Q. What is meant by Foreign Company?
A. Foreign Company is a company registered outside Pakistan, under a foreign law other than Pakistani law and establishes its place of business in Pakistan.
Q. Is registration of foreign company is mandatory with Securities & Exchange Commission of Pakistan?
A. Yes, registration of a foreign company with Securities & Exchange Commission of Pakistan is mandatory.
Q. Is a foreign company required to obtain any other permission from any other organization for opening and maintaining of its branch/liaison office in Pakistan?
A. A foreign company desirous of setting up a branch or liaison office is required to obtain permission from the Board of Investment, Government of Pakistan.
Q. For how long Board of Investment grants permission to open a branch/liaison office of foreign company in Islamic Republic of Pakistan?
A. The permission for opening of branch/liaison office is granted by the Board of Investment for an initial period of three to five years. Copy of such permission letter is required to be furnished with the documents meant for registration of a foreign company.
Q. After expiry does branch/liaison need permission again from Board of Investment?
A. Yes, after expiry renewal/extension of the permission to open/maintain a branch/liaison office is also required to be obtained from the Board of Investment on the expiry of the validity period of the permission originally granted. Whenever such renewal/extension is granted, a copy must be furnished to the Registrar SECP concerned. Further extension is granted after reviewing the performance of the entity during the initial period.
Q. Can a foreign company adopt any name it likes or if there are any restrictions?
A. Foreign Company can establish a principal place of business in Pakistan in the name of the company registered in the country of origin.
Q. Memorandum and Articles of Association of a foreign company, is in language other than English will Securities & Exchange Commission of Pakistan will accept them?
A. According to Rule 23 of Companies (General Provisions and Forms) Rules, 1985, if the document constituting charter, statute or memorandum and articles of association is not in English or Urdu, duly certified translation in English or Urdu language is required to be provided. Where any such translation is made outside Pakistan it shall be authenticated by the signature and seal of the public officer or Notary Public in the country where the company is incorporated, provided that signature or seal of the person so certifying shall be authenticated by a Pakistan diplomatic consular or consulate officer.
Q. Within how many days foreign company is required to deliver requisite documents to the Registrar Securities & Exchange Commission of Pakistan?
A. Every foreign company which establishes a place of business in Pakistan has to deliver the requisite documents to the registrar concerned within thirty days of establishment of a place of business in Pakistan.
Q. What type of certification is required for the documents constituting or defining the constitution of a foreign company?
A. As per Rule 22 of Companies (General Provisions and Forms) Rules, 1985 a copy of any charter, statute, memorandum, articles or other instrument, constituting or defining the constitution of a foreign company is required to be duly certified 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 a responsible officer of the company in the country where the company is incorporated.
The signature and seal of the official referred above or the certificate of the Notary Public referred above shall be authenticated by a Pakistani diplomatic consular or consulate officer.
Q. Whether a foreign company is required to file any document to the registrar concerned on change or alteration therein?
A. Yes, foreign company is required to notify registrar on any change or alteration of the documents.
Q. What is meant by Global Accounts?
A. Global accounts are the accounts which a foreign company files with the authorities in country of origin. If a foreign company is not required to file the Accounts in country of origin, it shall prepare Global Accounts and get the same audited for purpose of filing of such accounts under the Companies Ordinance, 1984 like a public company.
Q. Are there any statutory obligations for the foreign companies?
A. According to Companies Ordinance, 1984 a foreign company is required to comply with the statutory obligations i.e.
To maintain at its principal place of business in Pakistan a register of Pakistani members and debenture holders, directors and officers, which shall be open to inspection.
In every prospectus inviting subscriptions for its shares or debentures in Pakistan, state the country in which the company is incorporated.
Conspicuously exhibit on the outside of every place where it carries on business in Pakistan the name of the company and the country in which the company is incorporated in letters easily legible in English or Urdu characters and also, if any place where it carries on business is beyond the local limits of the ordinary civil jurisdiction of a High Court, in the characters of one of the vernacular language used in that place. Cause the name of the company and of the country in which the company is incorporated mentioned in legible English or Urdu characters in all bill-heads and letter papers, and in all notices, advertisements, documents and other official publication of the company.
If the liability of the members of the company is limited, cause notice of that fact to be stated in legible English or Urdu characters in every prospectus inviting subscription for its shares, all letter papers, bill heads, notices, advertisements, and other official publications of the company in Pakistan, and to be exhibited on the outside of every place where it carries on business in Pakistan.
Q. Is there any exclusion to foreign companies to deliver accounts?
A. No there is no exclusion, all foreign companies must deliver accounts in Pakistan, and accounts would be prepared and adjusted like a public company.
Q. Are provisions of Companies Ordinance 1984 for registration of mortgage and charges are also applicable to foreign companies?
A. Yes, all the provisions of Companies Ordinance, 1984, as applicable to other companies, relating to the registration of mortgage and charges are also applicable to a foreign company.
Q. Does books of account to be kept by a foreign company?
A. According to section 230 of the Companies Ordinance, 1984 every company shall keep at its registered office proper books of account, the provisions of the said section also apply to the foreign companies.
Q. Do a foreign company need to intimate registrar before closure of its business in Pakistan?
A. Any foreign company at least thirty days before it intends to cease to have any place of business in Pakistan give a notice of intention to the concerned registrar and publish a notice of such intention at least in two daily newspapers circulating in the Province or Provinces in which such place or places of business are situate. As from the date of intention to cease to have any place of business in Pakistan stated in the notice, unless the said date is by a similar notice altered, the obligation of the company to deliver any document to the registrar shall cease, provided it has no other place of business in Pakistan.
Q. If a foreign company having an established place of business in Pakistan goes into liquidation in the country of origin then what procedure is to be adopted in Pakistan?
A. If a foreign company having an established place of business in Pakistan goes into liquidation in the country of its incorporation then it shall within thirty days give notice thereof to the registrar, and simultaneously publish a notice at least in two daily newspapers circulating in the Province or Provinces in which its place or places of business are situated and furnish to the registrar within thirty days of the conclusion of the liquidation proceedings all returns relating to the liquidation and the liquidation account in respect of such portion of the company’s affairs as relates to its business in Pakistan. Publish a statement on every invoice, order, bill-head, letter paper, notice of other publication in Pakistan that the company is being wound up in the country of its incorporation. Where a company has been dissolved, ceased then no person shall after the date of such dissolution or cessation, carry on, or purport to carry on , any business in Pakistan in the name or on behalf of such company.
Q. If a foreign company in Pakistan fails to comply with provisions of Companies Ordinance, 1984 is there any penalty?
A. If any foreign company fails to comply with any of the provisions of the Companies Ordinance, 1984 then, the company and every officer or agent of the company who knowingly or willfully authorizes or permits the default, shall be liable to fine.
Q. Are foreign companies are required to be registered with tax authorities in Pakistan?
A. Yes, Liaison/Branch office is required to be registered with the Tax Authorities in Pakistan.