Establishing a Branch or Liaison Office in Pakistan: A Comprehensive Guide

By Legal Synergy

Expanding your business into Pakistan offers a wealth of opportunities. However, navigating the regulatory landscape requires a clear understanding of the processes involved. This comprehensive guide outlines the steps to register a branch or liaison office through the Board of Investment (BOI) and the Securities and Exchange Commission of Pakistan (SECP).

Understanding the Structures: Branch vs. Liaison Office

Before starting the registration process, it’s essential to understand the difference between the two office types:

• Branch Office
  Allows foreign companies to conduct business activities in Pakistan, including commercial transactions and revenue generation.

• Liaison Office
  Serves as a communication bridge between the parent company and Pakistani entities. It cannot engage in commercial activities or generate revenue.

Step 1: Registration with the Board of Investment (BOI)

The BOI is the key authority overseeing the establishment of foreign business entities in Pakistan.

Eligibility Criteria

Foreign companies must meet the following criteria:

• Valid incorporation in the country of origin.

• A clear business plan detailing the purpose and scope of operations in Pakistan.

Required Documentation

Applicants must submit:

• Prescribed BOI application form

• Company profile and business plan

• Certificate of incorporation & memorandum/articles of association

• Board resolution authorizing the establishment of the office

• Power of attorney in favor of the local representative

• Audited financial statements (last 3 years)

• Undertaking of non-involvement in commercial activities (for liaison offices)

Note: All foreign documents must be notarized and attested by the Pakistani Embassy/Consulate in the country of origin.

Application Process

1. Submission: Submit the application along with documents to the BOI.

2. Review: BOI reviews the application in coordination with relevant government bodies.

3. Approval: If approved, BOI issues a permission letter (valid for 3 to 5 years).

Step 2: Registration with the SECP

Following BOI approval, companies must register with the Securities and Exchange Commission of Pakistan (SECP) under Section 435 of the Companies Act, 2017.

Required Documentation

• BOI permission letter

• Charter documents of the parent company

• List of directors and officers

• Address of principal and Pakistani offices

• Power of attorney for the local representative

• Payment receipt of the prescribed fee

Registration Process

1. Form Submission: Submit Form 44 along with required documents to SECP.

2. Verification: SECP reviews and verifies the application.

3. Certificate Issuance: Upon approval, SECP issues a Certificate of Registration.

Additional Compliance Requirements

After successful registration, the following steps are essential:

• Tax Registration: Register with the Federal Board of Revenue (FBR) for income and sales tax.

• Social Security: Register with EOBI and relevant provincial social security institutions.

• Bank Account: Open a corporate bank account in Pakistan.

• Chamber of Commerce: Obtain membership from the local chamber of commerce.

• Visa & Work Permits: Facilitate work permits and visas for foreign employees as per BOI regulations.

Timelines and Validity

• BOI Approval: Typically takes 6 to 8 weeks

• SECP Registration: Takes 1 to 2 weeks after BOI approval

• Validity Period: The permission is usually valid for 3 to 5 years, with the option to renew

How Legal Synergy Can Help

At Legal Synergy, we provide end-to-end support for establishing your business presence in Pakistan:

• Expert guidance on selecting between a branch or liaison office

• Preparation and submission of BOI and SECP applications

• Tax registration and ongoing compliance assistance

• Advisory on banking, visa, and employment regulations

• Support for renewals and post-registration requirements

Conclusion

Setting up a branch or liaison office in Pakistan is a structured process that demands compliance with detailed regulatory requirements. With Legal Synergy’s legal and strategic expertise, you can confidently navigate this journey, ensuring a solid and compliant foundation for your business in Pakistan.