Business Setup & Company Formation in Pakistan
Business Setup & Corporate Services in Pakistan
Last updated: August 2026
Is 100% Foreign Ownership Possible in Pakistan?
In most sectors, yes. Pakistan permits 100% foreign ownership under the Board of Investment (BOI) framework for most manufacturing, services and trading activities. A small number of sectors, including certain defence, media, and specific agricultural activities, carry restrictions or require prior government approval.
Pakistan offers several ways for foreign companies, entrepreneurs and investors to establish a business. Companies are incorporated and regulated at federal level by the Securities and Exchange Commission of Pakistan (SECP), so choosing Karachi, Lahore, Islamabad or another city does not create a different company-registration jurisdiction, though where you operate still matters commercially, since provincial and local requirements can affect sales tax on services, labour registrations, professional tax, municipal permissions and activity-specific licences.
The right setup depends on your ownership structure, business activity, number of shareholders, whether you already operate an overseas company, where the business will operate and whether you qualify for an investment-zone regime.
Related: Special Economic Zones in Pakistan, accounting, tax and payroll in Pakistan and business visa services in Pakistan. View all business services in Pakistan or book a consultation with our team.
Pakistan Company Structures
Private Limited Company
One of the most commonly used structures for a locally incorporated business. Requires at least two members and is a separate legal entity from its shareholders, with liability generally limited according to the share structure. Suitable for SMEs, subsidiaries, family businesses, foreign investors and joint ventures. 100% foreign ownership is possible in many sectors, although restrictions and sector-specific foreign-equity limits apply to certain activities.
Single Member Company (SMC)
A private company with only one member, giving an entrepreneur or investor a separately incorporated company without requiring a second shareholder. Retains the limited-liability characteristics of a company, the sole member is not automatically personally liable for all debts and obligations merely because the company has one shareholder.
Public Limited Company
Can be formed by at least three persons, and can be listed or unlisted, not every Public Limited Company is traded on the Pakistan Stock Exchange. Generally more appropriate for larger businesses, companies seeking broader investment, or those intending eventually to access public capital markets, with additional governance and reporting requirements compared with a private company.
Limited Liability Partnership (LLP)
A separate legal entity under Pakistan’s LLP framework, combining aspects of a traditional partnership with limited liability and greater flexibility in the internal relationship between partners. Relevant for professional services, consulting businesses and other ventures involving two or more partners, subject to any professional or sector-specific regulations.
Branch of a Foreign Company
An existing overseas company can establish a branch instead of incorporating a new Pakistani subsidiary. The branch is an extension of the foreign parent rather than a separately owned Pakistani company. The foreign company must complete the applicable SECP foreign-company registration requirements, plus tax, banking and activity-specific registrations.
Liaison Office
For approved liaison, representation, coordination and other permitted non-commercial activities, not intended to carry out normal revenue-generating commercial operations. Companies that intend to actively trade or provide commercial services should determine whether a branch or locally incorporated company is the appropriate structure instead.
Joint Ventures
Pakistani and foreign investors can establish joint ventures for investments, strategic partnerships and specific projects. Not necessarily a separate statutory company type, can be structured through a Private Limited Company or another appropriate incorporated entity, with the partners becoming shareholders, or through contractual arrangements where legally appropriate, depending on ownership, liability, governance, financing and sector regulations.
Section 42 / Not-for-Profit Company
For charitable, social, educational, scientific and other permitted not-for-profit purposes, established under Section 42 of the Companies Act 2017. Must obtain the required SECP licence before incorporation and must apply its income and profits toward its stated objectives rather than distributing them to members.
Special Economic Zones
Not itself a company type, an investor establishes an appropriate legal entity and then, where eligible, applies for the relevant status as a zone enterprise. Qualifying SEZ enterprises can benefit from investment incentives including specified income-tax and customs concessions, subject to the applicable law, zone status and investment requirements. Pakistan also has other specialised regimes, including the Gwadar Free Zone, assessed separately according to the proposed project.
Our Support Includes
- Company registration with the Securities and Exchange Commission of Pakistan (SECP)
- Board of Investment (BOI) registration for foreign investors, where applicable
- Business activity classification and licensing
- Corporate documentation, including Memorandum and Articles of Association
- Branch and liaison office registration for foreign companies
Licences & Registrations
- SECP Incorporation / Registration: Pakistani companies are incorporated with the Securities and Exchange Commission of Pakistan; foreign companies establishing branches or liaison offices must complete the applicable foreign-company registration process
- Federal Board of Revenue (FBR): businesses must complete the applicable tax registration and obtain the relevant tax identification/registration
- Provincial Tax Registration: companies providing taxable services can have registration obligations with the relevant provincial revenue authority or, for Islamabad Capital Territory, under the applicable federal/ICT regime
- Activity-Specific Licences: banking, financial services, telecommunications, healthcare, education, aviation, energy, pharmaceuticals and other regulated activities require approvals from the relevant sector regulator
- Employment & Social-Security Registrations: businesses employing personnel must comply with applicable labour, social-security and employee-benefit registration requirements, which can differ by province
- SEZ / Investment Approvals: businesses seeking Special Economic Zone or other investment incentives must separately satisfy the applicable BOI, zone and regulatory requirements
Choosing a Region in Pakistan
Company incorporation itself is administered federally through SECP. You do not establish a fundamentally different corporate entity simply by choosing Karachi, Lahore or Islamabad, though the location decision still matters commercially. Karachi/Sindh is Pakistan’s principal commercial, financial, port and industrial centre, particularly relevant to trade, logistics, financial services, manufacturing and import/export businesses. Lahore/Punjab provides access to Pakistan’s largest provincial economy and significant manufacturing, agriculture, technology, consumer and services markets. Islamabad can be particularly relevant for companies working with the federal government, regulators, development institutions, technology and professional services. Other provinces, cities, industrial estates and Special Economic Zones can be preferable depending on the company’s sector, supply chain, workforce and investment incentives, the location should be selected after considering the business model rather than as part of choosing a different company law regime.
Pakistan Corporate Tax: What Actually Applies
Pakistan’s tax system is administered by the Federal Board of Revenue (FBR):
- Standard corporate income tax is 29% of net taxable profit.
- Small companies with annual turnover under PKR 250 million pay a reduced 20% rate.
- A minimum tax of 1.25% of turnover applies even where a company reports a loss, under Section 113 of the Income Tax Ordinance, 2001.
- Sales tax on goods is charged at the standard 18% rate; sales tax on services ranges 13-16% depending on the province.
- Registered IT and IT-enabled service exporters benefit from reduced rates and specific export-income exemptions, a relevant incentive if your Pakistan entity will service international clients.
- A branch remitting after-tax profits to its foreign head office is subject to a 15% tax on the transfer, except for oil and gas exploration and production businesses.
Repatriation of Capital & Profits
Pakistan’s investment framework provides mechanisms for foreign investors to repatriate capital, profits, dividends and qualifying investment proceeds, but this should not be described as an unrestricted or automatic transfer. Repatriation is subject to the State Bank of Pakistan’s foreign-exchange regulations, authorised-dealer bank procedures, documentation requirements and the way the original foreign investment was structured and recorded. Foreign investors should establish the correct banking and foreign-investment documentation when bringing capital into Pakistan, rather than addressing repatriation only when they later want to transfer funds abroad.
Which Pakistan Company Setup Is Right for You?
The appropriate structure depends on whether you are investing alone or with partners, whether you already have a foreign company, your intended business activity, foreign-ownership restrictions, where you will operate, staffing requirements and whether an SEZ or other investment regime offers advantages for your project. Speak with Meena Business Consultancy Services to discuss your planned activity, we can assess the appropriate company structure, foreign-ownership requirements, location and licences needed for your business in Pakistan.
Frequently Asked Questions
Is 100% foreign ownership possible in Pakistan?
In most sectors, yes. Pakistan permits 100% foreign ownership under the Board of Investment (BOI) framework, though a small number of sectors, including certain defence, media and agriculture activities, have restrictions or require approval.
How long does it take to set up a company in Pakistan?
Company registration through the Securities and Exchange Commission of Pakistan (SECP) can typically be completed within a few weeks, depending on the business activity and documentation.
Can I repatriate profit from Pakistan?
Yes. Foreign investors registered with the Board of Investment are generally permitted to repatriate capital and profits, subject to State Bank of Pakistan procedures.