Starting a business in Pakistan requires proper registration with relevant authorities. Whether you are launching a small trading company, a tech startup, or a manufacturing unit, understanding the registration process saves time and ensures legal compliance from day one. This guide walks you through the key steps and decisions involved in registering a business in Pakistan.
Choosing Your Business Structure
Before registering, decide on your business structure. Each structure has different registration requirements, tax implications, and liability characteristics. Common options in Pakistan include:
Sole Proprietorship: Simplest form, owned and operated by one person. Easy to set up with minimal formalities. The owner is personally liable for all business debts.
Partnership: Two or more people share ownership. Governed by Partnership Act, 1932. Partners share profits, losses, and liability according to partnership deed.
Private Limited Company: Separate legal entity registered under Companies Act, 2017 with SECP. Limits owner liability to their investment. More complex to establish but preferred for growth businesses.
Single Member Company (SMC): A company with one shareholder. Combines limited liability of companies with simplicity closer to sole proprietorship.
Registering a Sole Proprietorship
Sole proprietorships are the simplest to establish. Key steps include:
Obtain National Tax Number (NTN) from FBR through the IRIS portal. This establishes your tax identity for income tax purposes.
Register for Sales Tax (GST) if your business meets registration thresholds or engages in activities requiring registration. Check current FBR requirements for applicable thresholds.
Obtain any industry-specific licenses required for your business activity. For example, food businesses need food authority licensing, pharmacies need drug licenses, and so on.
Open a business bank account using your NTN registration documents.
Registering a Partnership
Partnership registration involves additional steps:
Draft a partnership deed specifying partners, capital contributions, profit sharing, and decision-making procedures. This document governs the partnership relationship.
Register the partnership with the Registrar of Firms in your province. This is optional but recommended as it provides legal benefits.
Obtain NTN for the partnership entity from FBR.
Register for GST if applicable.
Obtain any required business licenses.
Registering a Private Limited Company
Company registration is more complex but provides liability protection and credibility. The process involves SECP (Securities and Exchange Commission of Pakistan):
Name Reservation: Apply through SECP’s eServices portal to reserve your company name. The name must be unique and meet SECP naming guidelines.
Digital Signature: Directors must obtain digital signatures for document signing.
Incorporation Application: Submit incorporation documents including memorandum and articles of association, subscriber forms, and director consents through SECP eServices.
Registration Certificate: Upon approval, SECP issues a certificate of incorporation establishing your company as a legal entity.
After incorporation, register with FBR for NTN and GST. Complete ongoing SECP compliance requirements including annual returns and statutory filings.
FBR Registration
All business structures require FBR registration. The IRIS (Integrated Revenue Information System) portal handles registrations online:
Create an IRIS account with your CNIC (for individuals) or incorporation certificate (for companies).
Apply for NTN by submitting required information about your business.
Apply for Sales Tax Registration if your business qualifies or is required to register.
Maintain NTN and GST registrations through timely filing of required returns.
Provincial and Local Registrations
Depending on your business type and location, additional registrations may include:
Professional tax registration with provincial authorities.
Trade license from local development authority or municipality.
Chamber of Commerce membership (optional but often valuable).
Industry-specific registrations and approvals.
Opening Business Bank Accounts
After registration, open dedicated business bank accounts. Requirements vary by bank but typically include NTN certificate, registration documents, proof of address, and CNIC copies of owners/directors. Keep business finances separate from personal accounts for proper accounting and tax compliance.
Industry-Specific Licenses
Many industries require specific licenses or approvals:
Food businesses need licenses from Pakistan Food Authority or provincial food authorities.
Pharmaceutical businesses require DRAP licenses.
Import/export businesses need registration with Trade Development Authority.
Manufacturing may require environmental approvals.
Research your industry’s specific requirements before starting operations.
Timeline and Costs
Registration timelines vary by structure. Sole proprietorship NTN can be obtained within days. Company incorporation typically takes 1-2 weeks through SECP if documents are in order. Factor in additional time for any required approvals.
Costs include government fees for registration, professional fees if you use consultants, and any industry-specific license fees. Company incorporation involves SECP fees based on authorized capital.
Common Mistakes to Avoid
Starting business without proper registration, though common, creates problems later. Choosing wrong business structure for your needs wastes time and money restructuring. Incomplete documentation delays registrations. Not understanding ongoing compliance requirements leads to penalties.
Take time to plan properly before registering. Professional advice from company secretaries or lawyers can help navigate complex situations.
HysabOne: Ready When You Are
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