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Large South Asian market with IT/freelance sector
Region
ASIA PACIFIC
Corporate Tax
29%
Setup Time
3 weeks
Currency
PKR
Pakistan, the world's fifth most populous country, offers access to a young, growing market with expanding digital adoption. Company registration involves navigating complexity, but the demographic potential supports specific business setup strategies.
With a population of 230 million, Pakistan offers diverse living from commercial Karachi to cultural Lahore. Urdu and English are official languages, with English in business and education. The climate varies from extreme heat to mountain cold.
Healthcare varies significantly, with quality private facilities in major cities. Safety requires awareness with regional variation. The cost of living is low.
The hospitality, cultural richness, and entrepreneurial energy create opportunities for those understanding the context.
Corporate tax rates range from 29% to 35% depending on company type. Personal income tax reaches 35%. Sales tax applies at 17-18% on most goods. Special economic zones offer incentives.
The Pakistani rupee has experienced significant depreciation. The economy features textile exports, IT services, and growing e-commerce. China-Pakistan Economic Corridor creates infrastructure investment.
Company registration through SECP (Securities and Exchange Commission of Pakistan) is established. Private limited companies require minimum two shareholders and two directors. Foreign ownership is permitted in most sectors.
Company formation takes approximately 2-3 weeks. Minimum capital varies by structure. Annual compliance includes filings and audit requirements.
Pakistan has not established crypto license frameworks, with the State Bank maintaining cautious position. Digital asset businesses face regulatory uncertainty with ongoing policy discussions.
Gambling is prohibited under Pakistani law. No gambling license framework exists. Gaming businesses are not viable.
Political and economic stability requires ongoing assessment. Infrastructure and power challenges affect operations. The business environment requires local knowledge and relationships.
Banking access is available through Pakistani banks. Professional services exist in major cities.
Pakistan suits businesses targeting the young demographic, IT services, and patient investors with long-term market perspectives for their business setup.
Local: Pvt Ltd
Local: Ltd
Local: Branch
| Corporate Tax Rate | 29% |
| Personal Income Tax Rate | 35% |
| VAT / Sales Tax | 18% |
| Capital Gains Tax | 0-15% |
| Withholding Tax | 15% |
| Reduced Corporate Tax Available | Yes |
| Non-Resident Withholding Exempt | No |
| Tax Treaty Network | Yes |
| Banking Access | MEDIUM |
| Financial Privacy | MEDIUM |
| Currency Controls | SOME |
| Local Bank Account Required | Yes |
| Non-Resident Bank Account Allowed | No |
| Physical Presence for Banking | Yes |
| Banks Restrictive (High Risk) | Yes |
| AML Officer Required | No |
| MLRO Required | No |
| Compliance Officer Required | No |
| Data Protection Officer Required | No |
| Bookkeeping Frequency | Annual |
| Local Bookkeeping Required | Yes |
| Mandatory Audit | Yes |
| License Required | Yes |
| Local Director Required | No |
| Local AML Director Required | No |
| Local Legal Address Required | Yes |
| Local Physical Office Required | No |
| Capital Maintained in Account | No |
| Compliance Program Required | No |
| Travel Rule Compliance | true |
| Business Plan Required | FATF Travel Rule (framework under development) |
| Personnel Required | Detailed business plan required per PVARA guidelines |
| Insurance Required | No |
| Remote Incorporation Possible | Yes |
| 100% Foreign Ownership | No |
| Min. Directors | 2 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | false |
| Renewal Period | PVARA to maintain public register of licensed VASPs |
| Accounting Filing Required | No |
| Accounting Filing Frequency | true |
| Financial Statement Required | No |
| Financial Statement Frequency | true |
| Accounting Audit Mandatory | No |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | Yes |
| Corporate Income Tax Applicable | No |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | Yes |
| Territorial Tax Regime | Yes |
| VAT Applicable | No |
| Regulators | false |
| Licensing Fee Details | Exchange, Broker-Dealer, Custodian, Advisory Services (8 categories defined) |
| Permitted Business Models | Virtual asset trading, custody, advisory, brokerage |
| Permitted Activities | Banking services using virtual assets; virtual assets cannot be legal tender |
| Restricted Activities | Virtual asset trading, custody, advisory, brokerage |
| Cross-Border Service Allowed | No |
| Physical Inspection Required | No |
| Crypto Custody Allowed | Yes |
All gambling activities are prohibited except horse racing, cricket betting (skill-based exceptions), and national lottery
| License Required | Yes |
| Local Director Required | Yes |
| Local AML Director Required | Yes |
| Local Legal Address Required | Yes |
| Local Physical Office Required | Yes |
| Required Share Capital | $200,000,000 |
| Capital Maintained in Account | Yes |
| Compliance Program Required | Yes |
| Travel Rule Compliance | FATF compliant (removed from grey list October 2022) |
| Business Plan Required | Comprehensive business plan required with 3-year projections per SBP format |
| Personnel Required | CEO, CFO, Compliance Officer, AML Officer, Board of Directors with fit and proper clearance |
| Insurance Required | No |
| Remote Incorporation Possible | No |
| 100% Foreign Ownership | No |
| Min. Shareholders | 2 |
| Min. Directors | 2 |
| Shareholder/Director Same Person | Yes |
| Registry Public | Yes |
| Registry Access | https://www.sbp.org.pk - SBP licensed institutions list |
| Renewal Period | Annual |
| Accounting Filing Required | Yes |
| Accounting Filing Frequency | Annual |
| Financial Statement Required | Yes |
| Financial Statement Frequency | Annual |
| Accounting Audit Mandatory | Yes |
| Compliance Audit Mandatory | Yes |
| Technical Audit Mandatory | No |
| Corporate Income Tax Applicable | Yes |
| Dividend Tax Applicable | Yes |
| Capital Gains Tax Applicable | Yes |
| Territorial Tax Regime | No |
| VAT Applicable | Yes |
| Regulators | State Bank of Pakistan (SBP) for EMIs and payment services; SECP for NBFCs |
| Licensing Fee | $200,000 |
| Licensing Fee Details | PKR 200,000 non-refundable application processing fee for EMI license. Additional fees for different stages of licensing. |
| Permitted Business Models | EMI (Electronic Money Institution), PSO (Payment System Operator), PSP (Payment Service Provider), NBFC |
| Permitted Activities | E-money issuance, digital wallets, payment processing, bill payments, fund transfers, agent banking |
| Restricted Activities | Banking services (acceptance of deposits for lending), interest-bearing products, speculative activities |
| Cross-Border Service Allowed | Yes |
| Physical Inspection Required | Yes |