Differences between Branch Office and Liaison Office in Pakistan

Differences between Branch Office and Liaison Office in Pakistan

Foreign Companies which are planning to do business in Pakistan but not willing to get registered as a company, may opt to establish a liaison office or branch office. Foreign companies whose scope of work is limited or whose business agreement with any public or private organization require limited involvement  may open their Branch Office and Liaison Office in Pakistan, subject to permission of Board of Investment (BOI), Pakistan.

Branch Office:

Branch Office is established by a foreign company to fulfill its contractual obligations with the public or private sector in Pakistan. Their activity will be restricted to the work mentioned in the agreement / contract signed.

However they cannot indulge in commercial / trading activities.

Liaison Office:

Liaison Office is established by a foreign company for promotion of products(s), provision of technical advice & assistance, exploring the possibility of Joint Collaboration and export promotion.

However, they cannot undertake any commercial / trading activities.

Hiring of Foreign Nationals:

Employment of foreign nationals shall be made subject to the prior approval of the Government as per policy and in accordance with the policy of Pakistan

Required Time:

The request for opening of Branch office or Liaison Office is processed and finalized within 6-8 weeks’ time, provided that the company fulfills all requirements and concerned quarters have no objection.

The permission is issued for a period of 3-5 years, further renewable on submission of performance report with regard to Liaison Office and up to the completion of valid contract/agreement period in case of Branch Office.

Registration with SECP

It is mandatory to register your incorporation with Security and Exchange Commission of Pakistan (SECP).

Taxation

For taxation purpose branch office or liaison office of foreign company shall be taxed at rate applicable to corporate sector, current corporate tax rate is 32%.

Procedure for Establishing Branch and Liaison Office

Step-1: 

To download and send along with six sets of following documents:

• Application Form (duly filled in and signed with stamp)
• Copy of registration of the foreign company duly attested by respective Pakistani Embassy;
• Copy of Articles and Memorandum of Association duly attested by Respective Pakistan Mission;
• Copy of Resolution / Authority letter of the company to establish Branch / Liaison Office in Pakistan;
• Copy of contract / agreement (in case of Branch Office Only)
• Company Profile; and
• Designated person authorized to act on behalf of the company

Step-2:

On receipt of complete documents, BOI examines the documents and circulate the request to all concerned quarters for their views / comments.

Step-3:

Having received clearances from all concerned quarters / agencies, BOI grants permission to foreign company to open their Branch / Liaison office in Pakistan.

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