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Board of Investment
Government of Pakistan

	*Starting a Business - Main Fees to be paid to the registrar of Companies*
	*Rental Rates for Prime Office Space*
	*Cost of Industrial Land*
	*Taxation in Pakistan*
	*Rates of Capital Allowance*
	*Various incentives available for Setting up new business*
	*Human Resources - Minimum conditions of Employment*
	*Wages Rates*
	*Utilities*
	*Gas & Fuel Costs*
	*Telecommunication Rates*
	*Transportation Costs*
	*Rented Residential Accommodation*
	*Non-dutiable Goods*
	*Hotel Rates*
	*Club Membership*
	*English Medium School Fees*
	*Health Care*
	*Domestic Help*
	*Public Transport*
	*Domestic Air Fares*
	*Eating out in Pakistan*
	*Shopping in Pakistan*
	*Prices of Consumer items*

Starting a Business - Main Fees to be paid to the registrar of Companies

Companies doing business in Pakistan must register with the Registrar of Companies under the Companies Ordinance, 1984.Securities & Exchange Commission of Pakistan (SECP) is responsible for this registration.

Main fees to be paid to the Registrar of Companies

Registration	Rupees
Reservation of a name	1000
Application Fee	1000

For registration of a company, fees range according to nominal share capital,e.g:

Not exceeding Rs.500,000/-	5000
For every 100,000 rupees of nominal share capital or part of 100,000 rupees, after the first 500,000 rupees, upto 5,000,000rupees	500
For every 100,000 rupees of nominal share capital or part of 100,000 rupees, after the first 5,000,000 rupees	250

Average fees for Professional Company Secretarial Services
The services of a Professional Company are hired to prepare the necessary documents like Article of Association & Memorandum of Association etc.

Average fee for a medium sized Company is asunder:

For Private Company	20,000
For Public Company	25,000

Rental Rates for Prime Office Space

The following rates are approximate rentals (gross) per sq.ft. per month in the major cities of Pakistan.

Province	City	Rupees
Federal Territory	Islamabad	25-40
Punjab	Lahore	10-35
Sindh	Karachi	15-45
NWFP	Peshawar	10-20
Baluchistan	Quetta	10-20

Cost of Industrial Land

Province	Location	Cost of Land per sq.ft.in Rupees
Federal Territory	Islamabad	35 - 135
Punjab	Lahore (Sheikhupora Road)	80 -140
--do--	Gujrat	35 – 80
--do--	Sialkot	45 – 90
--do--	Taxila	25 - 30
--do--	Faisalabad	45 - 90
Sind	Karachi	50 - 150
--do--	Hyderabad	62 –100
NWFP	Peshawar	25 – 35
--do--	Hattar	20 - 25
Baluchistan	Quetta	20 – 25

Taxation in Pakistan

Generally, any income received / accrued in or deemed to be received / accrued in from any source is liable to tax in Pakistan. However income remitted to Pakistan by resident companies, non-resident companies and non-resident individuals are exempted from tax.

Income / Profits generated by an/ individual/company from the following setups is exempted from tax :

a) An industrial undertaking, which is engaged in manufacturing of goods or material transformation, conversion, transmission or distribution or supply of electrical energy or hydel power.

b) An undertaking approved by CB

c) A setup in areas specified by CBR.

d) Export of software developed in Pakistan.

Residential status determination In case of individuals:

a) Person in that year is in Pakistan for a period / periods amounting to 182 days or more.

b) Person in that year is in Pakistan for 90 days or more who has been in Pakistan within four preceding years for 365 days or more.

In case of companies:

The control and management of its affairs is situated wholly in Pakistan

Company Tax
Banking Companies	44%
Public Companies	35%
Other Companies	41%
Personal Income Tax
Resident and Non-Resident Individuals	7.5% - 35%
Withholding Tax
¨ Interest on Securities	20% after Zakat
¨ Profit on debit (on Bank Account / Fin.Inst.)	10% before Zakat
¨ Fees for Technical Services	15% of Gross Fee
¨ Royalty	15% of gross royalty
.. Services Rendered	5%
Execution of contracts
a) Value not exceeding 30 million rupees	5%
b) Value exceeding 30 million rupees	6%
c) Supply of Goods	3.5%
¨ Profit or Interest on Bonds, Certificates etc.	10%
¨ Commission or Brokerage	5%
Sales Tax
This tax is imposed at the import and manufacturing level	15 – 20%
Supplies by registered person to registered persons	15%
Supplies by registered person to un-registered persons	18%
Specified items (Mentioned in SRO 389(I)2001 dt. 18-6-2001	20%
Turn over Tax	2%
Interest rate for long term finances	6-10%

Rates of Capital Allowance

Capital allowances are given on qualifying capital expenditure. Initial allowances are given once only while annual allowances are given every year. Some of the items accorded allowances are shown below:

Initial Allowance
Industrial Buildings	20 - 30%
Initial depreciation on Buildings / Structures	10 – 25 %
First year Allowance (machinery, plant & equipment)	40 – 90 %
Re-investment Allowance (machinery, plant & equipment)	40 - 50 %

Annual Allowance

Buildings	5%
Factories / workshops	10%
Residential accommodation of labour	10%
Plant & Machinery	10%
Personal Computers	30%
Underground Installations	100%
Other Items / Equipments	10 - 25 %

Various incentives available for Setting up new business

In order to attract foreign investment, the Government of Pakistan has announced various incentive schemes and has given tax exemptions to the Companies who intend to invest in Pakistan.

Major exemptions are as under:-

	Interest Income on foreign currency accounts
	Profit from educational institutes
	Profit from computer training and educational centers
	Capital gains on sales of shares of listed companies
	Income from pioneer industrial undertakings
	Income from manufacture of electronics
	Income from manufacture of solar energy equipment
	Income from industrial undertaking in Export Processing / Special Industrial Zones
	Income from fruit processing
	Income from manufactures of soft and stuffed toys

Duties & Tariffs

Raw material duties and tariffs on imports	5-20%
Duties and Tariffs on import of machinery	5-30%

Human Resources - Minimum conditions of Employment

Paid maternity leave (max.)	90 days
Normal work hours	7 – 8 hours daily
Paid holidays (Gazetted)	11 days /Annum
Paid Annual Leave for Employees	33 days /Annum
Paid Sick Leave for Employees	15 days/Annum
Statutory Contributions
Employees Provident Fund
Employers	8.3% - 10%
Employees	8.3% - 10%
Workers Welfare Fund (WWF)	2% on pre-tax profit
Workers Profit Participation Fund (WPPF)	5% on pre-tax profit
Employees old-age benefits
The old age benefits Act-1976 covers industrial, commercial & other establishments where employees are ten or more in number.
Contribution:	5% of wages of insured workers getting upto Rs.3000/- p.m. payable by Employers.
Provincial Employees Social Security Scheme
The Provincial Employees Security Ordinance 1965 covers industrial, commercial & other establishments where employees are ten or more in number.
Contribution:	7% of wages of secured workers getting upto Rs.3000/- p.m. payable by Employers.

Wages Rates

Average total remuneration in manufacturing sector is as under

Salaries & Benefits (Executives)	Rupees per month
Managing Director	250,000	_	500,000
General Manager	125,000	_	275,000
Senior Manager	75,000	_	150,000
Manager	50,000	_	90,000
Deputy Manager	30,000	_	70,000
System Analyst	30,000	_	70,000
Programmer	20,000	_	50,000

Salaries & Benefits (Non Executives)

Foreman	8000	_	10,000
Supervisor	6000	_	8000
EDP Supervisor

Company Tax