How to Start a Business in Pakistan: A Complete Guide for Entrepreneurs
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Beginning a business in Pakistan is a thrilling and “depressing” undertaking. As reforms and digital tools reshape the economy, it is now easier than ever to start a business in Pakistan. In-fact government reforms have allowed entrepreneurs to be registered with SECP and FBR in a day. Whether you are an ambitious small-business owner, or you are an investor in Pakistan, the following will help you to learn how to start a business in Pakistan. If your goal is to start a small business in Pakistan with your family, or to grow it out of a solid new startup, the process is much the same. You can even kick start a business from home in Pakistan selling some homemade items or offering some online services which we will be touching here as well.
Choose Your Business Idea and Plan
All successful companies started with a vision and plan. Begin by taking an inventory of your skills, interests and market demand. Do extensive market research to find out what is possible and what your customers want. For example, if healthy eating is the next big thing in your city, opening a food business in Pakistan could mean setting up a healthy café or home-based catering operation. Similarly, if technology is your strength, you can think about starting an online business in Pakistan by selling digital products or services to a larger audience across the country.
Then, flesh out a real business plan. It could help that a good plan contains executive summary, market analysis, description and cost, projections and forecasts. This plan helps estimate costs and funding needs. For instance, if you want to start a small business at home in Pakistan, your initial costs might be lower (e.g. basic equipment and internet), whereas a brick-and-mortar restaurant business in Pakistan or café will require more capital. Outline expenses such as equipment, rent, utilities, and initial inventory to understand how much capital you’ll need.
Legal Structure and Registration
With your idea in hand, decide on the legal structure of your business. Common structures in Pakistan include sole proprietorship, partnership, and private limited company, each with its own liability rules and paperwork requirements:
Business Structure | Liability / Registration | Typical Use Case |
Sole Proprietorship | Unlimited personal liability; register with FBR for an NTN | Freelancers and solo entrepreneurs (e.g. beauty business from home or home bakeries) |
Partnership | Unlimited liability shared among partners; register via partnership deed | Small businesses with co-owners (friends or family ventures) |
Private Limited Co. | Limited liability; register online via SECP (requires Memorandum & Articles) | Growing companies needing legal protection (e.g. property businesses or tech startups) |
When you register, you’ll receive a National Tax Number (NTN) from the FBR, which legitimizes your enterprise and is required for tax filings. To start a property business in Pakistan or a travel agency, for example, many entrepreneurs form a private limited company. This means reserving a company name and submitting documents (Memorandum & Articles of Association, director details, etc.) through SECP’s online portal. Once approved, your company is officially incorporated and ready to trade.
Tax, Banking, and Licenses
After registration, focus on compliance. Open a separate business bank account to manage finances. Banks will require your registration certificate, NTN, and IDs of owners. Having a business account allows you to track income and expenses and makes applying for loans easier.
Next, secure any industry-specific licenses or permits. Requirements vary by sector. For instance, a restaurant business in Pakistan must obtain a food license from the local food authority. Similarly, to start a pharmacy business in Pakistan, you must register with the Drug Regulatory Authority (DRAP) and ensure you have a certified pharmacist on staff. An import export business in Pakistan requires registration with Pakistan Customs (using tools like WEBOC) and an STRN for sales tax. If you are wondering how to start an import export business in Pakistan, begin by obtaining these registrations and fulfilling customs requirements.
Set Up Operations and Funding
Efficient financial and operational systems are crucial. Use accounting software or hire an accountant to keep accurate books – this will help with tax filings and decision-making. Plan your workspace or store layout, source suppliers, and stock your initial inventory if needed. For example, to start a bakery business in Pakistan, set up a simple kitchen space and purchase bakery ovens and ingredients.
Funding is often a concern. Many creative options exist beyond personal savings: government schemes, bank loans, or investors. The Prime Minister’s Youth Business Loan scheme offers subsidized loans for educated entrepreneurs in any sector. Local banks and microfinance institutions also lend to small businesses. If you want to start a business with little money in Pakistan, or with low investment in Pakistan, focus on low-cost models: sell services online, use drop-shipping, or begin as a freelancer and reinvest profits. This shows you can start a business with low investment in Pakistan by focusing on essential expenses and leveraging digital tools.
Building Your Brand
Branding and marketing are how customers find you. Choose a memorable name and logo. In fact, some entrepreneurs even consider business names starting with A, so they appear first in alphabetized lists. Once you’ve chosen a name (check its availability with SECP and trademarks), create a logo and consistent color scheme. Build an online presence: register a domain and create social media profiles. Many aspiring entrepreneurs even ask how to start an online business in Pakistan, and the good news is that digital platforms make it easier than ever. Register your business, then create a website or social media pages to begin selling your product or service nationwide. Use digital marketing (SEO, social media ads, etc.) to reach customers beyond your local area.
Popular Business Ideas and Sectors
Pakistan’s diverse economy offers many niches. No matter which sector you choose, start small and test your model. Learn what to learn to start a business by taking short courses or workshops in relevant areas: accounting basics, digital marketing, customer service, or technical skills. For example, if you plan to sell online, learn about online advertising; if you’re in food, learn proper food handling and pricing. Continuous learning helps build a strong foundation. Here are some ideas aligned with high-demand sectors:
Home-Based & Online Services:
Consider businesses you can run from home or online. For example, people often start a small business at home in Pakistan as tutors (math, languages, etc.), freelance designers, or home bakers selling online. Starting a beauty business from home (like henna designs or hairstyling) requires minimal space and equipment. You could also start an online coaching or dropshipping store. To succeed, use social media and marketplaces (like Daraz or Facebook Marketplace).
Food & Hospitality:
The food industry is a popular choice. You might start a bakery business in Pakistan selling bread and sweets, open a small tea shop, or launch a home-based catering service. For a storefront, how to start a cafe business in Pakistan or restaurant: you’ll need more capital, a good location, and food safety permits. In fact, understanding how to start a restaurant business in Pakistan means learning about these regulations and planning accordingly. Even a roadside snack stall or food truck can be profitable if you offer unique items and great service, given high local demand.
Education & Training:
Education services are in high demand. Many entrepreneurs start a school business in Pakistan by offering tuition centers, preschools, or technical training (e.g., computer or language courses). Given healthcare needs, how to start a pharmacy business in Pakistan is another option for medical professionals – you must register with DRAP and keep proper inventory. Training centers for skills like sewing, driving, or software can also be lucrative and usually require low investment to start.
Property & Travel:
The real estate market remains active. Many wonder how to start a property business in Pakistan or how to start a real estate business in Pakistan by becoming property agents or launching construction services; this requires learning local property laws and networking. Other ideas include how to start a travel agency business in Pakistan (partner with hotels and airlines and obtain travel agency licenses) or how to start a rent a car business in Pakistan (purchase vehicles and handle permits). By the way, phrases like how to start rent a car business in Pakistan (omitting ‘a’) refer to the same process.
Agriculture & Industry:
Pakistan’s agriculture sector has room for innovation. For example, how to start a poultry farm business in Pakistan involves securing farmland, sourcing chicks and feed, and following livestock regulations. In manufacturing, starting a concrete business or how to start a construction business in Pakistan can be profitable but capital-intensive – they require heavy machinery, construction permits, and large startup investment. Another high-investment idea is a petrol pump business: how to start a petrol pump business in Pakistan involves meeting OGRA licensing requirements and securing an approved location.
Miscellaneous:
Other models include how to start a call center business in Pakistan by setting up a small office with computers and reliable internet (customer service and BPO are growing fields). E-commerce and tech services (like IT support or digital marketing agencies) are also booming – these effectively start a business online in Pakistan with very low startup cost since the work is mostly digital.
Challenges Entrepreneurs Face When Starting a Business
Launching a new venture comes with hurdles. Common challenges entrepreneurs face when starting a business include securing enough funding, navigating regulatory requirements, finding customers, and staying ahead of competition. Many startups struggle with inconsistent utilities (like electricity), high interest rates, and complex tax compliance. Bureaucracy can slow processes if issues arise. According to research, about 71% of businesses fail within their first 10 years, often due to lack of planning or cash flow problems.
To overcome these challenges, stay flexible and persistent. Start with affordable solutions (for example, use generators or work remotely to cope with power outages), and keep accurate financial records to avoid penalties. Leverage networking and mentorship – joining local entrepreneur groups or incubators. Take it step by step and be ready to pivot your strategy if one approach doesn’t work out.
Despite challenges, opportunities abound. Thanks to recent reforms, procedures like company registration are much faster, which means you spend less time on paperwork and more on growth. Many entrepreneurs have successfully started a business with low investment in Pakistan by using digital tools and social media. With passion and careful planning, you can beat the odds and build a sustainable business in Pakistan.
Why Choose PFOC: Pakistan’s First Online Consultants
Starting a business involves many steps – from choosing the right idea to registering with authorities and marketing your services. Pakistan’s First Online Consultants (PFOC) is here to guide you through the entire journey. As Pakistan’s premier consultancy for entrepreneurs, PFOC offers personalized support for any industry. Whether you want to start a small-scale business in Pakistan from your home or launch a larger enterprise, our experts can help. We assist with business planning, company registration, and financial planning at every step.
With PFOC, you get a friendly and knowledgeable partner who understands both local rules and modern business practices. We handle the complex parts – paperwork, filings, and permits – so you can focus on your passion. Many clients have successfully started a business at home in Pakistan with our guidance, turning small ideas into profitable ventures. From the initial planning stage through your launch, PFOC provides step-by-step assistance, making your path smoother and faster.
FAQS
Here are a few major steps to consider when doing business in Pakistan:
- Choose a Business Structure: Determine how you will run your business as either a sole trader, partnership, or company (Pty Ltd). Each one has its own legal and tax consequences.
- Reserving a Business Name: Reserve the business Name in SEC Pakistan. It will be possible online at the eServices portal of the SECP.
- Register Company: File the company incorporation documents to the SECP. For sole proprietors and partnerships, registration is usually completed with the Federal Board of Revenue (FBR) and local provincial departments.
- Get a National Tax Number (NTN): You have to register with the FBR to get NTN which is required by law for taxes.
- Open A Business Bank Account: Register your business with a bank – you need to present the NTN and registration documents to open a corporate bank account to keep your business money separated from your personal!
- Register for Sales Tax (if applicable): If you are involved in the sales of taxable goods or services, register for sales tax with the FBR or provincial revenue authority.
- Get the Licenses and Permits you need: Depending on the type of business you are starting and where you are located you may need to apply for certain licenses or permits to legally operate.
Registration process depends on the type of business:
Sole Proprietorship:
- Get yourself registered with the FBR to receive an NTN.
- If necessary, also register with the local or provincial authority.
Partnership:
- Prepare a partnership deed and get it notarized.
- Have the partnership registered with the Registrar of Firms in your state.
- Obtain an NTN from the FBR.
Private Limited Company:
- Get the name of your company reserved via the eServices portal of the SECP.
- You need to draft and file incorporation papers, i.e., Bothellen/Article of Incorporation.
- After that, pay the fee, and get the Certificate of Incorporation done with the SECP.
- Get yourself registered with FBR to get NTN.
The expenses will differ, based on size and type of business:
SECP Registration Fees:
- Name reservation fee: PKR 200
- Filing fee: PKR 400
- Registration fee: Depends on authorized capital; PKR 1,000 for online submission up to PKR 100,000 capital.
Professional Fees:
- Professional fees and consultants to prepare and submit documents.
Licenses and Permits:
- The cost is based on the nature of the business and what permits are needed.
Operational Costs:
- Office or retail space rent.
- Utilities and equipment.
- Wages and benefits of employees.
- That’s true for marketing and advertising expenses.
- Trade License: A document provided by local municipal authorities for retail and wholesale business.
- Professional License: Applicable for doctors, lawyers, and accountants; issued by respective regulatory (government) bodies.
- Import and Export License: For companies that participate in the foreign trade business; granted by the Ministry of Commerce.
- Health and Safety Permits: Required for the food and health industries; issues by provincial health departments.
- Environmental Permits: Required of any business that could affect the environment; offered by environmental protection agencies.
Yes, businesses in Pakistan are taxed in multiple ways:
Corporate Income Tax:
- Current rate: 19 percent for corporations.
- Discounts are available for SMEs.
Sales Tax:
- Standard rate: 18% on goods.
- Sales tax on services is calculated by province, it is around 15% to 16%.
Minimum Tax on Turnover:
- Relevant if the amount of income tax reduced is smaller than a percentage of the turnover.
Other Taxes:
- Customs and import duties.
- Levy of excise on certain goods and services.
- Property taxes were levied on owned properties.
- Law stamps; stamp duty on legal documents.
- Consult with a tax professional to learn the exact tax liabilities from your business.
Conclusion
Ready to be your own boss? Whether you have been wondering how to start a small business in Pakistan or need some help in polishing the idea, we have your back! Building a business is a journey. The journey of a thousand miles begins with a single step. Don’t delay Call PFOC now to book a free consultation and obtain professional advice that fits your requirements. Allow us to assist you with company incorporation, tax registration and a lot more. Let’s make your dream of being an entrepreneur a reality together. Start your journey today!
AURANGZAIB CHAWLA
Consultant
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