How to incorporate/Registered Foreign/Chinese Companies in Pakistan!
Around 700 small, medium and large scale Chinese companies are currently working in Pakistan investing in various sectors, including the China-Pakistan Economic Corridor (CPEC), and the number is growing rapidly.
Chinese companies are interested in investing in sectors such as electronics, automotive, education exchange programmes, insurance, agriculture, textiles, shoe manufacturing, chemicals and battery recycling plants etc.
Government of Pakistan has signed an MOU with Chinese government in terms of which Chinese Companies already registered can register and operate subsidiary/branch companies in Pakistan. In view of the MOU any Chinese company desirous to operate and perform business in Pakistan can registered a subsidiary/branch company in Pakistan by applying with The Securities and Exchange Commission of Pakistan (SECP). Once the subsidiary/branch company is registered, China Overseas Ports Holding Company Pakistan (Private) Limited (COPHC) as such a facilitation centre in Gwadar free zone, which will extend assistance to Chinese as well as other foreign investors to do business in Pakistan. The MOU is termed to facilitate cooperation between the two entities through the establishment of a facilitation centre by the SECP, which will act as a bridge between the SECP’s registration offices and the foreign potential investors on matters relating to the registration of companies and post-incorporation activities in Pakistan.
A foreign company shall obtain from Board of Investment (BOI), Government of Pakistan a permission letter with a specific validity period for establishing and maintaining a business in Pakistan. Such permission with than be tendered along with requisite documents required for registration of Chinese / foreign Company. Moreover, basis on each category and nature of business approval of respective ministries is required before incorporation of such companies. Incorporation of Foreign companies in Pakistan can be in the following manner:
- Fresh Company (NEW)
- Liaison Company/ Office
- Branch Company/ Office
Branch Office: Branch Office is established by a foreign company to fulfill its contractual obligations with the public or private sector in Pakistan. Their activity will be restricted to the work mentioned in the agreement / contract signed. However they cannot indulge in commercial / trading activities.
Liaison Office: Liaison Office is established by a foreign company for promotion of products(s), provision of technical advice & assistance, exploring the possibility of Joint Collaboration and export promotion. However, they cannot undertake any commercial / trading activities.
Procedure for establishment / opening of Branch Office and Liaison Office of Foreign / Chinese Company in Pakistan
Send application in prescribed form and send along with eight (8) sets of following documents:
- Application Form (duly filled in and signed with stamp)
- Copy of registration of the foreign company duly attested by respective Pakistani Embassy;
- Copy of Articles and Memorandum of Association duly attested by Respective Pakistan Mission;
- Copy of Resolution / Authority letter of the company to establish Branch / Liaison Office in Pakistan;
- Copy of contract / agreement (in case of Branch Office Only)
- Company Profile;
- Resume of Foreign directors; and
- Authority Letter in the name of person authorized to act on behalf of the Foreign Directors
After submission of requisite documents, BOI requires views and suggestions from concerned quarters on respective documents and criteria.
After receiving clearance from all concerned departments/quarters, permission for registration of Foreign Company / branch office in Pakistan is allowed by BOI.
SEEK AVAILABILITY OF COMPANY NAME
A foreign company is required to seek “Availability of Name” of proposed company from Securities and Exchange Commission of Pakistan (SECP). The proposed name should not be:
- Contemptuous to religion
- Identical or having close resemblance with already existing company.
- Suggesting linkage to any Government or its organization or any international organization
After approval from BOI, application seeking company name availability is filed with respective RTO, SECP. Once the name is approved by SECP, next step is documentation. A foreign company is required to file the following documents, within thirty days of establishing a place of business in Pakistan, to the concerned RTO, SECP:
- Forms (38-43) as prescribed under the Rules
- Form 38: Certified copy of the charter, statute or Memorandum and Articles of the company.
- Form 39: Address of registered office or principal office of the company.
- Form 40: Particulars of directors, Chief Executive and Secretary, if any, of the company.
- Form 41: Particulars of principal officer of the company in Pakistan.
- Form 42: Particulars of person(s) resident in Pakistan authorized to accept service on behalf of the foreign company along with the certified copy of the appointment order, authority letter of board of directors’ resolution and consent of the principle officer.
- Form 43: Address of principal place(s) of business in Pakistan of the foreign company.
- Authority letter in the name of authorized representative of the foreign company.
- Fee Challan to be filed to SECP ESTABLISHMENT OF BRANCH OFFICE
The request for opening of Branch office or Liaison Office is processed and finalized within 6-8 weeks time, provided that the company fulfills all requirements and concerned quarters have no objection. The permission is issued for a period of 3-5 years, further renewable on submission of performance report with regard to Liaison Office and up to the completion of valid contract/agreement period in case of Branch Office.