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

1. Minimum of 2 Directors
2. Minimum of 2 Shareholders
3. The minimum amount of capital Rs. 1 Lakh (Authorized Capital)
4. Pakistan address for registered office
5. 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.

Step 2– The Real Estate and Construction Business must apply for the name availability which endorsement given by SECP (Securities and Exchange Commission of Pakistan).

Step -3 Fill out Form II (Application for Company Incorporation), which describes Identification of office location, Particulars of directors; Authorized Capital and Paid Up Capital of Company. After filling out Form-II following requisite documents must attach with Application;

1. Name Availability Letter
2. Memorandum of Association
3. Articles of Association
4. CNIC Copies of Directors

After attachment of the above documents submit Application in SECP for issuance of Registration Certificate. The Company Registration fee is paid based on Authorized Capital.

Step 4- If all the submitted documents are in order Registrar issued the Incorporation Certificate.

Step 5- After getting the Incorporation Certificate, complete the following formalities;

1. Open a Bank Account in any Commercial Bank in Pakistan
2. Deposit paid-up capital as per shareholding of directors in Bank Account
3. 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;

1. Construction Industry Development Board set up to support the Construction Sector.
2. Subsidy of Rs.30 Billion granted to Naya Pakistan Housing Scheme.
3. Individuals and Companies investing in the construction sector will not be asked about their source of income.
4. Construction in Naya Pakistan Housing Scheme will get tax exemptions upto 90%.
5. Withholding tax on all construction-related material has been waived off except cement and steel/iron.
6. The tax rate will be fixed for the construction sector, and constructors will be charged tax per square foot or square yard.
7. 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.

1. 
   
   1. 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. 
   2. 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. 
   3. 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.
   4. 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. 
   5. 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.   
   6. 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. 
   7. 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.
   8. 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.

1. Registration Application form
2. Copies of CNIC of all directors (in case of Company), partners (in case of Firm).
3. Original fee payment voucher
4. The bank statement for last Financial year or Audited Financial Statement/Accounts certified by a Chartered Accountant in Pakistan
5. Copy of NTN Certificate (Company/Firm/Proprietorship)
6. List of machinery and equipment construction company, if any owned
7. Contract or agreement with the machinery supplier, if any
8. Organizational Chart of the Company/ Firm duly signed by the CEO/Managing Partner.
9. 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)
10. 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.

What is Punjab Revenue Authority?

“Punjab Revenue Authority” is lawful authority to manage the Sales Tax on Services in Punjab. Service Taxes are indirect taxes which apply to services specified in schedule II on “taxable service. The person who offers the taxable service is responsible for paying the service tax to the Punjab Revenue Authority.

Sales Tax Registration with Punjab Revenue Authority is done through electronic request or manual application filing. Any proprietor/Firm or Company needs not to get registration with PRA if already registered with the federal board of Revenue.

How to Register with Punjab Revenue Authority (PRA)?

Persons who are engaged in providing services of any kind are liable to get registered with the Punjab Revenue Authority (PRA). No exemption is applicable in case of services under the Punjab Sales Tax on Services Act, 2012 however rates differ based on services provided by the Taxpayers.

Services are any commercial activity other than the supply of goods. Typically Services include hotels, clubs, caterer, Advertisement on TV and Radio including Cable TV, Telecommunication, Insurance and Re-Insurance, Banking Companies, Non-Banking Financial Institutions, Stock Brokers, Shipping Agents, Courier Services, Constructors, etc. All services covered by this act are elaborated in the Second Schedule. 

The Followings are two ways of PRA Registration;

1. Voluntarily PRA Registration
2. Compulsory PRA Registration

PRA E-enrollment Process when Taxpayer already has Login ID of E-FBR Portal

PRA Registration Procedure

Step-1 PST-01 Application Form | Application for PRA Registration on (PST-01) form filing manually or electronically in PRA

Step-2 Verification of information and Documents | Verification or inquiry for the accuracy of information and documents provided for PRA Registration.

Step-3 Registration Certificate issued | In case Verification found successful then Punjab Revenue Authority issued PRA Registration Certificate to the Applicant.

Step-4 In the case of PRA Registration Application Rejection | In the case of Rejection Authority will inform the reason for rejection within 30 days of an PRA Registration application filed in Punjab Revenue Authority stated the reason for rejection.

Compulsory PRA Registration

In case Punjab Revenue Authority satisfied after verification that Person is liable to get register but didn’t registered yet then PRA notify the person before fifteen days and number issues to the person. In compulsory PRA registration every person gets the chance of hearing and no person is registered without giving any advance notice.

List of Documents required for PRA Registration

The following are the Documents that are required for Registration with Punjab Revenue Authority according to the Status of Taxpayer.

Documents Required for PRA Registration of Business Individual 

1. PST 01 Form
2. Copy of NTN
3. Copy of CNIC
4. Mobile Number and Email Address
5. Paid Electricity Bill
6. Tenancy Agreement along with owner CNIC or Ownership Documents of Business Premises
7. Bank Maintenance Certificate

Documents Required in case of PRA Registration of Partnership Firm 

1. PST 01 Form
2. Copy of Firm NTN
3. CNIC copy of Partners
4. Mobile Number and Email Address
5. Form C
6. Partnership Deed
7. Paid Electricity Bill
8. Tenancy Agreement along with owner CNIC or Ownership Documents of Business Premises
9. Bank Maintenance Certificate

Documents Required in case of PRA Registration of Company

1. PST 01 Form
2. Copy of Company NTN
3. CNIC copy of Partners
4. Mobile Number and Email Address
5. Form II
6. Incorporation Certificate
7. MOA and AOA
8. Paid Electricity Bill
9. Tenancy Agreement along with owner CNIC or Ownership Documents of Business Premises
10. Bank Maintenance Certificate

Suspension of PRA Registration

Punjab Revenue Authority may suspend or inactivate the registration of a person if it is satisfied that the person when not entitled to registered with PRA or has failed to comply with legal obligations defined under Punjab Sales Tax on Services Act and Rules.

De Registration from Punjab Revenue Authority

Punjab Revenue Authority may de-register any person who is not engaged in the services and not required to get registered under this Act. Where any person registered under this Act believes that he is not satisfied with the rules and legal obligations or requirements for registration stated in section 25 of the Punjab Sales Tax on Services Act 2012, he may file a de-registration application to the Authority. Authority is liable to dispose of the De-Registration Application within the three months of filing such an application or within an extended period of sixty days.

The Punjab Sales Tax on Services Act 2012 and rules made thereunder provide separate rules and regulations from the Federal Board of Revenue. FBR is liable for the Federal level tax system and PRA is representing on the provincial level. A separate return is liable to file by the registered person in respect of services if it comes under Punjab Revenue Authority.

Filing of Sales Tax Return with Punjab Revenue Authority

Sales Tax Return on services is an assessment form you file with PRA, usually before the 15th of every month, to show how much Sales Tax you are due to pay them. If you are registered in Sales Tax, you won’t file a Sales Tax Return. Persons who file their Return, not within the time limit prescribed by authority liable to pay penalty of Rupees five thousand.

Sales Tax Return shows how many services you have made and how much tax deducted during the month and how much balance payable to PRA. If the balance is payable then Person will prepare a challan and submit the payable balance of Sales Tax in any designated branches of National Bank of Pakistan or by Online ADC payment.

Active Taxpayer List Punjab Revenue Authority (PRA)

This is a PRA record of online monthly Sales Tax Return filers. PRA system regularly monitors the Sales Tax Return filing of Taxpayers. In case the Taxpayer is not able to file its Sales Tax Return for the last two months or more then Taxpayer becomes inactive in records of Punjab Revenue Authority. For Active Taxpayer, he needs to update his Sales Tax Returns in Punjab Revenue Authority. Taxpayers can check their Active Taxpayer status of their business by clicking the following Links *(Active Taxpayer List PRA)

Taxpayer Online Verification in Punjab Revenue Authority

For verification of Taxpayer in Punjab Revenue Authority, the following information is required and this information is given on clicking the following link (Taxpayer Online Verification)

• PNTN: XXXXXXX-X
• CNIC: XXXXXXXXXXXXX
• Passport No. as mention on the Passport
• Reg/ Inc. No As Provided by Firm Registrar or SECP, if any

A Person registered under this Act shall maintain all the records of services made during the tax period.

Records of taxable service indicates following according to the direction of Punjab Sales Tax Act on Services 2012; 

1. Description and nature of service; 
2. Service provided during the Tax Period; 
3. The details of the person to whom the service was given; and 
4. Records of exempted service; if any 
5. 5. Any other important information as specified by the PRA;

The decision to become a Sales Tax registered Person with PRA provides you to have an adequate understanding of your business turnover. If you are uncertain whether you should register, or which Sales Tax category is best suitable according to your business profile, then Tax Care is always here to help and making Taxes easy. We offer a full Sales Tax which ensures you to collect the accurate amounts of Sales Tax and make the applicable outstanding payments to the PRA.

• We offer our best services businesses individuals, Firms and Companies, when they come to register for Sales Tax. We help them avoid facing risks and penalties and also provide our assistance to new businesses to get their set up with the best possible business nature and tax rates.
• Sales Tax Registration Services PRA and FBR
• De-registration services with PRA and FBR.
• What Type of Sales Tax is the most suitable and gives the best results for you?
• Negotiation concerning possible disputes with Punjab Revenue Authority, as well as representing you at Sales Tax Tribunals
• Services with Sales Tax Returns
• General advice and assistance on all Sales Tax matters
• Regular checks and financial planning to ensure cost-saving opportunities.
• Invoice Preparation Assistance.
• Annual Filing Assistance

For PRA Registration and Return Filing

Just Dial 03078811535