If you are keen to establish your software house in Pakistan, this blog post is tailored for you. It offers a summary of the registration procedure and essential factors to consider beforehand. Establishing a software house in Pakistan involves multiple stages, such as meeting legal obligations, obtaining tax registration, and complying with local regulatory standards.

The workspace needed for each IT professional in a software house varies based on several elements, including the nature of tasks, office design, and ergonomic requirements.

Below are general guidelines to help you determine the space required per IT person:

Minimum Space Requirement (Approximately).

Approximately, per Person 80 to 100 square feet (8.8 to 11.11 square yards) per IT professional is considered the minimum for a comfortable workspace. This includes space for a desk, chair, and some movement.

The Government of Pakistan has acknowledged the significant potential of the IT sector in fostering business growth within the country. Previously, foreign income generated by the IT sector was exempt from taxation until June 30, 2025. However, recent reforms have revoked this exemption, replacing it with a 100% tax credit for entities meeting specific criteria, with no Turnover Tax required to claim the benefit. To qualify for this tax credit, companies must fulfill four key conditions.

• PSEB Registration.
• Income tax return submission timely.
• Withholding tax statements submission
• Provincial sale tax returns submission. (SRB-PRA-KPRA-BRA)
• Withholding tax should be deposited submitted in the treasury of a country or state.

Following are the steps to help you register your software house in Pakistan:

1. Choose a Business Structure

Decide on the legal structure of your business. Common options include:

· Sole Proprietorship

· Partnership

· Private Limited Company (most suitable for software houses)

For a software house, registering as a Private Limited Company is recommended due to its legal and financial benefits.

2. Register Your Company with SECP

The Securities and Exchange Commission of Pakistan (SECP) is regulator for company registration.

Steps:

1. Name Reservation:

o    Choose a unique name for your software house.

o    Submit the name application through the SECP.

o    Pay the name reservation fee.

2. Prepare Required Documents:

o    Memorandum of Association (MOA) and Articles of Association (AOA).

o    Form A (for company incorporation).

o    CNIC copies of directors and shareholders.

o    Proof of registered office address (utility bill or rent agreement).

3. Submit Application:

o    Submit the incorporation documents online via the SECP eServices portal.

o    Pay the registration fee.

4. Receive Certificate of Incorporation:

o    Once approved, SECP will issue a Incorporation Certificate.

3. Register with the Federal Board of Revenue (FBR)

After incorporation, register your software house for taxation purposes.

Steps:

1. Obtain National Tax Number (NTN):

o    Register for an NTN through the FBR.

o    Submit the required documents, including the Certificate of Incorporation.

2. Register for Sales Tax (if applicable):

o    If your software house will provide taxable services, register for sales tax.

3. Register for Income Tax:

o    File for income tax registration with the FBR.

4. Pakistan Software Export Board (PSEB) Registration

The Pakistan Software Export Board (PSEB) is a program launched by the Government of Pakistan to promote and develop the country’s IT industry at both national and international platforms. Organizations must register with PSEB to access various tax benefits provided by the Income Tax Department (FBR). This initiative not only offers advantages to businesses but also facilitates the government’s oversight of foreign remittances, thereby playing a crucial role in documenting economic transactions.

These efforts offer valuable insights into areas where technology can drive economic growth, attracting further foreign investment to Pakistan’s flourishing IT industry.

Steps:

1.      Submit the required documents, including:

o    Certificate of Incorporation.

o    NTN certificate.

o    Company profile.

2.      Once registered, you can avail benefits like tax exemptions and export facilitation.

5. Open a Business Bank Account

Open a corporate bank account in the name of your software house. Provide the following documents:

·         Certificate of Incorporation.

·         NTN certificate.

·         Board resolution for account opening.

·         CNIC copies of directors.

6. Register with Social Security and EOBI

If you plan to hire employees, register your software house with:

· Employees’ Old-Age Benefits Institution (EOBI).

· Social Security Institution.

7. Compliance with Labor Laws

Ensure compliance with Pakistan’s labor laws, including:

·         Drafting employment contracts.

·         Registering employees for social security and EOBI.

8. Maintain Accurate Accounting and Record-Keeping

Set up an accounting system to maintain financial records and comply with tax filing requirements.

Stay Updated with Regulations Keep yourself updated with changes in tax laws, corporate regulations, and industry-specific policies.

By following procedures, you may successfully register your software house in Pakistan and start your operations as per law. It’s advisable to consult a legal or financial expert to ensure compliance with all rules and regulations.