An IT services company uses business and technical know-how to help organisations create, manage, and optimise information and business processes. The main types of IT services include business process services, application services, and infrastructure services.

Overview of Pakistan’s IT Sector

Pakistan’s IT sector has enormous future promise and is rapidly expanding. Information technology (IT) include the usage of computers, storage, networks, other equipment, infrastructure, and systems to generate, process, preserve, protect, and exchange electronic data. Usually treated from a business viewpoint, IT is also occasionally considered for personal or entertainment usage. Commercial IT includes both computing and telecommunications technologies, which over time have expanded into many related technologies and methods.

Growth and Economic Impact of IT in Pakistan

The IT industry in Pakistan is booming. With a 20.75% rise rate, export revenue from IT and IT-enabled services (IT-eS) reached $1.11 billion, contributing around 1% of Pakistan’s GDP, approximately $3.5 billion. The State Bank of Pakistan values software exports at roughly $700 million. Government programs like Digital Policy 2018 and Pakistan Vision 2025 seek to further enhance and integrate the IT industry.

To support the IT industry, the government has introduced several incentives for IT and IT-eS professionals. For example:

• Tax exemptions for IT startups on income from IT and ITeS exports until June 2025 (clause 133, Second Schedule, Income Tax Ordinance 2001).
  
  
• Section 143, Second Schedule, Income Tax Ordinance 2001 provides a three-year tax exemption for profits and gains for companies registered with the Pakistan Software Export Board (PSEB).
  
  
• Exemption on sales tax for IT services exported from Islamabad and other federally controlled areas (FBR SRO 590(I)/2017).
  
  
• Special Exporters Foreign Currency Accounts (State Bank’s Foreign Exchange Manual, Chapter 12, Clause 12(ii)) enable exporters to keep as much as 35% of export revenue.
  
  
• Software Technology Parks offer IT-enabled office spaces for startups.
  
  
• IT and ITeS companies can have 100% foreign ownership.
  
  
• Foreign investors can repatriate 100% of profits.
  
  
• Tax holidays for venture capital funds (Section 101, Second Schedule, Income Tax Ordinance 2001).
  
  
• 5% cash rewards on net export remittances for PSEB-registered IT/ITeS companies.
  
  

Agencies for IT/ITeS Company Registration

Three main agencies handle IT company registration in Pakistan:

1. Securities & Exchange Commission of Pakistan (SECP)
   
   
2. Federal Board of Revenue (FBR)
   
   
3. Pakistan Software Export Board (PSEB)
   
   

Registration with SECP

The SECP regulates the corporate sector and oversees the incorporation of all public and private companies. The process has three main steps:

Reservation of Name

The first step is reserving a suitable company name under Section 10 of the Companies Act 2017. Applicants must propose three names that meet SECP criteria. Name reservation can be done with the incorporation application (no extra fee) or separately: Rs. 200 for online applications and Rs. 500 for physical submissions.

Once submitted, the registrar reviews the names. If approved, a name reservation certificate is issued for 60 days, during which the incorporation application must be submitted.

Application for Incorporation

The incorporation application can be submitted alongside or separately from the name reservation. Fees vary depending on the type, size, and capital of the company as per the Seventh Schedule of the Companies Act 2017. Required documents include:

• Memorandum of Association, signed by subscribers (stamped if submitted physically).
  
  
• Articles of Association, signed by subscribers.
  
  
• Copies of NIC/NICOP of subscribers, directors, or CEOs.
  
  
• NIC of witness for physical submissions.
  
  
• Stamped authority letter for authorised representatives filing physically.
  
  
• Original paid bank challan for physical submissions.
  
  

For online applications, scanned documents are uploaded, and the system generates the memorandum and articles automatically.

Issuance of the Incorporation Certificate

After reviewing all documents, the registrar registers the company’s memorandum and other documents. A certificate of incorporation is issued with the registrar’s signature and official seal.

Registration with the Federal Board of Revenue (FBR)

Previously, companies had to apply separately for an NTN number. Now, the SECP uses a one-window system, automatically sending company data to FBR for registration.

Registration with Pakistan Software Export Board (PSEB)

Although optional, PSEB registration is needed to access tax exemptions. Companies must:

1. Create a PSEB login.
   
   
2. Submit the online registration form with supporting documents.
   
   
3. Upload payment receipts for final approval.
   
   

Required documents include:

• Business NTN
  
  
• CNIC of all directors/proprietors (passport for foreign nationals)
  
  
• Attested copies of Memorandum & Articles of Association
  
  
• Attested Copy of Form 29
  
  
• Attested Incorporation Certificate
  
  
• Business bank statement of last six months (or new account letter)
  
  

New Company Registration Charges

Registration fees vary by city and company age:

• Established IT/ITeS companies in Karachi, Lahore, Islamabad, Rawalpindi, Peshawar, Faisalabad, Sialkot: Rs. 10,000
  
  
• Companies in other cities: No fee
  
  
• Startups under 12 months in major cities: Rs. 5,000
  
  
• Startups in incubators in major cities: Rs. 1,000
  
  
• Startups in other cities: Free
  
  

Ready to launch your IT or IT-eS company in Pakistan? Let SARDAR KHAN & CO guide you through every step from SECP registration to FBR and PSEB compliance so you can start smoothly and confidently. Get in touch with us today and turn your IT business idea into reality!