SME development is a significant focus area for Pakistan’s government and various organizations, and efforts to streamline business registration processes and promote entrepreneurship are ongoing.
The Securities and Exchange Commission of Pakistan (SECP) is responsible for regulating the corporate sector and overseeing business registrations in the country. They regularly release reports and data on business registrations, including those for SMEs. These reports often include details on the number of new businesses registered, their sectors, geographical distribution, and other relevant information.Similarly, organizations like the Small and Medium Enterprises Development Authority (SMEDA) and the State Bank of Pakistan (SBP) also collect data and conduct surveys related to SMEs, which include insights into business registrations.
Choosing the right legal structure for a business is a crucial decision that can significantly impact its operations, liability, taxation, and overall success. In Pakistan, entrepreneurs and business owners have several options, including sole proprietorships, partnerships, limited liability partnerships, private limited companies (include single member companies), and public limited companies. Each legal structure comes with its own set of advantages, disadvantages, and legal requirements. To make an informed decision, it is important to consider various factors that align with the specific needs and goals of the business. The key factors that should be considered when choosing a legal structure for a business in Pakistan, ensuring the selection best suits the nature, scale, and future aspirations of the business. The key factors include liability protection, ownership and control, cost and complexity, Future plans, credibility and perception, taxation, succession and continuity planning and compliance requirements. By evaluating these factors, entrepreneurs can make a well-informed decision and establish a solid legal foundation for their business endeavours in Pakistan.
SECP is where companies are registered in Pakistan, where one must select a unique name, ensuring it complies with section 10 of the Companies Act (2017). Once decided, create an online account with the Securities and Exchange Commission of Pakistan (SECP) to check name availability. Opt for ‘Fast Track Registration Services (FTRS)’ for same-day registration, providing necessary information and depositing the registration fee through designated banks or online. If the online system is unavailable, submit an application with three proposed names at the registrar’s office, with the offline process taking 3 to 5 days. Prepare required documents including Articles of Association, Memorandum of Association, CNIC copies (or passports for foreign nationals), and NOC if establishing a specialized business. For foreign company incorporation, provide directors’ details and certified documents. Additionally, register for a National Tax Number (NTN) at the Regional Tax Office of the Federal Bureau of Revenue (FBR) by submitting a duly filled NTN form and relevant documents. After compiling and submitting documents to SECP, await approval, during which the National Institution of Facilitation Centre (NIFC) will generate a company seal. Once approved, you’ll receive a Certificate of Incorporation, enabling you to commence business in Pakistan. Ensure shareholders transfer funds to the company’s bank account. SECP’s online registration system streamlines the process, making it entirely digital.
Registering a company in Pakistan offers numerous benefits, providing legal recognition and protection for business owners. Firstly, formal registration establishes credibility and trustworthiness, enhancing the company’s reputation and facilitating access to financing and investment opportunities. Moreover, registered companies enjoy limited liability, safeguarding personal assets from business debts and liabilities. This legal structure promotes risk-taking and encourages entrepreneurship, fostering innovation and economic growth. Additionally, registered companies gain access to various government incentives, subsidies, and support programs aimed at promoting business development and growth. Furthermore, registration enables businesses to enter into contracts, engage in legal proceedings, and own property in their own right, enhancing operational flexibility and scalability.
Growth for Rural Advancement and Sustainable Progress (GRASP) is a project funded by the European Union and implemented by the International Trade Centre (ITC), and is working to improve the business environment for small and medium enterprises in Pakistan. The project is partnering with SMEDA to launch an awareness campaign to promote business registration of SMEs across the country, especially in Sindh and Balochistan provinces.
