Setting Up a Company in Pakistan
Pakistan is South Asia's second-largest economy — 240 million consumers, a young population and a rapidly growing technology export sector. Here is how foreign investors incorporate in 2026.
Pakistan's Securities and Exchange Commission (SECP) operates a fully online company registration system (e-Services) that has significantly reduced incorporation timelines. The Companies Act 2017 governs corporate structures. Foreign investors can own 100% of a Pakistani company in most sectors — no local partner is required — and the Board of Investment (BOI) facilitates one-window approvals for larger projects.
Key facts for 2026
| Parameter | Detail |
|---|---|
| Corporate tax | 29% (standard rate) |
| SME tax (turnover-based) | 1.25% of turnover (for companies with turnover up to PKR 250 million) |
| GST (VAT) | 18% (federal); additional provincial sales tax on services |
| Foreign ownership | 100% in most sectors |
| SEZ corporate tax holiday | 10 years exemption for qualifying manufacturing in SEZs |
Corporate structures
The Private Limited Company (Pvt Ltd) is the standard vehicle — 2 to 50 shareholders, no minimum capital for most activities, full limited liability. A Single Member Company (SMC) allows a sole foreign shareholder. Foreign companies can register a branch for specific project operations. All structures are registered with SECP through the e-Services portal. A foreign-invested company must also register with the State Bank of Pakistan (SBP) for remittance purposes.
Special Economic Zones (SEZs)
Pakistan has 9 operational SEZs under the China-Pakistan Economic Corridor (CPEC) framework, including Rashakai (KPK), Dhabeji (Sindh) and Allama Iqbal (Punjab). SEZ entities manufacturing for export benefit from a 10-year corporate income tax exemption, duty-free import of capital goods, and single-window facilitation. The CPEC-backed zones are particularly attractive for Chinese and international manufacturers seeking access to Pakistan's domestic market and regional export corridors.
The incorporation process
- Reserve a company name on the SECP e-Services portal.
- Submit Memorandum and Articles of Association, director/shareholder documents (with notarised translations if non-English).
- Obtain a Certificate of Incorporation — typically 2–5 business days online.
- Obtain an NTN (National Tax Number) from the Federal Board of Revenue (FBR).
- Register for Sales Tax (GST) with FBR if applicable.
- Register with the relevant provincial Social Security Institution and Employee Old-Age Benefits Institution (EOBI).
- Open a corporate bank account; register with the State Bank of Pakistan for any foreign currency accounts.
Frequently asked questions
Can a foreigner own 100% of a Pakistani company?
Yes, for most sectors. Restricted sectors include media, arms, high explosives and certain security services. BOI publishes the restricted sectors list. No minimum local equity requirement applies for approved foreign investments.
What is the corporate tax rate in Pakistan?
29% standard rate for companies. SMEs with turnover up to PKR 250 million pay a reduced turnover-based tax of 1.25%. SEZ manufacturing entities get a 10-year income tax holiday.
What is the GST rate in Pakistan?
18% federal GST on goods. Services are taxed by provincial revenue authorities at varying rates (13–16%). Exports are zero-rated.
Official sources
- Securities & Exchange Commission of Pakistan (SECP)
- Board of Investment (BOI)
- Federal Board of Revenue (FBR)
This guide is general information prepared by ARM Management and is current as at July 2026. It is not legal advice. Confirm with SECP or a Pakistan-qualified advisor before incorporating.
Structure your Pakistan entry correctly from day one.
ARM Management advises on Pakistani company formation, BOI registration, SEZ licensing and ongoing tax compliance.