How to Obtained the Business license and permit in pakistan?
How to Obtained the Business license and permit in pakistan?
Introduction about business license and permit in Pakistan
In Pakistan to start a business there are certain legal and regulatory steps you need to take, such as obtaining any required license and permit. No matter if you’re launching a small startup or a big enterprise; with knowledge of the process, you can help ensure that you’re complying with the law from day one homework. In this blog we will break down the steps to obtain a business license and permit in Pakistan and certain tips to keep in mind while going through this process.
Why Do You Require a Business License and Permit?
Finding a business license and permit is essential for your company to operate legally. They allow you to:
Conduct your business in the confines of the law.
Make sure you are complying with local laws, including tax, health and safety, and relevant industry regulations.
Introduce yourself to customers, suppliers and investors.
Not getting the required business license and permit can result in penalties, fines, and even shutting down the business. That is specifically why you want to follow the correct procedure.
Establish Your Company
The first step before getting a business license and permit is registering your business with the corresponding entity. You depend on the structure of your business sole proprietor, partnership, corporate.
Sole Proprietorship
Once you have chosen the name, you will need to register with the Federal Board of Revenue (FBR) to obtain your National Tax Number (NTN) and Sales Tax Registration (if applicable) for a sole proprietorship. This is needed for tax reasons.
Partnership
If you are running a business as a partnership, you are required to register your partnership with the Registrar of Firms under the Partnership Act, 1932, at the specified provincial office.
Company (Private or Public)
To have companies register the Securities and Exchange Commission of Pakistan (SECP) must be registered. This process includes the submission of documents such as the name of the company, articles of association, memorandum of association, etc.
Get the Necessary Business License and Permit
Depending on what kind of business you are running, you will need to acquire certain licenses and permits. Generally issued from local or national government agencies, they can vary from province or city, also. Here are the most common licenses you might need:
General Business License
Trade License/Business License in Pakistan: In most of Pakistan cities, businesses are required to get a trade license or business license from the Municipal Corporation or City District Government of the area where the business is located. This is most often required by retail, service-oriented businesses, and manufacturing.
Sector-Specific Licenses
Some sectors need to obtain a supplementary regulator’s approval. Here are some examples of different types of business in Pakistan:
Food Business: If you are in the food business, such as a restaurant, bakery, hotel etc. you will get a food license from the Provincial Food Authority (PFA) for example, the Punjab Food Authority regulates Punjab Food-related enterprises.
Healthcare: Companies dealing in healthcare products require approval from the Drug Regulatory Authority of Pakistan (DRAP) or relevant local health authorities.
Import & Export: If you do business in international trade you will require an import/export support form from the Ministry of Commerce. You would also be bound to the customs policies of the Federal Board of Revenue (FBR).
Telecommunications: If you’re launching a telecommunications or media business, you’ll require a license from the Pakistan Telecommunication Authority (PTA).
Environmental and Safety Permits: For example, if you regularly handle hazardous cocaine or chemicals, your business will be targeted for chemicals or permits from the Environmental Protection Agency (EPA) to wave in order to confirm that your business is compliant with any laws and regulations since your business has a huge impact on the environment. Likewise, those firms with a plant or manufacturing process must ensure compliance with the Factory Act while not solely a health act, it does incorporate health and safety rules.
Register for Taxes
Once your business is registered, it’s important to make sure that your business abides all the tax laws of Pakistan.
National Tax Number (NTN)
First of all, you will need to register an NTN in FBR. Otherwise, your business will not be able to pay taxes. An NTN is a unique number assigned to you for taxation purposes.
Sales Tax Registration
If your business deals in taxable goods or services, you are required to register for Sales Tax with FBR. Then businesses with a turnover over a certain threshold are required to collect and remit sales tax to the government.
Registration of Social Security & EOBI
Strangely, if you have employees you need to also register them with the Employees Old-Age Benefits Institution (EOBI) and Employees Social Security Institution (ESSI) so that they are entitled to the benefits required of them.
Investigate the Zoning and Local Laws
Some businesses must obey local zoning laws. Manufacturing or beige businesses are typically required to stay on industrial-zoned land, for instance, while retail businesses must be in commercial places.Know to Check with your local City District Government/ Municipal Corporation to make sure your business is location-wise correct / permitted under Zoning Laws. You may also need an inspection before being issued a license (especially if your business touches anything to do with health, safety or the environment).
More to Consider
Licenses Renewal: Several business license and permit require periodic renewal. Track your renewal dates so you don’t miss them or be penalized with the loss of your operations.
Compliance with Labor Laws: Know all about Pakistan’s labor laws, which govern working conditions, employee rights, and wages. Businesses have legal obligations under the Factories Act and other relevant employment legislation and can therefore get in trouble if they do not comply with it.
Insurance: According to your business type, you may consider obtaining insurance such as liability insurance or worker’s compensation insurance, to protect against risks to which your business is exposed.
To run your business in Pakistan, you would need to get the right business license and permit. By completing the above, you will make sure that your business is compliant with local regulations, tax policies, and industry-specific laws. The reality is, if you’re not sure how to go through this and what licenses you’ll need it’s always best to contact a local business consultant or legal advisor to assist you with the process.Always remember, above mentioned regulatory landscape is based on the nature of a business and the area in which you want to start. So always check with the relevant authority to make sure your business is accordingly licensed and registered.