Incorporation in Pakistan: Part 2

17 08 2012

This entry is a continuation of the last post which dealt with the topic of incorporating companies in Pakistan under the Companies Ordinance 1984 (the “Ordinance”). Foreign investment is crucial for any country’s economy. In an era of globalisation, relocating overseas or doing business in a developing country is quite competitive and investors are spoilt for choice about where to go. There are loads of low cost destinations all over the world. Here, in this post, we will highlight and explore post incorporation requirements for foreign companies in Pakistan which – as an English based and American influenced legal system – offers unique business opportunities to Asian, African, American, European and other businessmen and entrepreneurs. 

  • Any change or alteration in particulars stated in the documents and returns filed at the time of registration under section 451 (Documents to be delivered to registrar by foreign companies) is required to be filed on form 44 with the registrar concerned within 30 days of such change or alteration (Section 452 – Return to be delivered to registrar by foreign companies whose documents, etc. altered).
  • Foreign companies are required to file annually with the registrar concerned annual accounts in respect of its operations within Pakistan as well as their global accounts together with the list of Pakistani members and debenture holders and of places of business of the company in Pakistan within the prescribed period (Section 453 – Accounts of foreign companies).
  • Foreign companies are required to submit the renewal/extension of the permission to open/maintain a branch/liaison office from the Board of Investment on the expiry of the validity period of the permission, originally granted.
  • Foreign companies are required to give notice on form 46 to the registrar concerned at least 30 days before they intend to cease to have a place of business in Pakistan and to 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

Foreign Investors are permitted to hold 100% equity of industrial projects without any permission of the government. No government sanction or permission is required for setting up any industry, in terms of field of activity, location and size except for the following:

(1) Arms and ammunitions

(2) High explosives

(3) Radio-active substances

(4) Security printing, currency and mint

However, no new units for the manufacture of alcoholic beverages or liquors will be allowed. There is no requirement for obtaining No Objection Certificates (NOC) from the provincial governments for locating the project anywhere in the country except in areas that are notified as negative areas. With the announcement of Investment Policy 1997 by Government of Pakistan foreign investment may be repatriated in agriculture, service, infrastructure and social sectors subject to conditions indicated against each. In order to achieve this foreign companies simply have to register a company with the SEC under the Ordinance and to inform the State Bank of Pakistan provided the relevant conditionality is fulfilled.




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