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Ease of Doing Business in

Pakistan

Pakistan Download Profile (2030.1KB, pdf)
Region South Asia
Income Category Lower middle income
Population 188,924,874
GNI Per Capita (US$) 1,440
City covered Karachi, Lahore

190

1

DB 2017 Rank

1

100

DB 2017 DTF (% points)

  • local_library
  • group
Topics DB 2017 Rank DB 2016 Rank info_outline Change in Rank DB 2017 DTF (% points) info_outline DB 2016 DTF (% points) info_outline Change in DTF (% points) info_outline
Overall 144 148 up
4
51.77 49.48 down
2.29
Starting a Business 141 135 down
6
77.88 77.43 up
0.45
Dealing with Construction Permits 150 150
-
59.07 58.56 up
0.51
Getting Electricity 170 163 down
7
42.05 43.73 down
1.68
Registering Property 169 173 up
4
40.70 39.22 up
1.48
Getting Credit 82 134 up
52
50.00 30.00 up
20.00
Protecting Minority Investors 27 25 down
2
66.67 66.67
-
Paying Taxes 156 154 down
2
53.40 53.74 down
0.34
Trading across Borders 172 172
-
39.41 38.11 up
1.30
Enforcing Contracts 157 156 down
1
43.49 43.49
-
Resolving Insolvency 85 85
-
45.01 43.87 up
1.14

Positive=Doing Business reform making it easier to do business. Negative=Change making it more difficult to do business.

Viewing the data for

DB 2017 DTF (% points): 77.88

DB 2016 DTF (% points): 77.43

Change in DTF (% points): up0.45

Standardized Company
Legal form: Private Limited Liability Company
Paid-in minimum capital requirement: PKR 0
City:
Indicator Karachi South Asia OECD high income
Procedure – Men (number) info_outline 12.0 8.1 4.8
Time – Men (days) info_outline 18.0 15.4 8.3
Cost – Men (% of income per capita) info_outline 12.4 13.4 3.1
Procedure – Women (number) info_outline 12.0 8.2 4.8
Time – Women (days) info_outline 18.0 15.6 8.3
Cost – Women (% of income per capita) info_outline 12.4 13.4 3.1
Paid-in min. capital (% of income per capita) info_outline 0.0 0.2 9.2
  • No. Procedure Time to Complete Associated Costs
    1

    Reserve a company name online via the Securities and Exchange Commission of Pakistan (SECP) E-services website

    Agency: Securities and Exchange Commission of Pakistan (SECP)

    The entrepreneur can check the availability of the desired company name via the website of the Securities and Exchange Commission of Pakistan (SECP).
    To reserve a company name, the applicant proposes one or more names in order of preference, and submits the application form to SECP either online or in person. The official confirmation (or rejection) of the chosen name and its availability is received by email or via courier upon payment of the name reservation fee of PKR 200 (online name reservation) or PKR 500 (offline name reservation) at the SECP-designated bank. The approved name is reserved for 90 days, during which the company must be incorporated.

    SECP recently introduced the Fast Track Registration Services (FTRS), processing the company name reservation applications within 4 hours of submission for an expedited fee of PKR 500 online and PKR 1,000 in person payable in addition to the normal fees.
    1 day no charge
    2

    Pay the name reservation and company incorporation fees at the MCB Bank

    Agency: Bank (MCB)

    The company must pay the name reservation and incorporation fees at the designated MCB Bank (formerly Muslim Commercial Bank) or at the United Bank Limited. The form indicating the amount due is obtained from SECP either online (downloaded) or on-site, or from the bank.

    The SECP launched online payment facility for its stakeholders in April 2014, therefore, online filing and payment is now possible for SECP’s online filers, without visiting the Bank or the SECP offices.
    1 day included in procedure 1 (name reservation fees) and procedure 3 (registration fees)
    3

    Obtain a digital signature from the National Institutional Facilitation Technologies (NIFT) system of SECP

    Agency: National Institutional Facilitation Technologies

    The digital signature is obtained from the National Institutional Facilitation Technologies (NIFT) through e-Services or at the SECP offices. To apply, the company must submit the Digital Signature Certificate Request Form, along with scanned copies of the Directors’ identity cards, the Name Availability Certificate and the proof of payment. For obtaining the Digital Signature within 1-2 hours under the Fast Track Registration Service (FTRS), an additional urgent fee of PKR 300 would apply.
    1 day PKR 837 (certificate charges) + PKR 163 (sales tax at 19.5%) + PKR 500 (validation charges) for each shareholder
    4

    Complete online registration on the Securities & Exchange Commission of Pakistan (SECP) e-portal

    Agency: Securities and Exchange Commission of Pakistan (SECP)

    Registration can either be completed online or in person at SECP. The following documents are required for submission:
    a. Form 1: Declaration of compliance
    b. Form 21: Identification of the location of the office
    c. Form 29: Particulars of directors, secretary, chief accountant, auditors, and others
    d. One copy of the Memorandum and Articles of Associations with the signature of each member (in presence of a witness)

    According to the 6th Schedule of Fee effective October 2010, the fees for incorporation of a company depends on the authorized capital as:
    - Online submission: PKR 2,500 for registration of a company whose nominal share capital does not exceed PKR 100,000 and an additional fee of PKR 500 for every PKR 100,000 of nominal share capital or part thereof, up to PKR 10,000,000. The online filing fee is PKR 600 per document.
    - Physical submission: PKR 5,000 for registration of a company whose nominal share capital does not exceed PKR 100,000 and an additional fee of PKR 1,000 for every PKR 100,000 of nominal share capital or part thereof, up to PKR 10,000,000. The filing fee is PKR 1,500 per document.

    A confirmation of the online or physical submission is received instantly, and the actual certificate a few days later via email or courier. The entrepreneur can register with any Company Registration Office, irrespective of the jurisdiction. All regional SECP offices are computerized. In February 2012, SECP launched the Fast Track Registration Services (FTRS), under which the incorporation of a company can take place within 4 hours for an expedited fee of PKR 20,000 for on-site incorporation and PKR 10,000 for online incorporation payable in addition to the normal fees above. To register a company online, the entrepreneur must first obtain a digital signature through the National Institutional Facilitation Technologies (NIFT) system. If the application is received with less than four hours remaining in the working day, the same shall be disposed of in the next working day.
    2 days PKR 8,500 registration fee + PKR +1,600 filing fees of Form 1, Form 21, Form 29, and Copy of the memorandum and articles of association
    5

    Open a bank account for tax registration

    Agency: Bank

    A bank account number in the name of the company is needed in order to register for taxes. A copy of the registration certificate is needed in order to open a bank account.
    1 day No charge
    6

    Apply for a national tax number (NTN) and register for income tax

    Agency: Tax facilitation center of the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR) in Karachi

    To apply, the company must submit a simple one page form called the NTN Form as well as a proof of registration, the Memorandum and Articles of Association, bank account number, copies of the national identity cards of its directors, and an attestation of the registered business address at the nearest tax facilitation counter of the Regional Tax Office in Pakistan.
    All applications are forwarded to the Central Registration Office (CRO) in Islamabad that allocates a uniform NTN number to each company. The center processes the application and issues the NTN at no charge. The certificate is then sent to the registered address of the applicant. The company can track the application online or through the RTO helpline. If undelivered, the NTN certification can be collected from the specified office at the Central Board of Revenue. Recently, the Federal Board of Revenue launched electronic services enabling online applications for NTN numbers to be made through its website: www.fbr.gov.pk.
    2 days no charge
    7

    Apply 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 Karachi

    Agency: Tax facilitation center of the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR) in Karachi

    According to the Sections 14, 15 and 16 of the Sales Tax Act 1990 and Sales Tax Rules 2006, the company must register for sales tax by submitting the application Form STR-1 at any tax facilitation counter at the nearest Regional Tax Office (RTO). The local RTO forwards all applications to the Central Registration Office. After verification, the CRO issues a Registration Certificate bearing the registration number and mails the same to the registered company, on a prescribed From STR-5.
    The Sales Tax General Order No. 4/2007 introduced electronic filing of the sales tax returns; and as of July 1st 2008, electronic filing was made mandatory for all categories of taxpayers.
    1 day no charge
    * 8

    Register for Professional Tax with the Excise & Taxation Department of the District

    Agency: Excise & Taxation Department of the District

    Following the Devolution Plan 2001, professional tax is enforced at the district level by the Excise and Taxation Department of the relevant provincial district. The tax is levied upon businesses, professionals, trades, callings or companies employing such professionals. The responsible district Excise and Taxation Officer (ET officer) is empowered to enroll in survey register every person who carries on any such business or profession and thereafter, give notice to such enrolled person. In case of a new business, the company is required to make a request to the ET officer to get enrolled by submitting a simple assessment form. The ET officer issues a registration number that acts as the reference number for the registered company and is noted down on every Bank Challan when assessments are paid into the Bank.
    7 days (simultaneous with the previous procedure) no charge
    * 9

    Register with the Sindh Employees Social Security Institution (SESSI)

    Agency: Sindh Employees Social Security Institution (SESSI)

    Registration with the Sindh Employees Social Security Institution is governed at the provincial level by an independent institution called the Sindh ESSI.
    7 days (simultaneous with the previous procedure) no charge
    * 10

    Register with Employees Old-Age Benefits Institution (EOBI)

    Agency: Employees Old-Age Benefits Institution (EOBI)

    According to the Amendment in EOBI Act 1976 effective as of July 2008, every industry or a commercial establishment with 5 or more employees must register with the federal Employees Old Age Benefits Institution. Under the Employees Old Age Benefit Scheme, insured persons are entitled to pension upon retirement, invalidity in the case of a disability, old-age grant in the case of a retiring elder lacking the minimum threshold for pension, and survivor’s pension. A contribution of 5% of minimum wage must be paid by the employer and 1% of minimum wage must be paid by the employee.

    An employer shall before expiration of thirty days from the day on which the Act becomes applicable to the industry or establishment in respect of which he/she is the employer, communicate to the Institution the name and particulars of the industry or establishment in Form PR-01 and of every insured person employed therein in Form PE-01 and, in the case of Form PE-01, give the receipt appended to the Form to the insured persons. An insured person may also communicate his/her name and other particulars to the Institution in Form PE-02.
    Upon receipt of the requisite particulars in Forms PR-01 and PE-01 from an employer, the Institution shall register the name of the industry or establishment in respect of which he/she is the employer and of the insured person and issue to the employer a Certificate of Registration in Form PI-02 and to each insured person a Registration Card in Form PI-03.
    The institution may send the Registration Card in Form PI-03 to the employer for delivery to the insured person to whom it relates.
    The minimum Pension has been increased from PKR 3000 per month to PKR 3600 per month.
    1 week (simultaneous with the previous procedure) no charge
    * 11

    Register under the West Pakistan Shops and Establishment Ordinance 1969 with the Labor Department of the District

    Agency: Labour Department of the District

    Pakistan Shops and Establishment Ordinance 1969 requires every establishment other than a one man shop to be registered with the Deputy Chief Inspector of the Labor Department in each district. This is to safeguard the labor standards of the workers.
    To register, the employer must submit the application Form A accompanied by a bank challan. The application for a new establishment shall be made within 2 months of setting up the establishment. The registration fees have been changed to the following pursuant to the Punjab Shops and Establishments (Amendment) Act 2014 (II of 2014):

    Rs. 200 in the case of an establishment employing 1 to 5 workers.
    Rs. 300 in the case of an establishment employing 6 to 10 workers.
    Rs. 500 in the case of an establishment employing 11 to 20 workers.
    Rs. 1000 in the case of an establishment employing more than 20 workers.


    Once the payment is settled, the Deputy Chief Inspection lists the establishment in the Register of Establishments maintained in Form B and issues a registration certificate in Form C. The registration certificate shall be prominently displayed by the employer at the establishment, and shall be renewed after every two years upon payment of fees.
    7 days (simultaneous with the previous procedure) PKR 1,000
    * 12

    Register the appointed CEO with the SECP

    Agency: SECP

    Pursuant to the Companies Ordinance 1984, articles 198 - 205, a CEO is to be appointed within 15 days of the company's incorporation. The company needs to register said CEO within 14 days of the decision.
    Half a day (online procedure) PKR 400 for the cost of form 29

    * Takes place simultaneously with previous procedure.