Opening a Branch Office in Pakistan – Complete Foreign Investor Guide

Foreign companies looking to expand into Pakistan often choose to set up a Branch Office or Liaison Office instead of incorporating a new local entity. This allows them to operate under their existing parent company while conducting business or promotional activities within Pakistan.

If you’re a foreign investor exploring business opportunities in Pakistan, here’s a complete, updated guide on how to establish a Branch Office, its regulatory framework, documents required, and ongoing compliance obligations.

What Is a Branch Office?

A Branch Office is an extension of a foreign company established in Pakistan to carry out commercial activities approved by the Board of Investment (BOI).

It does not create a separate legal entity — the parent company remains legally responsible for all the branch’s operations, obligations, and liabilities in Pakistan.

Branch Office vs. Liaison Office

Feature	Branch Office	Liaison Office
Purpose	Commercial operations (services, contracts, billing)	Promotion, coordination, market research
Income Generation	Allowed (subject to taxation)	Not allowed
Tax Registration	Required (FBR NTN, STRN)	Required for limited purposes
Local Invoicing	Permitted	Not permitted
BOI Approval Period	1–5 years (renewable)	1–5 years (renewable)
Typical Use	For companies executing contracts or offering services in Pakistan	For representative or marketing offices

Legal Framework

Branch and Liaison Offices in Pakistan are regulated by:

Board of Investment (BOI) – for approval and licensing
Securities and Exchange Commission of Pakistan (SECP) – for company registration
Federal Board of Revenue (FBR) – for tax registration
State Bank of Pakistan (SBP) – for foreign remittance reporting

All foreign companies must comply with the Companies Act, 2017 and the Companies (Registration of Foreign Companies) Regulations, 2018.

Step-by-Step Process to Open a Branch Office in Pakistan

Step	Description	Responsible Authority
1	Apply for permission to establish a Branch Office	Board of Investment (BOI)
2	Obtain SECP registration as a Foreign Company	SECP
3	Register for NTN and tax purposes	FBR
4	Open a local corporate bank account	Commercial Bank (with SBP reporting)
5	Apply for visa and work permits (if needed)	BOI & Immigration
6	Start operations within scope of approved activities	Company

Step 1: Obtain BOI Permission

All foreign investors must first apply to the Board of Investment (BOI) for permission to set up a Branch Office.

Documents Required for BOI Application

Application form (available at https://www.invest.gov.pk)
Copy of Certificate of Incorporation of the parent company
Memorandum & Articles of Association (MOA & AOA)
Details of directors, shareholders, and management
Power of Attorney authorizing local representative
Description of proposed activities in Pakistan
Bank statement or financial profile of the parent company
Fee challan (USD 3,000 to 5,000, depending on category)

BOI Approval Timeline

The BOI typically issues approval within 4–6 weeks, after reviewing the application and consulting relevant ministries (Interior, Finance, etc.).

Once approved, the Branch Office is issued a Permission Letter valid for 1–5 years, renewable upon expiry.

Step 2: Register with SECP

After BOI approval, the foreign company must register with the Securities and Exchange Commission of Pakistan (SECP) as a Foreign Company under Section 435 of the Companies Act, 2017.

Required SECP Documents

Certified copies of parent company’s incorporation documents
BOI Permission Letter
List of directors and principal officers
Address of principal place of business in Pakistan
Authorized representative details
Power of attorney in favor of local agent
Fee challan (approximately Rs. 50,000–100,000, depending on structure)

SECP then issues a Certificate of Registration of Foreign Company.

Step 3: Tax Registration (NTN & STRN)

After SECP registration, the Branch Office must obtain a National Tax Number (NTN) from the Federal Board of Revenue (FBR).

For service-based businesses, Sales Tax Registration (STRN) may also be required if taxable supplies are made in Pakistan.

Key Tax Points

Branch offices are taxed as non-resident entities on Pakistan-source income.
Income tax is levied at the standard corporate rate (currently 29%).
All income must be declared, and annual returns filed on the IRIS Portal.

Step 4: Open a Bank Account

To operate locally, the Branch Office must open a corporate bank account in Pakistan.
The bank will require:

SECP registration certificate
BOI permission letter
NTN certificate
Passport/ID of local signatories
Resolution authorizing account opening

All foreign remittances must be routed through State Bank of Pakistan (SBP) channels, with proper reporting of inflows and outflows.

Step 5: Employment, Visas, and Work Permits

Foreign employees working at the Branch Office require work visas and permits, which are processed through BOI.

The BOI allows:

Up to 4 foreign employees in managerial or technical roles
Additional staff upon justification
Work visa validity equal to BOI permission validity

Local employees must be registered under EOBI and social security as per labor laws.

Step 6: Annual Compliance Requirements

Compliance	Description	Frequency
SECP Filings	Annual accounts, Form 52 (foreign company return)	Annually
BOI Renewal	Permission renewal after expiry	Every 1–5 years
FBR Returns	Income tax and withholding tax filings	Annually
Audit	Accounts must be audited by a licensed Pakistani firm	Annually
SBP Reporting	Quarterly remittance statements	Quarterly

Failure to file within due dates can result in penalties and possible revocation of permission.

Key Advantages of a Branch Office

100% foreign ownership allowed
No need to incorporate a local subsidiary
Full control by parent company
Ability to execute contracts and generate income
Easier profit repatriation (subject to SBP approval)
Recognized as an official foreign business presence

Important Restrictions

Branch Office can only perform activities approved by BOI.
Manufacturing or trading is not allowed unless specifically permitted.
No expansion beyond approved scope without fresh BOI approval.
Repatriation of profits requires audited financials and tax clearance.

Typical Timeline Overview

Stage	Duration
BOI Approval	4–6 weeks
SECP Registration	1–2 weeks
FBR Registration	3–5 days
Bank Account Setup	1 week
Total Estimated Time	6–8 weeks

How Sterling Consultancy Helps

At Sterling Consultancy, we specialize in helping foreign companies establish a Branch or Liaison Office in Pakistan — efficiently and compliantly.

Our services include:

BOI application and documentation preparation
SECP foreign company registration
FBR tax and STRN registration
Assistance with bank account opening
Visa and work permit coordination
Annual compliance and renewal management

We handle all regulatory communication with BOI, SECP, FBR, and SBP, ensuring your company operates legally from day one.

Final Thoughts

Opening a Branch Office in Pakistan offers tremendous opportunities for international businesses seeking to enter one of South Asia’s most promising markets.

While the process involves multiple regulatory layers — BOI approval, SECP registration, FBR compliance — with the right guidance, it can be completed smoothly within a few weeks.

By establishing a compliant Branch Office, you gain full operational control while enjoying the advantages of foreign ownership, access to local clients, and simplified repatriation.

If you’re ready to expand your business footprint in Pakistan, Sterling Consultancy can manage the entire process — from approval to launch.