Registration Process for Real Estate and Construction Company in Pakistan

Step 1: All proposed directors create their accounts on the SECP portal by providing personal information, mobile numbers, and email addresses.

Step 2: Apply for company name availability through the SECP. Once approved, a Name Availability Letter is issued.

Step 3: Complete Form II for company incorporation, including office location, particulars of directors, and details of authorised and paid-up capital. Attach these documents:

1. Name Availability Letter

2. Memorandum of Association

Articles of Association

4. CNIC copies of directors

Submit the application to SECP and pay the incorporation fee based on authorised capital.

Step 4: Upon verification, SECP issues the incorporation certificate.

Step 5: After incorporation, fulfil the following formalities:
a. Open a bank account in Pakistan and deposit the paid-up capital.
b. Obtain an auditor’s consent for the deposited capital and submit it to SECP.

Finally, register the company for income tax and sales tax with the FBR at the regional tax office.

Incentives for Pakistan’s Construction Industry

The Government of Pakistan has introduced a relief package for the construction sector, granting it the status of an industry. Key incentives include:

1. Establishment of the Construction Industry Development Board to support the sector.

2. Allocation of a Rs. 30 billion subsidy for the Naya Pakistan Housing Scheme.

3. No source of income disclosure is required for individuals or companies investing in construction.

4. Up to 90% tax exemptions for construction under the Naya Pakistan Housing Scheme.

5. Withholding tax waiver on all construction-related materials, excluding cement and steel.

6. Fixed tax rates for the sector, calculated per square foot or square yard.

7. No capital gains tax on the sale of residential houses.

importance of real estate and construction companies in Pakistan

The real estate and construction sector is a cornerstone of Pakistan’s economic growth, providing essential infrastructure, housing, and commercial spaces that support both urban expansion and population demands. Key reasons for its importance include:

1. Economic Growth: Real estate and construction contribute significantly to Pakistan’s GDP, fuelling employment and investment opportunities across multiple industries.

2. Urban Development: With rapid urbanisation, these companies play a crucial role in developing sustainable and modern cities, transforming barren lands into residential societies and commercial hubs.

3. Employment Generation: The sector is a major employment source, engaging a diverse workforce from skilled labourers to professionals in engineering, architecture, and project management.

4. Investment Opportunities: Property remains one of Pakistan’s most attractive investment options, and construction companies drive this by creating safe, profitable avenues for both local and foreign investors.

Registration of Construction Companies with Pakistan Engineering Council (PEC)

Construction companies in Pakistan must register with the Pakistan Engineering Council (PEC) to comply with regulatory standards and qualify for government projects. PEC, as the primary regulatory authority for engineers and construction firms, ensures adherence to industry standards and oversees the recognition of engineering courses offered by accredited institutions nationwide.

Key points include:

• Mandatory Registration: Every construction company operating in Pakistan must register with PEC, as government projects require a PEC-issued No Objection Certificate (NOC).
• Categorisation: PEC classifies companies into eight categories (C-A to C-6) based on financial net worth and operational engineering staff.
• Registration Costs: Fees start at Rs. 15,000 for the lowest category and increase with higher classifications.

PEC registration legitimises construction companies, enabling them to participate in large-scale government and private sector projects.

Documents Required for Pakistan Engineering Council (PEC) Registration

To register with the Pakistan Engineering Council (PEC), applicants must submit the following documents:

Completed Registration Application Form.

1. Copies of CNIC of all directors (for companies) or partners (for firms).

2. Original fee payment voucher.

3. Bank statement for the last financial year or audited financial statements certified by a chartered accountant.

4. Copy of NTN Certificate for the company, firm, or proprietorship.

5. List of machinery and equipment owned by the construction company (if applicable).

6. Contracts or agreements with machinery suppliers (if applicable).

7. Organisational chart signed by the CEO or managing partner.

8. Notarised certificate for sole proprietorship or copies of:

Form C and partnership deed (for firms).

Form-II, certificate of incorporation, and memorandum and articles of association (for companies).

9. Undertaking from the CEO, directors, partners, or proprietor on a Rs. 100 stamp paper.