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Registration of Foreign Companies in Pakistan

Registration of Foreign Companies in Pakistan

Law governing registration of foreign companies in Pakistan
Foreign companies are subject to the requirements of Sections 434 to 443 of the Companies Act, 2017 [“Act”]. In this behalf, Securities and Exchange Commission of Pakistan [“SECP”] has issued S.R.O. 1224 (I)/2018 dated 5 October, 2018 where under it has issued Foreign Companies Regulations, 2018 [“Regulations”]. These Regulations repeal (i) Rules 22, 23 and Forms 38 to 46 of the Companies (General Provisions and Forms) Rules, 1985.

Applicability
These Regulations shall come into force at once from 5th October 2018 and are applicable on foreign companies except not for profit organizations (NPOs).

Reservation of name
A foreign company desirous of establishing a place of business in Pakistan is required to apply for reservation of name to the Registrar in the prescribed form along with a fee and copy of certificate of incorporation or registration or any other document issued by a public authority which proves that it is a recognized corporate entity and competent to use the name it has applied for in accordance with laws of the country of origin.
The Registrar may accept application for reservation of name for a period of 60 days, however, such reservation of name will not be available if applicant fails to file documents for registration under regulation within said period.

Refusal of name
In case of refusal of the proposed name, the Registrar shall issue the order of refusal.

Place of business or liaison office in Pakistan
Every foreign company establishing a place of business in Pakistan is required to deliver the following information and documents to the Registrar in prescribed form along with payment of fee:
• a certified copy of the charter, statute or memorandum and articles of the company, constituting the constitution of the company, and if the instrument is not written in the English or Urdu language, a certified translation thereof in the English or Urdu language;
• the full address of the registered or principal office of the company;
• a list of the directors, chief executive and secretary (if any) of the company;
• a return showing the full present and former names and surnames, father‘s name or, in the case of a married woman or widow, the name of her husband or deceased husband, present and former nationality, designation and full address in Pakistan:
• of the principal officer of the company in Pakistan;
– one or more persons resident in Pakistan authorized to accept on behalf of the company service of process and any notice or other document required to be served on the company together with his consent to do so; and
-full address of the principal place of business in Pakistan of the company.

The list referred above shall contain the following particulars with respect to each director
• in case of an individual, his present and former name and surname in full, his usual residential address, his nationality, and if that nationality is not the nationality of origin, his nationality of origin, and his business occupation, if any, and any other directorship which he holds;
• in case of a body corporate, its corporate name and registered or principal office; and the full name, address, nationality and nationality of origin, if different from that nationality, of each of its director

With respect to the secretary
• in case of an individual, his present and former name and surname, and his usual residential address;
• in case of a body corporate, its corporate name and registered or principal office

Copies of charter, statute, memorandum, articles or other instrument, constituting the constitution of a foreign company required to be filed with the Registrar shall be duly certified to be a true copy by:

• the public officer in the country where the company is incorporated to whose custody the original is committed; or
• a Notary public of the country where the company is incorporated; or
• an affidavit of an authorized officer of the company duly authorized in the country where the company is incorporated.
• The affidavit of the officer of the company shall be singed before a Pakistan diplomatic consular or consulate officer. The document regarding his authorization by the company for making such affidavit, shall be accompanied therewith and shall likewise be authenticated by a Pakistan diplomatic consular or consulate officer.

The translation of any document in English or Urdu required to be filed with the Registrar shall also be certified to be correct translation of the original in the manner provided below.
Where translation is made outside Pakistan, it shall be authenticated by the signature and seal, if any, of:
• the public officer in the country where the company is incorporated to whose custody the original is committed; or
• a Notary Public of the country where the company is incorporated

The signature or seal of the person so certifying shall be authenticated by a Pakistan diplomatic consular or consulate officer.

Where such translation is made within Pakistan, it shall be authenticated by an affidavit of any person having, in the opinion of the Registrar, an adequate knowledge of the language of the original and of English or Urdu.

Certificate of Registration
On registration of documents, the Registrar shall issue a certificate of registration.

Change of Name
To change its name in the country of origin, foreign company has to file an application to the Registrar.

The Registrar shall register the new name in place of the former name and issue a certificate after being satisfied that all the relevant requirements have been met.

Alteration in Documents
A return for any alteration in any documents of a foreign company shall be delivered along with payment of fee within 30 days of the alteration to the Registrar for registration
In case of change in persons authorized to accept service of process, notices and other documents on behalf of the company, the consent of such person shall also be attached.

Filing of Financial Statements
Every foreign company shall, every year file the following accounts with the Registrar, together with a list of Pakistani members and debenture-holders and of the places of business of the company in Pakistan:
• three copies of financial statements in respect of the company’s operations in Pakistan as mentioned in section 437 of the Act; and
• three copies of the of annual statement of financial position and profit and loss accounts, also such number of copies of that statement of financial position and profit and loss account which are required to be filed with public authority of the country in which the company is incorporated; or

Where foreign company is not required to file with the public authority of the country in which the company is incorporated, in such case:
• three copies of the financial statements drawn-out in accordance with the Act.

Cease of Business
A foreign company shall give notice to the Registrar along with payment of fee at least 30 days before it intends to cease to have any place of business in Pakistan.

Electronic Documents
The Commission may provide e-service for the electronic filing of the documents under the Act in respect of foreign companies.
A copy of or an extract from any document electronically filed with the Commission or the Registrar under these regulations or issued by the Commission or the Registrar and certified to be a true copy under the hand and seal of an officer of the Commission or the Registrar, shall be admissible as evidence in any proceedings of equal validity as the original document.

Document Filing
Any document required to be filed by the foreign company under the Act or these regulations shall be filed online through e-service or in physical form in the following manner to the Commission or the Registrar;
• through authorized intermediary or authorized officer;
• accompanied by the fee payment;
• signed and verified by the authorized intermediary or authorized officer;
• in case of manual application, it shall be in printed form setting out precisely the facts, grounds and specifying the relevant provisions of the Act under which action is applied for along with documents referred to in the application;
• any appeal, shall be accompanied by a certified copy of order or decision.

Modes of Payment
The fee as per Seventh Schedule of the Act for the filing of applications, documents or reports may be paid through
• credit card;
• debit card;
• other mode of online payment made available by the Commission; or
• challan in the designated branch of the bank.

Penalty
Whoever fails to comply with any provision of these regulations, shall, in addition to any other liability under the Act, be also punishable with penalty which may extend to five million rupees and, where the contravention is a continuing one, with a further penalty which may extend to one hundred thousand rupees for every day after the first during which such contravention continues.

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