Doing Business in Lahore, Pakistan
Real Estate and Construction Company Registration in Lahore, Pakistan
Real Estate and Construction is one of the most dynamic and productive businesses in Lahore and around Pakistan that has attained the value of industry in Pakistan as per the announcement of Prime minister of Pakistan. The Real Estate and Construction Business normally deals with land, residential, commercials that have converted from barrens or farms into cities and societies. All over the world, the sale, purchase, ownership, and lease of all such properties governed by a specific set of laws under the constitutional acts: The Registration Act 1908, The Land Revenue Act 1967, and Transfer of Property Act 1882. In Pakistan, the people usually dealing with real estate issues are known as Property dealers or Property advisors, which typically take a commission from both the parties for providing services. People deal in the construction industry in Lahore, Pakistan normally called contractors which work based on services they provide on the construction projects.
Rules for Registration of Real Estate and Construction Business in Lahore, Pakistan
A business engaged in Property construction carried out in Lahore and around Pakistan is too much productive in case of registered Business which makes the Construction industry authentic and fool-proof.
The Rules state:
- No business of Real Estate and Construction carried out in Lahore and around Pakistan without registration.
- A person intending to engage in the business of property must hold a valid certificate allowing him, from the respective authority.
- The registering authority is the SECP, FBR, Excise and Taxation, EOBI departments where the person plans to carry out his business.
Minimum Requirement for Real Estate and Construction Company Registration in Lahore, Pakistan
- Minimum of 2 Directors
- Minimum of 2 Shareholders
- The minimum amount of capital Rs. 1 Lakh (Authorized Capital)
- Pakistan address for registered office
- Address and Identity proof for Directors is mandatory.
Registration Process of Real Estate and Construction Company in Lahore, Pakistan
The registration process of the Real Estate and Construction Business is similar to the registration of other companies incorporated in Lahore and around Pakistan as a Private Limited Company.
Step 1– All Proposed Directors of the Company create their Logins in SECP by providing their Personal information, Mobile Number and Email.
c. Take consent from an Auditor about depositing Paid Up Capital in Bank and Submit that Consent in SECP.
After Registration of Real Estate and Construction Company with SECP, the Company must then register for Income Tax and Sales Tax at the Regional Taxation Office of the Federal Board of Revenue.
Incentives given to Construction Industry by Govt of Pakistan
Govt of Pakistan announced a special Relief package for the construction Sector giving a status of Industry in Pakistan. Main points of this package are as under;
- Construction Industry Development Board set up to support the Construction Sector.
- Subsidy of Rs.30 Billion granted to Naya Pakistan Housing Scheme.
- Individuals and Companies investing in the construction sector will not be asked about their source of income.
- Construction in Naya Pakistan Housing Scheme will get tax exemptions upto 90%.
- Withholding tax on all construction-related material has been waived off except cement and steel/iron.
- The tax rate will be fixed for the construction sector, and constructors will be charged tax per square foot or square yard.
- There will be no Capital Gain Tax on the sale of houses.
Importance of Real Estate and Construction Company in Lahore, Pakistan
Business growth and expansion normally depends on the efforts you made for the company but to choose the type of company is the basic part to start a Business. Company formation is relatively stressed free which provides the following benefits.
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- This Business provides a better return on investment than the stock market and gives more control of your contributed investment because property is a tangible asset that you can control to get the most out of investment on several income stages.
- This Business has a high tangible asset value – There will always be value in your land and constructed home. If you compare this value of land and constructed home with the value of Stocks and Motor vehicle then real estate and constructed projects always give you more equity on investment.
- Value of Real and Construction Projects always increase over time. Pakistan real Estate and Construction Business History proves that holding is power, more you hold you get the benefit.
- Investments in Real Estate and Construction Business projects diversify your portfolio- if you are aware and had experience with the diversification in Investment then you should know that this reduces the risk of investment.
- By registering a Company Personal liability of the Directors are limited up to the extent of his shareholding but in case the Company engaged in selling illegal projects in the market then you will personally responsible and liable for that Company act.
- By Company Registration your business reputation and brand image enhancement in the eyes of competitors. International business parties normally engage with registered companies because of trust and credibility.
- Raising capital for Business is much easy as compared to other types of businesses in Pakistan. Investing in company provide secure feeling to the investor because in exchange for their investment company normally issues shares up to the extent of their investment money.
- Perpetual Succession- Directors and members of the company joined, resigned and died but the company remain exist forever unless wound up by the provision of law.
Registration of Construction Company with Pakistan Engineering Council (PEC)
Most of the businesses normally proceed with their operations after registration with FBR but in the case of construction companies need to register with Pakistan Engineering Council (PEC).
PEC is the primary regulatory body for all Engineers who wish to work in Pakistan. The main function of PEC is to register Engineers and Constructors along with their recognitions of Engineering courses offered by higher institutes and recognized Universities operating in all over Pakistan.
It is highly compulsory for every construction company operating in Pakistan to get registered with the Pakistan Engineering Council because the government of Pakistan construction projects normally require No objection Certificate (NOC) from PEC.
Pakistan Engineering Council has divided around eight categories for constructors and operators, which represent C-A, C-B, C-1, C-2, C-3, C-4, C-5 and C-6. These categories are different based on the financial net worth of Companies and the number of Engineers in operations. Pakistan Engineering Council minimum Registration starts from Rs. 15,000 and goes upward based on Class in which the Company Register.
List of Documents required for Pakistan Engineering Council (PEC) Registration
Following is the List of Documents required at the time of Registration Application submission in the Pakistan Engineering Council.
- Registration Application form
- Copies of CNIC of all directors (in case of Company), partners (in case of Firm).
- Original fee payment voucher
- The bank statement for last Financial year or Audited Financial Statement/Accounts certified by a Chartered Accountant in Pakistan
- Copy of NTN Certificate (Company/Firm/Proprietorship)
- List of machinery and equipment construction company, if any owned
- Contract or agreement with the machinery supplier, if any
- Organizational Chart of the Company/ Firm duly signed by the CEO/Managing Partner.
- Notarized certificate of Sole proprietorship or Notarized Copy of Form C and Partnership deed, Form-II, Certificate of incorporation and Memorandum and Articles of Association (in case of Company)
- Undertaking from CEO/directors/partners/proprietor on stamp paper of Rs. 100
*Please note that the above list of documents may change on a case-to-case basis appeared in PEC.