Pakistan (PK)
Pakistan is South Asia's second-largest country and a land of extraordinary contrasts — from the towering Karakoram peaks in the north to the bustling port city of Karachi on the Arabian Sea.
Capital: Islamabad
Region: Asia
Language: Urdu
Currency: PKR (₨)
Cost of living: Very affordable (index 20)
Emergency: 15
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Business Setup
Start a business or go freelance in Pakistan.
🧑💻 Freelancer / Self-Employed Guide
Steps to register:
- 1 1. Register for a National Tax Number (NTN) with the Federal Board of Revenue (FBR) at iris.fbr.gov.pk — free online registration required before any taxable income is received.
- 2 2. Enrol on the Active Taxpayers List (ATL) — maintained by FBR and updated annually. ATL status reduces withholding tax rates on banking transactions and contracts.
- 3 3. Choose a business structure: most freelancers operate as sole proprietors (no separate registration needed beyond NTN and a business bank account). Register as a Pvt Ltd or SMC-Pvt Ltd via SECP if liability protection or corporate contracts are required.
- 4 4. Register a business name with the local Chamber of Commerce (PKR 500–2,000) if trading under a name other than your own legal name.
- 5 5. Open a business bank account — required for receiving foreign remittances. HBL, UBL, MCB, and Meezan Bank support freelancer/IT-export accounts. Pakistan State Bank's RAAST ID links payments to your IBAN.
- 6 6. Register for sales tax (GST) with FBR if annual turnover exceeds PKR 10,000,000 (PKR 1 crore) for services, or PKR 12,500,000 for goods. Software/IT services exported from Pakistan are zero-rated.
- 7 7. File quarterly advance tax returns via IRIS portal (iris.fbr.gov.pk) and submit your annual income tax return by 30 September each year.
- 8 8. For foreign earnings: declare all foreign-source income in your annual return. IT freelancers and exporters may benefit from reduced withholding tax rates (1% under SRO 586 for IT services).
- 9 9. If employing staff, register with EOBI (Employees Old-Age Benefits Institution) and SESSI/PESSI (provincial Social Security) — employer contributes 5% and employee contributes 1% of minimum wage.
Tax registration
Federal Board of Revenue (FBR) at iris.fbr.gov.pk. Register for NTN free online using your CNIC. For sales tax (GST): register via the same IRIS portal. Provincial sales tax on services is administered separately — Sindh (SRB: srb.gov.pk), Punjab (PRA: pra.punjab.gov.pk), KPK (KPRA), Balochistan (BRA). Determine jurisdiction by where services are supplied.
VAT threshold
PKR 10,000,000 (PKR 1 crore) annual turnover for services triggers mandatory sales tax registration. IT and software export services are zero-rated (0% GST) under FBR rules — exporters may still register voluntarily to claim input tax refunds. Provincial Sales Tax on services applies in the province where services are rendered; Sindh and Punjab have a PKR 6,000,000 threshold.
Invoicing
Invoices must include: business/taxpayer name, NTN, sales tax registration number (if applicable), invoice number, date, description of services, amount in PKR (and foreign currency if applicable), applicable GST rate and amount, and bank/IBAN details. For IT export invoices: include contract reference, foreign currency amount, and SWIFT/wire transfer details. FBR-verified invoices required for input tax credit claims.
Social security
EOBI (Employees Old-Age Benefits Institution): employee contributes 1% of minimum wage (approx. PKR 370/month at PKR 37,000 minimum wage 2025–26); employer contributes 5%. Provincial Social Security (SESSI/PESSI/KPRA): employer-only contributions of 6% of wages for employees earning below the provincial ceiling. Freelancers with no employees are not obligated to register with EOBI or provincial social security, but may do so voluntarily for pension coverage.
💡 Pakistan offers significant tax incentives for IT and software exporters — income from IT exports is taxed at a reduced final withholding rate (1% under SRO 586(I)/2022) rather than standard progressive rates, which can be substantial. Freelancers earning in foreign currency should maintain clear documentation of remittances (MT103 SWIFT receipts) as FBR increasingly scrutinises undeclared foreign income. SECP company registration and FBR tax registration are separate processes.
🏢 Business Structures
Sole Proprietorship · Sole Proprietorship
Sole Trader
None required
Min. capital
1–5 business days
Setup time
Liability: Unlimited personal liability
Setup cost: PKR 500–2,000 for trade name registration with the local Chamber of Commerce; NTN registration is free via FBR
Best for: Freelancers, consultants, small traders and solo service providers. Simplest structure — register an NTN with FBR and begin trading. Taxed at personal income tax rates (progressive 0–35%).
Partnership · Registered Firm (Partnership)
General Partnership
None required
Min. capital
1–2 weeks
Setup time
Liability: Unlimited joint and several personal liability for all partners
Setup cost: PKR 3,000–8,000 registration with the Registrar of Firms; partnership deed (PKR 5,000–15,000 with a lawyer)
Best for: Small professional practices (lawyers, doctors, accountants) and family-run businesses. Simple structure but high personal liability exposure. Profits distributed and taxed at each partner's personal income tax rate.
Pvt Ltd · Private Limited Company
Private Limited Company
PKR 100,000 minimum paid-up capital (SECP requirement)
Min. capital
3–10 business days via SECP e-Services portal (eservices.secp.gov.pk)
Setup time
Liability: Limited to share capital; shareholders protected from personal liability
Setup cost: PKR 5,000–25,000 SECP filing fee (fee scales with authorised capital); legal/professional fees PKR 20,000–60,000
Best for: Most preferred vehicle for foreign investors, startups and growing SMEs. Separate legal entity; corporate income tax 29% (SME reduced rate 20% where applicable). Required for work visa sponsorship and government contracts.
SMC-Pvt Ltd · Single Member Company (Private Limited)
Single-Member Private Limited Company
PKR 100,000 minimum paid-up capital
Min. capital
3–7 business days via SECP e-Services
Setup time
Liability: Limited to share capital
Setup cost: PKR 4,000–15,000 SECP fees; professional fees PKR 15,000–40,000
Best for: Solo entrepreneurs wanting limited liability without partners. One shareholder and one director permitted. Corporate tax 29%. Popular among sole operators in IT, consulting and e-commerce sectors.
Branch Office · Branch Office of a Foreign Company
Foreign Company Branch
None (backed by parent company equity)
Min. capital
3–6 weeks (BOI approval required before SECP registration)
Setup time
Liability: Parent company fully liable for all branch obligations
Setup cost: PKR 20,000–60,000 SECP fees + Board of Investment (BOI) approval; legal costs PKR 30,000–80,000
Best for: Foreign companies entering Pakistan to execute specific contracts or projects. Cannot conduct general trade; scope limited to permitted activities. Subject to 29% corporate income tax on Pakistan-source income. Remittances to parent require State Bank of Pakistan approval.
Liaison Office · Liaison / Representative Office of a Foreign Company
Representative Office
None
Min. capital
3–6 weeks
Setup time
Liability: Parent company fully liable
Setup cost: PKR 10,000–30,000 SECP fees + BOI approval; annual renewal required
Best for: Market research, promotion and liaison activities only — cannot generate revenue or invoice Pakistani clients. No corporate tax on permitted non-revenue activities. Suitable for foreign companies assessing the Pakistan market before committing to a commercial structure.
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