Introduction
Expanding into Pakistan is a strategic move for many international companies seeking to tap into a growing economy, cost-effective operations, and access to a vast South Asian market. One of the most common structures used by foreign corporations is the subsidiary company—a separate legal entity incorporated under Pakistani law but owned and controlled by a foreign parent company.
This detailed guide explains how to register a subsidiary company in Pakistan, covering legal requirements, documentation, procedures, timelines, compliance, and post-registration formalities for both foreign and local investors.
1. What Is a Subsidiary Company?
A subsidiary company in Pakistan is a company incorporated under the Companies Act, 2017, whose majority (or complete) shareholding is held by a parent company, usually incorporated outside Pakistan.
Key Features:
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Separate legal entity from parent
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May be Private Limited (Pvt Ltd) or Single Member Company (SMC)
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Registered with the Securities and Exchange Commission of Pakistan (SECP)
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May operate in any permitted commercial sector
2. Benefits of Registering a Subsidiary in Pakistan
✅ 100% foreign ownership allowed in most sectors
✅ Limited liability protection
✅ Tax residency in Pakistan (for tax planning)
✅ Local contracts and invoicing in PKR
✅ Eligible to hire employees, lease property, and open bank accounts
✅ Easier to repatriate profits under proper channels
3. Legal Framework Governing Subsidiaries
| Law/Authority | Description |
|---|---|
| Companies Act, 2017 | Incorporation, governance, disclosure rules |
| SECP (secp.gov.pk) | Incorporation and regulatory filings |
| FBR (fbr.gov.pk) | Income and sales tax registration |
| State Bank of Pakistan (SBP) | Foreign investment regulations |
| Foreign Exchange Regulations Act, 1947 | Capital remittance, funding rules |
4. Steps to Register a Subsidiary in Pakistan
Step 1: Name Reservation with SECP
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Apply via SECP eServices portal: https://eservices.secp.gov.pk
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Select Private Limited or Single Member Company
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Choose a unique name following SECP’s naming guidelines
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Pay Rs. 200 online (or via bank challan)
Timeline: Immediate to 1 working day
Output: Name availability certificate
Step 2: Prepare Documents for Incorporation
| Required Documents | Notes |
|---|---|
| Memorandum of Association (MOA) | States company objectives |
| Articles of Association (AOA) | Internal governance rules |
| CNICs or passports of directors/shareholders | Notarized copies for foreign nationals |
| Parent company incorporation certificate | Notarized and legalized (with Urdu translation if required) |
| Board Resolution of parent company | Approving investment and appointment of nominee directors |
| NOC from relevant regulator (if required) | For regulated sectors like telecom, banking |
| Registered office address proof | Tenancy agreement or ownership documents |
Important: Foreign documents must be notarized, apostilled/legalized by Pakistan’s embassy, and translated into English/Urdu.
Step 3: Submit Incorporation Application on SECP Portal
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Log in to SECP eServices
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Complete the Form 1 (Declaration of compliance)
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Submit Form 21 (Registered address)
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Submit Form 29 (Particulars of directors)
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Attach all documents digitally
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Pay incorporation fee based on authorized capital (e.g., approx. Rs. 1,800–Rs. 10,000 for Rs. 100,000 to Rs. 10 million capital)
Timeline: 2–5 working days
Output: Certificate of Incorporation
Step 4: Obtain Digital Signatures and Company Seal
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Obtain digital signatures (PKI tokens) from NIFT via SECP
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Order company rubber stamp/seal for banking and legal documentation
Step 5: Apply for National Tax Number (NTN)
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Register with FBR at: https://iris.fbr.gov.pk
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Submit:
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Incorporation Certificate
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MOA & AOA
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CNICs/passports of directors
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Office rent/ownership agreement
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Electricity bill
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Select Company as Taxpayer Type
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Choose correct business activity code (PSIC)
Timeline: 1–3 days
Output: NTN Certificate
Step 6: Sales Tax Registration (if applicable)
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Register for Sales Tax Number (STRN) with FBR
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Mandatory if:
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Business is involved in manufacturing, importing, or retail of taxable goods
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Providing taxable services under FBR or PRA/SRB
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Also register with provincial revenue authorities for services:
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PRA (Punjab) – pra.punjab.gov.pk
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SRB (Sindh) – srb.gos.pk
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KPRA/BRA – For Khyber Pakhtunkhwa and Balochistan
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Step 7: Open Company Bank Account
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Open a PKR and foreign currency account with a local bank
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Required documents:
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Certificate of Incorporation
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NTN
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MOA/AOA
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Form 29
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CNICs/Passports
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Company seal
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Resolution for account opening
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Step 8: Capital Injection and Foreign Remittance Reporting
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Foreign parent company wires initial paid-up capital via banking channel
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Bank issues Foreign Inward Remittance Certificate (FIRC)
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Report remittance to SBP through bank, often under General Permission List (GPL)
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Capital can be used to pay initial expenses, salaries, or investment costs
5. Post-Incorporation Compliance
| Requirement | Frequency | Relevant Form / Platform |
|---|---|---|
| Income Tax Return Filing | Annually | IRIS (FBR portal) |
| Sales Tax Return (if STRN) | Monthly | FBR/PRA/SRB portal |
| SECP Annual Return (Form A/B) | Annually | eServices |
| Form 45 (UBO Declaration) | Annually/Updates | SECP portal |
| Audited Financial Statements | Annually (if turnover > Rs. 3M) | Required for corporate tax filing |
6. Taxation of Subsidiary Companies
| Tax Type | Rate/Requirement |
|---|---|
| Corporate Income Tax | 29% on taxable income |
| Minimum Tax | 1.25% of turnover (if profit < threshold) |
| Sales Tax (Goods) | 18% (FBR) |
| Services Tax | 13%-16% (Provincial) |
| Withholding Tax | On payments to vendors/employees |
| Dividend Withholding | 15% (adjustable; may vary via treaty) |
Note: A subsidiary is treated as a Pakistani resident company for tax purposes.
7. Subsidiary vs. Branch Office
| Feature | Subsidiary | Branch Office |
|---|---|---|
| Legal Status | Separate Pakistani entity | Extension of foreign parent |
| Ownership | Local company (owned by parent) | No separate legal personality |
| Tax Residency | Resident company | Treated as non-resident |
| Liability | Limited to subsidiary | Parent company is liable |
| Remittance Rules | Normal dividend repatriation | Strict SBP permissions required |
| Compliance | Full company compliance with SECP | Registered under Section 435 of Companies Act |
8. Timeline Summary
| Task | Estimated Time |
|---|---|
| Name Reservation | 1 day |
| SECP Incorporation | 2–5 working days |
| NTN Registration (FBR) | 1–3 days |
| Bank Account Opening | 5–7 days |
| Capital Remittance & SBP Report | 3–10 days (varies by bank) |
| Sales Tax & Provincial STRN | 3–5 days (if required) |
Total Estimated Time: 10–20 business days (excluding delays in document legalization or foreign wire transfers)
9. FAQs on Subsidiary Company Registration in Pakistan
Q1: Can a foreign company own 100% of a Pakistani subsidiary?
Yes. There are no restrictions on foreign ownership in most sectors.
Q2: Do I need to visit Pakistan to incorporate a subsidiary?
No. Incorporation and tax registration can be done remotely via local consultants.
Q3: Can a foreign director be appointed?
Yes. Foreign nationals can be directors, but passport and address verification is mandatory.
Q4: What is the minimum capital requirement?
There’s no mandatory minimum, but Rs. 100,000 is commonly used. Higher capital is recommended for visa, bank credibility, and audit readiness.
Q5: Can profits be repatriated to the parent company?
Yes, after tax payments and through proper banking and SBP reporting.
10. How Sterling.pk Can Help
At Sterling.pk, we specialize in helping foreign companies establish and manage subsidiary companies in Pakistan.
✅ Name reservation and SECP registration
✅ Foreign document legalization assistance
✅ NTN and tax registrations (FBR, PRA/SRB)
✅ Monthly compliance filing and bookkeeping
✅ Local director provision (if needed)
✅ SBP reporting and capital remittance support
✅ Payroll, audit, and financial advisory services
We offer complete turnkey solutions to ensure your expansion into Pakistan is compliant, efficient, and hassle-free.
Conclusion
Registering a subsidiary company in Pakistan is a streamlined yet documentation-heavy process, especially for foreign corporations. With a growing economy, liberal foreign investment policies, and robust legal infrastructure, Pakistan offers tremendous opportunities for businesses looking to scale in South Asia.
By understanding the registration process and leveraging support from expert consultants like Sterling.pk, you can confidently establish a fully compliant, tax-efficient, and operational subsidiary that supports your long-term strategic goals.
