Manufacturing in Pakistan

Manufacturing refers to the process of converting raw materials into finished goods on a large or small scale through various production processes. Pakistan has a strong manufacturing industry, particularly in sectors such as agriculture, textiles, and apparel. The availability of raw materials and labour has contributed significantly to the growth of this sector.

To encourage the manufacturing of renewable energy equipment, the government of Pakistan has offered income tax exemptions for a period of five years for industrial undertakings set up between March 1, 2019, and June 30, 2023. Additionally, sales tax exemptions on plants and machinery have been proposed for greenfield industries to attract more investors.

Registration Process for Manufacturing Business/Industry

Registering a manufacturing business in Lahore follows a similar process to other business types. The business owners must choose the category under which they wish to register their business. The options include:

1. Proprietorship

A proprietorship is owned by a single person, with no legal distinction between the owner and the business. To start a manufacturing proprietorship, the business owner must get an NTN (National Tax Number) and Sales Tax Registration under the manufacturing category.

2. AOP (Association of Persons) / Partnership Firm

A partnership firm is regulated by the Partnership Act of 1932, which requires at least two members. Financial and legal responsibilities are shared equally between the partners.

3. Limited Liability Partnership (LLP)

An LLP is a new business structure introduced by the SECP (Securities and Exchange Commission of Pakistan), where partners have limited liability. This means that each partner is only liable for the firm’s debts up to the extent of their contribution, unlike in a traditional partnership.

4. Private Limited Company

A private limited company operates under the Companies Act of 2017 and requires at least two members. The liability of the members is limited to their shareholdings in the company.

NTN and Sales Tax Registration for Manufacturing Industry

The following documents are required for NTN and sales tax registration:

NTN Registration (for proprietor, firm, or company):

• NTN Registration Form (TRF-01)
• Letter of Authority (for one principal partner/member, if applicable)
• Original CNIC of the Proprietor, Partner, or Member
• Business Email and Mobile Number (that have not been previously used)
• Business Premises Title/Ownership Documents or Lease Agreement along with the owner’s CNIC
• Paid electricity bill (within the last 3 months)
• Incorporation/Registration Certificate (for Partnership Firms or Companies)
• Original Partnership Deed (for Partnership Firms registered under the Partnership Act, 1932)
• Certified Copies of MOA (Memorandum of Association) and AOA (Articles of Association) (for Companies)

Sales Tax Registration:

• Application for Sales Tax Registration
• Original CNIC of Proprietor/Partner/Member
• Bank Maintenance Certificate of Manufacturing Business
• Authority Letter signed by all partners to nominate a principal officer
• Minimum Electricity Utilisation: Rs. 60,000 to Rs. 70,000 per month (as per tax authorities)

Popular Manufacturing Concepts in Pakistan

The following are some of the popular manufacturing concepts and industries in Pakistan, under which business owners can obtain multiple benefits:

• Manufacturing of Biodiesel Products
• Household Gift Products
• Food Processing Manufacturing
• Luxury Candle Production
• 3D Printer Manufacturing
• Bioplastic Packaging Items
• Mattresses & Baby Pillows Manufacturing
• Body Supplement & Furniture Production
• Stationery Items Manufacturing
• Sports Goods Manufacturing
• Bakery Products Manufacturing
• Engineering Tools Manufacturing
• Plastic PVC Products
• Rubber Products Manufacturing
• Industrial Engineering Goods
• Water Filter & Filtration Systems
• Honey Processing Industry
• Fruit Jam, Jelly & Pickles Production
• Plastic Bottles Manufacturing
• Eyeglass & Frames Manufacturing
• Leather Products Manufacturing
• Mobile Phone Accessories Manufacturing
• Incense Stick Manufacturing
• Organic Soap and Detergent Production
• Face, Hair, and Beauty Products Manufacturing
• Handmade Candies and Biscuits Production
• Children’s Toy Manufacturing
• Kitchen Utensil Manufacturing
• Shoe Production
• Electrical Fittings Manufacturing
• Artificial Jewellery Making
• Flour Production
• Paint, Cement, Ceramic Tiles, Concrete Blocks Manufacturing
• Chemical Production
• Pharmaceutical Products Manufacturing
• Wooden Products Manufacturing
• Rice and Sugar Mills
• Storage Tanks & Containers Manufacturing

Ministry of Industries & Production (MoI&P) Initiatives

The Ministry of Industries & Production plays a crucial role in facilitating industrial growth in Pakistan. It encourages policy interventions, sets up industrial parks and export processing zones, and works on the skill development of human resources for industrial sectors.