In Pakistan, there are many different kinds of businesses ideas. It ranges from a sole proprietorship to partnership business, to limited company, public limited, joint ventures, and so on. Although the most popular ones in Pakistan are the sole proprietorship, partnership, and private limited companies. Despite all that, it is still a good place to conduct your business in. We have discussed shortly about advantage of setting up business in Pakistan.
In order to carry out your operations smoothly in Pakistan, you would require by law to incorporate your business. That is to say, you will have to register your business with a company. The registration process for each of those businesses may vary from one another but most of them are the fairly simple process. Once you register your business as a “company” there are quite a lot of advantages you can get out of it.
| Unlimited Lifespan | - The great thing about sole proprietorship is that you are in full control of your entity. All the risks are borne by you, and all the profits are enjoyed by yourself. If you pass away then your company does too. However, once you have converted into a company, your business will have an unlimited lifetime. The passing of its owner or the director has no direct effect on its continuation. Rather, it can carry on functioning as it was under new leadership. |
| Separate Entity | - When you are registering your business as a company, you are giving it a separate entity. It is not directly linked to the people who run it, i.e. the directors. In fact, the company is now being regarded as a person according to the law. It has its own identity. In Pakistan, a company will be completely different from its shareholders, directors, employees and creditors. One could even sue the company; get into separate contracts with it among other things. |
| Reputation | - In Pakistan setting up your business as a company will give it a whole new level of respect. This is because the people of Pakistan views limited companies as something completely different from a sole proprietorship. They think there are more status and value to a company. So if you are forming your business into a company, then it will be much easier for you to attract new potential investors, the shareholders will have more trust in the entity and people will respect you more for each decision you take. There is a conflict whether shareholders are required visa and/or work permit registering company in Pakistan? |
| Tax Benefit | -This is probably the one point which will pretty much convince all entrepreneurs to register their businesses as companies in Pakistan. As it stands, the rules of Pakistan dictate that the directors of a company are allowed to receive a salary from their own companies. In other words, not only will you be able to enjoy the profits but you can give yourself a salary as a token of work well done. On the other hand, individual business owners cannot take salaries out of their own business. Meaning not only do you have to bear all risks in a sole proprietorship, you do not get anything for all your hard work, apart from the company profit. And speaking about profits, by giving a salary to your director, i.e. yourself, you will be able to lower your net profits. This is vital because a lower net profit means you will have to pay a low tax. Suffice to say, there are many benefits and or advantage of setting up business in Pakistan as foreigner. |
| Transfer of ownership | - Most people in Pakistan like to follow traditions. One of the common traditional practices is the transferring of ownership of any object from father to son to daughter and so on. Gifting to the next generation is a very common practice. The same practice can be applied to your company as well. Transferring the ownership of your business is very much easy in Pakistan. If you are a limited company then the procedure is very simple unlike other forms of businesses. A family business is perceived as a more stable entity than one run by outsiders. It instills trust among the shareholders and potential new investors. So that is a benefit that one can fully take advantage of in Pakistan. |
| Limited Liability | - Another advantage of setting up your business in Pakistan is that once you register your business into a company you shall be able to enjoy limited liabilities. In simpler terms, sole proprietorship and partnership businesses both have unlimited liabilities. You can stand to lose everything you worked hard for in one single moment. However, if you are a private limited company then you won't have to risk everything. As mentioned before, the company has its own separate identity. This basically means that everything that is in the name of the company will be at risk but not your personal assets and belongings as would be the case in a partnership business. |
You may have many new small business ideas and plan for the same to be startup in Pakistan and our responsibilities to manage licensing and setting up within frame of Law and FDI for the nonresident investors who may live or without living.
