Company Registration In Pakistan, particularly in the financial services sector, involves a structured process governed by the Securities and Exchange Commission of Pakistan (SECP). Financial services companies are subject to additional regulations due to the sensitive nature of their operations, such as handling investments, loans, insurance, or banking. Below is a detailed step-by-step guide for registering a financial services company in Pakistan:
Step 1: Decide the Company Type
The first step is determining the legal structure of your company. Most financial services companies in Pakistan are registered as private limited companies, which provide limited liability protection and are suitable for business expansion. Other options include public limited companies or partnerships, depending on the scale and nature of the business.
Step 2: Choose a Unique Company Name
The company name must be unique and comply with the guidelines issued by the SECP. Avoid using prohibited terms or words that suggest state patronage, religious connotations, or resemble the names of existing companies. You can use SECP’s Company Name Search Tool to verify availability.
Step 3: Obtain Initial Approvals for Financial Services
Given the nature of financial services, initial regulatory approvals might be required before proceeding with the registration process. For example:
- Banking Companies: Approval is required from the State Bank of Pakistan (SBP).
- Insurance Companies: Licensing from SECP’s Insurance Division is mandatory.
- Asset Management Companies: Approval is needed under SECP’s regulations for asset management.
These approvals ensure compliance with Pakistan’s laws governing financial operations.
Step 4: File the Name Reservation Application
Apply for name reservation through SECP’s online platform, eServices. Upon approval, SECP will issue a name reservation letter valid for 90 days, during which the Company Registration In Lahore must be completed.
Step 5: Draft Memorandum and Articles of Association
The Memorandum of Association (MoA) outlines the business objectives, such as providing loans, managing assets, or offering insurance services. The Articles of Association (AoA) set out the company’s internal rules and governance framework.
For financial services, the MoA must specify the nature of financial activities. Ensure the objectives align with the relevant regulatory requirements. It’s advisable to engage a corporate lawyer to draft these documents.
Step 6: Submit Incorporation Documents
File the following incorporation documents through SECP’s eServices portal:
- Form 1: Declaration of compliance with company registration requirements.
- Form 21: Notice of the registered office address.
- Form 29: Details of the company’s directors, chief executive officer (CEO), and company secretary.
- Memorandum and Articles of Association: Properly drafted and signed.
- Copy of CNICs/Passports: For all directors, shareholders, and the CEO.
Pay the applicable registration fee, which depends on the company’s authorized capital.
Step 7: Obtain Incorporation Certificate
Upon successful submission and review, SECP issues a Certificate of Incorporation. This certificate officially recognizes the company as a legal entity in Pakistan.
Step 8: Apply for Licenses and Permissions
Financial services companies often require additional licenses to operate. Depending on the services provided, the following licenses may be necessary:
- Non-Banking Financial Companies (NBFC) License: Issued by SECP for businesses such as leasing, investment advisory, and mutual funds.
- Microfinance License: For companies involved in micro-lending.
- Stock Brokerage License: Required for firms dealing in securities.
- Insurance License: For insurance-related services.
Each license involves separate application procedures and compliance requirements.
Step 9: Register with Tax Authorities
Register the company with the Federal Board of Revenue (FBR) for a National Tax Number (NTN) and Sales Tax Registration Number (STRN) (if applicable). File these applications online via the FBR portal.
Step 10: Open a Corporate Bank Account
A corporate bank account is mandatory for financial transactions. The account must be opened in the company’s name using the Certificate of Incorporation, NTN, and other supporting documents.
Step 11: Register with Provincial Authorities
Certain financial services companies may need to register with provincial departments for labor laws, professional tax, or sales tax on services. For instance, companies operating in Punjab need to register with the Punjab Revenue Authority (PRA).
Step 12: Fulfill Compliance Requirements
After incorporation, financial services companies must adhere to ongoing compliance requirements, such as:
- Annual Filings: Submit financial statements and tax returns to SECP and FBR.
- Audits: Conduct regular audits to ensure transparency.
- Regulatory Reporting: Report to SECP or SBP as per licensing terms.
Conclusion
Registering a financial services company in Pakistan is a multi-step process involving regulatory approvals, careful documentation, and strict compliance with SECP and other authorities. It is advisable to work with legal and financial consultants like Hamza & Hamza Law Associates to ensure all requirements are met. By following these steps, you can establish a compliant and operational financial services company in Pakistan.