Starting a Business in Sialkot, Pakistan
STANDARDIZED COMPANYLegal Form: Private Limited Liability Company
Minimum capital requirement: N/A
Registration Requirements:
| Procedure 1. | Pay the fee for procedures 2 and 3, and obtain bank receipt/ copy of treasury challans. | ||||||||||||
| Time to complete: | 1 days | ||||||||||||
| Cost to complete: | no charge | ||||||||||||
| Comment: |
Pick up treasury challan forms at the counter of the bank and fill out the purpose of the payment; pay the amount due to the official accounts and obtain a copy of the form. The bank sends another copy to the relevant departments.
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| Procedure 2. | Seek the availability of a name proposed for the company from the Registrar of Companies. | ||||||||||||
| Time to complete: | 3-5 days | ||||||||||||
| Cost to complete: | PKR 200 | ||||||||||||
| Comment: | The company may propose one or more names according to their priority. The name should not be inappropriate, deceptive or designed to exploit or offend any religion. It should neither be identical nor have any close resemblance with the name of any existing companies. The availability of the name can be checked online ( www.secp.org.pk). By searching the names of the existing companies. Besides there are certain guidelines explaining the prohibition of the use of the name indicating the state sponsorship or association with the national leaders etc. The official confirmation of the availability of the name or otherwise is received by email within 24 hours. This confirmation is enough provided the name searching fee of Rs. 200 is paid into the bank account of the regulatory authority. |
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| Procedure 3. | Register the company at the Registrar of Companies. | ||||||||||||
| Time to complete: | 1-3 days | ||||||||||||
| Cost to complete: | registration fee + PKR 200, filing fee per document, 4 documents + PKR 50 for the Certificate of Incorporation | ||||||||||||
| Comment: | Companies in Sialkot falls within the Civil Division of Gujranwala and are required to be registered at the Companies Registration Office, Lahore.
The following documents are required for incorporating a private company: 1. Form-1 (Declaration of Compliance), signed by: (1) An advocate that is entitled to appear before any High Court in Pakistan or the Supreme Court; or (2) A qualified Chartered Accountant (Member of ICAP or ICMAP) practicing in Pakistan; or (3) A person named in the Articles of Association as a Director or other officers. Also attached: Three copies of Memorandum & Articles of Association, signed by each member in presence of a witness, and with special stamp pasted. 2. Form-21 (identifying the location of the office) 3. Form-29 (Particulars of Directors, Secretary, Chief Accountant, Auditors, etc). The copy of the National Identity Card of the subscriber is required to submit along with the documents. It is not mandatory to hire a lawyer or accountant to get a company incorporated but it is generally preferred for ease of accomplishment. Any of the initial subscriber to the Memorandum of Association has to declare that all the formalities in connection with the incorporation of the company stand completed before the certificate of incorporation is issued. The fee of incorporation is reduced recently. The schedule for the registration fee is:
The standard provisions of the Articles of Association are available at the Registration Office. |
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| Procedure 4. | Make a company seal. | ||||||||||||
| Time to complete: | 2 days | ||||||||||||
| Cost to complete: | PKR 1000 | ||||||||||||
| Comment: | Common seal is prepared after certificate of incorporation is obtained. It is affixed on the documents of significant nature in accordance with the provision of the Articles of Association. | ||||||||||||
| Procedure 5. | Apply for a National Tax Number (NTN) and register for the income tax. | ||||||||||||
| Time to complete: | 2 days | ||||||||||||
| Cost to complete: | PKR 50 | ||||||||||||
| Comment: | Every company is required to have the National Tax Number by providing the proof of registration, the Memorandum and Articles of Association of the Company, bank account number, NTN of its directors and the proof of relationship with the registered business address. All documents required due at a station by a Class-I of Gazette Officer or an Officer of a Bank. A company can start its business activities without even first obtaining the NTN but it is generally required by all the registering authorities like Chambers of Commerce, Import Export Regulatory Authority, utility authority etc. There is a uniform number of the NTN allotted by the NTN Branch (centralized for the whole of Pakistan) at Islamabad. The necessary form along with documents and duly verified are submitted to the same NTN Center after obtaining the incorporation of the company. The center quickly processes the application and issues the NTN within one week. The certificate is sent to the registered address of the applicant. In case it is not delivered at the postal address, the same can be enquired from the NTN center over the phone and its status is communicated instantly. The undelivered NTN certificate can be collected form the specified office of the CBR distinct from the NTN center.
The income tax is paid at the time of the filling of the return which is within six month from the end of the financial year of the company which is generally the June ending. Besides, the workers welfare fund at 2% is charged at the time of the income tax assessment by the income tax department. The company is also supposed to act as a Tax Withholding Agent for the state and deduct and deposit tax on most of the payments made by it in connection with the activities of its business. For this purposes, it is also required to file monthly returns to the tax authorities. Companies can go to the Internet to find out the status of the processing within 24 hours of the application. Meanwhile, since 2002, NTN are issued with a continuous valid term. Companies no long need to renew their NTN. |
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| Procedure 6. | Register for sales tax | ||||||||||||
| Time to complete: | 6 days | ||||||||||||
| Cost to complete: | no charge | ||||||||||||
| Comment: | The registration is with the national tax authority, but a different division from the income tax. The application is filed with the registering wing of the sales tax directorate. The documents are filed and scrutinized, and an official visit follows on the premises of the application for the purposes of the verification of the address and particulars of the prospective tax payer. This takes a long time and is cumbersome. The following documents (duly attested by Chamber of Commerce & Industries, President / Chairman of the Concerned Association, Any Assistant Collector of Sales Tax or Superintendent of Registration) are required to file to the authority for registration:
List of Machinery (if manufacturer). |
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| Procedure 7. | Register for the Professional Tax with the local tax authority | ||||||||||||
| Time to complete: | 7 days (simultaneous with the previous procedure) | ||||||||||||
| Cost to complete: | no charge | ||||||||||||
| Comment: | Professional tax is a yearly tax and is paid just for existence irrespective of paid up capital or turnover in smaller companies. The scale goes up with the increase in these two. It may ranges from PKR 5,000/- to 100,000/- depending on the province of registration and other criteria. The department generally obtains the list from the Registrar for the purposes of the issuing the payment challans. Before a challan is issued, a proforma is served on the company asking for certain details which are used for the assessment. There are no registration fees etc for the professional tax. The professional tax is not deducted at source rather it is paid into the bank account of the concerned department after assessment and issuance of the challan. No local taxes except for professional tax are charged from a company. A manufacturing unit owning fixed assets may have to pay certain local levies on its fixed assets. There is no registration for the latter. In practice, taxpayers usually do not register for the tax voluntarily unless the tax authority chases them to do so. |
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| Procedure 8. | Register with the Employee Social Security Institution | ||||||||||||
| Time to complete: | 11 days, simultaneous with the previous procedure | ||||||||||||
| Cost to complete: | no charge | ||||||||||||
| Comment: | The employment tax or social security registration is not mandatory, but subject to notification in the Official Gazette. The Social Security Institute (SSI) is managed by the provincial governments and charges are levied on the employers, whether incorporated or not, at 7% of wages up to PKR 5,000 per month. In case any worker due to increase in wages, starts drawing more than PKR 5000 per month, Social Security Contribution at the rate of 7% is payable for PKR 5000 only and nothing is payable on the amount in excess of PKR 5000. |
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| Procedure 9. | Register for old age benefits with Employees Old-Age Benefits Institution (EOBI). | ||||||||||||
| Time to complete: | 11 days, simultaneous with the previous procedure | ||||||||||||
| Cost to complete: | no charge | ||||||||||||
| Comment: | The provisions of Employees' Old-Age Benefits Act, 1976 automatically apply to every industry or establishment wherein ten or more persons are employed by the employer directly or through any other person, or were so employed on any day during the preceding twelve months and shall continue to apply to every such industry or establishment even if the numbers of persons employed therein is, at any time after the Act becomes applicable to it is reduced to less than ten. |
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| Procedure 10. | Register with Pakistan Shops & Establishment Ordinance, 1969 | ||||||||||||
| Time to complete: | 7 days | ||||||||||||
| Cost to complete: | PKR 2.00 – 10.00 | ||||||||||||
| Comment: | Every establishment and factories employing clerical staff within the factory premises other than a one-man shop shall be registered with the Deputy Chief Inspector for the area within which such establishment is situated. |
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