Branch office, liaison office or subsidiary: how a foreign company should enter Pakistan
The structure decides what you can earn, what you are liable for, and how you take money out. Choose it before you sign a lease.
Corporate · By Khalil Ahmad Bhullah, Founding Partner · 3 October 2026 · Pakistani law only
Foreign companies usually come to us with a commercial plan already made: a contract to perform, a market to test, or a team to hire. The legal structure should follow that plan. Pakistani law gives three main options, and each one has different limits.
Liaison office
A liaison office represents the foreign company. It can promote products, gather market information and coordinate between the parent and Pakistani customers. It cannot earn revenue in Pakistan, and its expenses are met by remittances from the parent. It suits a company that is still testing the market.
Branch office
A branch office can carry on specified business activities, commonly for a foreign company performing a contract in Pakistan. It is not a separate legal person; the foreign parent remains liable for its obligations. Permission is obtained from the Board of Investment, and the company then registers with the Securities and Exchange Commission of Pakistan (SECP) as a foreign company under the Companies Act, 2017. Branch permissions are usually tied to the activity or contract described in the application.
Subsidiary
A subsidiary is a Pakistani company incorporated with SECP and owned wholly or partly by the foreign company. It is a separate legal person, so liability normally stops at the subsidiary. It can trade, employ, contract and hold assets in its own name. For most businesses that intend to stay, this is the cleanest structure.
Questions that decide the choice
- Will the Pakistani operation earn revenue locally, or only support the parent?
- Is there one contract to perform, or an ongoing business?
- Does the parent want liability ring-fenced in Pakistan?
- Does the sector need a licence (for example banking, payments, NBFC or telecom) that is only available to a Pakistani company?
Security clearance and timing
Foreign directors and shareholders are subject to security clearance, which runs alongside the registration process. Build it into your timetable rather than treating it as an afterthought. We file the applications, track them, and tell you which steps can start in parallel.
Taking money out
A subsidiary pays dividends to its foreign shareholder, and a branch remits profits to its head office, in both cases subject to tax and to the State Bank of Pakistan's foreign exchange rules. Getting the initial investment documented correctly through a Pakistani bank matters, because it is what later supports repatriation.
We advise only on Pakistani law. Tax treatment in your home country should be checked with your own adviser.
More detail is on our corporate & commercial practice page.
Questions we get on this.
No. A liaison office cannot earn revenue locally. If you need to invoice Pakistani customers, a branch or subsidiary is required.
No. It is part of the foreign company, which remains liable for its obligations in Pakistan.
In most sectors, yes. Some regulated sectors have ownership or licensing conditions, which we check before incorporation.