges can apply.

The source identifies section 448 and its extension of the charge-registration regime to relevant foreign-company property in Pakistan.

Project finance should therefore coordinate:

• facility documentation;
• foreign-exchange rules;
• stamp duty;
• security perfection;
• land registrations;
• SECP charge filing; and
• intercreditor arrangements.

PART XXIX — CEASING BUSINESS AND EXIT

98. Entry Planning Should Include Exit Planning

Foreign clients understandably focus on incorporation.

A better legal structure asks at the beginning:

How do we get out?

Exit may occur through:

• share sale;
• asset sale;
• merger;
• closure of branch;
• closure of liaison office;
• voluntary winding-up;
• strike-off/easy exit where legally available;
• expiry of contract;
• repatriation; or
• group restructuring.

The cleanest exit is usually created by good records maintained from day one.

99. Closing a Branch or Liaison Office With BOI

BOI’s BLMIS guidance identifies closure documentation including:

• closure request;
• board resolution;
• activity report;
• proceeds-realisation certificate;
• audited accounts;
• newspaper publication;
• tax-clearance/confirmation; and
• legal-liability affidavit.

A foreign parent should therefore not simply close the office, terminate the lease and withdraw staff.

Formal regulatory closure matters.

100. Section 443 Notice Before Ceasing a Place of Business

The Companies Act separately requires a foreign company intending to cease having a place of business in Pakistan to give advance notice to the registrar and publish the prescribed newspaper notices.

The source identifies the thirty-day notice requirement and publication in two daily newspapers circulating in the relevant province or provinces.

SECP currently publishes Form 6 for notice by a foreign company ceasing to have a place of business.

BOI closure and Companies Act closure should therefore be coordinated.

101. Liquidation of the Foreign Parent

If the overseas company itself enters liquidation while maintaining a Pakistani place of business, Pakistani notification and publication requirements also arise.

The source records the section 450 obligation to notify the registrar and publish the fact of foreign liquidation, as well as requirements concerning the Pakistani portion of the company’s affairs.

International insolvency counsel should therefore coordinate with Pakistani counsel immediately when the parent enters formal insolvency.

PART XXX — PRACTICAL MARKET-ENTRY ROADMAP

102. Phase One: Legal Feasibility

Before filing anything, obtain answers to:

Business model

• What will the Pakistan operation actually do?
• Who will customers be?
• Where will revenue be earned?
• Who signs contracts?

Ownership

• Who is the ultimate investor?
• Is 100 per cent foreign ownership permitted?
• Is a JV commercially desirable?

Regulation

• Does the activity require a licence?
• Is pre-incorporation approval needed?
• Is security clearance required?

Tax

• Subsidiary or permanent establishment?
• What are withholding and indirect taxes?
• Is treaty relief available?

Banking

• How will capital enter?
• How will profits leave?
• Which bank will act as authorised dealer?

People

• Pakistani employees?
• Foreign executives?
• Work visas?

Assets

• Land?
• Equipment?
• IP?
• Inventory?

Only after those answers should the legal vehicle be selected.

103. Phase Two: Structuring

The legal team should then determine:

• subsidiary, JV, branch, liaison or acquisition;
• ownership percentages;
• capital;
• memorandum;
• board;
• shareholders’ agreement;
• BOI pathway;
• SECP pathway;
• FBR registrations;
• sector licences;
• banking route;
• IP protection;
• employment structure;
• foreign-exchange treatment; and
• dispute framework.

This phase is where avoidable future litigation is prevented.

104. Phase Three: Documentation

A foreign company should prepare a coordinated document set.

For a subsidiary this may include:

• foreign parent’s corporate documents;
• board resolution;
• UBO chart;
• foreign shareholder documents;
• subscribers’ passports;
• memorandum and articles;
• director consents;
• registered-office evidence;
• security-clearance undertakings;
• banking resolutions; and
• regulator-specific material.

For a branch/liaison office, BOI and SECP documentation will overlap but not be identical.

105. Phase Four: Incorporation or Permission

The appropriate regulator is then approached.

For a local company:

SECP incorporation → banking/tax → sector licence → operations, subject to the specific sector.

For branch/liaison:

BOI/BLMIS permission → Companies Act foreign-company filing → tax/banking → operational compliance, with sequencing adjusted to the actual permission and statutory triggers.

106. Phase Five: Operational Readiness

Before trading begins, counsel should confirm:

• corporate existence;
• licence;
• bank account;
• tax registration;
• contracts;
• employment;
• premises;
• data;
• IP;
• insurance;
• import/export permissions;
• internal authority; and

A company is operationally ready when all of these align — not merely when SECP has issued a certificate.

PART XXXI — COMMON FAILURE POINTS

107. Choosing a Liaison Office but Conducting Business

This is perhaps the clearest structural error.

If the company expects revenue, use a structure capable of lawful revenue-generating activity.

Do not attempt to disguise trading as “liaison”.

108. Opening a Branch When a Subsidiary Is Really Required

A branch may initially appear faster or more direct.

But if the business will employ hundreds of people, sell to the general market, own significant assets and operate indefinitely, a subsidiary may offer a better long-term framework.

109. Incorporating Before Checking the Sector Licence

This can leave the investor with a company whose:

• name;
• capital;
• directors;
• objects; or
• ownership

do not satisfy the regulator.

Licensing should be researched first.

110. Sending Foreign Documents Without Proper Authentication

Incorrect notarisation is one of the most avoidable causes of delay.

Determine whether apostille or consular authentication applies before the foreign board signs documents.

111. Ignoring Security Clearance Until the Board Is Finalised

A prudent multinational should maintain flexibility in board appointments where foreign director clearance remains outstanding.

Corporate governance should not collapse if one proposed officer must be replaced.

112. Bringing Money Into Pakistan Informally

Capital intended to be repatriable should move through traceable authorised banking channels.

The foreign investor should be able to prove:

• amount;
• currency;
• sender;
• beneficiary;
• investment purpose; and
• share issuance.

113. Letting a Local Partner Control Every Operational Lever

Foreign investors should not surrender:

• bank control;
• corporate records;
• SECP credentials;
• tax credentials;
• company seal;
• original licences;
• domain names;
• trademark filings; and
• customer databases

to one local individual without safeguards.

The company should remain institutionally controlled.

114. Failing to Protect the Brand

Register core IP early.

A dispute over a local trademark filed by an ex-distributor can cost far more than preventive registration.

115. Treating Tax as an Accounting Issue Rather Than a Transaction Issue

Tax affects:

• pricing;
• contracts;
• financing;
• dividends;
• royalties;
• services;
• imports;
• exit; and

Accountants calculate tax. Lawyers and tax advisers should help structure the transaction that creates it.

116. Forgetting Renewals

A business that took months to establish should not be jeopardised by failure to diary:

• BOI expiry;
• visa expiry;
• sector licence;
• corporate filings;
• tax returns;
• lease;
• insurance; and

Compliance calendars are inexpensive. Regulatory emergencies are not.

PART XXXII — A FOREIGN INVESTOR’S DUE-DILIGENCE CHECKLIST BEFORE PAKISTAN ENTRY

117. Corporate

Confirm:

• parent-company authority;
• UBO;
• ownership;
• proposed capital;
• foreign shareholders;
• board composition;
• shareholder agreement;
• signing authority;
• group structure.

118. Regulatory

Confirm:

• sector regulator;
• ownership restriction;
• minimum capital;
• licence;
• NOC;
• professional registration;
• environmental approval.

119. Tax

Confirm:

• residence;
• PE;
• corporate tax;
• withholding;
• sales tax;
• provincial tax;
• customs;
• DTA;
• transfer pricing;

120. Banking

Confirm:

• authorised dealer;
• capital remittance;
• dividend route;
• foreign loan;
• royalty;
• service fee;
• signatories;
• source of funds.

121. People

Confirm:

• employment contracts;
• labour jurisdiction;
• minimum wage;
• social security;
• EOBI where applicable;
• visas;
• expatriate tax;
• HR policies.

122. Assets

Confirm:

• land title;
• lease;
• equipment;
• imports;
• trademarks;
• software;
• licences;

123. Contracts

Confirm:

• governing law;
• dispute resolution;
• limitation;
• currency;
• tax;
• force majeure;
• termination;
• notices;
• sanctions;
• anti-bribery;
• confidentiality;

PART XXXIII — FAQS FOR FOREIGN COMPANIES

124. Can a Foreign Company Own 100 Per Cent of a Pakistani Private Company?

Generally yes in many sectors, but sector-specific restrictions must be checked.

125. Do We Need a Pakistani Shareholder?

Not generally for ordinary sectors in which full foreign ownership is allowed.

A local partner should be selected because it improves the business, not because someone claims — without identifying the law — that every foreign investor needs one.

126. Do We Need a Pakistani Director?

The corporate and regulatory requirements applicable to the particular company should be reviewed. Foreign directors are permitted, subject to applicable documentation and security-clearance requirements.

Certain regulated sectors can impose additional board requirements.

127. Is a Branch a Separate Company?

No.

It is a presence of the overseas company.

That distinction has liability, tax and contractual consequences.

128. Can a Branch Trade Freely?

No.

BOI’s current published policy states that branch activity is restricted to work under the relevant contract/agreement and is not an unrestricted commercial/trading vehicle.

129. Can a Liaison Office Invoice Customers?

It should not conduct commercial activity.

A company intending to earn Pakistani operating revenue should consider a different structure.

130. Does a Branch or Liaison Office Require BOI Approval?

Yes, within the BOI permission regime for those forms.

131. Does It Also Need SECP Registration?

The foreign company must comply with Part XII of the Companies Act where it establishes a Pakistani place of business or otherwise falls within the statutory regime.

BOI permission and Companies Act filing are separate compliance layers.

132. How Long Do We Have for Foreign-Company Registration?

Section 435 provides a thirty-day filing period from the statutory triggering event.

BOI’s SOP separately requires specified SECP documentation following BOI permission.

The relevant dates should be diarised separately rather than conflated.

133. Are Foreign Documents Required to Be Legalised by a Pakistani Embassy?

Not necessarily in every case.

Current corporate regulations recognise apostille in qualifying circumstances as an alternative certification route.

The correct method depends upon the document and country of origin.

134. Is Security Clearance Required Before Every Foreign-Owned Company Can Be Incorporated?

No.

For many non-Indian foreign subscribers/officers, incorporation can proceed upon the prescribed undertaking while clearance is processed.

Indian nationals/persons of Indian origin are subject to the prior-clearance rule contained in the Companies Regulations.

135. Can Profits Be Repatriated?

Pakistan’s foreign-exchange regime provides mechanisms for repatriation of qualifying dividends, profits and disinvestment proceeds subject to applicable tax, banking, valuation and documentary requirements.

136. Can We Fund the Company Through a Foreign Loan?

Potentially, but cross-border borrowing requires specific SBP and tax analysis.

Do not treat foreign shareholder debt as an ordinary domestic loan.

137. What Is the Corporate Income-Tax Rate?

For an ordinary company the standard federal rate is presently 29 per cent, subject to the applicable tax year and other taxes.

Effective taxation may differ materially because of super tax, minimum tax, withholding and other rules.

138. Is a Liaison Office Tax-Free?

That is too broad a statement.

Its non-commercial status may mean there is little or no business income attributable to it, but tax registration, filing, permanent-establishment and other obligations should still be assessed.

139. Can We Hire Foreign Employees?

Yes, subject to immigration and other applicable requirements.

The BOI currently publishes a work-visa framework providing up to two-year entry/extension with multiple entries, subject to governmental approval.

140. Can Foreign Investors Obtain Long-Term Residence?

Eligible investors may now consider Pakistan’s Long Term Residency regime introduced under the Foreigners (Long Term Residency) Order, 2025.

141. Do We Need to Register Our Trademark?

Strongly advisable.

Foreign brand ownership should be secured in Pakistan before a distributor, employee or competitor has an opportunity to appropriate the mark.

142. Can We Buy a Pakistani Company Instead of Forming One?

Yes.

But comprehensive corporate, tax, litigation, labour, regulatory, property and beneficial-ownership due diligence should precede acquisition.

143. Do Takeover Rules Apply to a Private Company Acquisition?

The listed-company public-offer regime is specific to listed targets.

Private-company acquisitions involve a different corporate and contractual framework.

144. Could Competition Approval Be Required?

Yes.

Transactions meeting the Competition Act and Merger Control Regulations thresholds should be assessed for pre-merger notification.

145. Can We Resolve Disputes Through International Arbitration?

Yes, where a valid arbitration agreement is used and the subject matter permits arbitration.

Pakistan has legislation implementing the New York Convention framework for foreign arbitral awards.

146. Can a Non-Compliant Foreign Company Sue in Pakistan?

Section 441 can prevent a foreign company that has failed to comply with sections 435/436 from instituting specified proceedings until compliance is remedied, although the underlying contract is not necessarily invalidated.

147. Do Foreign Companies Need Pakistani Accounts?

Foreign-company financial reporting and Pakistan-business accounting requirements apply under the Companies Act.

The precise accounts depend upon the entity and statutory framework.

148. Can We Close a Branch Simply by Stopping Operations?

No.

Formal BOI, SECP, tax, banking and publication steps need to be managed.

149. How Early Should Branch/Liaison Renewal Begin?

BOI’s current SOP says renewal requests should be received at least three months before expiry.

150. Does Pakistan Have a Comprehensive Personal Data Protection Act?

As at August 2026, no comprehensive federal personal-data statute of that description is in force; MoITT continues to list the May 2023 Personal Data Protection Bill as a draft.

Sectoral and other legal obligations can nevertheless apply.

PART XXXIV — HOW JOSH AND MAK INTERNATIONAL ASSISTS FOREIGN INVESTORS

Foreign businesses entering Pakistan do not ordinarily need a lawyer simply to press the “submit” button on an incorporation portal.

They need Pakistani counsel who can identify how company law, investment policy, tax, banking, foreign exchange, sector regulation and commercial contracting interact.

Josh and Mak International advises foreign companies, overseas investors, multinational groups, international law firms, family offices and cross-border commercial clients on Pakistan market entry and continuing operations.

Our work can include:

Market-Entry Opinions

We can advise whether the client’s objectives are best served by:

• a wholly owned subsidiary;
• joint venture;
• branch;
• liaison office;
• acquisition;
• distributor arrangement;
• project vehicle; or
• another structure.

Company Incorporation

We can coordinate:

• name reservation;
• incorporation;
• foreign shareholder documentation;
• directors;
• memorandum and articles;
• UBO disclosure;
• registered office;
• post-incorporation filings; and
• regulatory coordination.

Branch and Liaison Office Work

We can advise and assist with:

• BOI applications;
• BLMIS filings;
• corporate document preparation;
• authentication;
• SECP foreign-company registration;
• renewal;
• conversion;
• change of representative;
• change of office;
• sub-office applications; and

Joint Ventures

We can draft and negotiate:

• shareholders’ agreements;
• investment agreements;
• reserved matters;
• board structures;
• minority protections;
• deadlock clauses;
• transfer rights;
• exit rights; and
• dispute-resolution clauses.

Acquisitions and Due Diligence

We can undertake legal due diligence into:

• target-company ownership;
• corporate records;
• liabilities;
• disputes;
• property;
• contracts;
• licences;
• employees;
• charges;
• IP;
• regulatory exposure; and

Regulatory Advice

We can identify and coordinate sector-specific requirements affecting the intended business model.

Foreign Exchange and Repatriation

Working alongside the client’s banking and tax advisers where appropriate, we can structure documentation concerning:

• foreign share capital;
• dividends;
• disinvestment;
• royalties;
• service fees;
• foreign loans; and
• commercial remittances.

Commercial Contracts

We can prepare and review:

• distribution agreements;
• agency agreements;
• supply contracts;
• EPC and project contracts;
• licence agreements;
• franchise agreements;
• consultancy agreements;
• technology agreements;
• employment agreements;
• NDAs;
• shareholders’ agreements;
• loan documents; and
• settlement agreements.

Disputes and Enforcement

Where an investment encounters difficulty, we advise on:

• Pakistani litigation;
• interim relief;
• arbitration;
• enforcement;
• regulatory proceedings;
• shareholder disputes;
• debt recovery;
• public-law challenges; and
• negotiated settlement.

PART XXXV — INFORMATION WE WOULD NORMALLY REQUEST FROM A FOREIGN CLIENT

For an initial structuring review, foreign clients can accelerate the advice process by providing:

1. full legal name and jurisdiction of the foreign parent;
2. certificate of incorporation;
3. corporate profile;
4. ownership and UBO chart;
5. proposed Pakistani business activity;
6. expected customers;
7. whether any Pakistani contract has already been awarded;
8. expected annual turnover;
9. proposed ownership percentages;
10. proposed directors;
11. nationalities of foreign shareholders/directors;
12. proposed capital;
13. anticipated number of employees;
14. number of foreign personnel;
15. whether land or premises will be acquired;
16. whether machinery will be imported;
17. whether the business will receive Pakistani revenue;
18. expected transfers to and from the foreign parent;
19. intellectual property to be licensed;
20. target commencement date;
21. sector licences already identified;
22. whether a local partner is proposed;
23. any target company if an acquisition is contemplated;
24. expected funding model; and
25. anticipated exit strategy.

With those facts, Pakistani counsel can usually determine the central legal structure quickly and identify where specialist tax, banking, regulatory or technical input is also required.

CONCLUSION — FOREIGN INVESTMENT IN PAKISTAN SHOULD BE STRUCTURED, NOT IMPROVISED

Pakistan does not present foreign investors with a single bureaucratic wall called “company registration”.

It presents a series of legal choices.

A foreign investor can often own a Pakistani company outright. It can establish a subsidiary. It may use a joint venture where commercial circumstances justify one. A foreign parent may register a branch for defined contractual activity. A liaison office can provide a limited non-commercial presence. Existing Pakistani companies can be acquired, subject to due diligence, foreign-exchange, competition, regulatory and — where relevant — listed-company takeover requirements.

The real legal work lies in determining which of those structures produces the correct combination of commercial freedom, liability protection, regulatory permission, tax efficiency, banking functionality and exit flexibility.

Corporate registration should never be viewed in isolation.

A company whose SECP record is immaculate but whose foreign investment cannot be repatriated has been badly structured.

A liaison office that earns revenue has been badly structured.

A subsidiary incorporated without checking its industry licence has been badly structured.

A joint venture that gives the local partner control of the bank account but contains no deadlock or exit mechanism has been badly structured.

A foreign acquisition completed without checking tax liabilities, employee claims, beneficial ownership or property title has been badly structured.

And a foreign company that discovers section 441 only when it needs to sue a defaulting Pakistani counterparty has allowed corporate compliance to become litigation risk.

The better approach is integrated legal planning from the outset.

A foreign client entering Pakistan should know, before substantial expenditure begins:

what entity will operate; who will own it; who will control it; what it may lawfully do; which regulator must approve it; how its money will enter Pakistan; how earnings may leave; what tax will arise; how foreign personnel may work; how intellectual property will be protected; how disputes will be resolved; and how the investment can ultimately be sold, closed or repatriated.

That is the difference between incorporating a company and establishing a business.

For foreign corporations, international investors and overseas counsel requiring advice on Pakistani market entry, branch or liaison registration, corporate structuring, joint ventures, acquisitions, foreign investment, regulatory approval, contracts or disputes, Josh and Mak International provides Pakistan-law advice focused upon the commercial objective behind the transaction rather than registration formalities alone.

Josh and Mak International
Your Gateway to Honest and Accurate Legal Advice

joshandmakinternational.com
aemen@joshandmak.com
WhatsApp: +92-304-8734889

This publication provides general information on Pakistani law as at 27 August 2026. Foreign investment, taxation, licensing, security clearance, immigration and foreign-exchange treatment may depend upon the nationality of the investor, sector, province, transaction structure and facts. Specific legal and tax advice should be obtained before implementing an investment or corporate restructuring.

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An Older Version of Our Original Article  at this page (Pre-2026) appears below: 

Options for Foreigners to Open a Limited Liability Company in Pakistan

If you are a foreign national or a foreign company looking to establish a limited liability company in Pakistan, there are four main options available to you. However, it is important to note that these options are subject to security clearance.

1. Branch Office: You can set up a branch office in Pakistan, which will serve as an extension of your foreign company. The branch office can engage in commercial activities and conduct business on behalf of the parent company. It is essential to comply with all legal and regulatory requirements in Pakistan for the smooth operation of the branch office.
2. Liaison Office: Establishing a liaison office is another option for foreigners. The primary purpose of a liaison office is to promote the products or services of the foreign company, provide technical advice and assistance, explore collaboration opportunities, and facilitate export promotion. However, a liaison office is not permitted to engage in commercial or trading activities.
3. Incorporate a New Company: Foreign nationals or companies can choose to incorporate a new limited liability company in Pakistan. This involves registering a separate legal entity under the Companies Act. By incorporating a new company, you will have your own distinct identity and legal status in Pakistan. This option provides more autonomy and flexibility in managing your business operations.
4. Acquisition of Shares: If you prefer to acquire shares in an already incorporated company in Pakistan, you have the option to do so. However, it is crucial to comply with the security clearance requirements set by the Ministry of Interior. Additional documents need to be submitted to the Securities and Exchange Commission of Pakistan during the registration process to seek security clearance.

Security Clearance Requirement: For foreign nationals serving as shareholders or directors in a company, security clearance is mandatory. These individuals must submit additional documents to the Securities and Exchange Commission of Pakistan at the time of filing company registration documents. The purpose is to seek security clearance from the Ministry of Interior.

In cases involving the transfer of shares to foreign nationals or the appointment of foreign individuals as directors or chief executives, security clearance is also obtained from the Ministry of Interior. However, if clearance is not granted, the foreign individual or company must provide an undertaking stating their willingness to transfer the shares or resign from the Board of Directors, as required.

Client information Article on structuring a local entity in Pakistan

When advising foreign companies and directors on the prospect of establishing a sister, affiliate, or subsidiary company in Pakistan, we believe that it’s crucial to understand the distinctions between these entities and the specific legal steps for setting them up.

Here’s an informed analysis for our clients tailored to guide them effectively in this regard.

Sister Company A sister company in Pakistan is a distinct legal entity that shares the same parent company with another company. It operates independently, although connected through common ownership. It’s essential for foreign entities to recognize that while sister companies may collaborate, they are legally separate and thus must adhere to Pakistani corporate laws independently.

Affiliate Company An affiliate company, while also a separate legal entity, differs in the degree of control exerted by the parent company. The parent entity might not have full ownership, but possesses significant influence, possibly through a substantial shareholding. In Pakistan, affiliates operate with some level of autonomy but must align certain decisions with the controlling company, especially if these decisions significantly impact the affiliate’s operations or financial health.

Holding Company A holding company is established with the primary purpose of owning shares in other companies (subsidiaries). It typically doesn’t engage in producing goods or services itself. In Pakistan, a holding company’s role is to oversee and manage its subsidiaries, making it a strategic choice for foreign entities looking to exert control over multiple companies while segregating liabilities and operations.

Establishing These Entities in Pakistan: Legal Steps

1. Company Name Approval: Initiate by applying for company name approval with the Securities and Exchange Commission of Pakistan (SECP).
2. Registration with SECP: Submit necessary documentation including the memorandum and articles of association, details of directors, and compliance documents.
3. Obtain National Tax Number (NTN): Secure an NTN from the Federal Board of Revenue.
4. Open a Corporate Bank Account: Essential for financial transactions.
5. Licenses and Permits: Depending on the business, obtain relevant permits from local or federal authorities.
6. Register with the Chamber of Commerce: Useful for networking and accessing business support.
7. Labour Law Compliance: Ensure adherence to Pakistani labour laws for employee management.

Key Legal Considerations

• Control and Influence: These entities differ in their degree of control and influence. A holding company has substantial control over subsidiaries, an affiliate is influenced but not completely controlled, and sister companies, while related, operate independently.
• Legal Liability: Each entity’s legal liabilities are typically contained, safeguarding other related entities from direct legal issues.
• Financial Independence: Sister and affiliate companies may exhibit more financial independence than subsidiaries under a holding company.
• Operational Autonomy: Sister companies generally enjoy more autonomy compared to affiliates or subsidiaries.

Conclusion The decision to establish a sister, affiliate, or holding company in Pakistan should be aligned with the business objectives, control requirements, and investment strategies of the foreign entity. Due to the complexities of corporate structuring and compliance with Pakistani laws, it’s advisable to seek legal and financial counsel to navigate these processes effectively.

This guidance aims to provide a foundational understanding for foreign entities considering expanding into Pakistan, highlighting the importance of strategic decision-making in line with legal and regulatory frameworks.

Registering a Foreign Company in Pakistan

Registering a foreign company in Pakistan involves a step-by-step process that requires compliance with the Companies Act 2017 and the Foreign Companies Regulations 2018 (as amended), obtaining permission from the Board of Investment (BOI), and fulfilling the registration requirements set by the Securities and Exchange Commission of Pakistan (SECP). It is essential to differentiate between foreign companies and local Pakistani companies with foreign directors or shareholders to ensure compliance with the relevant laws

Defining a Foreign Company in Pakistan:

Under the Companies Act 2017, a foreign company in Pakistan refers to any company or body corporate incorporated outside Pakistan that meets specific criteria:

• It maintains a place of business or liaison office in Pakistan, either directly or through an agent, physically or via electronic mode.
• It conducts any business activity in Pakistan through other means specified in the law.
• It has registration with the Securities and Exchange Commission of Pakistan (SECP) and permission from the Board of Investment (BOI) of Pakistan are mandatory for classification as a foreign company.

Differentiating Foreign Companies from Local Pakistani Companies:

It is crucial to understand that a foreign company is distinct from a local Pakistani company with foreign directors or shareholders. The registration process and legal requirements for these entities differ significantly. If you are a foreign entity interested in registering a company in Pakistan, please refer to the link below

https://joshandmakinternational.com/company-registration-in-pakistan/

Obtaining Permission for Branch or Liaison Office from the BOI (Board of Investment of Pakistan)

Before applying for name availability at the SECP, the first step for registering a foreign or multinational company in Pakistan is to acquire permission from the Board of Investment (BOI) for establishing a Branch or Liaison Office. The permission from BOI has to be annexed to the name availability application at the SECP.

Establishing a branch office in Pakistan allows foreign companies to fulfill their contractual obligations with the public or private sector.

A branch office, as defined by the Companies Act 2017, refers to any establishment set up by a foreign company that carries out the same or substantially similar activities as its parent company. It includes offices, factories, registration offices, or other fixed places of business. However, it does not include agencies unless the agent has the authority to negotiate and conclude contracts on behalf of the company.

To operate a branch office in Pakistan, companies must comply with all legal, regulatory, and procedural requirements set by relevant government departments and agencies. These requirements encompass guidelines prescribed by the Board of Investment (BOI), Securities and Exchange Commission of Pakistan (SECP) for branch offices, the State Bank of Pakistan (SBP) for fund flow, and the Federal Board of Revenue (FBR) for taxation and transactions. Branch offices are restricted from engaging in commercial or trading activities.

Renewal of Registration:

The permission granted by the Board of Investment (BOI) for establishing a branch office is subject to renewal. Companies must provide all necessary documents and pay the applicable fees to renew their registration.

Submission of Request for Branch office  to the BOI (Board of Investment)

The foreign company seeking to open a branch office must submit its request through the online “Branch/Liaison Management Information System (BLMIS)” on the Board of Investment’s website. All formalities and fees related to the application process should be completed.

Application and Documentation for submission at the BOI (Board of Investment)

• Completed application form for a branch office, as prescribed by the Board of Investment to be sent to BOI portal.
• Copy of the foreign company’s registration or certificate of incorporation, attested by the respective Pakistani Embassy, High Commission, or Consulate General.
• Copy of the foreign company’s Memorandum and Articles of Association, attested by the respective Pakistani Embassy, High Commission, or Consulate General.
• Copy of the resolution or authority letter from the company authorizing the establishment of a branch office in Pakistan.
• Company profile of the foreign company.
• Copy of the designated person’s CNIC/Passport and Curriculum Vitae (CV) who will act on behalf of the company.
• Payment of the prescribed fees set by the Board of Investment.
• Any additional documents requested by the Board of Investment.
• Directors’ Information: Include the CVs and copies of the passports of all directors of the foreign company.

For further assistance and guidance on registering a branch office in Pakistan, please contact our knowledgeable team of legal experts at Josh and Mak International. We are dedicated to helping foreign companies navigate the complexities of the registration process and ensure compliance with all applicable laws and regulations of Pakistan.

Establishing a Liaison Office in Pakistan (BOI Permission)

Foreign companies seeking to promote their products, provide technical advice, explore collaboration opportunities, and engage in export promotion can establish a liaison office in Pakistan. This article aims to provide a comprehensive overview of the registration procedure for liaison offices, including the required documents and the application process. Understanding these guidelines is essential for foreign companies looking to enhance their presence and activities in Pakistan.

A liaison office, as a representative office of a foreign company in Pakistan. Its primary functions include product promotion, provision of technical advice and assistance, exploring collaboration opportunities, and facilitating export activities. However, it is important to note that liaison offices are not permitted to engage in any commercial or trading activities.

Submission of Request to the BOI

The foreign company should submit a written request to the Board of Investment (BOI) or complete the online application process, ensuring that all necessary formalities and fees are fulfilled.

Application and Documentation:

The following documents are required for BOI (Board of Investment) permission the opening of a liaison office:

• Completed application form for a liaison office, as prescribed by the Board of Investment.
• Copy of the foreign company’s registration or certificate of incorporation, duly attested by the respective Pakistani Embassy, High Commission, or Consulate General.
• Copy of the foreign company’s Memorandum and Articles of Association, duly attested by the respective Pakistani Embassy.
• Copy of the resolution or authority letter from the company, granting permission to establish a liaison office in Pakistan.
• Company profile providing information about the foreign company’s activities, experience, and objectives.
• Copy of the designated person’s CNIC/Passport and Curriculum Vitae (CV) who will act on behalf of the company.
• Payment of the prescribed fees set by the Board of Investment.
• Any additional documents requested by the Board of Investment.
• Directors’ Information: Include the CVs and copies of passports of all directors of the foreign company.

Establishing a liaison office in Pakistan enables foreign companies to engage in various promotional and collaborative activities while exploring opportunities in the local market. By adhering to the registration process outlined by the Board of Investment, companies can navigate the legal requirements and expand their presence in Pakistan. It is crucial to seek guidance from experienced legal professionals to ensure compliance with all applicable laws and regulations.

For expert advice and assistance regarding the registration of a liaison office in Pakistan, please contact our dedicated team of legal experts at Josh and Mak International. We possess extensive experience in corporate matters and can guide you through the entire process, ensuring a smooth and successful establishment of your liaison office in Pakistan.

Should you register as a Branch Office of A Foreign Company and a Liaison Office of A Foreign Company in Pakistan? A comparative chart.

Once the BOI grants permission, the next phase involves fulfilling the SECP’s registration requirements. This includes submitting the necessary documents and information as specified by the SECP.

Our experienced team of legal professionals is ready to assist you in navigating the complexities of company registration and ensuring compliance with local laws and regulations

Due Diligence Process with Certified Copies of Company Documents (Memorandum and Articles of Association, Certificate of Incorporation)

Foreign Company Registration in Pakistan (the SECP Process)

Frequently Asked Questions (FAQs) about Foreign Company Liaison Office /branch Office  registration in Pakistan at the SECP

What is meant by a foreign company?

A foreign company is a company registered outside Pakistan, governed by a foreign law other than Pakistani law and establishes its place of business in Pakistan.

Is registration of a foreign company mandatory with the Securities & Exchange Commission of Pakistan?

Yes, registration of a foreign company with the Securities & Exchange Commission of Pakistan is mandatory.

Is a foreign company required to obtain any other permission from any other organization for opening and maintaining of its branch/liaison office in Pakistan?

A foreign company desirous of setting up a branch or liaison office is required to obtain permission from the Board of Investment, Government of Pakistan.(The procedure has been discussed above).

For how long does the Board of Investment grant permission to open a branch/liaison office of a foreign company in Islamic Republic of Pakistan?

The permission for the opening of a branch/liaison office is granted by the Board of Investment for an initial period of three to five years. Copy of such a permission letter is required to be furnished with the documents needed for the registration of a foreign company.

Following expiry does the branch/liaison need permission again from Board of Investment?

Yes. After expiry the renewal/extension of the permission to open/maintain a branch/liaison office is also required to be obtained from the Board of Investment on the expiry of the validity period of the permission originally granted. Whenever such a renewal/extension is granted, a copy must be furnished to the Registrar SECP concerned. A further extension is granted after reviewing the performance of the entity during the initial period.

Can a foreign company adopt any name it likes or are there are any restrictions?

A foreign company can establish a principal place of business in Pakistan in the name of the company registered in the country of origin.

The memorandum and articles of association of a foreign company is in language other than English, will the Securities & Exchange Commission of Pakistan accept them?

If the document constituting charter, statute or memorandum and articles of association are not in English or Urdu, duly certified translation into English or Urdu must be provided. Where any such translation is made outside Pakistan it shall be authenticated by the signature and seal of the public officer or public notary in the country where the company is incorporated, provided that the signature or seal of the person so certifying has been authenticated by a Pakistan diplomatic consular or consulate officer.

Within how many days is a foreign company required to deliver requisite documents to the Registrar Securities & Exchange Commission of Pakistan?

Every foreign company that establishes a place of business in Pakistan has to deliver the requisite documents to the registrar concerned within thirty days of establishment of a place of business in Pakistan.

What type of certification is required for the documents constituting or defining the constitution of a foreign company?

A copy of any charter, statute, memorandum, articles or other instrument, constituting or defining the constitution of a foreign company is required to be duly certified by:-

• the public officer in the country where the company is incorporated to whose custody the original is committed; or
• a public notary of the country where the company is incorporated; or
• an affidavit of a responsible officer of the company in the country where the company is incorporated

The signature and seal of the official referred to above, or the certificate of the public notary referred to above shall be authenticated by a Pakistani diplomatic consular or consulate officer.

Is a foreign company required to file any document/s to the registrar concerned regarding change or alteration therein?

Yes, foreign company is required to notify the registrar on any changes or alterations of the documents.

What is meant by Global Accounts Filing in Pakistan?

Global accounts are the accounts which a foreign company files with the authorities in its country of origin. If a foreign company is not required to file the Accounts in the country of origin, it will prepare global accounts and get them audited for the purpose of filing such accounts under the Companies Act 2017 in the same manner as a public company.

Are there any statutory obligations for foreign companies?

A foreign company is required to comply with the statutory obligations i.e – to maintain at its principal place of business in Pakistan a register of Pakistani members and debenture holders, directors and officers, which shall be open to inspection.

• – In every prospectus inviting subscriptions for its shares or debentures in Pakistan, state the country in which the company is incorporated.
• – Conspicuously exhibit on the outside of every place where it carries out business in Pakistan the name of the company and the country in which the company is incorporated in letters easily legible in English or Urdu characters and also, if any place where it carries out business is beyond the local limits of the ordinary civil jurisdiction of a High Court, in the characters of one of the vernacular language used in that place. The name of the company and of the country in which the company is incorporated must be mentioned in all legible English or Urdu characters in all bill-heads and letter papers, and in all notices, advertisements, documents and other official publication of the company.
• If the liability of the members of the company is limited, notice of that fact must be stated in legible English or Urdu characters in every prospectus inviting subscriptions for its shares, all letters, bill headings, notices, advertisements, and other official publications of the company in Pakistan, and to be exhibited on the outside of every place where it carries out business in Pakistan.

Is there any exclusion to foreign companies in terms of delivering accounts?

No there is no exclusion. All foreign companies must deliver accounts in Pakistan, and accounts would be prepared and adjusted like any public company.

Are company law provisions on registration of mortgages and charges also applicable to foreign companies?

Yes, all the provisions of Company law in Pakistan relating to the registration of mortgages and charges are also applicable to a foreign company.

Do books of account need be kept by a foreign company?

Every company has to keep at its registered office proper books of accounts, the provisions of the said section also apply to the foreign companies.

Does a foreign company need to give notice to the registrar before closure of its business in Pakistan?

Any foreign company, at least thirty days before it intends to cease to have any place of business in Pakistan, must give a notice of intention to the concerned registrar and 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 situated. As from the date of intention to cease to have any place of business in Pakistan stated in the notice, unless the said date is by a similar notice altered, the obligation of the company to deliver any document to the registrar shall cease, provided it has no other place of business in Pakistan.

If a foreign company having an established place of business in Pakistan goes into liquidation in the country of origin what procedure is to be adopted in Pakistan?

If a foreign company that has an established place of business in Pakistan goes into liquidation in the country of its incorporation then it shall within thirty days give notice thereof to the registrar, and simultaneously publish a notice at least in two daily newspapers circulating in the Province or Provinces in which its place or places of business are situated and furnish to the registrar within thirty days of the conclusion of the liquidation proceedings all returns relating to the liquidation and the liquidation account in respect of such portion of the company’s affairs as relates to its business in Pakistan. Publish a statement on every invoice, order, bill-head, letter or notice of other publication in Pakistan that the company is being wound up in the country of its incorporation. Where a company has been dissolved no person shall, after the date of such dissolution or cessation, carry on or purport to carry on any business in Pakistan in the name or on behalf of such a company.

If a foreign company in Pakistan fails to comply with the provisions of the Companies Legislation is there any penalty?

If any foreign company fails to comply with any of the provisions of the Company Laws in Pakistan then the company and every officer or agent of the company who knowingly or wilfully authorizes or permits the default shall be liable to fine.

Are foreign companies required to be registered with tax authorities in Pakistan?

Yes, Liaison/Branch office are required to be registered with the tax authorities in Pakistan.

Please contact Josh and Mak International law firm for further details and professional business and legal consultation, at aemen@joshandmak.com 

More information on Foreign Company Registration in Pakistan

Company Ownership in Pakistan, What does ‘Owned or Controlled by Aliens’ mean?

A company in which 50% or more of the shares are subscribed by a foreign national would be regarded as a company controlled by a person resident outside Pakistan. Foreign-controlled companies engaged in manufacturing are entitled to borrow working capital without limit; semi-manufacturing and non-manufacturing concerns are allowed to borrow 75% and 50% respectively of their paid up capital including reserves. Such companies engaged in manufacturing also permitted to raise rupee capital requirements from local banks or financial institutions. Except for restriction above, corporations controlled by aliens are treated on same basis as Pakistani controlled companies.

Companies (Appointment of Legal Advisers) Act 1974.

Under § 3 every company with paid up capital of more than Rs. 500,000 shall appoint at least one legal adviser on retainership to advise such company in performance of its functions and discharge of its duties in accordance with law.

Retainer in respect of a legal adviser appointed by a company shall not be less than Rs.1,200 per mensem.

An advocate may represent three companies as legal adviser and a registered firm may represent product of three and total number of partners of firm.

An advocate means an advocate entered in any roll under provisions of Legal Practitioners and Bar Councils Act 1973.

Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance 2002 prohibits any person from directly or indirectly acquiring voting shares, which (taken together with voting shares, if any, held by such person) would entitle such person to more than 25% voting shares in listed company or control of listed company unless such person makes public announcement of offer to acquire voting shares or control of such company. Acquisition of shares must be preceded by public announcement required to be published in one Urdu and one English daily newspaper having circulation in province in which concerned stock exchange is situated. Copy of announcement also needs to be submitted to SECP, concerned stock exchange and target company at least two working days prior to publication. In addition, acquirer is required to make disclosure of aggregate of his shareholding in target company to company itself as well as to concerned stock exchange. Acquirer is also required to send letter containing formal offer to target company, all shareholders (including convertible security holders, if any) of target company and concerned stock exchange within two working days of publication. List of relevant shareholders is required to be supplied to acquirer by board of directors of target company.

What is a foreign company under the Companies Act 2017?

As per the Act a “foreign company” is defined as any company or body corporate incorporated outside Pakistan, which—

(a) has a place of business or liaison office in Pakistan whether by itself or through an agent, physically or through electronic mode; or

(b) conducts any business activity in Pakistan in any other manner as may be specified;

 What is the process for reservation of name by a Foreign Company ?

As per sections 435 and 442 of the Companies Act 2017  and as per the Foreign Companies Regulations 2018, a foreign company desirous of establishing a place of business in Pakistan can apply to Registrar for reservation of name in terms The registrar, while considering the application may require it to furnish additional information or document as deemed appropriate and necessary. This needs to be done within the time allowed by the registrar which is basically a period of sixty days if he is satisfied that the name applied for registration by the foreign company is identical to its name in the country of origin and does not fall within the prohibitions provided in Section 10 of the  Companies Act 2017.If the applicant fails to file documents for registration under regulation 5 of the Foreign Companies Regulations, 2018 along- with evidence of payment of fee within sixty days period, the name shall not remain available. After the reservation of name, a foreign company shall be bound to obtain all necessary approvals from relevant authorities as per the applicable policy of the Federal Government of Pakistan.

Can the foreign company name be refused? Yes, and if this is the case the registrar will order issues of refusal as per Annexure-II of the 2018 Regulations.

Is there a requirement for the establishment of a place of business or liaison office in Pakistan by a Foreign Company?

AS per regulation 5 of the 2018 Regulations, subject to sections 434 and 435 of the Act and regulation 3, every foreign company shall deliver the information and documents as mentioned in section 435 of the Act to the registrar as per Form-II along with payment of fee.

(2) Copies of documents required to be filed with the registrar shall be certified in the manner as provided in regulation 13 and the translation of any document in English or Urdu shall be certified in a manner as provided in Regulation 14.

Companies Act 2017 relates retrospectively to foreign companies wishing to establish a place of business in Pakistan. As per section 434 the provisions of the Act shall apply to all foreign companies, that is to say, companies incorporated or formed outside Pakistan which, after the commencement of this Act, establish a place of business within Pakistan or which have, before the commencement of this Act, established a place of business in Pakistan and continue to have an established either a place of business within Pakistan or conduct business in Pakistan through an agent or any other means at the commencement of this Act.

Which Documents are to be delivered to the SECP registrar by foreign companies?

As per section 435 every foreign company which, after the commencement of this Act, establishes a place of business in Pakistan shall, within thirty days of the establishment of the place of business or conduct of business activity, deliver to the  SECP registrar—

(a)  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, and if the instrument is not written in the English or Urdu language, a certified translation thereof in the English or Urdu language;

(b)  the full address of the registered or principal office of the company;

(c)  a list of the directors, chief executive, and secretary (if any) of the company;

(d)  a return showing the full present and former names and surnames, present and former nationality, full address in Pakistan and such other particulars, as may be specified, of the principal officer of the company in Pakistan by whatever name called; and

(e)  the full present and former names and surnames, full addresses and such other particulars as may be specified of some one or more persons resident in Pakistan authorized to accept on behalf of the company service of process and any notice or other document required to be served on the company together with his consent to do so; and

(f)  the full address of that office of the company in Pakistan which is to be deemed its principal place of business in Pakistan of the company.

How would you define Business Activity for a Foreign Company under the Companies Act 2017 and Foreign Companies Regulations 2018?

As per the 2017 Act “conduct of business activity” includes any business to be undertaken by a foreign company by virtue of its memorandum and articles of association or as licensed or authorized by any law (of Pakistan).

What particular list of the directors, chief executive, and secretary (if any) of the Foreign company is to be submitted to the Registrar?

With respect to each director, chief executive, and secretary:

• In the case of an individual director/ chief executive his present and former name and surname in full, his usual residential address, his nationality, and if that nationality is not the nationality of origin, his nationality of origin, and his business occupation, if any, and any other directorship which he holds;
• In the case of a body corporate/ chief executive as a director, its corporate name and registered or principal office; and the full name, address, nationality and nationality of origin, if different from that nationality, of each of its director;
• In case of a Secretary (individual), his present and former name and surname, and his usual residential address and in the case of a Secretary (body corporate), its corporate name and registered or principal office.
• Where all the partners in a firm are joint secretaries of the company, the name and principal office of the firm may be stated instead of the particulars mentioned above.

What if a foreign company registered before 2017, failed to comply with the old Companies Ordinance 1985 (section 451)?

If a foreign company, has not delivered to the registrar before the commencement of the 2017 Act, the documents and particulars specified in section 451 of the Companies Ordinance, 1984 (XLVII of 1984), shall continue to be under an obligation to deliver those documents and particulars and be liable to penalties in accordance with the provisions of the 1984 Ordinance.

If any of my Foreign Companies Details change in the country of Incorporation or Pakistan, do I need to resubmit these documents?

As per Section 436 of the Companies Act 2017, if any alteration is made or occurs in the following records of a Foreign Company in the original Country of Incorporation or in Pakistan, the company within thirty days of the alteration has to deliver to the SECP registrar a return containing the specified particulars of the alteration and in the case of change in persons authorized to accept service of process, notices and other documents on behalf of the company,their consent to do the same.

(a)  the charter, statute or memorandum and articles of a foreign company or any such instrument as is referred to in section 435;

(b)  the address of the registered or principal office of the company

(c)  the directors, chief executive or secretary or in the particulars contained in the list referred to in section 435;

(d)  the principal officer referred to in section 435;

(e)  the name or addresses or other particulars of the persons authorized to accept service of process, notices, and other documents on behalf of the company as referred to in the preceding section 435, or

(f)  the principal place of business of the company in Pakistan;

What are the laws about Financial Reporting by Foreign Companies in Pakistan?

As per Section 437 of the Companies Act 2017, every foreign company shall annually make out and file with the registrar, together with a list of Pakistani members and debenture-holders and the places of business of the company in Pakistan

(a)  such number of copies of financial statements, not being less than three, as may be specified, in such form, audited by such person, containing such particulars and including or having annexed or attached thereto such documents (including, in particular, documents relating to every subsidiary of the foreign company in Pakistan ) as nearly as may be as under the provisions of this Act it would, if it were a company formed and registered under this Act, be required to file in accordance with the provisions of this Act, in respect of the company’s operations in Pakistan as if such operations had been conducted by a separate public company formed and registered in Pakistan under this Act; and

(b)  in a case where, by the law for the time being in force of the country in which the company is incorporated, such company is required to file with the public authority an annual statement of financial position and profit and loss accounts, also such number of copies of that statement of financial position and profit and loss account together with any documents annexed thereto as may be specified, and if the same is not in the English language a certified translation thereof; or

(c) in a case where a company is not required to file with the public authority of the country in which the company is incorporated an annual statement of financial position and profit and loss account as referred to above the specified number of copies, not being less than three, of the statement of financial position and profit and loss account and the report of auditors and other documents annexed thereto, in such form and manner as under the provisions of this Act it would, if it had been a public company within the meaning of this Act, be required to make out and lay before the company in general meeting.

The period within which the documents, returns, or reports referred to in sub-section (1) are to be filed with the registrar shall be a period of forty-five days from the date of submission of such documents or returns to the public authority of the country of incorporation or within one hundred and eighty days of the date up to which the relevant accounts are made up, whichever is earlier.

Guide on Regulatory Regime for Foreign Investments in Pakistan

Introduction

Josh and Mak International is dedicated to providing robust legal support and information regarding the regulatory landscape for foreign investments in Pakistan. The regulatory framework is shaped by a combination of statutory provisions and policy directives from the Board of Investment (BOI). Understanding these elements is crucial for foreign investors seeking to navigate the legal and administrative requirements in Pakistan.

Board of Investment Policies

The BOI plays a significant role in shaping the investment climate through its fluid and adaptable policies. Although the BOI does not possess statutory authority, its policies historically influenced compliance due to its control over remittances through the State Bank of Pakistan. However, with the liberalisation of the foreign exchange regime under the Foreign Exchange Regulation Act, the strict enforcement of BOI policies has decreased, although compliance remains essential for smooth operations.

Statutory Regulation: Companies Act, 2017

The primary statutory framework for foreign investments is found in the Companies Act, 2017, particularly Part XII (Sections 434 to 445). This part mandates that foreign companies establishing a ‘place of business’ in Pakistan must register with the Securities and Exchange Commission of Pakistan (SECP). A ‘place of business’ encompasses any form of office, including liaison or branch offices.

Registration Requirements

Foreign companies must submit several documents to the SECP:

• Constitution and bye-laws
• Full address of the registered office
• List of directors
• Audited balance sheets and profit or loss accounts
• Address of the company in Pakistan

Failure to register precludes the foreign company from filing suits or claiming set-offs in Pakistani courts, though their contracts remain valid.

BOI Directives

In addition to statutory requirements, the BOI issues directives that foreign companies must follow. For instance, foreign companies establishing a branch or liaison office must file an application with the BOI. These offices are limited to non-commercial activities such as quality control, technical assistance, joint collaboration exploration, and export promotion.

Options for Foreign Investors

Foreign nationals or companies can invest in Pakistan through several avenues, subject to security clearance:

1. Branch Office: For conducting activities aligned with the parent company.
2. Liaison Office: For non-commercial activities.
3. Incorporating a New Company: Establishing a separate legal entity.
4. Acquisition of Shares: In an existing Pakistani company.

Security Clearance

Security clearance from the Ministry of Interior is mandatory for foreign shareholders or directors. This involves submitting comprehensive documentation, including:

• Complete bio-data of directors/chief executive/shareholders
• Resumes, qualifications, and valid passports
• Passport size photographs
• Contact details
• Notarised undertakings confirming compliance with security clearance requirements

In cases where a foreign company is a shareholder, additional documentation such as notarised certificates of incorporation, memoranda and articles of association, and board resolutions are required.

Repatriation of Foreign Investment

Profits from foreign investments can be repatriated with an ‘Entitlement Certificate’ from the State Bank of Pakistan. This certificate authorises scheduled banks to handle remittances of dividends to non-resident shareholders, following the procedures outlined in the Foreign Exchange Manual.

Conclusion

Navigating the regulatory regime for foreign investments in Pakistan involves understanding both statutory requirements and policy directives. At Josh and Mak International, we are committed to guiding our clients through these processes to ensure compliance and facilitate successful investments. By adhering to these regulations, foreign investors can confidently engage in business activities within Pakistan.

What legal obligations of foreign companies in Pakistan arise under the Companies Act 2017?

As per the Act every foreign company shall–

(a)  maintain at its principal place of business in Pakistan, or, if it has only one place of business in Pakistan, in that place of business, a register of Pakistani members and debenture-holders, directors, and officers, which shall be open to inspection and copies thereof supplied as in the case of similar registers maintained by a company under this Act;

(b)  in every prospectus inviting subscriptions for its shares or debentures in Pakistan, state the country in which the company is incorporated;

(c)  conspicuously exhibit on the outside of every place where it carries on business in Pakistan the name of the company and the country in which the company is incorporated in a letter easily legible in English or Urdu characters and also, if any place where it carries on business is beyond the local limits of the ordinary original civil jurisdiction of a Court, in the characters of one of the vernacular language used in that place;

(d)  cause the name of the company and of the country in which the company is incorporated mentioned in legible English or Urdu characters in all bill-heads and letter papers, and in all notices, advertisements, documents, and other official publications of the company; and

(e) if the liability of the members of the company is limited, cause notice of that fact to be stated in legible English or Urdu characters in every prospectus inviting subscriptions for its shares, and in all bill-heads and letter papers, notices, advertisements and other official publications of the company in Pakistan, and to be exhibited on the outside of every place where it carries on business in Pakistan.

What powers does the SECP have to require information from foreign companies in Pakistan?

As per section 439 of the Companies Act, the Commission may, at any time, call upon a foreign company to furnish information of shareholding including beneficial ownership or such other information or document, as may be required for this Act or in connection with any inspection, inquiry or investigation and it shall be the duty of the company and its officers to furnish such information or document within specified time.

What is the legal requirement for serving process documents or notices on a foreign company in Pakistan?

A document may be served on the company against an acknowledgement or by post or courier service to, any place of business established by the company in Pakistan or through electronic means or in any other manner as may be specified.

Refer to Section 440 of the Companies Act 2017, where it is stated that any process, notice, or other document required to be served on such company as is referred to in this Part shall be deemed to be sufficiently served if addressed to any person whose name has been so filed with the registrar as aforesaid and left at or sent by post to the address which has been so filed.This is based on the two conditions below:

 (a)  where any such company makes default in delivering to the registrar the name and address of a person resident in Pakistan who is authorized to accept on behalf of the company service of process, notices, or other documents; or

(b)  if at any time all the persons whose names and addresses have been so filed are dead or have ceased to so reside, or refuse to accept service on behalf of the company or for any reason cannot be served;

Does a company’s failure to comply with section 435 or section 436  affect its arrangements under contracts (right to sue or liability to be sued) it has signed in Pakistan?

As per Section 441 Any failure by a foreign company to comply with any of the requirements or section 435 or section 436 shall not affect the validity of any contract, dealing, or transaction entered into by the company or its liability to be sued in respect thereof; but the company shall not be entitled to bring any suit, claim any set-off, make any counter-claim or institute any legal proceeding in respect of any such contract, dealing or transaction until it has complied with the provisions of section 435 and section 436.

Do the same provisions which apply to domestic companies apply to foreign companies with respect to names, changes in names, and SECP powers of inspection, inquiries, and investigation?

As per Section 442 the provisions of sections 10 to 13 of the Companies Act 2017 relating to names and changes in the names of companies shall, as far as applicable, also apply to foreign companies and the power of inspection, inquiries, and investigation conferred by this Act on the registrar and the Commission in respect of companies shall likewise extend to such foreign companies.

Exiting Pakistan, what is the obligation of intimation of ceasing to have a place of Business in Pakistan upon a foreign company?

As per section 443 Companies Act 2017,  any company to which this Part applies shall at least thirty days before it intends to cease to have any place of business in Pakistan, –

(a)  give a notice of such intention to the SECP registrar; and

(b)  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 situated.

As per Section 445 (c)  the expression “place of business” includes a branch, management, share transfer or registration office, factory, mine, or other fixed place of business, but does not include an agency unless the agent has, and habitually exercises, a general authority to negotiate and conclude contracts on behalf of the company or maintains a stock of merchandise belonging to the company from which he regularly fills orders on its behalf:

 (i) a company shall not be deemed to have an established place of business in Pakistan merely because it carries on business dealings in Pakistan through a bona fide broker or general commission agent acting in the ordinary course of his business as such;

(ii) the fact that a company has a subsidiary which is incorporated, resident, or carrying on business in Pakistan (whether through an established place of business or otherwise) shall not of itself constitute the place of business of that subsidiary an established place of business of the company; and

What is the law relating to issues, circulation, or distribution of prospectus offering for subscription securities of a foreign company or soliciting deposits of money?

Section 446 of the Companies Act 2017 states that No person shall issue, circulate or distribute in Pakistan any prospectus offering for subscription securities of a foreign company or soliciting deposits of money, whether the company has or has not established, or when formed will or will not establish, a place of business in Pakistan unless authorized to do so by the Commission under the relevant law or as may be specified.

Is there a restriction on canvassing for sale of securities of a foreign company in Pakistan?

Section 447 states that no person shall go from house to house offering securities of a foreign company for subscription or purchase to the public or any member of the public.This provision pertains to a restriction on canvassing for the sale of securities, specifically those issued by foreign companies. According to this provision it is prohibited for any individual to go door-to-door, approaching households to offer securities of a foreign company for subscription or purchase to the public or any member of the public. This section further clarifies that the term “house” in this context does not encompass an office used for business purposes. In other words, the restriction on canvassing applies to residential premises and not to offices or establishments primarily engaged in business activities.This provision is designed to regulate and control the offering and sale of securities by foreign companies to the public, ensuring transparency and safeguarding the interests of investors. By prohibiting door-to-door solicitation of securities, the provision aims to prevent unscrupulous practices and maintain the integrity of the securities market.Individuals and companies involved in the sale and distribution of securities need to comply with such regulations to maintain legal and ethical standards while engaging with potential investors.

What are the obligations of a foreign company in Pakistan for registration of charges on property by property acquired or owned by foreign company?

As per Section 448 of the Companies Act 2017, sections 100 to 112 of the Companies Act 2017 shall apply to charges on properties in Pakistan which are created, and to charges on property in Pakistan that is acquired, by a foreign company which has an established place of business in Pakistan. With regard to these sections, the registered office of the foreign company shall be deemed to be reference to the principal place of business in Pakistan of the company. This provision also deals with the situtations where a charge is created outside Pakistan or the completion of the acquisition of property takes place outside Pakistan.

Where a company to which this section  448 applies creates or has created at any time before establishing a place of business in Pakistan, a charge on any property otherwise registerable under this Act it shall register the same with the SECP registrar by the provisions of this Act−

 (a)  within thirty days of the establishment of a place of business in Pakistan; or

(b)  if the charge was created before the commencement of this Act and subsisted immediately before such commencements, within ninety days thereof.

What law is applicable for a foreign company with regards to notice to SECP of appointment of a receiver?

As per section 449, the provisions of sections 113 and 114 of the Companies Act 2017 shall mutatis mutandis apply to the case of all foreign companies having an established place of business in Pakistan and the provisions of section 220 of the Companies Act 2017 shall apply to foreign companies to the extent of requiring them to keep at their principal place of business in Pakistan the books of account required by that section(220) with respect to money received and expended, sales and purchases made, and assets and liabilities in relation to its business in Pakistan. Here registered office of the company means the principal place of business in Pakistan of the company.

If a foreign company having an established place of business in Pakistan goes into liquidation in the country of its incorporation, does it have to notify the SECP Registrar in Pakistan?

The answer is yes, as per section 450 of the Companies Act 2017 if a foreign company having an established place of business in Pakistan goes into liquidation in the country of its incorporation, it shall–

(a)  within thirty days give notice thereof to the registrar, and simultaneously publish a notice at least in two daily newspapers circulating in the Province or Provinces or the part of Pakistan not forming part of a Province, as the case may be, in which its place or places of business are situated and furnish to the registrar within thirty days of the conclusion of the liquidation proceedings all returns relating to the liquidation and the liquidation account in respect of such portion of the company’s affairs as relates to its business in Pakistan; and

(b)  cause, in legible letters, a statement to appear, on every invoice, order, bill-head, letter paper, notice of other publication in Pakistan, to the effect that the company is being wound up in the country of its incorporation.

How can a foreign company in Pakistan change its name and register alteration in documents/details of the foreign company in the country of its incorporation?

As per the Foreign Companies Regulation, in case a foreign company changes its name in the country of origin, it may file an application to the registrar to change its registered name subject to compliance with the requirements of section 12 of the Companies Act 2017  as far as applicable and regulation 3 of these regulations.The SECP registrar after satisfying himself that the requirement under the Act and these regulations are fully met shall register the new name in place of the former name and shall issue a certificate as per Annexure-IV of the Foreign Companies Regulation to meet the circumstances of the case.

As per Foreign Companies Regulation 2018, pursuant to the provisions of section 436 of the  Companies Act, a return for any alteration in any documents and other details of a foreign company as per Fnc. Form-III containing the specified particulars of the alteration shall be delivered along with payment of specified fee within thirty days of the alteration to the registrar for registration.In case of change in persons authorised to accept service of process, notices and other documents on behalf of the company, the consent of such person shall also be attached to Fnc. Form-III of the Foreign Companies Regulation 2018.

Which accounts need to be filed by the foreign company in Pakistan?

As per Foreign Companies Regulation 2018 every foreign company shall, in every year within the time period as mentioned in sub-section (2) of section 437 of the Companies Act 2017 file the following accounts as per Fnc. Form-V with the registrar, together with a list of Pakistani members and debenture-holders and of the places of business of the company in Pakistan,—

(i) three copies of accounts in respect of the company’s operations in Pakistan, pursuant to clause (a) of sub-section (1) of section 437 of the Companies Act 2017; and

(ii) three copies of the accounts and documents as referred to in clause (b) of sub-

section (1) of section 437 Companies Act 2017, together with such additional documents, if not already attached, as are required to be annexed with the accounts referred to in clause (a) of sub-section (1) of section 437; or

(iii) three copies of the accounts together with the documents as referred to in clause (c) of sub-section (1) of section 437 of the Companies Act 2017

As per Foreign Companies Regulation 2018 Regulation 10 a foreign company shall at least thirty days before it intends to cease to have any place of business in Pakistan give notice to the registrar on Fnc. Form-VI along with payment of SECP fee.

Who can file Foreign Company documents?

Any application, document, or report required to be filed or lodged by the foreign company under any provision of the Act or these regulations shall be so filed or lodged online through e-service or in physical form in the following manner to the Commission or the Registrar, as the case may be:

(i) through authorized intermediary or authorized officer ;

(ii) accompanied by the fee payment as per Seventh Schedule;

(iii) signed and verified by the authorized intermediary or authorized

officer;

(iv) in case of manual application, it shall be in printed form setting out precisely the facts, grounds and specifying the relevant provisions of the Act under which action is applied for along with documents referred to in the application;

(v) in case of an appeal, it shall be accompanied by a certified copy of such order or decision.

What kind of certification of documents is required to be filed by a foreign company under the Companies Act 2017?

As per Foreign Companies Regulation 2018, a copy of any charter, statute, memorandum, articles or other instrument, constituting or defining the constitution of a foreign company required to be filed with the registrar under clause (a) of sub-section (1) of section 435 and 436 and any other document required to be filed under Part XII of the Act and these regulations, shall be duly certified to be a true copy by –

(i) the public officer in the country where the company is incorporated to whose custody the original is committed; or

(ii) a Notary public of the country where the company is incorporated; or

(iii) an affidavit of an authorized officer of the company duly authorized in the country where the company is incorporated.

The signature and seal of the official referred to above or the certificate of the Notary Public referred to above shall be authenticated by a Pakistan diplomatic consular or consulate officer.

The affidavit of the officer of the foreign company referred shall be signed before a Pakistan diplomatic consular or consulate officer. The document regarding his authorization by the company for making such affidavit, shall be accompanied therewith and shall likewise be authenticated by a Pakistan diplomatic consular or consulate officer.

How is the certification of translation of documents required to be filed under the Companies Act 2017 and the 2018 regulations?

The translation into English or Urdu of documents required to be filed with the registrar in pursuance of section 435, 436 or 437 or any other document required to be filed under the Companies Act 2017 and these regulations, shall be certified to be the correct translation of the original.

If any such translation is made outside Pakistan, it shall be authenticated by the signature and seal, if any, of

(i) the public officer in the country where the company is incorporated to whose custody the original is committed; or

(ii) a Notary Public of the country where the company is incorporated:

(Provided that the signature or seal of the person so certifying shall be authenticated by a Pakistan diplomatic consular or consulate officer)

If such translation is made within Pakistan, it shall be authenticated by an affidavit of any person having, in the opinion of the registrar, an adequate knowledge of the language of the original and of English or Urdu, as the case may be.

What Amendments to the Foreign Companies Regulations 2018 deal with ultimate beneficial ownership of Foreign Companies ?

This amendment was made on 28th September, 2020 via  S.R.O. 926 (I)/2020 to Foreign Companies Regulations, 2018 S.R.O. 866 (I)/2020 to define ultimate beneficial owner means a natural person who ultimately owns or controls a foreign company, whether directly or indirectly, through at least 25% of shares or voting rights or by exercising effective control in that company through other means. ‘Control through other means’ may be exercised through a chain of ownership or through close relatives or associates having significant influence or control over the finances or decisions of the foreign company.

 The amendment also deals with maintenance of records of ultimate beneficial owners of foreign company and states that in case of a member of a foreign company holding at least twenty five percent of the shares, voting rights or controlling interest in the foreign company on behalf of some other person, following additional particulars of ultimate beneficial owner(s), shall be obtained, maintained and duly updated by the foreign company:

1. Name of the member of the foreign company not having beneficial interest in the foreign company
2. Name of the natural person who is the ultimate beneficial owner of the foreign company
3. Father’s name/Spouse’s Name
4. NIC/NICOP/ Passport no. alongwith date of issue
5. Nationality
6. Country of origin
7. Usual residential address
8. Email address

In case of indirect shareholding or control, following particulars of legal persons or legal arrangement through whom shareholding, interest or control exercised in the chain of ownership or control:

1. Name of the entity
2. Legal form (Company/ LLP/Partnership Firm/Trust/ Any other body corporate (to be specified))

• Date of incorporation/ registration

1. Name of the registration authority
2. Business Address
3. Country

• Email address
• Percentage of shareholding, control, or interest of UBO in the legal person or legal arrangement

1. Percentage of shareholding, control, or interest of the legal person or legal arrangement in the foreign company
2. Identity of the natural person who ultimately owns or controls the legal person or arrangement

The most recent development /amendment in the Foreigners Regulations 2018 has been made in 2023 (May) Islamabad, the 3rd May, 2023 and reads as follows

S.R.O. 532 (I)/2023.- In exercise of the powers conferred by sub-section (1) of section 512 of the Companies Act, 2017 (XIX of 2017), the Securities and Exchange Commission of Pakistan is pleased to make the following amendments to the Foreign Companies Regulations, 2018, the same having been previously published for public comments vide S. R. O. 472 (I)/2023, dated April 10, 2023, namely: to Regulation 13, for sub-regulation (1) the following to be substituted namely:

“(1) A copy of any charter, statute, memorandum, articles or other instrument, constituting or defining the constitution of a foreign company required to be filed with the registrar under clause (a) of sub-section (1) of section 435 and 436 and any other document required to be filed under Part XII of the Act and these regulations, shall be duly –

(i)  certified to be a true copy by the public officer in the country where the company is incorporated to whose custody the original is committed; or

(ii)  certified to be a true copy by a Notary public of the country where the company is incorporated; or

(iii)  certified to be a true copy by an affidavit of an authorized officer of the company duly authorized in the country where the company is incorporated; or

(iv)  apostillised by the designated competent authority of the state of origin of the foreign public document, who have acceded to the Hague Convention abolishing the requirement of Legalisation for foreign public documents (Apostille Convention) of 1961 and such state is also recognized by the Government of Pakistan for receiving of apostilled documents.’

Provided further that such translation shall also be accepted if the translated document is apostillised by the designated competent authority of the state of origin of the foreign public document, who have acceded to the Hague Convention abolishing the requirement of Legalisation for foreign public documents (Apostille Convention) of 1961 and such state is also recognized by the Government of Pakistan for receiving of apostillised documents.

Other legal considerations for Foreign Companies Entering the Pakistani Market

Expanding business operations to a foreign market like Pakistan requires careful attention to legal matters to ensure compliance with local regulations and protect the interests of the company. In this article, we will outline key legal considerations that foreign companies, should take into account before entering the Pakistani market.Our law firm is able to advise you on all the matters listed below.

Legal Structure and Incorporation:

To operate in Pakistan, foreign companies must choose the appropriate legal entity, such as a subsidiary or branch office. Compliance with the BOI registration requirements Companies Act, 2017 , and the Foreign Companies Regulations 2018 is essential for branch office and liaison office company registration, and necessary incorporation documents should be prepared and submitted to the BOI (Board of Investment) and Securities and Exchange Commission of Pakistan (SECP) accordingly as discussed liberally above.

Foreign Companies (issues of shares to non-residents of Pakistan)

Issue of shares to non-residents of Pakistan requires permission of SEC State Bank of Pakistan. Protection of minority shareholders is normally achieved by suitable provisions in Articles which under Companies Act 2017 can only be altered by special resolution requiring 3⁄4 majority. Special resolution is also required for reduction of issued share capital along with confirmation of reduction by court.

No shares or debentures in a company registered in Pakistan may be issued or transferred to a person who is not a resident of Pakistan (which expression is defined to include a foreign national who is for the time being resident in Pakistan and a company registered in Pakistan which is controlled directly or indirectly, by a person resident outside Pakistan) without permission of State Bank of Pakistan. However, State Bank has given general permission for certain categories of transactions for which no prior permission is required. Issues or transfer of shares of industrial companies (other than specified industries) quoted on Stock Exchange now allowed if price paid is not less than stock exchange price on date of sale. Disinvestment likewise permitted and disinvesting foreign investor permitted to repatriate proceeds provided not in excess of quoted price on date of transaction. Likewise issue or transfer of shares in private or public unquoted companies permitted if consideration paid is not less than “break-up” value as certified by chartered accountant. Likewise upon disinvestment in favour of resident repatriation of proceeds not exceeding break-up value certified by chartered accountant permitted. All issues required to be supported by evidence of remittance to issuing company in Pakistan. All transactions to be reported to State Bank and tax on capital gain, if any, required to be deducted.

Other laws requiring compliance by Foreign Companies in Pakistan

Tax and Financial Compliance:

Foreign companies must obtain a Taxpayer Identification Number (NTN) from the Federal Board of Revenue (FBR) and register for sales tax by obtaining a Sales Tax Registration Number (STRN). Compliance with income tax regulations, including the filing of annual income tax returns, is crucial. Proper accounting records and financial statements should be maintained in accordance with the Companies Act 2017 and International Financial Reporting Standards (IFRS).

 Employment and Labor Laws:

Compliance with labor laws and regulations is essential for foreign companies operating in Pakistan. This includes establishing employment contracts with employees in accordance with labor laws, ensuring compliance with minimum wage requirements and working hour regulations, and providing appropriate benefits while fulfilling social security obligations.

Intellectual Property Protection:

To safeguard intellectual property assets, foreign companies should conduct a comprehensive trademark search and register their trademarks with the Intellectual Property Organization of Pakistan (IPO). Protection for other intellectual property assets, such as copyrights and patents, should be pursued through registration or appropriate contractual arrangements.

Regulatory and Licensing Compliance:

Foreign companies should determine if specific licenses or permits are required for operating in their chosen industry sector and obtain the necessary approvals from relevant regulatory authorities. This may for example involve engaging with bodies such as the State Bank of Pakistan, Pakistan Standards and Quality Control Authority or the Drug Regulatory Authority of Pakistan.

Consumer Protection and Advertising Laws:

Compliance with consumer protection laws, including the Consumer Protection Act, 2005, is essential for foreign companies. Transparency and fair practices in advertising and marketing activities should be ensured to maintain consumer trust.

Data Protection and Privacy Laws:

Foreign companies must understand and comply with the provisions of the Personal Data Protection Bill ( still not enacted), or other applicable data protection and privacy laws. Implementing necessary measures to protect customer data and ensure data privacy is crucial.

 Environmental and Sustainability Regulations:

Compliance with environmental regulations, obtaining necessary clearances or permits, and promoting sustainability practices and corporate social responsibility initiatives are important for foreign companies to demonstrate their commitment to environmental stewardship.

Compliance Monitoring and Reporting:

Establishing internal compliance mechanisms, designating a compliance officer or team, regularly reviewing and updating compliance policies and procedures, and reporting any non-compliance or regulatory breaches to appropriate authorities are crucial steps for foreign companies to maintain compliance and mitigate legal risks.

Entering the Pakistani market as a foreign company requires meticulous attention to legal compliance. Seeking legal guidance and partnering with the experienced professionals at Josh and Mak International can further facilitate the compliance process and ensure a smooth market entry.

Matters of the BOI registration process and Post-Registration Legal Compliance at the BOI for a Foreign Company Setting Up a Branch office or Liaison office in Pakistan

Return of Documents and Withdrawal of Applications for Branch/Liaison Offices in Pakistan

When establishing a branch or liaison office in Pakistan, it is essential to be familiar with the procedures related to document submission, potential queries, and the possibility of withdrawing an application. This article aims to provide an overview of the return of documents process and the conditions for withdrawal of applications as prescribed by the Board of Investment (BOI) in Pakistan.

Return of Documents by the BOI:

Upon submission of the application and accompanying documents, the BOI conducts an initial review. If the application is found to be incomplete or requires further information, it will be returned to the company through the “Branch/Liaison Office Management Information System (BLMIS).” The company can access the returned documents through their user account on the BLMIS portal. This enables the company to rectify any deficiencies or provide the requested information and re-submit the application accordingly.

Rejection of Applications:

The BOI reserves the right to reject applications that contain incorrect information, inaccurate data, or fictitious addresses. In such cases, the fees paid by the company during the application process will not be refunded. It is crucial for companies to ensure the accuracy and validity of the information provided in their applications to avoid rejection and financial implications.

Withdrawal of Applications:

In certain circumstances, a foreign company may decide to withdraw its application for establishing a branch or liaison office in Pakistan. The following points outline the conditions and implications of application withdrawal:

• Refund of Fees: If a company withdraws its application before it has been circulated, the fees deposited with the BOI will be eligible for a refund. However, once the application has been circulated, no refund of fees will be granted.
• Proper Notification: The company must inform the BOI in writing about its decision to withdraw the application. This notification should be submitted promptly to ensure the smooth processing of the withdrawal request.

Understanding the processes related to the return of documents and withdrawal of applications is crucial for companies seeking to establish branch or liaison offices in Pakistan. It is essential to ensure the accuracy and completeness of application submissions to avoid rejection and financial loss. In case of any queries or incomplete documents, prompt action should be taken to rectify the deficiencies and resubmit the application. Additionally, companies should comply with the prescribed guidelines and notify the BOI in writing if they decide to withdraw their application. Seeking professional guidance from experienced legal experts can help navigate these processes efficiently and ensure compliance with all requirements.

For expert advice and assistance regarding the establishment of branch or liaison offices in Pakistan, please contact our dedicated team of legal experts at Josh and Mak International.

Processing of Branch/Liaison Office Applications at the Board of Investment in Pakistan

Establishing a branch or liaison office in Pakistan requires adherence to specific procedures and guidelines set by the Board of Investment (BOI). This article aims to provide an overview of the processing of branch/liaison office applications, including the necessary documents, timelines, and important considerations.

Processing of Applications at the Board of Investment:

• Document Examination: Upon receiving a complete application for a branch or liaison office, the BOI thoroughly examines it. If the application is found to be in order and complete, it is forwarded to the relevant stakeholders for their views, comments, and issuance of No Objection Certificates (NOCs).
• Timelines for Response: Stakeholders have a period of seven (07) weeks to provide their feedback and NOCs to the BOI. If no response is received within this timeframe, the BOI proceeds to issue or grant permission to establish the branch or liaison office in Pakistan.
• Cancellation/Withdrawal of Permission: The granted permission is subject to cancellation or withdrawal if adverse remarks or reports are received from any of the concerned stakeholders. In such cases, the branch or liaison office must be closed down. Additionally, if an application for a branch or liaison office is rejected or permission is cancelled or withdrawn, the fees paid by the company during the application process will be forfeited, and no refund claims will be entertained.
• Review Application: If a foreign company is aggrieved by the decision of the BOI, it has the option to file a review application within 30 days of such a decision. The BOI examines the review application and communicates its final decision to the company.
• Duration and Renewal: The permission granted for the establishment of a branch or liaison office is valid for a period of three years. Upon expiration, the permission can be renewed for successive terms, subject to compliance with the relevant regulations and requirements.
• Submission of Documents to SECP: Within 30 days of receiving permission from the BOI, the foreign company must submit the prescribed documents required under the Companies Act, 2017, to the Securities and Exchange Commission of Pakistan (SECP). The company will receive an acknowledgment certificate for the submitted documents from the SECP.
• Submission of SECP Certificate to BOI: A certificate confirming the submission of documents to the SECP must be provided to the BOI before applying for the renewal of permission.
• Registration with Tax Authorities: The foreign company must register with the local tax authorities and other relevant departments, wherever applicable, to fulfill its obligations and comply with local tax regulations.

Understanding the processing of branch/liaison office applications at the Board of Investment is vital for companies seeking to establish their presence in Pakistan. Adhering to the prescribed procedures, submitting the required documents within specified timelines, and complying with local tax and regulatory requirements are essential for the successful establishment and renewal of permission. Seeking professional legal assistance from experienced experts can provide valuable guidance and ensure compliance with all the necessary steps for establishing and maintaining a branch or liaison office in Pakistan.

For expert advice and assistance regarding the establishment of branch or liaison offices in Pakistan, please contact our dedicated team of legal experts at Josh and Mak International. 

Review and Conversion of Liaison Office to Branch Office or Vice Versa

Companies operating in Pakistan through liaison offices or branch offices may need to review their office structure or convert from one type to another due to changing business needs. This article outlines the process of reviewing adverse remarks or comments received from stakeholders and provides guidance on converting a liaison office to a branch office or vice versa.

Review Against Adverse Remarks:

• Review Request: If adverse remarks or comments are reported by stakeholders regarding the company, the company has the right to request a review of the decision. The review request must be submitted to the Board of Investment (BOI) within the specified timeframe, typically within 30 days of the adverse decision.
• Referral to Stakeholders: The BOI will refer the case back to the stakeholder(s) whose remarks or No Objection Certificates (NOCs) were not supportive of the company. The stakeholder(s) will be requested to review and reconsider their initial decision.

Conversion of Liaison Office to Branch Office or Vice Versa:

• Required Documents:
  • Prescribed Application Form: The company must complete the relevant application form through the “Branch/Liaison Office Management Information System (BLMIS)”.
  • Board Resolution: A resolution passed by the company’s board of directors approving the conversion is necessary.
  • Processing Fee: The applicable processing fee must be paid for the conversion, depending on whether it is a conversion from a liaison office to a branch office or vice versa.
  • Copy of Valid Permission/Renewal Letter: A copy of the latest valid permission or renewal letter issued by the Board of Investment must be provided.
  • Contract Agreement (for Conversion from Liaison Office to Branch Office): If converting from a liaison office to a branch office, a copy of the contract agreement supporting the conversion should be included.

Conclusion:

Reviewing adverse remarks or comments received from stakeholders is an important step in addressing concerns raised against a company. By submitting a review request, companies can seek reconsideration of the adverse decision and present their case for further evaluation. Additionally, when business requirements change, converting a liaison office to a branch office or vice versa may be necessary. Companies must follow the specified procedures and submit the required documents to the Board of Investment to successfully complete the conversion process.

At Josh and Mak International our team of legal experts can assist you in navigating the review process and guide you through the conversion of your liaison office to a branch office or vice versa. Contact us today for professional advice and support tailored to your specific needs.

Renewal of Permission at the Board of Investment in Pakistan: A Comprehensive Guide

Foreign companies operating in Pakistan through branch offices or liaison offices are required to renew their permission periodically. This article outlines the renewal process and provides information on the required documents for renewal at the Board of Investment (BOI) in Pakistan.

Renewal Process:

• Timely Submission: Companies must submit their request for renewal of permission at least three months before the expiry date to ensure sufficient processing time.
• Compliance with SOPs: The renewal request will be processed in accordance with the Standard Operating Procedures (SOPs) set by the BOI. It is essential to fulfill all the formalities and requirements prescribed by the BOI for successful renewal.

Required Documents for Renewal:

(a) Branch Office:

i. Online Request: Submit the renewal request through the “Branch/Liaison Management Information System (BLMIS)” online platform.

ii. Copy of Latest Audited Accounts: Provide a copy of the branch office’s latest audited accounts.

iii. Proof of Fees Paid: Include evidence of payment for the renewal fees.

iv. Proceeds Realization Certificate: Obtain a certificate from the concerned bank authorities to verify the realization of proceeds from the branch office’s bank account.

v. Copy of SECP Certificate: Submit a copy of the Securities and Exchange Commission of Pakistan (SECP) certificate for filing of documents.

vi. Copy of Income Tax Return: Include a copy of the branch office’s income tax return.

vii. Additional Documents: Provide any other relevant documents requested by the BOI to support the renewal process.

(b) Liaison Office:

i. Online Request: Submit the renewal request through the “Branch/Liaison Management Information System (BLMIS)” online platform.

ii. Performance Activity Report: Include a report detailing the liaison office’s performance during the last permitted period.

iii. Receipt and Payment Statement or Latest Audited Accounts: Provide a statement or copy of the latest audited accounts reflecting the liaison office’s financial transactions.

iv. Proof of Fees Paid: Include evidence of payment for the renewal fees.

v. Proceeds Realization Certificate: Obtain a certificate from the concerned bank authorities to verify the realization of proceeds from the liaison office’s bank account.

vi. Copy of SECP Certificate: Submit a copy of the Securities and Exchange Commission of Pakistan (SECP) certificate for filing of documents.

vii. Copy of Income Tax Return: Include a copy of the liaison office’s income tax return.

viii. Additional Documents: Provide any other relevant documents requested by the BOI to support the renewal process.

Renewal of permission for branch offices or liaison offices is an important process to ensure the continued legal operation of foreign companies in Pakistan. By adhering to the renewal timeline and submitting the required documents, companies can facilitate a smooth renewal process. It is crucial to comply with the BOI’s SOPs and meet all formalities and requirements specified by the BOI. For expert guidance and support in the renewal process, consult our experienced legal professionals at Josh and Mak International.

BOI required processes for Change of Address, Authorized Representative, and Closure of Foreign Company Offices in Pakistan

Foreign companies operating in Pakistan may encounter situations where they need to change their office address, authorized representative, or even close their branch or liaison office. This section  provides an overview of the processes and requirements for these administrative actions as regulated by the Board of Investment (BOI) in Pakistan.

Change of Address:

• Processing and Notification: The request for a change of address for the company’s branch, liaison office, or sub-office is processed and notified to the stakeholders involved. The BOI reviews the request, and if there are no negative remarks from any concerned stakeholders, the change of address is approved.

Change of Company’s Authorized Representative:

• Request Submission: To change the company’s authorized representative, a written request is submitted to the BOI along with a resolution passed by the company’s board of directors.
• Processing and Approval: The BOI processes the request, considering the provided resolution. Upon verification and satisfaction, the change of the authorized representative is approved.

Closure of the Branch/Liaison Office:

• Request Submission: The request for closure of the branch or liaison office is submitted to the BOI.
• Required Documents:
  • Request Letter: A formal request letter for closure is submitted to the BOI.
  • Board Resolution: A copy of the board resolution approving the closure of the office in Pakistan is included.
  • Activity Report and Audited Accounts: An activity report, proceeds realization certificate, and copies of audited accounts for the last permitted period are provided.
  • Press Clippings: Copies of press clippings from main Urdu and English newspapers, respectively, confirming the closure of the office are submitted.
  • Confirmation from Tax Authorities: A confirmation is obtained from the tax authorities indicating that all assessments are finalized, and no outstanding tax amount is due.
  • Legal Liability Affidavit: A legal liability affidavit is prepared and submitted to affirm the company’s compliance with legal obligations.

Foreign companies operating in Pakistan should be aware of the procedures and requirements for administrative changes such as address updates, authorized representative changes, and office closures. By following the processes outlined by the BOI and providing the necessary documents, companies can ensure a smooth transition and compliance with regulatory obligations. For expert legal guidance and support in these matters, consult our experienced team at Josh and Mak International.

Guidelines for Opening Sub Offices and Regularization of Missing Period for Foreign Companies in Pakistan

Foreign companies operating in Pakistan may require the establishment of sub offices at different locations or seek regularization of any missed renewal periods. The Board of Investment (BOI) has established guidelines and procedures to facilitate these actions. This article provides an overview of the application process, fees, and general regulations related to opening sub offices and regularization of missing periods.

Opening Sub Offices at Additional Locations:

• Application Submission: Foreign companies seeking to expand their network within Pakistan by opening sub offices at new locations submit an application to the BOI. The application is processed upon completion of all required formalities.
• Fees: A one-time fee for each sub office, as determined by the BOI, is charged separately. The specific fee amount is prescribed by the BOI and subject to change.

Regularization of Missing Period:

• Application for Regularization: If a foreign company fails to renew its permission within the due date, it can apply for the regularization of the missing period. The application must include a solid reason and justification for the delay.
• BOI Review: The BOI reviews the application and has the discretion to accept or reject the request for regularization. If accepted, the company may be required to pay the necessary fees as prescribed by the BOI.

General Guidelines regarding BOI permissions and processes for foreign companies:

• Attestation/Notarization: All documents requiring attestation or notarization must comply with Pakistan’s Law of Evidence/Qanoon-e-Shahadat Order 1984.
• Blacklisting: Companies that do not adhere to the contents of their application form or permission letter provided to the BOI, or violate any provisions outlined in the guidelines, may be declared “Blacklisted” by the BOI. Blacklisted companies are ineligible to open an office for a period of 5 years, but they have the right to appeal to the BOI.
• Authority to Decide: In situations not covered by these guidelines, the authority to make decisions rests with the Secretary of the BOI.
• Repeal of Previous Instructions: These guidelines supersede all previous instructions, directions, and guidelines issued by the BOI.

Foreign companies seeking to open sub-offices at additional locations in Pakistan or regularize missed renewal periods should adhere to the guidelines provided by the BOI. By following the application process, paying the prescribed fees, and ensuring compliance with the regulations, companies can expand their operations and maintain legal conformity. For expert legal advice and support throughout these processes, consult our experienced team at Josh and Mak International.