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Guide to Starting a Business in Pakistan

Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Pakistan. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected from World Bank: Doing Business 
No.ProcedureTime to CompleteAssociated Costs
1Obtain approval of company name through the Securities and Exchange Commission of Pakistan (SECP) E-service website1 dayPKR 200 (E-services online name reservation)
2Pay the fees for name registration and company incorporation using bank challans at the designated bank (MCB)1 dayinlcuded in procedure 1 (name verification fees) and procedure 3 (registration fees)
3Register the company with the Securities & Exchange Commission of Pakistan (SECP) through online E-services2 daysPKR 6500 registration fee + PKR 2400 filing fee ( Form 1, Form 21 & form 29 & copy of memorandum of association)
4Obtain digital signatures from the National Institutional Facilitation Technologies (NIFT) through the SECP e-services1 dayPKR 837 (certificate charges) + PKR 163 (sales tax at 19.5%) + PKR 500 (validation charges)
5Apply for a national tax number (NTN) and register for income tax2 daysno charge
6Register for sales tax by applying for a Sales Tax Number (STN) at the tax facilitation center of the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR) in Karachi1 dayno charge
* 7Register for Professional Tax with the Excise & Taxation Department of the District7 days (simultaneous with the previous procedure)no charge
* 8Register with the Sind Employees Social Security Institution (SESSI)11 days (simultaneous with the previous procedure)no charge
* 9Register with Employees Old-Age Benefits Institution (EOBI).11 days (simultaneous with the previous procedure)no charge
* 10Register under the West Pakistan Shops and Establishment Ordinance 1969 with the Labour Department of the District7 days (simultaneous with the previous procedure)PKR 10
* Takes place simultaneously with another procedure.
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