The construction industry is one of the most lucrative and highly-rewarding industries in Pakistan, attracting investors from all over the world. Finance Act 2019, issued by the previous government, brings several tax exemptions and relief packages for this industry, creating a trend of investments.
With hundreds of construction projects across the country, this industry can be the perfect opportunity to establish yourself and grow. To help you start your business in this sector, Graana.com, Pakistan’s smartest property portal, has prepared a complete guide on registering a construction company in Pakistan.
Steps to Register a Construction Company in Pakistan
Before setting up a construction company in Pakistan, you require registration documents from several regulatory bodies and tax authorities such as ‘The Securities and Exchange Commission of Pakistan’, ‘The Federal Board of Revenue’ or provincial boards of revenue for the respective provinces. Following are the three major steps to follow before you set up your office:
- Registration with the Securities and Exchange Commission of Pakistan (SECP)
- Registration with the Federal Board of Revenue (FBR)
- Registration with the Pakistan Engineering Council (PEC)
There are the three major regulatory authorities that can help you legalize your construction company or startup.
Securities and Exchange Commission of Pakistan (SECP) is the first major regulatory body that helps you in the registration of your company name, incorporation of your company to the national companies database, and issuance of a digital signature for future proceedings.
The Federal Board of Revenue (FBR) is a major tax registration and collection body in Pakistan. It helps you register your business with a proper National Tax Number (NTN), which is the company’s legal business venture.
Pakistan Engineering Council (PEC) functions as the primary body for the registration of engineers and contractors for various construction projects. Moreover, registration with PEC is also mandatory to get a no-objection certificate (NOC) for the projects.
Registration with the Securities and Exchange Commission of Pakistan (SECP)
SECP came into power in 1997 through the Securities and Exchange Commission Act. With investigative and enforcement powers, SECP performs various roles such as
- Capital Market and Corporate Sector Regulation
- Regulation and supervision of Insurance Companies
- Regulation and supervision of non-banking finance companies
- Supervising several external service providers to the finance and corporate sectors
Company Registration Offices (CROs) play a vital role in the registration of any company and performing various tasks of SECP. The process of registering a company is not very complex as it follows a few simple steps. SECP facilitates the registration of
- Single Member Company
- Private Limited Company
- Public Listed Company
- Unlisted Company
These are different types of companies based on their market capital, shareholders, and transfer of shares.
Registering a construction company with SECP follows two major steps:
- Registration of Company Name
- Incorporation of the Company
After registration of the company name and incorporation of your construction company in the SECP database, you will be ready to apply for the National Tax Number (NTN).
Steps to Register Your Company Name
Section 10 of the Companies Act 2017, along with Regulation 4 of Companies Regulations 2017 provides a complete guideline on how to choose a company name for your business. You can register your company’s name through SECP’s online portal by creating your account and following the steps listed below.
- Login to e-services on the SECP website
- If you are a Pakistani national, a valid CNIC is required
- If you are a foreign national, a valid passport number is required
- Fast Track Registration Service helps you with same-day registration
- Fill out the form with the required information and submit it
- Verify the security code sent on your registered email or phone number
- A PIN will be generated once the security code is verified
- Deposit the fee of challan form generated on-site in the nearest MCB or UBL bank, or deposit it online through credit or debit card.
- If your desired name does not contain any prohibited word, you will be informed via email or text that your company’s name has been reserved.
Online processes are more desirable as compared to offline form and fee submission. However, if there is any problem with the SECP’s website or online registration process, you can submit an on-site application and receive a challan form directly from the office. The offline process takes 3-5 days for completion.
Incorporation of the Company
Submission of the documents for the incorporation of your company in Pakistan via SECP is the second major step for official registration. During this process, you need the following documents:
- Memorandum of Association: This document is the declaration of the company’s principal business, aims, location of head office, official branches, and future ventures.
- Article of Association: This document discusses the functionality of the company and its corporate values.
- Filing Fee: Construction companies usually work with a larger set up so when you are applying for the certificate of incorporation, you need to pay a filing fee. The filing fee varies according to the type of your construction company.
|Single Member Company
|Private Limited Company
|Public Listed Company
Other documents that you need for the registration of your construction company have been listed below.
- Scanned CNIC Copies of all directors
- Scanned Bank Deposit
- Authorization Document for the Company Registration
After you have successfully applied for the certificate of incorporation, you are now ready to apply for the tax registration.
National Institutional Facilitation Technologies (Pvt) Ltd helps in the issuance of digital signatures for the company and the certificate of incorporation. However, the process is not that simple as you need to give a detailed presentation about the overall operation of the company.
Registration with the Federal Board of Revenue (FBR)
FBR regulates all the tax bodies and supervises the private and public corporate sectors for tax evaluation and collection. Your construction company is an immense business, and to start that officially you must register yourself with the FBR. Otherwise, you may face legal consequences and fines in the future.
The Federal Board of Revenue (FBR) provides you with an NTN (National Tax Number) after the submission of your application. The following documents are required to apply for the NTN.
- NTN Form
- Company Incorporation Certificate
- Original Letterhead of the company signed by all the directors of company
- Memorandum of Association
- Articles of Association
- Bank Account Number and Deposited Receipts
- CNIC copies of the board of directors
- Email address of the company
- Cell Phone registered against the CNIC for the director
- Original evidence of ownership of the business premises
- Originally paid utility bills of the business premises for at least last 3 months
Registration with Pakistan Engineering Council (PEC)
PEC is the regulatory body for the registration, regulation, and supervision of engineers, contractors, and construction companies. Established under the PEC Act, it works closely with other government institutions to regulate the construction industry.
To take up any government or private sector project, all construction companies must be registered by the Pakistan Engineering Council. The apex council does not release NOC to any construction company, until and unless it is registered and verified by PEC.
The Central Enrollment Committee (CEC) regulates the licensing process of the new companies. The authority verifies all the documents in detail and then issues the license to these construction companies. The companies that fall under the categories of C-A, C-B, C-1, C-2, C-3, and C-4 – all licensed by CEC.
However, companies that fall under the categories of C-5 and C-6 are regulated and licensed by the Regional Enrollment Committee (REC). Construction companies are usually categorized based on their net worth and shares in the market.
The following documents are to be submitted to PEC for the registration of your construction company.
- Company Registration Form
- Copies of the CNICs of the board of directors, shareholders, and partners
- Original Paid Fee Voucher
- Bank statement of the company’s bank accounts
- NTN Certificate Copy
- List of equipment and machinery owned by the company
- Contract agreement with the machinery supplier
- Organizational chart signed by the CEO
- Certificate of ownership of the company
- Incorporation Certificate
- Undertaking from the board of directors/partners/shareholders on stamp paper of 100 rupees.
For category C3 or above following documents are required:
- SECP Registration Evidence
- Audited Financial Statement or Bank Certificate
- Experience Letter of each Director
- List of major projects completed
- Bank statement of last 1-year
- Copy of NTN certificate
For registration of your construction company, there are several regional and brand offices across the country for your ease. You can visit any of the nearest regional offices. For more information on how to register a construction company in Pakistan, visit Graana.com – Pakistan’s first online real estate marketplace.
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