Doing Business in Taxila, Pakistan
Registration of Real Estate and Construction Company in Taxila, Pakistan
Real Estate and Construction are key sectors in Taxila and across Pakistan, recognized as an industry by the Prime Minister. This sector primarily engages with transforming barren lands and farms into residential and commercial areas, turning them into cities and societies. Globally, real estate transactions including sales, purchases, ownership, and leases are regulated by specific laws such as The Registration Act 1908, The Land Revenue Act 1967, and the Transfer of Property Act 1882. In Pakistan, individuals working in real estate, often referred to as Property dealers or Property advisors, earn commissions from both parties involved in transactions. Meanwhile, those in the construction sector in Taxila are generally known as contractors, who are compensated based on the services they provide on construction projects.
Rules for registering real estate and construction businesses in Taxila, Pakistan.
A business involved in property construction in Taxila and across Pakistan is highly productive when registered, making the construction industry reliable and secure.
The Rules state:
- No Real Estate or Construction business is conducted in Taxila or across Pakistan without registration.
- A person planning to engage in the property business must hold a valid certificate from the respective authority.
- The registering authority includes SECP, FBR, Excise and Taxation, and EOBI departments for the business location.
Minimum Requirements for Registering a Real Estate and Construction Company in Taxila, 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 for a Real Estate and Construction Company in Taxila, Pakistan
The registration process for Real Estate and Construction Businesses is similar to that of other Private Limited Companies in Taxila and throughout Pakistan.
Step 1– All proposed directors of the company create their logins in SECP by providing personal information, mobile number, and email.
c.Obtain an Auditor's consent for depositing Paid Up Capital in the bank and submit it to SECP.
After registering the Real Estate and Construction Company with SECP, the Company must register for Income Tax and Sales Tax at the Regional Taxation Office Federal Board of Revenue.
Incentives given to Construction Industry by Govt of Pakistan
The Government of Pakistan announced a special relief package for the construction sector, granting it industry status. The main points of this package are as follows;
- The Construction Industry Development Board was established to support the Construction Sector.
- A Rs.30 billion subsidy was granted to the Naya Pakistan Housing Scheme.
- Investors in the construction sector won't be questioned about their income source.
- Construction in the Naya Pakistan Housing Scheme will receive tax exemptions of up to 90%.
- The withholding tax on all construction-related materials has been waived, except for cement and steel/iron.
- The tax rate for the construction sector will be fixed, and constructors will be taxed per square foot or square yard.
- The sale of houses will not incur Capital Gains Tax.
Importance of Real Estate and Construction Company in Taxila, Pakistan
Business growth and expansion depend on your efforts, but choosing the right type of company is crucial. Company formation is relatively stress-free and offers the following benefits.
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- This business offers a better return on investment than the stock market and provides more control because property is a tangible asset you can manage for maximum returns at various income stages.
- This business has a high tangible asset value—there will always be value in your land and home. Compared to stocks and motor vehicles, real estate offers more equity on investment.
- Real estate and construction project values in Pakistan always increase over time. History shows that holding these assets is beneficial—the longer you hold, the greater the benefit.
- Investments in real estate and construction diversify your portfolio; if you have experience with diversification, you know it reduces investment risk.
- By registering a company, directors' personal liability is limited to their shareholding. However, if the company sells illegal projects, they are personally liable.
- Registering your company boosts your business reputation and brand image among competitors. International business partners prefer registered companies for their trust and credibility.
- Raising capital for a business is easier compared to other types in Pakistan. Investing in a company provides security to investors, as companies usually issue shares equivalent to their investment.
- Perpetual Succession - Directors and members can join, resign, or die, but the company continues to exist until it is legally dissolved.
Registering a Construction Company with the Pakistan Engineering Council (PEC)
Most businesses operate after registering with the FBR, but construction companies must register with the PEC.
PEC is the main regulatory body for engineers working in Pakistan. Its primary function is to register engineers and constructors and recognize engineering courses offered by institutes and universities across the country.
In Pakistan, construction companies must register with the Pakistan Engineering Council because government projects typically require a No Objection Certificate (NOC) from PEC.
Pakistan Engineering Council has divided constructors and operators into eight categories: C-A, C-B, C-1, C-2, C-3, C-4, C-5, and C-6. These categories differ based on the companies' financial net worth and the number of engineers in operation. The minimum registration fee with the Pakistan Engineering Council starts at Rs. 15,000 and increases depending on the company's registration class.
List of Documents required for Pakistan Engineering Council (PEC) Registration
Below is the list of documents needed for submitting a registration application to 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 the 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; partnership deed, Form-II; certificate of incorporation and memorandum and articles of association (for a company).
- Undertaking from CEO/directors/partners/proprietor on Rs. 100 stamp paper
*Please note that the above list of documents may vary case by case in PEC.
