Operating a Business

flag Pakistan Pakistan: Operating a Business

In this page: Setting Up a Company | The Active Population in Figures | Working Conditions | Cost of Labour | Social Partners


Setting Up a Company

Sole Proprietorship
Number of partners: One shareholder.
Capital (max/min): No minimum capital required
Shareholders and liability: Unlimited liability
Number of partners: Minimum of 2 with a maximum of 20.
Capital (max/min): No minimum capital required (generally it is PKR 100,000)
Shareholders and liability: Liability of the partners is unlimited
Private Limited Company
Number of partners: Minimum number is 2, while as the maximum number is 50.
Capital (max/min): Minimum paid up capital of PKR 100,000
Shareholders and liability: Limited liability to the amount contributed.
Public Limited Company
Number of partners: Minimum number is 3, while as there is no limit on the maximum number of members/shareholders. Listed Public Limited companies must have at least 7 members.
Capital (max/min): Minimum paid up capital of PKR 100,000. Public limited companies have a minimum capital requirement of PKR 200 million
Shareholders and liability: The liability of a member is limited to the face value of the shares he owns
Setting Up a Company Pakistan South Asia
Procedures (number) 5.0 7.1
Time (days) 16.5 14.6

Source: Doing Business.

Business Setup Procedures
Consult Doing Business Website, to know about procedures to start a Business in Pakistan.
Trade Register

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The Active Population in Figures

Labour Force 72,039,85173,855,15372,334,842

Source: International Labour Organization, ILOSTAT database

Total activity rate 54.64%54.43%54.50%
Men activity rate 84.37%84.69%84.79%
Women activity rate 23.42%22.62%22.63%

Source: International Labour Organization, ILOSTAT database


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Working Conditions

Legal Weekly Duration

48 hours, 54 hours for seasonal factories.

This applies only to factories/offices employing ten or more workers.

Retirement Age
60 years
Working Contracts

Employment contract (also called Appointment letter) is regulated by Industrial and Commercial Employment Ordinance of 1968 Every employer in an industrial or commercial establishment (with more than 20 workers) is required to issue a formal appointment letter at the time of employment of each worker. The appointment letter should necessarily mention the main terms and conditions of employment, namely nature and tenure of appointment, pay allowances and other benefits.

There are specific rules for termination of an employee. Terminating an employee is not always so easy.

Labour Laws
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.

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Cost of Labour

Minimum Wage
In 2020, the government increased the minimum wage to PKR 17,500 per month.
Average Wage
In 2018, the average hourly gross wage was PKR 90 according to the ILO (latest available data).
Social Contributions
Social Security Contributions Paid By Employers: 6% of covered earnings (7% of earnings up to Rs. 5,000 in Balochistan province) + 5% for pension each month.
Social Security Contributions Paid By Employees: 1% of covered earnings for pension + Rs. 40 for healthcare each month. 

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Social Partners

Social Dialogue and Involvement of Social Partners
The labour relations in Pakistan are controlled by the Industrial Relations Ordinance of 2002 gives industrial workers the right to form trade unions and bargain.
The country’s petroleum sector is subject to the Essential Services Maintenance Act. The Act bans strikes, limits workers’ rights to change employment, and affords little recourse to a fired worker, but allows collective bargaining. However, this legislation is not applied very frequently.

The government of Pakistan has ratified 34 ILO conventions relating to human rights, workers' rights and working conditions.
Labour Unions
Pakistan Workers Federation
All Pakistan Trade Union Congress
Unionisation Rate

10% in industrial labor force.

5% in total labor force.
Labour Regulation Bodies
Pakistan Manpower Institute
Ministry of Overseas Pakistanis and Human Resource Development

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Latest Update: May 2024