Doing Business in Pakistan

Doing Business in Pakistan

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Doing business in PaKISTAN: This guide is an overview of those recent key developments that will affect how business is conducted within Pakistan. It will also act as an introduction to the Pakistani legal system.

In particular, we will be drawing your attention to foreign investments including currency regulations. restrictions, business vehicles and incentives, along with any relevant liabilities and restrictions.

This article will also be summarising the laws which regulate employment relationships including mass lay-offs and redundancies, as well as providing and short overviews of competition law, product safety and liability and data protection.

Additionally, there will also be more comprehensive summaries on tax residency and taxation, intellectual property rights concerning trademarks and patents on designs that are both registered and unregistered.

We are a leading authority on all manner of business within Pakistan and will help you with any or all areas of the following laws and legalities.


Key developments which affect how you do business within your jurisdiction.

The following are affecting how businesses are being run in Pakistan;

  • A deterioration in law and order
  • An energy crisis
  • Circular debt within the power sector

Political stability is on the horizon however as, for the first time in the history of Pakistan, two government have completed their full terms in office; in 2013 and 2015 respectively. This should encourage new foreign investment in the country. .

Legal system

The Pakistan legal system in is based on the common law system in England.

Foreign investment

  1. The following are the general and sector specific restrictions related to foreign investment in Pakistan;
  • Obtaining a licence or permission from the pertaining government body
  • Fulfilling the requirements of relevant sector laws or the investment policy
  • Obtaining the governments permission for investing in such specified industries as currency and minting, high explosives and arms and ammunition
  • Obtaining permissions from the State Bank of Pakistan relative to various exchange controls and/or currency restrictions listed under the Foreign Exchange Regulation Act 1947.

The restrictions on doing business with certain jurisdictions and countries

The IPO, or Import Policy Order 2013 and EPO; Export Policy Order 2013 provide comprehensive lists of goods which are allowed to be both imported and exported. They also set out all restrictions and prohibitions on the importation and exportation of goods.

Under the rules of IPO, worldwide importation of goods is allowed except for those which are listed as being prohibited, banned, and/or restricted. An example of this is the importation of goods that are from India, or originated in India, and are restricted within Appendix G of the IPO.

Under the rules of EPO, the exportation of all goods is permissible apart from those which are specified in EPO’s Schedule-I. The exportation of goods which are specified in Schedule II of the EPO is subject to all of the conditions stated therein.

Items specified in Schedule IV of the EPO are also subject to a minimum export price restriction. The IPO and EPO can both be viewed by visiting the official website of the Ministry of Commerce (

  1. The following regulations are for exchange controls and currency regulations;
  • Foreign Exchange Regulation Act 1947
  • Foreign Exchange Manual. This is effectively a compilation of a variety of circulars and statutory notifications that have been issued by the SBP, State Bank of Pakistan, under the Foreign Exchange Regulation Act of 1947
  1. The following incentives and grants are currently available to investors:
  • Tax concessions
  • Double tax treaty which offers exemption from various duties and taxes
  • Loans with low interest rates
  • Development and research and

There are specific laws in place which protect foreign investors. These include the Foreign Private Investment (Promotion and Protection) Act 1976 and the Protection of Economic Reforms Act 1992.

Business vehicles

The most common business vehicles used in Pakistan are partnerships, public companies and private companies.

Under Pakistani law, trusts aren’t recognised as legal entities and are, therefore, precluded from owning properties or entering into contracts in their own name. However, under the Pakistani Trusts Act 1882, a trust can be created for any of the lawful purposes defined in the Act.

Charitable foundations, also known as non-profit making associations, may be both registered and licensed under the CO; Companies Ordinance 1984.

The private limited company is the most common form of business vehicle currently used by foreign companies in Pakistan. This is due to the procedure for incorporating such a company being fairly straightforward and not taking long.

Moreover, when you compare it to a public limited company, the private limited company has fewer requirements when it comes to corporate governance.

Foreign companies who wish to commence business in Pakistan will typically establish a branch as their place of business in the country and and register that with the Securities and Exchange Commission of Pakistan under the Companies Ordinance 1984.

  1. The following are the main reporting and registration requirements relating to the most common forms of corporate business vehicle which foreign companies use.

Registration and Formation

In order to incorporate a private limited company within Pakistan, the availability of any name the company intends to use must be validated by sending an application to the SECP.

If the chosen name is available, A Confirmation of Availability of Name is issued by the SECP. The following prescribed forms and documents must be then submitted to the SECP:

  • The articles of association and memorandum of the company
  • Copies of all national identity cards for resident subscribers
  • Copies of passports for all non-resident subscribers which have been duly attested and certified by the Pakistan embassy in the relevant country
  • Form 1 which is the declaration of compliance within the requirements of registration
  • Notice of situation of the Registered Office. IE; the address where the company’s registered office is likely to be situated; form 21
  • Particulars of officers and all directors of the company; form 29
  • A special power of attorney, which has been duly notarised by a notary public and signed by all those subscribed to the company’s articles of association and memorandum. This gives authorisation to a lawyer to procure incorporation on behalf of the subscribers should the subscribers not be doing this themselves
  • Filing/registration fee and a copy of the original paid challan which is the receipt showing evidence of payment of the registration fee

Once the SECP is satisfied that all the submitted documents are satisfactory, the SECP will issue a certificate of company incorporation. This process of incorporation for a private limited company typically takes around two weeks from the day the required documentation is submitted

Additional steps are required when it comes to the incorporation of a company in the name of overseas shareholders. Homeland security is the primary concern of the MOI; Ministry of Interior.

At one time the MOI required that, prior to any registration of shares or incorporation or registration with the SECP which involves non-residents, full details relating to the company, and all connected individuals, must be first processed by them in order for a mandatory No Objection Certificate to be issued.

This requirement has, however, undergone revisions by the MOI. SECP, Board of Investment and Overseas Chambers of Commerce and Industry.

The SECP Instruction No. 3 dated 18 March 2013 gave notification that the MOI had relaxed the policy for a company obtaining prior security clearance. This effectively means that obtaining this security clearance is no longer needed for the registration of the following;

  • Companies with foreign investors seeking incorporation in Pakistan; or
  • Foreign nationals who intend investing in local companies

The invariable delay which existed in the obtaining of security clearance was considered to be a major deterrent for prospective foreign investors and led to a multitude of and also complaints.

The SECP. MOI, Board of Investment and Overseas Chambers of Commerce and Industry have now determined that the SECP is in charge of dealing with the:

  • Incorporation of those companies that have foreign investment/directors
  • Registration of statutory returns of companies with foreign investment/directors
  • Appointment of the foreign director

It is now mandatory to file all documents related to security clearance with the undertaking that should be a refusal of that clearance, all relevant returns shall be unregistered and immediate termination of the directorship will take place.

Additionally, all or any foreign shareholders are required to agree that should they not receive the MOI’s security clearance they will transfer their shares immediately.

Full information about registration can be found on the SECP website;

Reporting Requirements

Annual returns on the relevant form must be filed, within 30 days of that years AGM, with the registrar. The required form are the PKR600 for online filing and the PKR1500 for offline.

Share Capital

Private limited companies must issue at least one share. Under the rules of Companies Ordinance 1984, a private limited company is defined as a company which, as stated within its articles, limits the number of shares in the company to 50 and also prohibits any public invitations to subscribe for any debentures or shares of the company.

Non-cash Consideration

If the necessary approval is given, shares can be issued on a non-cash basis.

Rights Attached to Shares

Every class of share within a company comes with different privileges and rights and privileges attached to them which are detailed within the company’s articles.

Restrictions on Rights Attached to Shares

These are provided for within the:

  • CO (for example, section 91 of the CO clearly states that no company can issue part paid shares)
  • Company’s articles
  • Shareholders’ agreement if there is one

Automatic rights attached to shares

Examples of the automatic rights attached to shares include:

  • Voting rights
  • Entitlements to dividends and bonus or right shares
  • Entitlement to receive due notice of, and to attend, annual general meetings
  • Rights and privileges for specified, limited or indefinite periods
  1. Management structure

A board of directors manages a private limited company, and they are appointed for a three year term. Private limited companies are required to have at least two directors.

In addition, the company must appoint a CEO, or chief executive officer, either at a general meeting or by a board resolution. The CEO is deemed as a director, and benefits from all the rights, privileges and liabilities that come with that position.

Management Restrictions

The shareholders must approve certain decisions at a general meeting. These include;

  • Directors elections
  • Auditors appointments
  • Investments in associated entities
  • Alteration of articles and the memorandum
  • Any increase in the share capital of the company

Directors’ and Officers’ Liability

Both directors and officers can be penalised if they fail to ensure the company’s compliance with the CO.

Parent Company Liability

Parent companies aren’t automatically liable for any debts or any other liabilities of their subsidiary companies.


Laws, Contracts and Permits

  1. The main employment statutes include the following:
  • The Workmen’s Compensation Act 1923
  • The Payment of Wages Act 1936
  • The Employer’s Liability Act 1938
  • The Minimum Wages Ordinance 1961
  • The WP Industrial and Commercial Employment (Standing Orders) Ordinance 1968
  • The Factories Act 1934
  • The West Pakistan Shops and Establishment Ordinance 1969
  • The Industrial Relations (Revival and Amendment) Act 2010 ( only applicable in the Sindh province)
  • The Punjab Industrial Relation Act 2010 (only applicable in the Punjab province)
  • The Khyber Pakhtunkhwa Industrial Relations Ordinance 2010
  • The Balochistan Industrial Relations Act 2010
  • The Industrial Relations Act 2012 (deals specifically with trans-provincial labour matters and the Islamabad Capital Territory)
  • The Contract Act 1872

There is also a secondary legislation in place which covers:

  • Maternity (West Pakistan Maternity Benefit Ordinance 1958)
  • Social security and welfare (Provincial Employees Social Security Ordinance 1965)
  • Unskilled workers (Minimum Wages for Unskilled Workers Ordinance 1969)
  • Bonded labour (Bonded Labour System (Abolition) Act 1992)

These laws apply to all foreigners who are working in Pakistan should the statute apply in that specific case. If the labour statute applies, any right conferred by that statute can’t be contracted out of, so the right must stay in place.

  1. When a written contract of employment is required and which main terms it must include as well as any implied terms and/or collective agreements which apply to the said employment relationship?

Terms are incorporated into the employment relationship by:

  • Statute
  • Case law

Contracts of employment can be either written or oral, with the exception being a workman for whom the the Industrial and Commercial Employment (Standing Orders) Ordinance 1968 (Standing Orders Ordinance) applies.

In this case, a commercial or industrial establishment must issue a letter of formal appointment which contains the full terms and conditions of the service.

The employment conditions of all workmen within every industrial and commercial establishment must be regulated in accordance with the Orders contained within the Schedule of the Standing Orders Ordinance.

Modifications to the Standing Orders can only go ahead if a collective agreement has been made but this agreement cannot be used on order reduce or take way any benefits or rights that are available to workers through Standing Orders.

  1. Work permits and/or residency permits

All foreign employees require a work visa in order to work in Pakistan. The only exception to this is if a visa abolition agreement exists between Pakistan and the home country of the employee.

Applications must be made to the Board of Investment Pakistan. The process will take around 4 weeks and the fees are $25 for 1 year or $50 for 2 years.

There is also a fast track, business service operating in Pakistan which has a 24 hour turn around for those businessmen who come from any of the 66 countries listed on business visa agenda. These are 5 year, multiple entry visa with no single visit permitted to be longer than 3 months.

You can find the full list of countries, and the necessary documents required on the official Pakistan Board of Investment website;

Termination and Redundancy

  1. Employees aren’t entitled to any management representation nor can they be consulted with relation to any corporate transactions that are not stated in their employment contract.
  2. The termination of all individual employment contracts is strictly regulated by the:
  • Doctrine of a master and servant relationship as given in case law
  • Specific employment legislation should this be applicable
  • The terms of the actual contract itself

Whether or not the employment of an employee can be terminated at will very much depends on the applicability of the labour legislation within that specific case and also the terms of the actual employment contract.

For example, under the West Pakistan Shops and Establishments Ordinance 1969 (Shops and Establishments Ordinance), a permanent employee can’t be terminated at will, and any termination carries with it a months notice or a payment in lieu of this notice period for the employee.

Under the Standing Orders Ordinance, ending an employment for any reason apart from misconduct requires one month’s notice or one month’s wages in lieu of said notice.

However, should a worker be found guilty of misconduct, he could be dismissed without any type of compensation payment, and may also be liable to be punished under the Standing Orders Ordinance.

If the employment isn’t terminated in the manner stated by the Standing Orders Ordinance, or should it be deemed to be unfair dismissal, any employee can then initiate action within the labour courts.

  1. The regulation of mass lay-offs and redundancies.

Mass lay-offs and redundancies, which account for over 50% of a workforce, are both regulated under the Standing Order No.11-A of the Standing Orders Ordinance. This kind of mass termination of employment, or the actual place of business closing down, can only be carried out when it has received permission from the labour court.

Mass lay- offs and redundancies are also regulated under these provincial statutes:

  • The Punjab Industrial Relations Act 2010
  • The Khyber Pakhtunkhwa Industrial Relations Ordinance 2010
  • Balochistan Industrial Relations Act 2010
  • The Industrial Relations (Revival and Amendment) Act 2010 (applicable to the Sindh province)
  • The Industrial Relations Act 2012 (deals with trans-provincial labour matters and Islamabad Capital Territory)

Unfair labour practices under one of these statutes is a contravention of the Standing Order No.11-A.


Taxes on employment

There are several circumstances under which an employee is taxed in your jurisdiction and different criteria used to ascertain this.

An individual is considered to be a resident for a tax year if they are either:

  • Present in Pakistan for a period of, or periods amounting in total to, 183 days or more within a single tax year
  • An employee or an official of a provincial or the federal government who has had an overseas posting during a tax year

Income tax and social security contributions are paid by the employee and/or employer during the term of the employment depending on the following criteria.

Tax Resident Employees

The income of a resident is calculated in accordance with the ITO; Income Tax Ordinance 2001. This is done by looking at the amounts which have been earned in Pakistan and that income earned in a foreign country.

A person’s total annual income in a single tax year is divided under several headings including salary, and any tax is deducted from the salary at the rate specified in Division I of Part I of the First Schedule to the ITO.

Non-tax Resident Employees

Non-residents are only liable to pay tax on their Pakistan-sourced income. A salary is deemed to be Pakistan-sourced when the monies are received from an employment that is exercised in Pakistan or is paid on behalf of, or by, local, provincial or federal governments in Pakistan.

Any person who is paying royalties or fees for technical services and any other services to a non-tax resident as specified under ITO must deduct any tax from the gross amount.

Employers Liabilities

Employers are responsible for making contributions in respect of employees should the Employees’ Old-Age Benefits Act 1976, the Companies Profits (Workers’ Participation) Act 1968 or the Provincial Employees’ Social Security Ordinance 1965, apply to them.

Business vehicles

The rules regarding business vehicles being subject to tax

Tax resident business

A company is typically considered to be a resident company for a single tax year should any of the following rules apply:

  • If it has been formed or is incorporated under any current law in Pakistan
  • The management and control of the affairs of the company is wholly situated wholly within Pakistan at any time during the tax year
  • It is a local or provincial government in Pakistan

Non-tax Resident Business

Non-tax resident business vehicles can be liable to pay tax if they are discovered to have permanent establishments within Pakistan.

Should a non-tax resident company not have any kind of permanent establishment within Pakistan it could still be liable to tax on any Pakistan sourced income if that income falls within the Section 10 ITO definition of sourced Pakistan income.

An example of this is when the business income of a non Pakistan resident is sourced within the country to such an extent that it is attributed either directly or indirectly to any business in Pakistan.

The main taxes that could potentially apply business vehicles that are subject to tax in your jurisdiction

Income that tax is chargeable for during a tax year is the total annual income after any allowable deductibles have been applied as per section 9 of ITO. A residents income is calculated by way of taking into account both the amounts that are Pakistan sourced and foreign sourced. It is mandatory for all companies to electronic file all income tax returns.

The many taxes that exist in Pakistan include:

  • Corporate tax;a company’s tax liability varies greatly depending on the sector it operates in. The rates of tax that were imposed on the taxable income of a company fell from 34% in 2014 to 33% in 2015
  • Sales tax;under the 1990 STA, Sales Tax Act, the rate of this tax stands at 17% of the total value of any taxable supplies made by a person who is registered in Pakistan under the STA in accordance with any other taxable activity they carry and also on goods they have imported into the country.
  • Sales tax on services;the various provinces of Pakistan each have separate laws regarding sales tax on services depending on what form those services take. These include, but aren’t limited to; clubs,hotel,travel, transportation of goods, advertisements, insurance services and telecommunications. A comprehensive list can be found within the first schedule of each provincial law. This tax is calculated at whatever rates are provided within the relevant schedules of each respective law.
  • Corporate Gains tax.A gain that arises from the disposal of any capital asset or by any person in a single tax year, unless they are exempt under the rules of ITO, is liable to pay corporate gains tax. Examples of this are;
    • the rate of CG tax relating to the disposal of securities that have been held for less that a year is 12.5% (section 37A, ITO);
    • the rate of CG tax relting to the disposal of securities that have been held for 12-24 months is 10%(section 37A, ITO);
    • when a security has been held for over 24 months, it is liable for tax at a rate of 0% (section 37A, ITO).

As mentioned in section 37A of the ITO, the word ‘security’ is used to define shares in public limited companies which include modaraba certificates, vouchers from the Pakistan Telecommunication Corporation or any type of debt securities, redeemable capital and any derivative products.

  • Capital Value Tax.This is both levied and collected within the respective Pakistan provinces. How much of a percentage of an immovable properties value is charged is dependent on the size of that property.

Dividends, interest and IP royalties

  1. How the following are taxed;
  • Dividends paid out to shareholders in foreign corporations
  • Dividends that have been received from any foreign companies
  • Interest paid out to shareholders of foreign corporations
  • IP, or Intellectual property, royalties paid out to shareholders in foreign corporations

Dividends Paid Out

Every company that pays a dividend has to deduct tax at a rate of 10% from the gross total of the dividend the have paid.

Dividends received

The current tax rate which is imposed on those dividends which have been received from a company stands at 10%. The method used to calculate this is to apply the relevant tax rate to to the dividends gross amount. If the resident has paid any foreign income tax they are entitled to;

calculated by and is calculated by applying the relevant rate of tax to the gross amount of the dividend. If foreign income tax has been paid by the resident, they will be entitled to either:

  • A tax credit that is equal to the lesser amount of paid foreign income tax


  • The tax payable in Pakistan relating to that income

The tax payable in Pakistan, in respect to the foreign sourced income, is derived by the tax payer in a single tax year and calculated by the application of the average rate of income tax payable in Pakistan for that tax year compared to that tax payer’s net income from a foreign source for that tax year.

Interest Paid

The interest payer must deduct tax at a rate of 10% from the total gross amount of interest. This is subject to any reduction or exemption allowed under ITO rules.

IP Royalties Paid

The withholding tax rate that is imposed on the royalties paid to non-residents currently stands at 15% of the total gross amount of any royalties.

Groups, Affiliates and Related Parties

  1. Thin capitalisation rules in relation to the restrictions on loans received from foreign affiliates

Section 105 of ITO covers thin capitalisation rules. Should the ratio of foreign debt to foreign equity of a resident company under foreign control, with the exception of banks or financial institutions, or a branch of any foreign company that operates Pakistan be in excess of 3 to 1 during any time of a tax year, no deductions are allowed for any interest paid on the debt by that company during that year on any part of that debt which exceeds that ratio.

  1. Details of profits of a foreign subsidiary being imputed to a parent company that’s a tax resident within jurisdiction

There are no currently no tax rules for specifically controlled foreign companies in Pakistan. However, there are anti avoidance rules within the law of Pakistan that, amongst other things, will permit the Commissioner of Income Tax to re-categorise any transaction, or an element of that transaction, which was voluntarily entered into with the purpose of tax avoidance as stated in section 109 of ITO.

The ITOs definition of tax avoidance schemes is of a transaction when one of the prime reasons for entering into it was to avoid or reduce a persons tax liability under the rules of ITO.

Furthermore, the Commissioner of Income tax is entitled to, with respect to transactions between those people, apportion, allocate or distribute income or tax credits between, or who are associates of, the persons as is deemed necessary in order to reflect any income that those persons wouldn’t have realised with an “arms length” transaction. As described in Section 108 of ITO.

Transfer pricing rules

Rules governing transfer pricing are covered within Chapter VI of the Income Tax Rules 2002.

Customs Duties

Import and export taxes

Both Imports and exports are subject to the following taxes:

  • Sales tax;the importer is responsible for paying sales tax on all the good they import into Pakistan
  • Customs duty;goods that are imported into, and exported out of, Pakistan are all liable to the rate of customs duty which are dictated by the Pakistan Customs Tariff
  • Federal excise duty;only imported goods are liable for Federal Excise duty.
  • Income tax on imports;this advance tax is collected from all importers and is calculated on the value of those imported goods unless they are exempt under the rules of Federal Board of Revenue

Double Tax Treaties

  1. Pakistan has entered into full scope double tax treaties with 63 countries, including The UK , Austria, China. Germany, the US, Japan, Mauritius and France.


  1. The following guidelines relate to the restrictive practices and agreements which are regulated by competition law.

Competition Authority

The CCP, Competition Commission of Pakistan, is the main authority when it comes to competition The official CCP website is and here you will find all the information and guidance relating to the rules of competition law.

Restrictive Practices and Agreements

Restrictive practices and agreement are banned in Pakistan under the rules of the Competition Act 2010. This act applies to all the actions, matters or undertakings which take place within Pakistan which could potentially distort the competition within the country.

Unilateral Conduct

Section three of the Competition Act bans companies from abusing its dominant position in the market. This includes taking part in any practices that will reduce, restrict, distort or prevent competition within the relevant market.

The CCP can legally impose penalties on those who fail to comply with any of the provisions laid down in the Competition Act. Failing to comply with any order from the CCP is classed as a criminal offence that is punishable with up to one year in prison or a fine that can be as high as PKR25m.

Merger control of acquisitions and mergers

When one undertaking has the intention to acquiring the assets or shares of a second undertaking, and complies with all the pre-merger notification guidelines stipulated within Regulation 4 of the Competition (Merger Control) Regulations 2007, that undertaking has to apply for official CCP clearance.

These thresholds include, but aren’t limited to:

  • The total value of the undertakings gross assets, excluding goodwill value, is set PKR300m or more. The combined value of the shares which the transaction pertains to is PKR1bn or more
  • The undertakings annual turnover in the previous year is PKR500m or over, and/or the combined gross turnover of that undertaking whose shares are to be acquired is PKR1bn or over
  • The transaction pertains to an acquisition of assets or shares with a value of PKR100million or over
  • When the undertaking acquires shares that also include voting shares which, combined with voting shares they already hold, makes a total of over 10% of the voting shares relating to that company

Intellectual property

Outline the main IP rights in your jurisdiction.


Nature of Right

To be eligible for a patent all inventions must:

  • Be brand new
  • Involve a new and inventive step forward
  • Be capable of application within industry
  • Not be excluded by any specific statute


The rules on protection are laid out in the Patents Ordinance 2000.


The court enforces all patents but a patent application can be made directly to the Controller who has powers equivalent to the civil court with any proceedings that come before him under the guidelines of the Patents Ordinance 2000. The courts can also grant damages, injunctions and order infringing goods to be disposed.

Length of protection

Protection last for 20 years as long as the renewal fees have been paid within the designated period.


Nature of right

To become a registered trademark, all marks must:

  • Be able to demonstrate graphical representation
  • Be able to distinguish the services or goods of one undertaking from all others


The rules pertaining to protection are laid out in the Trade Marks Ordinance 2001.


The court enforces all trademarks. The main processes are very similar to those in place for patents (see above, Patents).

Length of Protection

The length of protection for trademarks is 10 which are is renewable for further 10 year periods.

Registered Designs

Nature of Right

To become registered, all designs must:

  • Be new and completely original
  • Have individual and distinguishable character
  • Be previously unpublished


The rules of protection for designs are laid out in the Registered Designs Ordinance 2000.


The courts offer protection for registered designs. The two main remedies which the court grants are injunctions and damages.

Length of Protection

30 years which can be renewed after each 10 year period.

Unregistered Designs

There are no laws in Pakistan to protect unregistered designs


Nature of Right

The rules of copyright apply to all works of authorship that include original literary, musical, dramatic, audiovisual and artistic works.


Automatic protection subsists once the work has been created. The rules on copyright protection are laid out inhe Copyright Ordinance 1962.


Copyright enforcement is carried out through the courts. Both criminal and civil proceedings are available. Any person who has suffered an infringement on their copyright can:

  • Sue for financial damages
  • Demand the court to grant an injunction
  • Demand to see an account of any profits gained through this infringement
  • Request immediate delivery of those infringing articles

Criminal penalties for copyright infringement are either, or both, of the following:

  • A prison term of up to 3 years
  • A fine of up to PKR100,000

All recognised offences under the Copyright Ordinance are both non-bailable and cognizable.

Length of Protection

The length of copyright protection of literary, musical, artistic or dramatic works, with the exception of photographs, is the life term of the author or artist plus and additional 50 years. For photgraphic or cinematographic works, copyright lasts for 50 years from the 1st day of the calender year in which the work was first published.


The protection of all confidential information is based upon both the principles of common law and contractual obligations. This information must be:

  • Confidential in its nature
  • Communicated in any circumstance that imposes obligations of confidence

Any court action dealing with a breach of confidence will be based on either a breach of contract or equity. The court enforces these rights and the main remedies they deliver are injunctions and damages. The length of the protection is dependent upon the stated contractual obligations.

Marketing Agreements

  1. The regulation of marketing agreements are covered by the following;


Agencies are governed by the Contract Act 1872.


Pakistan has no specific laws regarding distribution.


Pakistan currently has no specific laws relating to franchising in Pakistan. It is, however, regulated indirectly through several other laws which include the various competition laws, the Foreign Exchange Regulation Act 1947 and the Contract Act 1872.


  1. The regulation of e-commerce is covered by the ETO; Electronic Transactions Ordinance 2002. This recognises and facilitates all information, records, documents, transactions and communications in electronic form. The ETO also provides for digital and electronic signals to be legally recognised.


  1. Outline the regulation of advertising in your jurisdiction.

Pakistan has no current legislation in place with specifically deals with advertising. However, there are various laws in place which deal with the regulation of advertising relating to specific areas. The following are some examples of this:

  • The Pakistan Electronic Media Regulatory Authority Ordinance 2002 covers the regulation of advertising within electronic media
  • The Prohibition of Smoking and Protection of Non-Smokers Health Ordinance 2002 sets out the conditions relating to advertising tobacco and any tobacco products on every advertising platform
  • The Drugs (Licensing, Registering and Advertising) Rules 1976 regulates the advertising of drugs in Pakistan
  • Competition Act, 2010

Data Protection

  1. Pakistan currently has no legislation in force specifically dealing wiith data protection in Pakistan. There are, however, various laws that are designed to protect confidential data and information relating to specific areas. Examples of these are;
  • Qanun-e-Shahadat 1984, the Pakistan law of evidence, provides confidentiality for advocate-client relationships
  • The Electronic Transactions Ordinance 2002 covers confidentiality in information systems
  • Banking Companies Ordinance 1962, covers the confidentiality of information relating to the customers of financial institutions and banks

Product Liability

  1. Product liability and safety is regulated by the following;

Laws regulating product liability and product safety include the following:

  • Punjab Consumer Protection Act 2005
  • NWFP Consumers Protection Act 1997
  • Balochistan Consumers Protection Act 2003
  • Islamabad Consumers Protection Act 1995
  • The Pakistan Standards and Quality Control Authority Act 1996
  • Sale of Goods Act 1930
  • Drugs Act 1976 (enforced by the Drugs Regulatory Authority of Pakistan)


Under § 24 of State Bank of Pakistan Ordinance 1955 the Bank has the sole right to issue bank notes for periods fixed by Federal Government.Rupees and Paisas are legal tender in Pakistan; 100 paisas are equivalent to one rupee. Notes used are of value of Rs. 10/—, Rs. 20/—, Rs. 50/—, Rs. 100—, Rs. 500/—, Rs. 1,000/—and Rs. 5,000/—.Rate of exchange is linked to basket of currencies and rate is fixed on daily basis against U.S. dollar by State Bank of Pakistan and vary according to transaction.


Official name of country is Islamic Republic of Pakistan presently under rule of President General Pervez Musharraf. President maintains Pakistan is moderate Islamic state positioned to progress from its current status as “developing country”. Brief history follows.

First Constitution was promulgated in 1956 whereby Pakistan became a Republic within Commonwealth of Nations, whereas originally it had been a Dominion with Governor-General as its chief executive. This Constitution was abrogated in Oct. 1958 but country was governed as nearly as possible in accordance with abrogated Constitution. A new Constitution was promulgated in 1962. This Constitution was abrogated in 1969 but country was governed as nearly as possible in accordance with 1962 Constitution. On 10th Apr. 1973 National Assembly passed present Constitution, effective 14 Aug. 1973.

On 5th July 1977 General Zia-ul-Haq Chief of Army Staff proclaimed Martial Law and assumed Office of Chief Martial Law Administrator. Superior Courts continued to function as before. Certain parts of Constitution relating to fundamental rights were suspended, but otherwise Pakistan was governed as nearly as may be in accordance with Constitution of 1973.

By Provisional Constitution Order 1981 all laws made by authorities since inception of martial law were declared valid and President and CMLA were always to have had power to amend Constitution.

By Establishment of the Office of Wafaqi Mohtasib (Ombudsman) Order 1983 office of Ombudsman has been created to investigate complaints of maladministration against government functionaries, upon complaints by aggrieved persons and other specified institutions. Ombudsman has wide ranging remedial powers but if his orders are not complied with he may only refer matter to President who, in his discretion, may direct that they be duly implemented. Ombudsman has powers of civil court in many specified matters and no court has jurisdiction to stay or grant injunction against any order of Ombudsman or to question validity of any order or action taken by Ombudsman. Person aggrieved by order of Ombudsman may make representation to President.

By Revival of Constitution of 1973 Order, 1985, provisions of constitution as amended by order to stand revived on such dates as President may appoint. Amended Constitution still provides that President is Head of State and holds office for term of five years from day he enters upon his office; however General Mohammad Zia-ul-Haq appointed President for five years from Mar. 23, 1985.

By Constitution (Eight Amendment) Act, 1985 all President’s orders, ordinances, and martial law orders and regulations, including Referendum Order 1984 (pursuant to which referendum was held, and General Mohammad Zia-ul-Haq became President), Revival of Constitution Order 1985, Constitution second and third amendment Orders 1985 and all other laws made between July 5, 1977 and Dec. 30, 1985 were validated by Parliament; and all orders made, proceedings taken, and acts done by any authority, or person between July 5, 1977 and Dec. 30, 1985, in exercise of powers derived from above-mentioned enactments were ratified, and could not be called in question in any court on any ground whatsoever. On Dec. 30, 1985 General Zia-ul-Haq issued last Martial Law (Pending Proceedings) Order, 1985. Pursuant to which all Martial Law Orders and Regulations made on or after July 5, 1977, except for 32 Order and Regulations specified in Schedule to said Order, were cancelled.

By Proclamation (withdrawal of Martial Law) 1985 General Mohammad Zia-ul-Haq revoked Proclamation of July 5, 1977 and repealed laws (Continuance in force) Order 1977, and Provisional Constitution Order 1981. Offices of Chief Martial Law Authority, and martial law authorities of various zones, and Military Courts were abolished. Fundamental rights under Constitution revived, and Constitution of 1973 as amended by Constitution (Eight Amendment) Act 1985, and jurisdiction of courts stand fully restored.

Amended Constitution also provides for Parliament (called “Majlis-e-Shoora”) consisting of two houses known as National Assembly and Senate, with National Assembly consisting of 207 Muslim members with ten additional seats for representatives of religious minorities and Senate consisting of 87 members, of whom 14 are to be from each of the four provinces, eight from Federally Administered Tribal Area, three from Federal Capital, and five from “Ulema” (religious scholars, technocrats and other professionals). Term of National Assembly is five years and that of members of Senate six years, approximately half of them retiring every three years.

Rules on sessions of two houses of Parliament (Senate and National Assembly) are contained in Arts. 52, 54 and 61 of Constitution of Pakistan. Under Art. 52, term of National Assembly is five years from day of its first meeting, after which term Assembly stands dissolved.

Art. 54(2) stipulates that there must be at least three sessions of National Assembly every year, and not more than 120 days should intervene between last sitting of Assembly in one session and date appointed for its first sitting in next session. National Assembly must meet for at least 130 working days in each year.

Under Art. 54 of Constitution, President can summon, from time to time, either House or both Houses in joint sitting to meet at such time and place as he thinks fit and also prorogue same. Further, under Art. 54(3), on requisition signed by no less than one-fourth of total membership of National Assembly, Speaker can summon National Assembly to meet, at such time and place as he thinks fit, within 14 days of receipt of requisition; and when Speaker has summoned Assembly only he may prorogue it.

Lastly, Art. 61 applies above provisions to Senate (Upper House) as they apply to National Assembly, except that Senate is required to meet for at least 90 days in each year.

Upon death of General Mohammad Zia-ul-Haq in a plane crash, Mr. Ghulam Ishaq Khan, Chairman of Senate, became President under Constitution. General Elections were held when Ms. Benazir Bhutto became Prime Minister for first time. Her Government however lasted for little over 20 months when President dissolved National Assembly and dismissed Benazir’s Government, inter alia, on charges of corruption and misrule. President purported to act under Art. 58(2)(b) of Constitution and fixed date for fresh General Elections.

General Elections were held in Oct. 1990 when electoral alliance of nine political parties by majority was able to form Federal Government. Mr. Mohammad Nawaz Sharif, President of alliance, was elected Prime Minister on 6th Nov. 1990.

Serious differences arose between elected Prime Minister Mohammad Nawaz Sharif and Mr. Ghulam Ishaq Khan, President of Pakistan. On 18-4-93 President of Pakistan announced that under Art. 58(2)(b) of Constitution (i.e. 8th Amendment of Constitution) he had dissolved National Assembly, dismissed Prime Minister and his cabinet and had called for general elections in country and appointed caretaker cabinet, sworn that very evening, which was comprised of 62 ministers.

A week later dismissed Prime Minister Mohammad Nawaz Sharif moved Supreme Court of Pakistan under its Original Constitutional Jurisdiction of Art. 184(3) of Constitution praying that order of dissolution of National Assembly and dismissal of his government by President of Pakistan was malafide, without lawful authority, null and void and of no legal effect. Full Court consisting of 11 judges of Supreme Court heard matter day to day and vide unprecedented and historical decision announced on 26-5-93 by majority (10 to 1) held inter alia that order passed by President dismissing National Assembly, Prime Minister and his Government was not within ambit of constitutional powers conferred upon President and in consequence, restored National Assembly and Government of Prime Minister. Decision of Supreme Court (reported in PLD 1993 S.C.-473) was unique in recorded history of legal jurisprudence in that discretionary order of highest in power in hierarchy of State – the President – was declared nullity and overturned and overthrown Government and dissolved Parliament were restored to life and legitimacy by sheer majesty of law enshrined in judiciary.

Shortly after being restored to power, under political settlement Mohammad Nawaz Sharif resigned as Prime Minister and Mr. Ghulam Ishaq Khan retired as President. Chairman of Senate Mr. Wasin Sajjad became Acting President. General Elections were held on 6-10-1993 and Ms. Benazir Bhutto, former Prime Minister and leader of PPP, was elected as Prime Minister for second time.

Mr. Farooq Ahmad Khan Leghari, close associate of Ms. Benazir Bhutto, was elected by National Assembly and Senate as President of Pakistan.

Second term of Ms. Benazir Bhutto commenced on 19-10-93 and lasted till 5th Nov. 1996 when President Laghari dismissed her Government on charges of massive corruption and misrule and simultaneously announced date for new General Elections.

Ms. Benazir Bhutto challenged dismissal of her Government and dissolution of National Assembly in Supreme Court. Full Court of seven judges of Supreme Court by majority (of 6 to 1) rejected Ms. Benazir’s Application and upheld dismissal of her Government and of National Assembly.

Fresh General Elections as earlier scheduled were held on 3-2-97 and Mr. Mohammad Nawaz Sharif, former Prime Minister, returned to power with massively overwhelming majority in National Assembly.

In dramatic and lightning move, Parliament by Constitution (Thirteenth Amendment) Act No. I of 1997 unanimously amended Constitution. Amendment repealed Art. 58(2)(b) of Constitution under which by exercising discretionary powers pursuant to Eighth Amendment, Presidents had dismissed as many as four elected Governments within span of less than ten years. Thirteenth Amendment also made certain other changes which related to abolishment or curtailment of certain discretionary powers of President.

Cumulative effect of Thirteenth Amendment in Constitution was that President’s powers under Constitution to dismiss elected Parliaments and elected Prime Ministers were taken away unanimously by Senate and National Assembly and President’s discretionary authority in appointment of Armed Forces Chiefs was also withdrawn. It may thus be said that Thirteenth Amendment in Constitution was major step towards restoration of Parliamentary form of Government in country.

In July 1997, Government of Pakistan again amended Constitution by passing Fourteenth Amendment thus introducing Art. 63A in the Constitution. Purport of this Article was to prevent instability in relation to formation of functioning of Government by disqualifying member of political party on grounds of defection. Member of a House shall be deemed to defect from political party if he having been elected as such candidate or nominee of political party commits breach of party discipline which means violation of party constitution, code of conduct and declared policies, or votes contrary to any direction issued by Parliamentary Party to which he belongs, or abstains from voting in House against party policy in relation to any Bill.

In May 1998, Pakistan responded to nuclear experiments conducted by India through conducting six similar experiments of her own. This resulted in most of developed countries penalising Pakistan by stopping their much-needed aid to country. Severe economic turmoil followed these sanctions in Pakistan, forcing Government to impose emergency throughout country as well as restrictions on transactions in foreign exchange. Imposition of emergency was declared unjustified by Supreme Court and, consequently, revoked by Government. Most restrictions on foreign exchange transactions have now been relaxed. Economic condition of country is improving now, and it is hoped that all restrictions on foreign exchange dealings will soon be lifted.

On 12 Oct., 1999 Army once again took over reins of country when Chief of Army Staff, General Pervaiz Musharaf, removed Mr. Nawaz Sharif from post of Prime Minister and proclaimed himself Chief Executive of country. General also dismissed Mr. Sharif’s entire cabinet and suspended Parliament and constitution of country. The Proclamation of Emergency of 14th Oct., 1999 was made to give necessary legal cover to Army’s action.

While Martial Law was not imposed, Chief Executive held absolute control over way country was to be governed. Under Provisional Constitution Order No. 1 of 1999, country was to be run as nearly as possible in accordance with suspended constitution, including provisions for safeguarding fundamental human rights. Further, courts of land were not to have any powers to make any order against Chief Executive or any person exercising jurisdiction under his authority, nor could they call or permit to be called in question Proclamation of Emergency. However, Army’s act was challenged before Superior Courts, and Supreme Court. In deciding one such matter, Supreme Court gave Government three years to complete its agenda of reform and economic reconstruction. Upon completion of this period, Government was to hold General Elections and give way to properly elected democratic Government. Government showed its acceptance of Supreme Court decision and as first step towards restoration of democracy held local elections in country. President Tarar continued in office under Provisional Constitutional Order 1 of 1999 until June 20, 2001, when Chief Executive General Pervaiz Musharraf issued Chief Executive Order No. 2 of 2001, providing for immediate cessation of holding of office of president by Mr. Tarar. Order also provided for immediate dissolution of national and provincial assemblies, which were hitherto suspended. Speakers and Deputy Speakers of said assemblies were declared to have ceased to hold their offices with immediate effect. On same day, Chief Executive passed Chief Executive’s Order No. 3 of 2001 allowing him to take over the office of president of Pakistan. Coup de grace for Mr. Musharraf came through referendum held on Apr. 30, 2002 under Chief Executive’s Order No. 12 of 2002, allowing him to claim “people’s mandate” by securing more than 99% majority of total votes cast.

Chief Executive’s Orders Nos. 2 and 3 of 2001 and Chief Executive’s Order No. 12 of 2002 were challenged in Supreme Court under Constitutional Petitions Nos. 15 and 22 of 2002. Supreme Court declared first two Orders validly issued by Chief Executive in exercise of his powers under Proclamation of Emergency Order and Provisional Constitutional Order of 1999. However, as regards Chief Executive’s Order No. 12 of 2002, Court declared that issue of any harmful consequences flowing from holding of referendum under this Order were purely academic, hypothetical and presumptive in nature and not capable of being determined at that time. Court, therefore, while allowing referendum to proceed, left issue to be determined at “proper forum at some appropriate time”. Overwhelming victory in referendum entitles Mr. Musharraf, under terms of Chief Executive’s Order No. 12 of 2002, to hold office of president of Pakistan for period of five years. This has been further fortified by passing of President to Hold Another Office Act 2004 which allows Musharraf to hold both offices of President and Chief of Army Staff simultaneously.

True to declaration made under Order 12 of 2002 General Elections were held in country on 10 Oct. 2002 as scheduled and Pakistan Muslim League (Q) emerged as leading party and Mr. Zafarullah Khan Jamali was elected as Prime Minister. Provincial governments have also been formed with duly elected representatives of people. Mr. Jamali resigned office on 26 June 2004 citing “greater interests of democracy” and nominated finance minister Shoukat Aziz as his successor. Chouhdary Shujat acted as interim Prime Minister while Mr. Aziz, who was then senator, contested election for National Assembly and became member whereupon he was elected as Prime Minister of country by Parliament.

Upon completion of its five year term by Parliament, fresh elections were held on 18 Feb. 2009 when ruling Muslim League-Q was routed and Pakistan People’s Party emerged as leading force. Asif Ali Zardari, widower of Benazir Bhutto, who had earlier been assassinated on her return from exile to Pakistan, led Pakistan People’s Party to election victory and Yousuf Raza Gillani became Prime Minister of Pakistan. Musharraf stepped down as President of Pakistan when faced with real prospect of impeachment and Mr. Zardari was elected by Parliament as President of Pakistan.

Musharraf’s tenure was marked by various important developments on constitutional front. National Security Council comprising Prime Minister, Chairman Senate, Speaker of National Assembly. Leader of Opposition in National Assembly, Chief Ministers of Provinces, Chairman of Joint Chief of Staff Committee and Services Chiefs has been set up through amendments to constitution with purpose to aid and advise President in exercise of his functions as President.

Effects of 13th Amendment to constitution introduced by Mr. Shareef’s Government have been reversed through amendments to constitution and President’s power under Art. 58(2)(b) to dissolve Parliament has been restored. Amendments also do away with automatic disqualification of members of Parliament due to defection as introduced by 14th Amendment to Constitution by Mr. Shareef’s Government by leaving final decision on disqualification in such cases to Election Commission.

Newly elected Government has continued with several of previous Government’s schemes and seems to be equally committed to restoring confidence of foreign investors in country’s economy and all possible steps are being taken towards reducing budget deficit, increasing exports, retiring foreign loans and giving country much needed economic uplift.

Pakistani Supreme Court’s Decision on Interest

Supreme Court of Pakistan in its judgment of Dec. 23, 1999 declared interest charges to be illegal and instructed Government to adopt Islamic modes of financing instead. Decision also gave time frame to guide Government to achieve results. Under guidelines, Government was required to introduce new legislation by June 2001—date set by Supreme Court in its decision for all existing laws that are in conflict with Islamic principles to become void. Just days before expiration of that period, local bank filed review application before Shariat (religious) Appellate Bench of Supreme Court for reconsideration of Court’s earlier decision. Attorney General, acting for Government, also lent his voice to bank’s contention and argued that deadline for new legislation should be extended till Dec. 31, 2005 to enable Government to overcome several practical hindrances in abolishing interest-based laws. Appellate Bench, while refusing to grant extension sought by Government, agreed to extend deadline till June 30, 2002, by which date all laws in contradiction of Islamic principles would stand abolished. Court hinted that provided Government sincerely took steps to totally eliminate interest-based laws it may be willing to grant further extension in revised deadline. However, court has subsequently reviewed its decision and has held that issue is not free of complications and needs further analysis of position of interest in Islam. Earlier decision has been suspended and case remanded back to Shariat Court for reconsideration.

Pakistani Economic Policy

Last few governments had initiated policies of economic liberation, denationalization and privatization of commercial and industrial units and other economic concessions and introduced substantial deregulation of industrial controls, exchange and payment controls and partial de-registration of capital issues particularly as regards foreign investment in industrial undertakings and issue and transfer of securities pertaining thereto. Present Government is also committed to like policies and is encouraging infrastructure development on BOT (build, operate and transfer) principles with generally unrestricted foreign participation in power generation, highways, airports and telecommunications. Other significant factor is taxation of agricultural income for first time. Economic Reforms Ordinance gives protection to these reforms.

Under latest Investment Policy, integrated strategy for creating even more investor friendly environment has been formulated with focus on further opening up of economy and marketing potential of all economic sectors for direct private investment. Essence of policy is to keep Pakistan attractive in International Investment Market by improving Policy Regime, offering fiscal and tariff relief and providing additional procedural and social facilitation. Previously only manufacturing sector was open to foreign investment. It has been decided to liberalize Policy Regime, open up other economic sectors for foreign investment and mobilize domestic financial resources towards long-term investment. Foreign investment on repatriable basis is now allowed in Agriculture, Service/Infrastructure and Social sectors.

Islamic Laws in Pakistan

On Feb. 10, 1979 two Ordinances came into force for purposes of providing punishments under Islamic Laws against offences of theft and adultery. Two more Ordinances dealing with manner in which punishment of whipping was to be carried out and amending second Schedule attached to Code of Criminal Procedure 1898, for purpose of facilitating enforcement of punishment of whipping and powers of authority to arrest in certain cases, also came into force on this date.

Under Ordinance VI of 1979, courts have now been empowered to award persons found guilty of offences of theft for first time punishment of “amputation of the right hand from the joint of the wrist” and for second time punishment of amputation of his left foot up to ankle and for third time and all subsequent occasions punishment of life imprisonment. Under Ordinance VII of 1979 courts have now been empowered to award persons found guilty of offence of “adultery” punishment of “stoning to death.” Under Prohibition (Enforcement of Hadd) (Amendment) President’s Order No. 12 of 1983, person found guilty of manufacturing and trafficking in opium, heroin, cocaine and other dangerous drugs “shall be punishable with imprisonment which is not less than two years and with whipping not exceeding 30 stripes and shall be liable to fine”.

It may be noted however that punishments under both above Ordinances, i.e., VI & VII, are not ordinarily awarded but are subject to strict proof, e.g. in case of theft evidence of only those two witnesses is to be taken who are regarded fit by court in this behalf, meaning thereby that to qualify witnesses should have exemplary character themselves, both religion-wise and according to norms of society. In case of “adultery” requirement of witnesses as regards both their character and numbers is even stronger. Here four such witnesses are required to depose before court.

Besides above safeguards certain exceptions have also been provided in both Ordinances and provisions relating to lesser punishments have been incorporated in addition to stricter punishments. These lesser punishments are contained in Penal Code and now punishment of whipping has supplemented same.

Provisions regarding presence and examination by medical officers both before and at time of punishment are part and parcel of two Ordinances.

Government of Pakistan under Islamic Laws has also imposed complete “prohibition” in country. Prohibition under Central Laws has been supplemented by Provincial Ordinances which inter alia provide following: (a) That no member belonging to Muslim Community, be he citizen of Pakistan or any other country, would be allowed either to consume alcoholic beverages or sell, deal, keep or manufacture same; (b) all other persons whose religions allow consumption of alcohol, would henceforth be allowed to consume same only within four walls of their homes and not publicly; (c) strict punishments have been provided for violators of these regulations which include punishment of whipping.

Except in cases where punishment of whipping is provided for in hadd, sentence of whipping under other laws stands abolished in Pakistan by Abolition of the Punishment of Whipping Act, 1996.

In order to provide mechanism for prevention of terrorism, sectarian violence and for speedy trial of heinous offences, Anti-terrorism Act, 1997 was passed. Act was aimed to combat terrorism in country and to provide sense of security to general public. In Act, sentence of two years was also provided for delinquent officers for carrying out defective investigations.

By Constitution Amendment Order 1980 Federal Shariat Court replacing Shariat Benches of High Courts has been constituted. It consists of five members including Chairman who has rank of Supreme Court Judge while remainder have rank of High Court Judges. All five are appointed by President of Pakistan. Federal Shariat Court (“FSC”) exercises noncontentious jurisdiction and may be petitioned by any citizen of Pakistan, Federal or Provincial Governments to examine any law except Constitution, Muslim personal law, law of procedure of any court or tribunal and, until May 1990, any fiscal law, or law relating to levy and collection of taxes and fees or banking or insurance practice and procedure. Court must decide whether it conforms to injunctions of Islam as contained in Holy Quran and Sunnah. If law is held to be repugnant to these injunctions it ceases to be effective from date specified and must be amended. FSC (Nov. 1991) struck down provisions relating to payment of interest in 22 laws and required amendment by 30 June 1992. However, court has subsequently reviewed its decision and has held that issue is not free of complications and needs further analysis of position of interest in Islam. Earlier decision has been suspended and case remanded back to Shariat Court for reconsideration.

By Banking Companies (Third Amendment) Ordinance 1980 banks can now accept deposits on basis of participation in profit and loss of bank. Money so deposited will be invested by banks in business or transactions returns of which do not accrue to bank by way of interest. Person depositing money on this basis shall be entitled, subject to such general directions as State Bank may give from time to time in interest of monetary stability, to receive periodically share of profit of banking company arising out of such business or transactions and in event of loss, shall be liable to bear proportionate loss. In addition to above, banks can also accept deposits free of interest or return in any form and, until such time as government may determine, deposits can also be accepted on interest accounts. In order to promote Islamic banking State Bank issued detailed criteria on Dec. 1, 2001 for setting up of scheduled Islamic commercial banks in private sector. Existing scheduled commercial banks have also been allowed to open subsidiaries for Islamic banking operations.

By Circular dated June 20, 1984, of State Bank of Pakistan, issued under Banking Companies Ordinance, 1962, interest directed to be eliminated from banking system with effect from Jan. 1, 1985, in respect of finances provided by bank to Federal Government, Provincial Governments, public sector corporations and public or private joint stock companies, and with effect from Apr. 1, 1985, in respect of finances provided by bank to all other entities including individuals. As from July 1, 1984, all banks permitted to adopt alternative modes of financing listed in Annexure I to Circular, including profit and loss sharing, purchase of goods by banks and their sale to clients at appropriate mark-up in price on deferred payment basis, leasing, hire purchase, equity participation, purchase of participation term certificates, etc. Maximum and minimum rates of return or profit to be derived by banks from these transactions is to be determined by State Bank from time to time. As from July 1, 1985, no banking company to accept interest bearing deposits and all deposits to be on basis of participation in profit and loss of bank. These instructions have been implemented by Banking and Financial Services (Amendment of Laws) Ordinance, 1984, and Banking Tribunals Ordinance, 1984, has been enacted to provide for speedy recovery of finance provided by banks under these alternative systems. However these instructions are not to apply to on-lending of foreign loans or to foreign currency deposits.

By Zakat and Ushr Ordinance 1980, provision has been made for collection of Zakat and Ushr from Muslim citizens of Pakistan, or from companies, majority of whose shares are held by such citizens. Zakat is tax of 2_% on all assets, but compulsory deduction at source is only made from specified list of assets, including bank accounts, savings and investment certificates etc. On all other assets, Zakat is payable on self-assessment basis. Ushr is tax of 5% of produce from land. Zakat funds have been established at central, provincial and local level, and moneys in Zakat fund are to be utilised for specified purposes: For helping needy, orphans, widows, handicapped, and on public hospitals, educational institutions etc. Zakat councils, at central, provincial and lower levels have been created for administration and organisation of Zakat and Ushr collection and disbursement etc. Certain tax concessions are available on assets on which Zakat and Ushr has been paid.

By Zakat and Ushr (Amendment) Ordinance 1980, no compulsory deduction at source will be made from assets of person who files declaration in prescribed form.

By Zakat & Ushr (Amendment) Ordinance, 1984, no Zakat to be charged on compulsory basis on assets which have been acquired against payment in foreign currency, or which are maintained in foreign currency and return on which and value on encashment, redemption or withdrawal which is payable in foreign currency.

The Modaraba Companies and Modaraba (Floatation and Control) Ordinance 1980 provides for setting up of Modaraba companies and carrying on of Modaraba business, which is defined to mean business in which person(s) participates with his money and another with his efforts and/or skill. Company can apply to Registrar (appointed under Ordinance) for registration as Modaraba company. Modaraba Company can then apply to Registrar for permission to float Modaraba business. Public participates by buying Modaraba certificates, Modaraba company shall subscribe in each Modaraba business floated by it to not less than 10% of total amount of Modaraba certificates offered for subscription, but remuneration of Modaraba company shall not exceed 10% of net annual profits. Registrar has powers of holding inquiries into running of Modaraba or of appointing administrator. Special tribunal may be constituted, with civil and criminal jurisdiction to hear claims and try offences, under Ordinance.

Evidence Act, 1872 repealed and replaced by Qanun-e-Shahadat Order, 1984. Majority of sections in new statute same as those of old Act. Certain changes have been made with view to bring law of evidence in conformity with injunctions of Islam. Under new statute all courts of law required to determine competence of witness in accordance with qualifications prescribed by injunctions of Islam, but where such witness is not forthcoming, court may take evidence of available witness. All accused persons, including accomplice made liable to cross-examination. Instruments pertaining to financial or future obligations must be attested by two men or one man and two women.


Governed by Weekly Holidays Act 1942 which provides for persons employed in shops, restaurants and theatres. It declares that a shop will be entirely closed one day in every week and employees except anyone in a confidential or managerial position are entitled by law to one complete day’s holiday, which will be day shop is closed unless employee’s total period of employment is less than six days altogether or he has been allowed some other day completely free. Penalties under Act for Employer are Rs. 25 for a first offence and as much as Rs. 250 for a second offence. Weekly holiday is Sun. with effect from 15th Mar. 1997.

Public Holidays in PAKISTAN

Number of public holidays has been reduced from 21 to 11. Now public holidays include two main Muslim festivals of Id-ul-Fitr and Id-ul-Zuha fixed with reference to lunar calendar, Ashura in lunar month of Muharram and Id-e-Milad-un-Nabi, Dec. 25 (which is both Christmas and birthday of Quaid-e-Azam Mohammad Ali Jinnah), Independence Day and Pakistan Day, on Aug. 14 and Mar. 23 and Iqbal Day on Nov. 9. Government holidays are compulsory but there are various other religious holidays which may or may not be given by individual employers, e.g., during the month of Ramzan all government offices and most other offices work Ramzan hours which are from 8 A.M. to 2 P.M. These hours are also the official summer hours for government offices and the courts.


Pakistan is in the +05:00 GMT in summer, +04:00 GMT in winter time zone. Office hours are generally from 9 a.m. to 5 p.m.

AGENCY Law in Pakistan

An “agent” is a person employed to do any act for, or represent, another in dealing with third persons. The person for whom such an act is done, or who is so represented is called the “principal.”

Any person who is major and sane can employ a person as agent. No requirements as to sanity or majority are necessary in an agent for purposes of binding the principal to third parties but in such cases principal will not be able to enforce his rights against the agent. No consideration is needed between the parties and the authority can either be express or implied. Authority to do an act means implied authority to do every lawful thing supplementary to this act. If the authority is to conduct a business on behalf of the principal, the agent may do all things incidental to this. Special powers lie with an agent in cases of an emergency to protect the interests of the principal.

Law of Sub-Agents or Sub-agency in Pakistan

Any work personally to be done by the agent cannot be delegated by him, but otherwise he may, unless expressly forbidden to, delegate work to other persons who are then known as sub-agents. A sub-agent is responsible to the agent who is in turn answerable to the principal but third parties are bound directly to the principal. Where a sub-agent is appointed without authority he is in relation to the agent as an agent and the agent is, in relation to him, a principal.

Implications of Ratification in Pakistani Agency Law

Where a person acts for another the other can either expressly or impliedly confirm the actions provided he has knowledge of them and has free choice. Partial ratification is not possible nor is ratification possible of originally unauthorised action that injures third party.

Legal Termination of agency in Pakistan can be by revocation, by renouncement or by death, insanity, or insolvency of principal. Where agent has interest in property forming subject matter of agency, agency cannot be terminated to detriment of such interest. Revocation is not possible by principal with regard to acts already performed on his behalf. Where agency was for period of time and is revoked earlier, compensation becomes payable to agent or where agent is person who terminates relationship, to principal. Reasonable notice should be given, and any acts done while there was no knowledge of revocation will equally bind principal. Where principal dies, or becomes insane, agent is bound to take all adequate steps to safeguard principal’s interest.

Rights and Duties of an agent under the agency law in Pakistan

An agent is required to show skill and diligence in conducting his principal’s business, to communicate his actions to him and present accounts. Where agent deals on his own account in the business of agency without principal’s consent, principal has a right to the benefits gained by agent. Agent has a right to be indemnified against the consequences of his lawful acts and acts done in good faith. He is entitled to be compensated for any injury caused by the principal’s neglect. No agent is liable to carry out other than lawful orders of principal. Agent’s duty is to pay sums received on principal’s behalf though he may retain a portion out of these sums as retainer. An agent has a lien on principal’s property for remuneration which becomes due when act to be performed is completed.

Third Party Rights and Legal Duties of an Agent in Pakistan

Principal is bound to third parties by his agent’s lawful and authorized acts. Where agent exceeds authority given to him and this is not ratified, principal is only bound to extent of authority he gave where the further transaction outside the agent’s authority is separable from the authorized transaction. Otherwise he is not bound at all. Notice given to agent is notice to principal. Agent cannot, however, enforce a contract on his principal’s behalf nor is he personally bound to third parties except where a contract exists to this effect or where the contract made by agent is for the sale or purchase of goods for a merchant resident abroad, or where agent does not disclose his principal’s name, or where principal cannot be sued. Third parties have same rights and duties towards undisclosed principals as they would have had against the agents as principals but if the third parties can show that they would not have contracted with the principal had he been disclosed or that nature of contract would be changed by intervention of principal, they can refuse to fulfill contract. Undisclosed principal cannot have greater rights against third parties than his agent would have had. Where agent is personally liable, person dealing with him may hold either him, or his principal, or both of them liable. Where third party induces agent or principal to act on belief that other only will be liable he is estopped by this representation and cannot sue person so induced to act. Person falsely representing himself as agent if his authority is not ratified is bound to make compensation for any loss or damage he has caused to third parties. Persons falsely contracting as agents where they are principals are not entitled to performance. Where principal induces belief that agent’s unauthorized actions were authorized principal will be bound by his misrepresentation. Misrepresentation or fraud by agent acting in course of his business will have same effect in agreements as if such misrepresentations were made, or frauds committed, by agent in matters which do not fall within his authority and do not affect his principal.

Law of ASSOCIATIONS in Pakistan

Associations, clubs and societies are usually unincorporated and without shares; they have no legal entity and cannot sue or be sued on contracts made in their own name or on their behalf. Liability generally falls on office bearers.

Societies in Pakistan can be for scientific, charitable, educational and similar purposes may be incorporated under the Societies Registration Act 1860.

Legal Formation of a society in Pakistan

Any seven or more persons may form society by subscribing to and filing memorandum of association with Registrar of Joint Stock Companies.

Rights and Powers of a society in Pakistan

All those necessary to attain objects.

Property of such societies if not vested in trustees, vested in governing body and in all proceedings property described as that of trustees or governing body.

Legal Capacity of societies in Pakistan

May sue or be sued in name of president or other officials as determined by rules and regulations of society. Judgments enforced against property of society and not against that of officials.

Dissolution by law of societies in Pakistan

By vote of three-fifths of members and all necessary steps must be taken for disposal and settlement of property according to the rules. If no rules, then as governing body finds expedient. In event of dispute adjustment of affairs may be referred to court. Where any provincial government is member of society, no dissolution without its consent.

Law of Professional Associations in Pakistan

No statutory authorization necessary but Pakistan Bar Council constituted by Legal Practitioners and Bar Councils Act 1973 which came into force in Feb. 1973.

Law pertaining to Co-operative and religious societies formed under Co-operative Societies Act 1925 and Religious Societies Act 1880 respectively.


Law relating to corporations (or “companies” as they are called in Pakistan) is chiefly contained in Companies Ordinance, 1984 as amended.

General Supervision of Companies in Pakistan

Duties of registration of companies and enforcing Ordinance are vested in Registrars, Additional Registrars, Joint Registrars, Deputy Registrars or Assistant Registrars of Joint Stock Companies who maintain offices in Karachi, Lahore, Peshawar, Quetta, Multan and Hyderabad. Securities and Exchange Commission (“SEC”) enjoys wide powers of investigation of affairs of companies. SEC may in pursuance of findings of such investigation either itself take action or apply to court of law for any number of specified sanctions against company, including dismissal of any officer of company or direction to directors to carry out requisite changes in management or accounting policies. In addition, courts have jurisdiction in certain matters relating to Ordinance.

Code of Corporate Governance has been issued by SEC for all listed and insurance companies to follow. Code encourages such companies to appoint independent nonexecutive directors, including chairman of company, and afford reasonable representation to minority interests. No person directly or indirectly engaged in business of stock brokerage or part of particular company’s external auditors may be appointed director of that company. Board of Directors of every listed company must prepare “Statement of Ethics and Business Practices”, adopt “Mission Statement” and overall corporate strategy and generally establish sound system of internal control. Code also contains detailed criteria for persons appointed as Chief Financial Officers. All listed companies would be obliged to appoint independent share registrar of company possessing such qualifications and performing such functions as may be specified by commission. All listed companies must also establish internal Audit Committees, comprised of at least three members, that shall consult with external auditors at least once a year. Companies shall also be required to change their external auditors after every five years. § 234A of Companies Ordinance 1984 has been inserted with objective to enable commission to order special audit of company and hence appoint auditor to carry out such audit by detailed scrutiny of affairs of company. Powers and duties of auditor to be appointed to undertake special audit are to be governed by § 255 of Companies Ordinance 1984. § 234A empowers commission to pass such interim orders and directions during course of special audit as it may deem appropriate and also issue such directions for immediate compliance to company and its management as may be deemed appropriate.

Formation of Companies in Pakistan

Incorporated company, with or without limited liability, is formed in case of private company by one or more persons, in case of unlisted public company by three or more persons, and public listed company by ten members (as quorum for general meetings of public listed companies has been set at ten) subscribing their names to Memorandum of Association thereby agreeing to take at least one share each in company, and by otherwise complying with requirements of Ordinance as regards registration. Memorandum must state name of company with “Limited” as last word in its name in case of public limited company and parentheses and words “(Private) Limited” as last words in its name in case of private limited company; province in which registered office will be situated; objects of company; (in case of company limited by shares) that liability of members is limited; and amount of authorized share capital and its division into shares of fixed amount. Company may be limited by guarantee.

Rules on Naming Companies in Pakistan

Name of company must not be identical to, or closely resemble, that of existing company or (without SEC’s consent) contain any words denoting patronage of or in connection with any past or present, Pakistani or foreign, Head of State or Government or any international organisation. Name which is inappropriate or deceptive or designed to exploit or offend religious susceptibilities is also prohibited. Ordinance lays down procedure whereby company can change its name.

Registration of Articles in Pakistan

A company limited by shares (to which the succeeding paragraphs exclusively relate) may also register articles of association signed by subscribers to memorandum setting out the company regulations. A company may adopt the specimen articles contained in Table A in First Schedule to Ordinance, which will in any case be deemed to be regulations of company in so far as its registered articles do not exclude or modify them.

Law of Stamp Duty and Registration Fees for companies in Pakistan

Memorandum and articles of a company (which must be printed) are required to be stamped in accordance with Stamp Act 1899 in federal capital Islamabad. No stamp duty is payable in this respect in other parts of country. Fee based on amount of the authorized capital is, however, payable to Registrar. There is no capital duty as such.

Certificate of Incorporation of Company

On registration of memorandum and articles together with certain prescribed returns. Registrar will issue certificate of incorporation, upon which subscribers (with such other persons as may become members of the company) become a body corporate with perpetual succession and common seal.

Public and Private Companies in Pakistan

Private company is company which by its articles restricts right to transfer its shares, limits number of its members to 50 and prohibits any invitation to the public to subscribe for shares. Law also allows single member private companies which are treated differently than ordinary private companies. All other companies are public companies. Many provisions of Ordinance do not apply to private companies, and certain provisions do not apply to private companies unless they are subsidiaries of public companies.

Commencement of Business by a new Company in Pakistan

Except in case of private company, a company cannot commence any business or exercise any borrowing powers unless shares have been allotted to an amount not less than the minimum subscription; every director has paid full amount on shares taken or contracted to be taken by him; no money is or may become liable to be paid to applicants for shares owing to failure to obtain permission for shares to be dealt in on stock exchange; declaration that above conditions have been complied with has been filed with Registrar and Registrar has issued certificate to commence business; and either prospectus inviting public to subscribe for shares has been filed with Registrar or, if no prospectus is issued, statement in lieu of prospectus.

Alteration of Memorandum and Articles in Pakistan

A company may alter its memorandum to change its name or place of its registered office to another province or to alter or restructure its share capital, or (to limited extent) with respect to its objects, and may alter or add to its articles, by special resolution, but any such alteration of memorandum must be confirmed by Registrar of Companies in each province.

Share Capital Rules in Pakistan

Shares of no par value are not permitted. All shares issued by company must be fully paid up. Companies are now allowed to have any type of share capital. Shares in company are moveable property transferable as provided in company’s articles. Certificate under common seal of company is prima facie evidence of title of member to shares specified therein. Company is required to keep register of members and, if it has more than 50 members, index of members. No notice of any trust can be entered on register of members. Application for registration of transfer of shares can be made by transferor or transferee by delivering to company stamped and executed instrument of transfer along with scrip. Transfer of share of deceased member can be made by his legal representative. Member may confer on his spouse, parents, siblings or children right to acquire his shares in event of his death and such person(s) shall be entitled to such shares to exclusion of all others. Listed companies are allowed to repurchase their own shares subject to certain requirements. No company (except private company not subsidiary of public company) can give any financial assistance in connection with purchase of any of its shares. However, Finance Act 1999 has now allowed companies to have Employees Stock Option Schemes. Where share capital of company is divided into several classes of shares, and rights attached to any class of shares are varied, holders of not less than 10% of shares of that class may apply to court to have variation cancelled. Company, if so authorized by its articles, may alter conditions of its memorandum so as to increase its share capital by issue of new shares; consolidate and divide its share capital into shares of larger amount; convert its shares into stock and vice versa; subdivide its shares into shares of smaller amount than fixed in memorandum; or cancel shares not taken or agreed to be taken by any person. Company may not, however, reduce its share capital unless approved by court. And management in company cannot disinvest its shares unless minority shareholders are offered same price and prior approval of SEC is obtained.

Finance Bill 2007 seeks to relax existing provisions, where company was prohibited from purchasing its own shares and shares of its holding company. Amendment enables subsidiary to act as trustee of holding company provided holding company is not beneficially interested in trust.

Subsidiary may also deal in shares of holding company listed at stock exchange in ordinary course of bona fide business of brokerage of shares. However, such subsidiary shall not be entitled to exercise voting rights to such shares.

Impact of the Central Depositories Act, 1997 in Pakistan

Act brings capital market in Pakistan at par with its counterparts in advanced countries in terms of credibility and transparency. Central Depository Company acts as custodian of shares in same sense as bank is custodian of money. Its most significant function is to facilitate prompt transfer of shares to buyers.

Law on General Meetings of a Company in Pakistan

A public company must hold statutory meeting of its members, called “the statutory meeting” not less than three months nor more than six months from date on which it became entitled to commence business, at which members may discuss formation of company and statutory report. This report, certified by directors and auditors of company, must be circulated to members and filed with Registrar prior to meeting. Company must hold annual general meeting within 18 months from date of its incorporation and thereafter at least once calendar year, within three months from close of financial year, not more than 15 months intervening between meetings. All other general meetings are extraordinary general meetings, but directors shall be bound to convene such meeting on meeting of requisition of holders of not less than 1/10th of issued share capital upon which all calls and other sums then due have been paid.

Both public listed and unlisted companies have to file their financial statements with registrar of companies within 30 days from date of Annual General Meeting. Private limited companies were exempted from this requirement. By virtue of proposed amendment in Finance Bill 2007, this exemption available to private limited companies is restricted only to such private limited companies which have paid-up capital of less than 7.5 million rupees.

Law on Quorum, Voting and Proxies in Pakistan

Unless articles of company provide for larger number, one member in case of single member private company, two members in case of ordinary private company, ten members in case of listed company, and three members in case of unlisted public company, personally present at meeting, and representing not less than 25% of total voting power of company either of their own account or as proxies, constitute quorum; each member has, except in case of appointment of director, votes proportionate to paid up value of shares carrying voting rights held by him according to entitlement of class of such shares; on poll votes may be given personally or by proxy; proxy must be member of company unless articles of company provide otherwise. Minutes of all general meetings (and directors meetings) must be kept.

Finance Bill 2007 proposes to insert new section to entitle acquirer of 12.5% or more of voting shares in listed company in his name to have board of directors reconstituted.


An ordinary resolution is passed by a simple majority. Special resolution is passed by three-quarter majority of such members entitled to vote as are present in person or by proxy at meeting for which 21 days notice must be given to members of intention to propose resolution as special resolution, provided that, if all members entitled to attend and vote so agree special resolution may be passed at shorter notice. Copy of every special resolution must be filed with Registrar and annexed to articles. Distinctions between special and extraordinary resolutions is removed.

Law of Directors in Pakistan

Single member private company must have at least one director, other private companies must have minimum of two directors, unlisted public company must have three directors and listed public company must have seven directors to be elected by members of company in general meeting on basis of cumulative voting system. Only natural persons may be directors. Company may also have nominated (contractual) directors with certain restrictions. Member may cast as many votes as is equal to product of shares held by him and number of directors to be elected and may cast all his votes in favour of any one or more candidates. Every director must hold at least one share in company, unless nominated as directors. In addition articles of company may provide for holding of qualification shares by director. Normally, SEC imposes such condition for permitting company to issue shares. All directors of company can hold office for maximum period of three years only unless nominated as directors. Director cannot assign his office unless such assignment approved by special resolution of company. Director with approval of board, may appoint alternate director to act for him during his absence for period of not less than three months from Pakistan. No company except private company may make, guarantee or provide any security in connection with loan to director or partner, spouse or minor child of director. Director cannot hold any office of profit under company without consent of company in general meeting and he cannot enter into contracts of sale or purchase with company without consent of board. Ordinance lays down certain grounds upon which office of director shall be vacated and company may at any time, by resolution in general meeting, remove any director provided that resolution shall not be deemed to have been passed if number of votes in favour of it is less than: (i) Minimum number of votes cast for election of director at immediately preceding election of directors, in case of removal of elected director, or (ii) total number of votes computed in manner in which votes are computed for election of directors divided by number of directors for time being, in case of removal of persons appointed as first directors of company or to fill casual vacancy on board. Director must disclose nature of any interest he may have in contracts entered into by him with company and cannot vote on any contract in which he is interested.

Law on Managing Agents in Pakistan

Appointment of managing agents prohibited except in certain limited cases. No Pakistani company, or company conducting major portion of business in Pakistan may appoint sole purchase, sale or distribution agent without approval of SEC. Penalty for contravention of these provisions is imprisonment of up to two years and/or fine of Rs. 100,000.

Law of Mortgages and Charges in Pakistan

Every mortgage or charge by company affecting its assets is void against any creditor of company unless registered in prescribed manner with Registrar.

Law on Execution of Documents by a Company in Pakistan

Instruments not executed by a company under its common seal may be executed under the hand of an attorney of the company duly authorized by writing under its common seal.

Law on Books and Returns by a company in Pakistan

Ordinance contains detailed provisions as to maintenance by companies of books of accounts, registers and other documents, and as to filing returns with Registrar giving notice of changes in board, shift of registered office, allotment of shares etc.

Law on Winding-up of a Company in Pakistan

Company may be wound up by court if: (a) It resolves to do so by special resolution; (b) it fails to file the statutory report or hold statutory meeting or any two consecutive annual general meetings; (c) it fails to commence business within one year from date of its incorporation or suspends its business for one year; (d) number of its members is reduced below statutory minimum; (e) it is unable to pay its debts; (f) it is carrying on unlawful or fraudulent activities or business not authorised by its memorandum or which is oppressive to any of its members or is run by persons who fail to maintain proper accounts or commit fraud in relation to company or who refuse to act according to its constitution or Ordinance; (g) being listed with stock exchange, it ceases to be so listed; or, (h) in court’s opinion it is just and equitable that company should be wound up. Company may be wound up voluntarily: (a) When period (if any) fixed by articles for duration of company expires or event, if any, occurs on occurrence of which articles provide that it is to be dissolved and company in general meeting passes resolution to be wound up voluntarily; or (b) if it resolves to do so by special resolution. When company has resolved to wind-up voluntarily, court may order that winding-up will continue subject to court’s supervision.

Law on Foreign Companies in Pakistan

Before company incorporated abroad can open branch in Pakistan it is necessary for permission of Board of Investment to be obtained. Further, issue of shares to nonresidents requires permission of SEC State Bank of Pakistan. Protection of minority shareholders is normally achieved by suitable provisions in Articles which under Companies Ordinance, 1984 can only be altered by special resolution requiring ” majority. Special resolution is also required for reduction of issued share capital along with confirmation of reduction by court.

Every company incorporated outside Pakistan must, within one month of establishing a place of business in Pakistan, file with Registrar a certified copy of its charter or memorandum, address of its principal or registered office, list of its directors, chief executive and secretaries, name and address of principal officer of company in Pakistan, names and addresses of one or more persons authorized to accept service of process and notices on behalf of company, and address of its principal place of business in Pakistan. Any change in any of matters aforesaid must be reported to Registrar, and company must file with Registrar each year its annual balance sheet and profit and loss account.

Capital Issues (Continuance of Control) Act 1947 has been repealed but this does not affect consent given by Federal Government or licences issued under § 3 of Act.

Foreign Exchange Regulation Act 1947 in Pakistan

No shares or debentures in a company registered in Pakistan may be issued or transferred to a person who is not a resident of Pakistan (which expression is defined to include a foreign national who is for the time being resident in Pakistan and a company registered in Pakistan which is controlled directly or indirectly, by a person resident outside Pakistan) without permission of State Bank of Pakistan. However, State Bank has given general permission for certain categories of transactions for which no prior permission is required. Issues or transfer of shares of industrial companies (other than specified industries) quoted on Stock Exchange now allowed if price paid is not less than stock exchange price on date of sale. Disinvestment likewise permitted and disinvesting foreign investor permitted to repatriate proceeds provided not in excess of quoted price on date of transaction. Likewise issue or transfer of shares in private or public unquoted companies permitted if consideration paid is not less than “break-up” value as certified by chartered accountant. Likewise upon disinvestment in favour of resident repatriation of proceeds not exceeding break-up value certified by chartered accountant permitted. All issues required to be supported by evidence of remittance to issuing company in Pakistan. All transactions to be reported to State Bank and tax on capital gain, if any, required to be deducted.

Meaning of ‘Owned or Controlled by Aliens’

A company in which 50% or more of the shares are subscribed by a foreign national would be regarded as a company controlled by a person resident outside Pakistan. Foreign-controlled companies engaged in manufacturing are entitled to borrow working capital without limit; semi-manufacturing and non-manufacturing concerns are allowed to borrow 75% and 50% respectively of their paid up capital including reserves. Such companies engaged in manufacturing also permitted to raise rupee capital requirements from local banks or financial institutions. Except for restriction above, corporations controlled by aliens are treated on same basis as Pakistani controlled companies.

Companies (Appointment of Legal Advisers) Act 1974.

Under § 3 every company with paid up capital of more than Rs. 500,000 shall appoint at least one legal adviser on retainership to advise such company in performance of its functions and discharge of its duties in accordance with law.

Retainer in respect of a legal adviser appointed by a company shall not be less than Rs.1,200 per mensem.

An advocate may represent three companies as legal adviser and a registered firm may represent product of three and total number of partners of firm.

An advocate means an advocate entered in any roll under provisions of Legal Practitioners and Bar Councils Act 1973.

Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Ordinance 2002 prohibits any person from directly or indirectly acquiring voting shares, which (taken together with voting shares, if any, held by such person) would entitle such person to more than 25% voting shares in listed company or control of listed company unless such person makes public announcement of offer to acquire voting shares or control of such company. Acquisition of shares must be preceded by public announcement required to be published in one Urdu and one English daily newspaper having circulation in province in which concerned stock exchange is situated. Copy of announcement also needs to be submitted to SECP, concerned stock exchange and target company at least two working days prior to publication. In addition, acquirer is required to make disclosure of aggregate of his shareholding in target company to company itself as well as to concerned stock exchange. Acquirer is also required to send letter containing formal offer to target company, all shareholders (including convertible security holders, if any) of target company and concerned stock exchange within two working days of publication. List of relevant shareholders is required to be supplied to acquirer by board of directors of target company.

Prior to making public announcement, acquirer must appoint bank, or financial institution or member of stock exchange as manager to offer. Manager shall ensure that acquirer is able to implement public offer and, generally, that provisions of Ordinance have been duly complied with. Where shares offered for sale in pursuance to public announcement are more than voting shares offered to be acquired by acquirer, acquirer will be required to accept shares actually offered on proportional basis. Upon transfer of securities, acquirer shall be entitled to proportionate representation on board of directors of target company.

PARTNERSHIP Laws in Pakistan:

Partnership is a status arising from contract between persons who have agreed to share the profits of a business carried on by all or any of them acting for all. A Partnership may be at will, for any duration specified, or for the prosecution of some particular and defined business.

Liability of the partners of a firm is joint and several. The firm is liable for individual acts of misfeasance and misapplication of money or goods by one of its partners.

Legal Capacity of Partnerships in Pakistan

No minor can be a partner but he may with consent of all partners be admitted to the benefits of the partnership. The minor’s right of action against the partners will only arise when and if he desires to sever the connection between himself and them and his share will then be determined after valuation.

Legal Registration of Partnerships in Pakistan is not compulsory but if done should include particulars of the firm’s name, address of principal place of business and any other places of business, date of formation of the firm and date of joining of each partner and his address. This document should be signed and verified by all partners. Any alterations should be recorded. A firm which is not registered is not competent to sue for enforcement of any right from contract except as regards suit or claim of set-off not exceeding Rs. 100.

Rights and Liabilities of Partners in a Partnership in Pakistan

Duties of a partner are to carry on business to the greatest common advantage of all and to indemnify the other partners for any loss caused by his own fraud. Other rights and duties may be created by contract and can be varied or restricted. By contract it may be provided that a partner be reimbursed for his part in the conduct of the business. A partner is entitled to be reimbursed for expenses incurred by him in the ordinary and proper conduct of the business or in an emergency but not where the emergency arose out of his own wilful neglect. Unless otherwise agreed by contract, each partner is entitled to an equal share in the profit of the firm. Consent of all the partners is required to any changes.

Change in the Constitution of the firm does not vary the rights and duties of the remaining partners. If after expiry of a fixed term of years for the existence of the firm the partners continue their business, the rights and liabilities inter se remain as before and where other enterprises are undertaken as additional ventures to the original undertaking, the same rights and duties that attended the original undertaking will continue to apply to the additional undertaking.

Rights and Liabilities of Partners as to Third Parties in Pakistan

A partner is agent for the firm and his actions bind the firm but he cannot without express authority (i) submit a dispute to arbitration, (ii) open a bank account for the firm in his own name, (iii) compromise a claim without authority on behalf of the firm, (iv) institute a suit, (v) withdraw a suit, (vi) admit liability, (vii) acquire immoveable property or transfer the firm’s immoveable property, (viii) enter into a partnership on behalf of the firm. However, by implied authority he may do all these things in an emergency to protect the firm from loss. Admissions by a partner are admissions by the firm and notice to one partner is notice to all except where it relates to a fraud committed by or with the consent of that partner.

Retirement from firm can be by consent; or by express agreement. Where a partner becomes insolvent, even if the partnership is not dissolved, he ceases to be a partner. Partner can also be discharged provided that power to expel has been conferred by express agreement between partners and said power has been exercised in good faith. Retiring partner can open new business and carry on same business as firm from which he retired but he cannot use firm name, represent former firm or solicit orders from its customers. Reasonable agreements in restraint of operating such new firm may be made and will be enforced.

Dissolution of the whole firm can take place by consent; adjudication of a partner, or the firm, as insolvent or, dissolution by notice of partnership-at-will; or happening of some event that makes pursuit of its purpose illegal. Firm will also be held to have been dissolved on expiry of express term of its duration or completion of its purpose. Liability of firm and each individual partner after dissolution continues until notice has been given to public of such dissolution.



Nationalised Pakistani banks being denationalised by sale of shares and transfer of management to private sector bidders and/or employees. Government also allowing applications, in accordance with certain criteria, to set up new commercial banks including with foreign participation. Investment banks also allowed to be set up with foreign participation.

In banking sector, one of most important developments was completion of process of legislation for its structural reform. State Bank of Pakistan Act, Banks Nationalization Act, and Banking Companies Act, were amended further and new recovery law under name of Financial Institutions (Recover of Finances) Ordinance 2001 was legislated.

Changes in State Bank Act gave full and exclusive authority to State Bank to regulate banking sector, to conduct independent monetary policy and to set limit on government borrowings from State Bank of Pakistan. In significant development, State Bank of Pakistan (SBP) has recently been bifurcated. Under SBP Banking Services Corporation Ordinance 2002, SBP Banking Services Corporation has been set up to perform all non-core functions of SBP. SBP transfers to new corporation all such agreements and contracts, deeds and bonds, powers of attorney, letters of credit, guarantees and legal representations that have been established in its favour or to which it has been party. Bifurcation allows SBP to perform core job of central bank, such as formulating following monetary policy, regulating and supervising banks, managing debt and foreign exchange reserves etc., more efficiently.

Microfinance Institutions Ordinance 2001 has been enacted to provide organizational, financial, and infrastructural support to poor people especially women; to relieve poverty; and to promote social welfare and economic justice through establishment of company that would accept deposits from public for purpose of providing above services. By Companies (Second Amendment) Ordinance 2002 non-banking finance companies may be established, which may carry out investment finance services, leasing, housing finance services, venture capital investment, discounting services and asset management services, etc.

Amendments in Banks Nationalization Act abolished Pakistan Banking Council and institutionalized process of appointment of Chief Executives and Boards of nationalized commercial banks and development finance institutions with State Bank having role in their appointment and removal. Amendments also increased autonomy and accountability of Chief Executives and Boards of Directors of banks and development finance institutions.

New recovery law is designed to ensure expeditious recovery of stuck up loans and to speed up court proceedings for loan recovery decrees and their implementation. Full and effective implementation of these laws would improve health and viability of banking sector, which is critically needed for efficient financial intermediation in context of increasing integration of economy of Pakistan with world money and capital markets. However, in recent decision, full bench of Lahore High Court has struck down § 15 of Financial Institutions (Recovery of Finances) Ordinance 2001, declaring it repugnant to fundamental rights enshrined in Arts. 2-A, 3, 4, 9, 23, 24, and 25 of Constitution. Consequently, financial institutions stand barred from disposing of mortgaged properties of defaulters without obtaining court order.

Law on BILLS AND NOTES in Pakistan

Bills of exchange (including cheques) and promissory notes are regulated by Negotiable Instruments Act, 1881.

Law on Inland Instrument and Foreign Instrument in Pakistan

An inland instrument is a promissory note, bill of exchange or cheque drawn or made in Pakistan payable in or drawn upon any person resident in Pakistan. Any other instrument is a foreign instrument.

Law on Maturity in Pakistan

Maturity of a promissory note or bill of exchange is date at which it falls due. Every promissory note or bill of exchange which is not expressed to be payable on demand, at sight or on presentment is at maturity on third day after day on which it is expressed to be payable. When day on which a promissory note or bill of exchange is at maturity is a public holiday, instrument is deemed to be due on next preceding business day. Expression “public holiday” includes Sundays and days declared by Federal Government by notification in Official Gazette to be public holidays.

Holder in due course is a person who for consideration becomes possessor of a promissory note, bill of exchange or cheque if payable to bearer, or payee or endorsee thereof, if payable to order, before it became overdue, without notice that title of person from whom he derived his own title was defective and holds bill free of defects of title or prior parties and may enforce payment against all parties liable on bill. A holder who derives his title through a holder in due course, and who is not himself a party to any fraud or illegality affecting the negotiable instrument, has all the rights therein of that holder in due course as regards acceptor and all parties to instrument prior to that holder. Every party to a bill is deemed to have become a party thereto for value and each holder is prima facie deemed to be a holder in due course.

Presentment for acceptance is necessary when a bill is payable a certain number of days after acceptance, or after sight. Presentment for acceptance is absolutely necessary in case of such bills to fix date of payment. Also, where a bill expressly stipulates that it shall be presented for acceptance, it must be presented for acceptance before it can be presented for payment. A bill of exchange is said to be dishonoured by nonacceptance when the drawee, or one of several drawees not being partners, makes default in acceptance upon being duly required to accept the bill, or where presentment is excused and the bill is not accepted, where drawee is incompetent to contract, or acceptance is qualified, the bill may be treated as dishonoured.

Where there are several persons, not being partners, liable on the negotiable instrument as makers, acceptors or drawees, as case may be, and no place of payment is specified, presentment must be made to them only.

Presentment for Payment in Pakistan

Promissory notes, bills of exchange and cheques must be presented for payment to maker, acceptor or drawee thereof respectively, by or on behalf of holder in manner provided in law. In default of such presentment, other parties thereto are not liable thereon to such holder.

Where authorised by agreement or usage, a presentment through the post office by means of a registered letter is sufficient.


Where a promissory note is payable on demand and is not payable at a specified place, no presentment is necessary in order to charge maker thereof nor is presentment necessary to charge acceptor of a bill of exchange.

Notice of dishonour must be given in case of dishonour by nonacceptance or nonpayment by the holder thereof or some party thereto who remains liable thereon to all other parties whom holder seeks to make severally liable thereon, and to some one of several parties whom he seeks to make jointly liable thereon.

When a bill of exchange is dishonoured by non-acceptance drawer or any indorser to whom such notice is not given is discharged, but rights of holder in due course subsequent to omission to give notice are not prejudiced by that omission.

When a bill of exchange is dishonoured by nonacceptance and notice of dishonour is given, it is not necessary to give notice of a subsequent dishonour by nonpayment, unless the bill is, in the mean time, accepted.

Stamp Duty laws in Pakistan

Under § 35 of Stamp Act 1899, no instrument chargeable with stamp duty shall be admitted in evidence, acted upon, registered or authenticated unless such instrument is duly stamped. This defect cannot be rectified in case of bills of exchange, and promissory notes, but in case of other such instruments this defect can be rectified by payment of proper duty and specified penalty.

Foreign unstamped notes and bills if invalid in the foreign country are invalid in Pakistan, and are never admissible in evidence in Pakistan.

Conflict of Laws in Pakistan

If a negotiable instrument is made, drawn, accepted or indorsed outside Pakistan but in accordance with law of Pakistan, the circumstance that any agreement evidenced by such instrument is invalid according to law of country wherein it was entered into does not invalidate any subsequent acceptance or endorsement made thereon within Pakistan.

Where there is no provision to contrary in the contract, legality and validity of the instrument or of its acceptance or negotiation is governed by law of the place where instrument was made, drawn, accepted or negotiated. Law of place where instrument is payable determines liability of the parties, duties of holder with respect to presentment for acceptance or payment, date of maturity of instrument, what constitutes dishonour, all questions relating to payment and satisfaction including the currency and rate of exchange at which instrument is to be paid.

Law of any foreign country regarding promissory notes, bills of exchange and cheques is presumed to be same as that of Pakistan unless and until contrary is proved.


Registration is not compulsory except for joint stock companies.

CONTRACTS in Pakistan

The law relating to contracts which is to a great extent based on the Common Law of England is to be found in codified form in the Contract Act 1872. Previously this Act had contained sections on the sale of goods and on the Law of Partnership. Subsequently in 1930 and 1932 respectively these sections were repealed and separate Acts covering these subjects passed. Amongst the main differences between the Act and the Common Law are the provisions of the Act to the effect that a third party’s actions may constitute sufficient consideration for the performance of promise and that past consideration is good consideration. (§ 2). Promisee may also dispense with, or remit wholly or in part, performance of promise made to him or may extend time for such performance or may accept instead of it any satisfaction which he thinks fit. There is however nothing corresponding to enforceable document under seal without consideration. See, however, § 25 of Contract Act (Act IX of 1972).

Contract with a minor is void. For purposes of contract persons under 18 are minors.

Agreement to contracts obtained by force, fraud or undue influence are voidable at option of person coerced, defrauded or influenced. The consideration must be permissible by law. Illegal contracts, wagering contracts and contracts against public policy cannot be enforced. Contracts in restraint of trade are void to extent of the restraint except where made on the sale of goodwill of business, when a reasonable restraint upon the Vendor will be enforced. Principle of negotiorum gestor is also recognized and person benefitting must make some sort of payment to the other.

Excuses for Non-performance of Contracts in Pakistan

When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless promisee is ready and willing to perform his reciprocal promise.

When a contract contains reciprocal promises and one party to contract prevents other from performing his promise, contract becomes voidable at option of the party so prevented, and he is entitled to compensation from the other party for any loss which he may sustain in consequence of nonperformance of the contract.

When a contract consists of reciprocal promises such that one of them cannot be performed or that its performance cannot be claimed till other has been performed, and promisor of the promise last mentioned fails to perform it, such promisor cannot claim the performance of the reciprocal promise, and must make compensation to the other party to the contract for any loss which such other party may sustain by the nonperformance of the contract. An agreement to do an act impossible in itself is void. Contract to do an act which after contract is made becomes impossible, or by reason of some event which the promiser could not prevent, unlawful, becomes void when the act becomes impossible or unlawful.

If parties to a contract agree to substitute a new contract for it, or rescind or alter it, original contract need not be performed. Where a person at whose option a contract is voidable rescinds it, the other party thereto need not perform any promise therein contained in which he is a promisor.

If any promisee neglects or refuses to afford the promisor reasonable facilities for performance of his promise, the promisor is excused by such neglect or refusal as to any nonperformance caused thereby.

Measure of Contract Damages in Pakistan

On breach of a contract proper measure of damages is loss sustained by injured party naturally following as consequence of breach.

Contracts without Consideration in Pakistan

In four instances a contract even without consideration is valid. Firstly, where agreement is in writing and is based on natural love and affection, secondly, where agreement is to compensate person who has performed some act voluntarily for promisor or done something which promisor would have been legally obliged to do, thirdly, where it is promise in writing to pay time-barred debt, and, lastly, where there is contract of agency.

Applicable Law for Contracts in Pakistan

In absence of an express intention to contrary the proper law of a contract is presumed to be law of country where contract is made, and, where contract is made in one country and is to be performed wholly or partly in another country, the law of the country where performance is to take place. Parties to a contract are free to choose its proper law subject to the qualification that contract should have a substantial connection with the country the law of which is chosen and that there should be no reason for avoiding the choice on grounds of public policy.

Where parties have not expressed any intention the proper law is inferred from terms and nature of contract and from general circumstances of the case. Proper law governs the material or other essential validity of the contract as well as its interpretation, effect and discharge. Formation of the contract is governed by the law which would be the proper law if the contract were validly concluded. Capacity to contract is governed by law of country with which the contract is most closely connected. Formal validity is governed by law of country where contract is made or by the proper law.

Laws on Government Contracts in Pakistan

There are no special requirements to be observed when contracting with Government. General law of contracts applies.

Distributorships, Dealerships and Franchises in Pakistan are governed by general law of contracts and agency.

Is there a statute of Frauds in Pakistan?

There is no statute of frauds in Pakistan, and under § 11 of Contract Act 1872 all agreements are contracts if they are made by free consent of parties competent to contract, for a lawful consideration and with a lawful object and are not in the section expressly declared to be void. Provisions of the section do not affect any law in force in Pakistan by virtue of which a contract is required to be made in writing or in presence of witnesses or any law relating to registration of documents. Examples of such laws are Companies Ordinance, 1984 §§ 19 and 27 of which require memorandum and articles of association respectively of company to be in writing; Transfer of Property Act, under provisions of which sales, mortgages, leases, exchanges and gifts of immovable property and transfers of actionable claims must be in writing. Writing is also required for creation of trust by Trusts Act, in case of acknowledgment of barred debts by Limitation Act, in case of submission to arbitration by Arbitration Act.

Where a contract is not required to be in writing it is immaterial whether a clause is written, printed or typewritten. When written and printed clauses are inconsistent greater importance is to be attached to written clause.


Laws on the INTERNET AND NEW MEDIA in Pakistan

Computer software and Information Technology has been declared industry via government notification. Government has offered various incentives for facilitation and growth in this area such as 0% customs duty on import of IT related machinery and equipment. Software companies are allowed to retain 35% of their export earning in Foreign Exchange to meet expenditure on purchase of hardware/software and hiring of consultants, etc. Provinces of Balochistan and Sindh have enacted Balochistan Information Technology Board Ordinance 2001 and Sindh Information Technology Board Ordinance 2002 with sole aim of taking all necessary measures for promotion, development and use of information technology. Special Information Technology Board Fund has also been set up to allow Board to perform its functions effectively.

In order to develop broadcast media and to regulate establishment and operation of all broadcast and CTV stations, Pakistan Electronic Media Regulatory Authority has been formed.

Legal recognition and facilitation of documents, records, information, communications and transactions in electronic form and accreditation of certification service providers is provided for in Electronic Transactions Ordinance 2002. No record, document or transaction will be denied legal recognition on ground that it is in electronic form. Detailed rules determine origin of electronic transmission and time when such transmission is made or received, etc. It is hoped that these rules will help parties determine their liabilities or other legal consequences of electronic transmissions, especially in cases of electronic contracts. Time for receipt of transmission, in particular, is time when electronic record enters addressee’s computer source. However, if recipient had designated particular computer source and transmission is to different source, receipt is deemed to have been made when record is actually retrieved by addressee. Place of dispatch of electronic record under IT Ordinance is (principal) place of originator’s business/residence and of receipt is (principal) place of addressee’s business/residence.

Ordinance also provides for establishment of Certification Council. Council shall grant and renew accreditation to service providers and monitor their compliance with provisions of Ordinance. Council may also recognize certificates issued by foreign certifying authorities. Certification Council may also act as repository of certificates issued and has wide powers to investigate any contravention of licenses and Ordinance. Council may also with permission of government make regulations pertaining to safety and management of keys, and passwords, inspection of operations, privacy and protection of data subscribers, suspension and revocation of certificates and accreditation.

Offences Under Electronic Ordinance 2002 include provision of false information to certification service provider by subscriber, intentionally issuing false certificate by director or officer of certification provider (in both cases, wrongdoer liable to pay fine up to 10 million rupees or imprisonment not exceeding seven years). Other offences include accessing computer system without permission of owner, intentionally tampering with computer source documents (up to seven years imprisonment and one million rupees fine). In absence of intent to facilitate, network service provider shall not be subject to any liability in connection with contravention of Ordinance by person not subject to direction or control of network service provider.

Legal Protection of Software in Pakistan

Pakistani IT Policy also contains draft “Protection of Software Ordinance 2000” (“Software Ordinance”). This Ordinance provides for establishment of “Registry of Software Intellectual Property” consisting of registrar and sub-registrars. Registry shall be entrusted with task of issuing certificates of registration to appropriate applicants and of protecting owners of software as well as consumers of software against anticompetitive conduct of owners, and of adjudicating disputes between owners, owners and consumers and owners and third parties.

Applications for registration of software must be in prescribed form and accompanied by description of relevant particulars of software and registration fee. Registration is to be valid for 15 years and may subsequently be renewed by concerned party. Registration may be transferred into name of any other person, if registered owner so wishes. Infringement of registration rights will be offence punishable by imprisonment and/or fine.


Abuse of dominant position, entering into agreement in respect of production, supply, distribution, acquisition or control of goods, or provision of services which have object or effect of preventing, restricting, or reducing competition within relevant market, entering into deceptive marketing practices, and entering into merger which substantially lessens competition by creating or strengthening dominant position in relevant market area are acts that are prohibited under Competition Ordinance 2007. Abuse of dominant position must be deemed to have been brought about, maintained, or continued if it consists of practices which prevent restrict, reduce, or distort competition in relevant market.

Expression “practices” include: (a) Limiting production, sales and unreasonable increases in price or other unfair trading conditions; (b) price discrimination by charging different prices for same goods or services from different customers in absence of objective justifications that may justify different prices; (c) tie-ins, where sale of goods or service is made conditional on purchase of other goods or services; (d) making conclusion of contracts subject to acceptance by other parties of supplementary obligations which, by their nature or according to commercial usage, have no connection with subject of contracts; (e) applying dissimilar conditions to equivalent transactions on other parties, placing them at competitive disadvantage; (f) predatory pricing driving competitors out of market, prevent new entry, and monopolize market; (g) boycotting or excluding any other undertaking from production, distribution or sale of any goods, or provision of any service; and (h) refusing to deal.

Deceptive marketing practices must be deemed to have been resorted to or continued if undertaking resorts to: (a) Distribution of false or misleading information that is capable of harming business interests of another undertaking; (b) distribution of false or misleading information to consumers, including distribution of information lacking reasonable basis, related to price, character, method or place of production, properties, suitability for use, or quality of goods; (c) false or misleading comparison of goods in process of advertising; and (d) fraudulent use of another’s trademark, firm name, or product labeling or packaging.

Ordinance creates new regulatory body by name of Competition Commission of Pakistan. This body has power to conduct enquiries and issue orders and grant individual and block exemptions. Noncompliance with provisions of Ordinance entail fine not exceeding Rs. 50 million or amount not exceeding 15% of annual turnover of defaulting undertaking. Any person aggrieved by order of Competition Commission can appeal against it to Appellate Bench of the Commission within 30 days from decision of which appeal lies to Supreme Court of Pakistan.

Law on Government Control in Pakistan

Essential Commodities Distribution Order 1953 and Essential Supplies Act 1957, Essential Commodities Control Order 1965 and Price Control and Prevention of Profiteering and Hoarding Act, 1977 are enactments which enable Federal Government to control distribution and price of commodities therein specified. Number of these specified commodities is steadily decreasing as it is policy of Government to allow free play of market forces and to do away with price control.

Law on PRICE CONTROL in Pakistan

Price control is regulated by government under Price Control and Prevention of Profiteering & Hoarding Act, 1977. Items affected thereby have been progressively reduced and at present direct control is exercised only in respect of few items. Full powers to regulate price, however, still lie with government and would be used if government felt prices were being inflated. Control also exists in relation to supply of essential commodities.


A contract for sale of goods is governed by Sale of Goods Act 1930 and is a contract whereby seller transfers or agrees to transfer property in goods to buyer for a price. Such a contract may be conditional or absolute and may be effective immediately or in the future. A contract for future sale is an agreement to sell.

Law on Formalities in Pakistan

There must be an offer and acceptance of existing or future goods. The sale may be in writing or oral. If the goods have already perished, unknown to the seller, at the time of contracting then the contract to sell is void. If the goods perish before reaching the buyer the contract may be voidable.

Law on Conditions and Warranties in Pakistan

A condition is a stipulation that is essential to the contract while a warranty is a stipulation collateral to the main agreement. A condition may, and in certain cases, must be waived and treated as a warranty. This waiver becomes mandatory where goods have been partly accepted and are not severable. Implied undertaking or condition exists that seller has or will have the right to sell the goods. There is an implied warranty that buyer will have quiet enjoyment of the property and that the goods are free from encumbrances. It is a condition that where sale is by description or sample, the goods should correspond to the description or sample. There is no implied condition or warranty as to the fitness of goods sold for any particular purpose except where buyer makes known to seller such particular purpose and places reliance on seller’s skill and judgment. If goods are generally sold by seller there is also an implied condition that they are fit for the purpose sold except where they are sold under their patent or trade name. Where sale is by description there is an implied condition that the goods will be of merchantable quality except where buyer examined the goods before purchase and the defects were not latent defects.

Transfer of Title.

Property passes in the goods when it is intended that it should pass. No better title can be passed than that of the seller unless the owner is precluded from denying seller’s authority. A mercantile agent in possession, with consent, of goods can pass a good title to a bona fide purchaser as if expressly authorised so to do with the owner’s consent. Similarly one of several joint-owners, in possession of the goods with the consent of all, can pass a good title to a bona fide purchaser. Where a seller has acquired goods under a voidable contract but which has not at the time he contracts been rescinded, a bona fide purchaser takes good title. Where a seller after sale retains possession of the goods and subsequently resells them to a third party, who is in good faith, that third party takes a good title. A buyer in possession after sale can also sell and a third party will take without notice of the original seller’s lien, if any.

Law on Delivery in Pakistan

Unless otherwise agreed, payment and delivery are concurrent conditions though seller is not bound to deliver until buyer applies for delivery. Delivery should be made within a reasonable time at seller’s expense. Where buyer rejects the goods he is not bound to return them physically to seller. Delivery is deemed to take place at time of the handing over of the goods to the carrier but seller must stipulate this.

Law on Notices Required in Pakistan

Unless otherwise agreed, where goods are delivered to buyer and he refuses to accept them, having the right so to do, he is not bound to return them to seller but it is sufficient if he intimates to seller that he refuses to accept them. Buyer is deemed to accept the goods when he intimates to seller that he has accepted them or when goods are delivered to him and he does any act in relation to them which is inconsistent with the ownership of seller, or when, after lapse of a reasonable time, he retains the goods without intimating to seller that he has rejected them.

Law on Stoppage in Transit

It is possible for an unpaid seller to take this action when buyer becomes insolvent. The duration of transit is calculated to last until buyer takes delivery from the carrier, even if after arrival of the goods at the appointed destination the carrier acknowledges to agent of buyer, or to buyer that he holds the goods on his behalf. It is a question of fact when goods are shipped as to whether the master is a carrier, or an agent of the buyer. The remainder of goods partly delivered can be stopped in transit.

Law on Remedies of a Seller in Pakistan : A seller can sue for the price of goods even where delivery is not made, if the price was by contract payable on a certain date irrespective of delivery. He can also claim damages for non-acceptance of goods by buyer.

Law on Remedies of a Buyer in Pakistan

Buyer can sue for damages for non-delivery. He can also sue for damages for breach of warranty, or for breach of a condition being treated as a warranty, or set up this breach in reduction of the price. Both these remedies can lie on the same breach where additional damage is incurred by buyer. Where either party repudiates the contract before date of delivery the other can sue immediately or wait until the contractual date comes around. Special damages and interest are also recoverable in certain cases.


Proof of Foreign Claims in Pakistan

A foreign claim may be proved in same manner as a local claim. Where a claim is to be proved by evidence of a foreign witness, such evidence can be taken on commission if Pakistani Court concerned issues a commission or letter of request to the foreign court.

Proof of Foreign Law in Pakistan

Foreign law may be proved either by evidence of a person specially skilled in it or by direct reference to books printed or published under authority of the foreign Government. A man will not be accepted as competent to prove foreign law unless he is a practising lawyer, or has held some official position which presumes a knowledge of that law or has special knowledge of that law acquired from practical experience.

  • 94 of Qanun-e-Shahadat Order, 1984 dispenses with proof of genuineness of every book purporting to be printed or published under authority of government of any country and to contain any of laws of that country, and of every book purporting to contain reports or decisions of courts of such country.

Limitation of Actions in Pakistan


These may be taken in criminal cases by Magistrates and Sessions Judges and in civil matters by the civil judges. Provisions for this are to be found in Civil Procedure Code Order XVIII and Criminal Procedure Code, § 353-§ 363. The maxim omnia praesumuntur rite acta esse applies to depositions and it will generally be assumed that, if signed by the judge or magistrate concerned, the contents thereof have been read over to the witness and checked. Where depositions are given in English the accused if he does not understand English, is entitled to a written interpretation of the contents which then forms part of the court record.

Depositions are either taken down by the magistrate or judge in his own hand or else a memorandum of the substance of the evidence is recorded by him, or failure to do this accounted for. The deposition should be read over to the witness, and if necessary, corrected.

‘De Bene Esse’ in Pakistan

Under O. XVIII Civil Procedure in a case where it is feared that a witness is about to leave the jurisdiction, or other sufficient cause is shown to the court, a witness’ evidence may be recorded immediately.

Dying declarations in Pakistan are admissible under § 164 Criminal Procedure Code before a magistrate or judge.

Compelling Attendance of Witnesses in PakistanExpenses of witnesses are paid into court by the applicant for summons, and summons to attend will subsequently be issued to witness named. Summons must specify time and place of attendance. Where expenses have been underestimated the court may direct the applicant to make up the sum. Where any witness fails to accept service, or having accepted service fails to appear and it seems to the court that such non-acceptance or nonattendance is deliberate, he may be arrested or his property attached.

Depositions outside the country may only be taken on commission or a letter of request.
A commission may only be issued to a competent foreign court in whose jurisdiction the witness resides.

Notice must be given to the other side and the other side must have an opportunity to cross-examine in person, by representation, or cross-interrogatories, when a commission outside the jurisdiction is executed.

Restriction on Local Use in Pakistan

Depositions taken abroad are placed on same footing as depositions taken in Pakistan.

JUDGMENTS in Pakistan

Law on Judgments on Admissions in Pakistan

Any party may, at any stage of a suit, where admissions of fact have been made, either on the pleadings, or otherwise, apply to the court for such judgment or order as upon such admissions he may be entitled to, without waiting for the determination of any other question between the parties, and court may upon such application make such order or give such judgment, as court may think just.

Judgment by Consent in Pakistani

If it is proved to satisfaction of court that a suit has been adjusted wholly or in part by any lawful agreement or compromise, or where defendant has satisfied plaintiff in respect of whole or any part of subject matter of suit, court orders such agreement, compromise or satisfaction to be recorded, and passes a decree in accordance therewith so far as it relates to the suit.

Declaratory Judgments.

Any person entitled to any legal character, or to any right as to any property can institute a suit against any person who denies or is interested in denying his title to such character or right. Court may in its discretion make a declaration that he is so entitled, and plaintiff need not in such suit ask for any further relief. Court will, however, make no such declaration where plaintiff, being able to seek further relief than a mere declaration of title, omits to do so.

Judgment by Default in Pakistan

If defendant does not appear when suit is called on for hearing, and it is proved that summons was duly served, court may proceed ex parte and pass an ex parte order.

Where defendant appears and plaintiff does not appear when suit is called on for hearing, court shall make an order that suit be dismissed, unless defendant admits the claim, or part thereof, in which case court shall pass a decree against defendant upon such admission, and where part only of claim has been admitted, shall dismiss the suit so far as it relates to remainder.

Revival of Judgements in Pakistan

First application for execution for a decree, to be within time, must be made within three years of decree.Subsequent applications must be made within three years from date of final order made on last application.

Foreign Judgments in Pakistan

A foreign judgment is conclusive as to any matter directly adjudicated upon between the same parties or between parties under whom they or any of them claim litigating under the same title except: (a) Where it has not been pronounced by a court of competent jurisdiction; (b) where it has not been given on merits of the case; (c) where it appears on face of proceedings to be founded on an incorrect view of international law or a refusal to recognize the law of Pakistan in cases in which such law is applicable; (d) where proceedings in which judgment was obtained are opposed to natural justice; (e) where it has been obtained by fraud; (f) where it sustains a claim founded on a breach of any law in force in Pakistan.

Foreign judgment may be enforced by proceedings in execution mainly under § 44A of Code of Civil Procedure 1908, but in other cases foreign judgment can only be enforced by a suit upon judgment.

  • 44A states: (1) Where certified copy of decree of any of superior courts of U.K. or any reciprocating territory has been filed in District Court, decree may be executed in Pakistan as if it had been passed by District Court. (2) Together with certified copy of decree shall be filed certificate from such superior court stating extent, if any, to which decree has been satisfied or adjusted and such certificate shall, for purpose of proceedings under this section, be conclusive proof of extent of such satisfaction or adjustment. (3) Provision of § 47 shall as from filing of certified copy of decree apply to proceedings of District Court executing a decree under this section, and District Court shall refuse execution of any such decree, if it is shown to satisfaction of court that decree falls within any of exceptions specified in Clauses (a) to (f) of § 13 which define cases in which a foreign judgment is not conclusive and are quoted first above. Also § 14 states that court shall presume, upon production of any document purporting to be a certified copy of foreign judgment, that such judgment was pronounced by court of competent jurisdiction, unless contrary appears on record; but such presumption may be displaced by proving want of jurisdiction.
  • 47 defines the questions to be determined by court executing decree: (1) All questions arising between parties to suit in which decree was passed, or their representatives, and relating to execution, discharge or satisfaction of decree, shall be determined by court executing decree and not by separate suit. (2) Court may, subject to any objection as to limitation or jurisdiction, treat proceeding under this section as suit or suit as proceeding and may, if necessary, order payment of any additional court fees. (3) Where question arises as to whether any person is or is not representative of party, such question shall, for purposes of this section, be determined by court.

Award given in foreign state by arbitrators selected by parties cannot be equated to judgment given by foreign court and its validity is not open to attack on grounds mentioned in § 13. Award pronounced in foreign state is not judgment within this section and no suit will in consequence lie on it even if it was filed in foreign court unless it was made a rule of court. However suit may be filed on award itself under Arbitration (Protocol & Convention) Act, 1937.

Where a foreign judgment is sought to be enforced in execution under § 44A it will be open to the judgment-debtor to raise all objections which would have been open to him under § 13 if suit had been filed on judgment.

Suit on foreign judgment in court governed by Code of Civil Procedure 1908 must satisfy conditions of § 20 which states that suits should be instituted where defendant resides, or carries on business or personally works for gain or where cause of action wholly or in part arises.

Period of limitation for suit on foreign judgment in six years from date of judgment. (Limitation Act 1908, Schedule 1, Article 117). Pendency of appeal in foreign country will not bar a suit on foreign judgment, but if appeal results in decree dismissing appeal, appellate decree affords fresh starting point for limitation.


Limitation is governed by the Limitation Act 1908. Actions must be commenced within the following periods:

The ‘Sixty Years’ Rule

Any suit by or on behalf of the central government, suits by a mortgagee for foreclosure and sale, against a mortgagee for redemption or to recover possession of immoveable property.

Thirty Years.

Against a depositary or pawnee to recover moveable property deposited, by a mortgagee to recover possession of the immoveable property from the mortgagor.

Twelve Years.

Inter alia, to recover a legacy or share in an intestacy, to establish a periodically recurring right, to enforce a charge upon immoveable property, to recover immoveable property mortgaged or bequeathed in trust which has been transferred for a valuable consideration, by a landlord to recover possession from a tenant, by a remainder-man or reversioner for possession of immoveable property, generally for the possession of immoveable property or any rights therein not specially provided for.

Six Years.

For compensation for breach of a contract in writing registered, upon a foreign judgment, to obtain a declaration that an alleged adoption is invalid or valid, any suit for which no limitation is provided elsewhere in the Act.

Three Years.

Most actions arising in contract are within three years limitation including any breach of contract not specially provided for.

Two Years.

Suits against executors or administrators, for compensation for any malfeasance, misfeasance or nonfeasance independent of contract and not specially provided for.

One Year.

For wages, for price of food or drink supplied, for price of lodgings, to enforce a right of prescription, to set aside, inter alia, sale in execution of a decree, against the government to recover land acquired, money paid, challenged orders, for compensation for false imprisonment, by executors and administrators, for compensation for injuries under Fatal Accidents Act, or other injury, for compensation for malicious prosecution, libel and slander.

Six Months.

Under the Specific Relief Act.

Ninety Days.

For compensation for doing or omitting to do an act alleged to be in pursuance of any enactment for the time being in force.

Thirty Days.

To contest an award of the Board of Revenue.
Limitation need not be specifically pleaded as the courts must take cognizance of this.

Exclusion of Time in Pakistani Limitation law

Where at time of commencement of the period of limitation the person in whom right of action lies is under a disability e.g., where he is insane, a minor, or an idiot, time will not commence to run against him until disability ceases. Where a second disability commences before the first disability is over, time will run after second disability is over. Once time begins to run, however, subsequent disability will have no effect. Where the person dies still under a disability, his right of action passes to his legal representatives and time will commence to run from that date.

Public holidays and court holidays are excluded from the period of limitation.

In an appeal the time for obtaining a copy of the decree and judgment will also be excluded.
Where a plaintiff bona fide prosecutes his claim in a wrong court, the time of such prosecution will be excluded.

Extension of Time in Pakistani Limitation Law

Where a defendant acknowledges a debt in writing during the period of limitation or makes a part payment of rent a fresh period of limitation will be computed from that date (Limitation Act 1908, § 19).


By State Immunity Ordinance 1981, foreign state is immune from jurisdiction of courts of Pakistan, except as specified. Exceptions include submission to jurisdiction by state and suits relating to commercial transactions, contracts of employment (where contract was made or work is to be wholly or partly performed in Pakistan), ownership, possession or use of property, patents and trademarks, memberships of corporate bodies (by state) arbitration (agreed upon by state), ships belonging to state, levy of customs duties, value added tax etc. Procedural requirements are also laid down. Government of Pakistan and Provinces are not immune from suit or other legal proceedings in courts in Pakistan.

COURTS in Pakistan

Highest Court in country is Supreme Court of Pakistan which sits at Rawalpindi and hears both civil and criminal appeals from various High Courts. By virtue of Supreme Court (Number of Judges) Act, 1997, number of judges of Supreme Court shall be 16. There is one High Court for each Province and federal capital Islamabad. Supreme Court of Pakistan and Peshawar High Court have in relation to Provincially Administered Tribal Areas of Chitral, Dir, Kalam, Swat and Malakand Protected Area, same jurisdiction as in relation to other areas of North West Frontier Province. High Courts are superior Courts of Record. High Court of Sind hears original civil cases originating from Karachi District and being of value of more than Rs. 3,000,000, and appeals from civil and criminal courts of province. Other High Courts do not have original civil jurisdiction.

The subordinate courts can be divided into two broad divisions, the District Courts for civil matters and the Sessions and Magistrates Courts which deal with criminal matters. The District Courts consist of the Court of the District Judge, which hears civil cases and also a certain amount of appellate matters, both civil and criminal, and the lower courts of Additional District Judges and Subordinate Judges. The pecuniary limit of such courts in Karachi is Rs. 3,000,000, while at other places district judge or senior civil judge has unlimited pecuniary jurisdiction. There is also Small Causes Court where simple money suits within pecuniary limit which varies from place to place are heard. Pecuniary limit in Karachi is Rs. 5,000. On criminal side are Sessions Courts and Magistrates Courts, latter being subdivided into three classes, first, second and third. Small Claims & Minor Offences Courts may now be established by Government, which will have exclusive jurisdiction to try suits subject matter of which does not exceed Rs. 100,000. By Code of Civil Procedure (Amendment) Ordinance 2002, courts may with consent of parties adopt alternate dispute resolution method for expeditious disposal of cases.


Under Proclamation of Emergency Order of 14 Oct. 1999 Constitution of 1973 and Parliament were suspended. However, Constitution was revived with certain significant amendments by Legal Framework Order 2002 (“LFO”). Under 1973 Constitution as amended by LFO there shall be Parliament called Majlis Shoora consisting of two houses, to be known as National Assembly and Senate. National Assembly shall consist of 342 members, of which 272 are elected on general seats, 60 on seats reserved for women, and ten on seats reserved for non-Muslims. Senate shall consist of 100 members of whom 14 shall be elected by each of four provincial assemblies, eight from Federally Administered Tribal Areas, four shall be chosen from Federal Capital, four women and four technocrats to be elected by each of four provincial assemblies. National Assembly shall be elected for five years. Senate shall not be subject to dissolution but its members shall hold office for six years approximately half of them retiring every three years. If Bill is rejected or not passed within 90 days of receipt, or passed with amendments by either house, it shall, at request of House in which Bill originated be referred to Mediation Committee for consideration and resolution therein. Mediation Committee shall within 90 days formulate agreed bill which is likely to be passed by both houses of Parliament and place bill separately before each house. Bill passed by Parliament can become law either on being assented to by President within 30 days or if after President sends it to reconsider by both Houses in joint session, it is again passed, with or without amendment, by majority of total membership of both Houses under Art. 70 after which President must give consent. When National Assembly is not in session, President has power to make Ordinance which will be placed before National Assembly as soon as practicable and shall stand repealed at expiration of four months from its promulgation or earlier disapproval by Assembly. There are four provincial legislatures headed by governors, one each for provinces of Baluchistan, North West Frontier Province, Punjab and Sind consisting of 65, 124, 371 and 168 members respectively elected by direct and free vote. Relationship between governors and provincial legislature is similar to that between President and National Assembly.


These are published here in a series of volumes by Law Department of Ministry of Law & Parliamentary Affairs. These publications cover post-partition period, i.e., from 1947 and also contain latest acts, ordinances and notifications. Revenue decisions are also published. There is also a more exhaustive private publication “The All Pakistan Legal Decisions” which contains reports of Supreme Court and High Court cases and from 1954 onwards have also contained latest acts, ordinances and notifications. There is also a private publication “Pakistan Tax Decisions” of revenue cases.

Authorities binding on the courts in Pakistan are judgments of the Supreme Court of Pakistan and Privy Council decisions pre-1950 and all Indian decisions before that date of courts of equivalent or superior status; persuasive authorities are decisions of the House of Lords, the Privy Council, the Indian Supreme Court, decisions of Indian High Courts, and decisions of Supreme Court of United States. National Judicial (policy making) Committee has been set up to publish annual or periodic reports of Supreme Court, Federal Shariat Court, High Courts, subordinate courts and administrative courts and tribunals.

STATUTES in Pakistan

Law in force in Pakistan is based on English common law and except for the law of torts and personal law it is to be found in the various Federal and Provincial statutes and ordinances, and rules, regulations and orders framed thereunder from time to time. Recent enforcement of Islamic laws is also enacted by statute. (See category 1 Introduction, topic 1.02 Government and Legal System, subhead Islamic Laws.)

All un-repealed Federal statutes and ordinances from 1836 to 1965 have been assembled and published by Ministry of Law & Parliamentary Affairs of Government of Pakistan in a set of 15 volumes under title “The Pakistan Code.” These volumes have been amended up to May 1966. Federal as well as Provincial Acts, Ordinances, Rules, Orders and Regulations are first published in official Gazettes of Pakistan, and from 1954 have also been published in All Pakistan Legal Decisions, a private publication.

ASSIGNMENTS (Debtor and Creditor) in Pakistan

All rights in moveable or immoveable property are assignable by way of gift, hire, lease or sale by § 30 of Trustees and Mortgagees Powers Act 1866 a person may transfer to himself and another person or persons or corporation any moveable property that is by law assignable, as if he were transferring the property to another. Any actionable claim (chose in action) other than debt secured by mortgage of immoveable property or hypothecation or pledge of moveable property or beneficial interest in property not in possession of claimant, which actionable claim be transferred. Such transfer must be in writing and signed by transferor or his duly authorized agent and can be with or without consideration.

Sale of tangible immovable property over value of Rs. 100 or of reversion can only be effected by registered assignment. Where value of such tangible immovable property is under Rs. 100 it can be effected by mere delivery.

A gift (transfer without consideration) must be made within lifetime of donor. A donor may also dispose of, in expectation of death, any moveable property that he could have disposed of by gift. A gift by a Muslim, which is called Hiba can be either of immoveable or moveable property without consideration and by word of mouth but in the case of immoveable property the donee must take possession of the property.

Whether Insurance policies in Pakistan are assignable?

Yes they are, unless the Policies themselves provide otherwise. In the case of Life Policies this can only be done by a deed of transfer or an endorsement on policy which must be attested by a witness. A Marine Policy can be assigned either before or after the loss occurs.

Effect of assignment is to create an interest for assignee, in the assigned object. No greater rights can be created than those which existed in the transferor.

Mere right to sue cannot be transferred nor can the salary of a public officer either before or after it has become payable.

Law of ATTACHMENT in Pakistani cases

Rules regarding attachments are governed by Code of Civil Procedure 1908.Attachment orders made both in execution of decree and before judgment. Orders for attachment before judgment may be made in all except following actions: For recovery of immovable property; for foreclosure, sale or redemption in case of mortgage of or charge on immovable property; for determination of any other right or interest in immovable property; and for attachment of any agricultural produce in possession of agriculturist, or attachment or production of such produce. Order only made before judgment if defendant has failed to show cause to contrary or to furnish security. Provided however, attachment before judgment is not to affect rights existing prior to attachment, of persons not parties to suit nor bar any person holding decree against defendant from applying for sale of property under attachment in execution of such decree.

Property once attached before judgment, may not be reattached in execution of decree.

Where holder of decree for possession of immovable property or purchaser of any such property sold in execution of decree is resisted or obstructed by any person in possession of property he may make application to court and court shall investigate matter. All questions as to right, title or interest in or possession of immovable property shall be adjudicated upon and determined by court and no separate suit shall lie for determination of any such matter.

Courts Which May Issue Order.

All courts including industrial and tax tribunals, except Small Causes Court.

In Whose Favour These can be Given

In favour of plaintiff when made before judgment and in favour of decree holder to enforce execution. In both cases may be given in favour of nonresident or foreign corporations.

Grounds for attachment in Pakistan

Order for attachment may be made before judgment if court satisfied that defendant with intent to obstruct or delay execution of decree that may be passed against him is about to dispose of whole or part of his property or is about to remove whole or part of his property from local limits of jurisdiction of court. Order for attachment after judgment made only to enforce decree.

Proceedings to Obtain Attachment in Pakistani cases

Application of plaintiff or decree holder is necessary, together with affidavit and schedule specifying property to be attached.

Attachment Bond in Pakistan

Judgment debtor may be required to furnish attachment bond to effect that he will not dispose of property in question and will endeavour to satisfy decree.

Levy in Attachment Cases in Pakistan

Both moveable and immovable properties are subject to attachment. However, certain things necessary for judgment debtor’s survival may not be attached.

Lien in Attachment Cases in Pakistan

Decree holder has lien over property attached.

Release of Property in Attachment cases in Pakistan

Attachment withdrawn on dismissal of suit; where decree is satisfied or where other security furnished to satisfaction of court.

Sale by Court Order in Pakistan: Court can order sale only after judgment but pending execution of decree. Property attached may be sold only after public notice and proclamation of sale issued. Moveable property may be sold after 15 days of proclamation, and immoveable property after 30 days. Where immoveable property sold in execution of decree, person owning it or having an interest in it, may within 30 days of sale apply to have sale set aside on depositing in court (1) 5% of purchase money for payment to purchaser, and (2) decretal amount specified in proclamation of sale for payment to decree holder. Where immoveable property sold in execution of decree, decree holder or other person entitled to a rateable distribution of assets, or where their interests are affected by such sale, may within 30 days of sale apply to court to set aside sale on grounds of material irregularities or fraud in publicizing or conducting sale.

Claims of Third Persons in Pakistan

Where property attached any person with interest in property may prefer a claim or make objection to attachment which must be investigated by court. Where claim or objection is rejected, person may institute suit to establish such claim. Limitation period is one year from date of attachment order.

EXECUTION of Degree in Pakistan

Rules regarding execution governed by Civil Procedure Code 1908.Decree may be executed by court which passed it or by court to which it is sent for execution. Court which passed decree may send it to another court for execution if judgment debtor: (1) Resides or carries on business within local limits of jurisdiction of other court; (2) has no property within jurisdiction of court passing decree and has property within jurisdiction of other court; (3) has immoveable property within jurisdiction of other court and order is regarding sale of such property; (4) for any other reason recorded by court. All questions arising out of execution determined by court executing decree.

Decree against firm can be executed against: (1) Property of firm; (2) partners sued in their own names; (3) any person who has been individually served with a summons as a partner and has failed to appear; (4) in other cases against any other persons except aforestated with leave of court.

Where judgment debtor dies without satisfying decree, decree holder may apply to court for execution against legal representatives who are only liable to extent of deceased’s property which is in their hands and is not already disposed of. Notice to representatives necessary.

Foreign decrees, including arbitration awards, may be executed in Pakistan if decree is from court of country with which Pakistan has reciprocal arrangements, or from any superior court of U.K.

Kinds of Executions of Orders in Pakistan

Court has wide powers to enforce execution by attachment and sale of moveable and immoveable property including shares, securities, salary, negotiable instruments and debts, arrest and detention of judgment debtor.

Time for Issuance of orders of execution in Pakistan

Execution application may be made immediately after decree passed and warrant of execution may be served on judgment debtor without calling upon him to file objections except in case where decree is to be executed by detention and arrest of judgment debtor in which case notice is necessary. If notice issued more than one year after decree passed judgment debtor has right to file objections. Limitation period for execution 12 years from date of decree; may be extended in cases of fraud or force.

Stay granted at court’s discretion if judgment debtor shows sufficient cause. Appellate court may grant stay where judgment debtor has filed appeal against judgment of trial court.

Lien of Decree Holder in Pakistan

The Decree holder has lien on property attached.

Where immoveable property sold in execution of decree proceeds of sale applied as follows: (1) Defraying expenses of sale; (2) discharging amount due under decree; (3) discharging principal and interest due on subsequent incumbrances, if any; (4) rateably among holders of decrees for payment of money who have, prior to sale of property, applied to court which passed decree ordering sale for execution of decrees and have not yet obtained satisfaction.

Where money payable under a decree is paid out of court or is otherwise adjusted in whole or part decree holder must certify payment or adjustment to court for record. Judgment debtor may apply to court notifying payment and/or adjustment and court after notice to decree holder must record such payment or adjustment if decree holder fails to show cause. Payment or adjustment not certified or adjusted is not recognised.

Both moveable and immoveable property may be sold under court supervision upon decree holder showing sufficient cause. Sale usually effected by public auction.

Judgment debtor may offset sale by offering other security.

Judgment debtor may apply for appointment of receiver to collect sale proceeds when property attached is to be sold. (Capias ad satisfaciendum).A Writ for arrest of judgment debtor may be issued if judgment debt not satisfied.

Law of GARNISHMENT in Pakistan. Any person who has obtained a decree for any sum of money may apply to court that judgment has been obtained but decree is unsatisfied in respect of specified sum and that a third person (garnishee) owes money to judgment debtor. Property Which May Be Reached. All moveable and immoveable property.

Jurisdiction. Garnishee must reside or property to be attached must be within local limits of jurisdiction of court issuing order.

Proceedings to Obtain Court may order garnishee to appear before court to show cause why he should not deposit money in court. Deposit by garnishee is valid discharge to garnishee.


Law of personal insolvency is governed in Karachi by Insolvency Act 1909; Provincial Insolvency Act 1920 applies elsewhere. Under Provincial Insolvency Act a debtor is held to commit an act of insolvency when: (i) he transfers all or substantially all his property to a third person for the benefit of his creditors; or, (ii) he transfers all his property with the object of defeating or delaying his creditors; or, (iii) where it is feared that he is about to abscond from the jurisdiction, or abandons his house or place of business or otherwise secludes himself so that he cannot be approached; or, (iv) where any of his property is sold in execution; or, (v) if he petitions to be adjudged an insolvent; or, (vi) makes an announcement that he has or is about to suspend payment of his debts; or, (vii) if he is imprisoned in execution of any decree against him.

Insolvency is deemed to commence from date of presentation of the petition.

For a creditor to bring a Petition against the debtor, the debt must be Rs. 500 or more and have become due. The act of insolvency complained of must have occurred not more than three months prior to presentation of petition. A debtor may not present a petition to the court unless the debts amount to more than Rs. 500 or he is under arrest, or an order for attachment has been made and is subsisting against his property.

A debtor can be imprisoned in civil prison if he does not give security for his appearance. An interim order for the attachment of his property can be passed. An order for an arrest warrant to issue against him can also be made if it is shown that the debtor is committing various acts of bad faith.

After hearing of the petition for insolvency, the court may either dismiss it, or pass an adjudication order. Such an order brings the whole of the debtor’s property into the receivership of the court and his debts are settled in the following order of priority: (1) State and municipal debts; (2) salary or wages of any clerk or salary in respect of work rendered to the insolvent not more than four months before the petition nor above Rs. 20; (3) secured creditors against their security; (4) expenses of administration; (5) unsecured creditors pro rata.

After an adjudication order the insolvent may apply for court protection against arrest. When a reasonable time has elapsed and the assets have been dealt with the insolvent may apply to court for discharge, but no absolute discharge will be given to him in the following circumstances: (a) The insolvent’s assets are not of a value equal to 50 paisas on the rupee relating to the amount of his unsecured liabilities unless he satisfies the court that these circumstances are not his responsibility; (b) that he has omitted to keep proper account books in the business carried on by him within three years of his insolvency; (c) that he has continued to trade after knowing himself to be insolvent; (d) that he contracted any debt provable under Act without reasonable or probable grounds of being able to repay it; (e) that insolvent has failed to account satisfactorily for any loss on deficiency of assets; (f) that insolvent brought on insolvency by rash and hazardous speculations or by unjustifiable extravagance, or by gambling or by culpable neglect of his business affairs; (g) that insolvent has on any previous occasion been adjudged an insolvent or made composition or arrangement with his creditors; (h) that insolvent within three months prior to presentation of the petition gave undue preference to any of his creditors; (i) that insolvent has concealed or removed his property or any part thereof or has been guilty of any other fraud or fraudulent breach of trust.

An order for discharge does not release insolvent from: (a) Any debt due to the Crown; (b) any debt or liability incurred by means of any fraud or fraudulent breach of trust to which he was party; (c) any debt or liability in respect of which he has obtained forbearance by any fraud; (d) any liability under an order for maintenance of wife and children made under § 488 Code of Criminal Procedure.

The debtor may be liable for any acts of fraud, making of false entries, wilful failure to perform duties imposed upon him, destruction of records, keeping or causing to be kept false books, to a year’s imprisonment and this liability continues notwithstanding his discharge or the approval of any composition or scheme of arrangement.

Appeals can be preferred against any order of the court from a court subordinate to a District Court to the District Court whose order is final, provided that the High Court may call for the case to satisfy itself that the order in appeal was made according to law and may make such orders with respect thereto as it may think fit.A person may also appeal from an original order of the District Court, to the High Court. Appeal must be taken to District Court and to High Court within 30 and 60 days respectively.

Law of LIEN in Pakistan

Lien is a right in one person to retain in his possession such property moveable or immoveable belonging to another until such time as claims of person in possession are satisfied. Lien, unless there is express provision to contrary, is not transferable and confers no right of sale on creditor without court intervention. Lien may be general, i.e., for a general balance owing to the creditor, or particular, i.e., a right over goods until certain demands are satisfied.

Carriers, unpaid sellers, hotel keepers, agents and all persons who are entitled to be paid for services rendered or for expending money for purposes of debtor have a right of lien on property in their possession belonging to debtor. Banker may have a lien over securities deposited with him for money due and in such cases bankers generally retain right to sell without recourse to debtor. Trustee has lien over trust property in respect of expenses lawfully incurred in connection with such property. Company may in its articles of association create lien over its own shares.

Right of lien is lost upon payment of debt, by tender of debt and by taking alternative security for debt.


Arbitration Act 1940 governs arbitration proceedings in Pakistan. Rules follow ordinary law of contract to major extent. “Arbitration Agreement” has been defined in Act as “a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not”. Arbitrator’s Award, in order for it to be valid, must be final and certain, and must contain decision only on matter referred.

Law implies certain conditions in arbitration agreements, which may be excluded by express statements to contrary. These include following conditions: reference to arbitration will be deemed to be sole arbitrator; where even number of arbitrators are appointed by parties, umpire must be appointed by those arbitrators within month of their own appointment; Award by arbitrators will be made within four months of reference whereas umpire must announce his Award within two months of entering on reference; Award shall be final and binding on all parties; and, awarding cost of reference shall be within discretion of arbitrators.

  • 13 of Act defines powers of arbitrators, but makes them subject to any agreement to contrary between parties. These include, inter alia: to administer oath to parties and witnesses; to make Award conditional; and to administer such interrogatories to any party to arbitration as may be necessary. Civil Procedure Code of Pakistan does not apply to these proceedings, but arbitrators are under duty to observe common principles of equity and justice. Authority of arbitrator may be revoked if power is given by arbitration agreement itself, on such grounds as are specified therein, or it may be revoked with leave of court. Court will grant leave where arbitrator has personal interest in matter, or he is indebted to one of parties, or has conducted proceedings with undue and inordinate delay, or has committed some misconduct, or lacks jurisdiction, or there is some other bias in mind of arbitrator which may unfairly prejudice interest of any of parties, § 5 of Act.

Arbitration Award may be modified or corrected by court where it is necessary to do so for removing any ambiguity, confusion or obvious mistake etc. as long as such modification or correction does not change Award materially. Court may not, however, change Award merely because it takes different view as to what is fair and what is not. It cannot, therefore, go into merits of case or try to incorporate its own decision into Award. Further, § 26A of Act, inserted by Arbitration (Amendment) Act 1981, allows parties to be notified of any irrelevant or extraneous considerations or erroneous view of law or material facts and evidence etc. taken by arbitrators, so that they may, if aggrieved by Award, challenge same in court.

Arbitration Award may be set aside by court on any of following grounds: that arbitrator or umpire has committed some misconduct (which includes not following common rules of justice); that Award has been made after issue of order by court superseding arbitration or after arbitration proceedings have become invalid; or that Award has been improperly procured or is otherwise invalid.

New York Convention was ratified through Recognition and Enforcement (Arbitration Agreements and Foreign Arbitral Award Ordinance, 2005). This Ordinance lapsed after four months as per terms of Constitution of Pakistan but has been subsequently re-enacted several times. It is anticipated that Act of Parliament will be enacted to place New York Convention on more permanent statutory footings.

Jurisdiction to arbitrate is often agreed to be conferred on International Court of Arbitration, International Chamber of Commerce and London Court of International Arbitration by parties. Alternative methods of dispute resolution, such as Mediation, Conciliation, Fact Finding, Med-Arb, Early Neutral Evaluation and Multi-door Courthouses are still at early inceptive stages in Pakistan.

MEDIATION in Pakistan

Karachi Centre for Dispute Resolution (KCDR) is successfully resolving commercial disputes which are increasing along with business activity, according to Pakistan former Chief Justice who is on KCDR board.

Established in 2005 with help from the World Bank, International Finance Corporation (IFC), KCDR is now non-governmental organization guided by both active and retired judges and business leaders.

By reducing expenses and delays and freeing assets tied up in court, it is observed that KCDR encourages market based activity as also intended by IFC and serves as example for rest of Pakistan.

ACKNOWLEDGMENT legal requirement in Pakistan

A certificate of an officer attesting an instrument that the person executing it acknowledged it to be his voluntary act is not a legal requirement in Pakistan.

Law on AFFIDAVITS in Pakistan

An affidavit is written statement on oath made before person competent to receive it and for production in Court. Affidavits sworn within Pakistan must embody title of the suit, or other proceeding, and complete identification of deponent as to name, religion, age and residential address as e.g., the following.


I, . . . . . .son of. . . . . .,. . . . . .(state religion) adult , aged, years, residing at. . . .make oath and state:

Affidavit must be on facts within deponent’s knowledge.

Deponent must be identified to commissioner of oaths by an advocate or registered court clerk. An affidavit is sworn before commissioner of oaths or first class magistrate in district court or commissioner for taking affidavits or deputy registrar in High Court.

Stamp laws in Pakistan

Affidavits for immediate use in court and also affidavits in support of applications need not be stamped. Other affidavits must carry Rs. 20/—stamp.

Affidavits sworn abroad must be sworn before notary public and must then be legalized by Pakistan Embassy or Consulate as case may be.


There are at present two sorts of notaries public. Those who are appointed by the faculty in the United Kingdom who are empowered to do all things that it is usual for notaries public to do, such as enter protests from ships’ masters, legalize documents, etc.; and those that are appointed under the Negotiable Instruments Act 1881 whose powers are limited to the powers delegated to them under that Act.A new ordinance, namely, Notaries Ordinance 1961, was promulgated in June 1961 and has been enforced throughout Pakistan except Tribal Areas. This Ordinance, inter alia, appoints notaries public in supersession of first of above-mentioned categories.

RECORDS in Pakistan

Power to make rules for the disposal of such records as are not in their opinion worth preserving lies with High Court over documents appertaining to High Court and to subordinate courts and with Chief Controlling Revenue Officer for the revenue courts. Of documents in the possession or custody of any other public officer, if these documents relate to the provinces then the provincial government or any other officer specifically appointed may deal with the disposal or retention of these. In any other case the central government or an officer especially appointed for this purpose may make such rules as to them may seem fit for the disposal of other documents. Where such rules are formulated, they must, where relating to a provincial government be subject to approval of such government and where relating to the central government be subject to its approval.

Employment records are governed by the Employment (Record of Services) Act 1951. This act applies to all persons concerned as employers or employees in such classes of employment and in such areas as the appropriate government may specify. An employee must keep a service book containing identification of the employee, name and other particulars of his or her employers, the period of employment, occupation rate of wages, leave taken and records of conduct and efficiency, and if the employee is male, a photograph. If such a book is kept prospective employers may ask for it to be produced. Employers may keep copies of such “service books” of their employees.

LABOUR LAWS in Pakistan

Major Central Acts and Ordinances which affect labour management relations in Pakistan are: (1) The Factories Act, 1934; (2) Payment of Wages Act, 1936; (3) Workmen’s Compensation Act, 1923; (4) Minimum Wages Ordinance 1961; (5) Income Tax Ordinance, 1979; (6) Companies Profits (Workers Participation) Act, 1968; and (7) Industrial Relations Ordinance, 2002; (8) The West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968; (9) West Pakistan Shops and Establishments Ordinance, 1969; (10) The West Pakistan Employees Social Security Ordinance, 1965; (11) Workers’ Children (Education) Ordinance, 1972.

Acts and Ordinances relating to mining industry in Pakistan are not included in the above list. All these statutes are subject to frequent amendment.

Law on Industrial Disputes in Pakistan

Industrial Relations Ordinance was first introduced in 1969 and thereafter amended in 1970, 1973 and 1975. In 2002 new Industrial Relations Ordinance was promulgated which repealed Industrial Relations Ordinance of 1969. Repealed 1969 Ordinance has, however, recently been revived. Industrial Relations Act 2008, passed by National Assembly in Nov. 2008, is stated to be interim law and is proposed to be replaced by more comprehensive legislation in 2010. Ordinance applies to all persons employed in any establishment or industry and deals with formation of trade unions, regulations of relations between workmen and employer and avoidance and settlement of differences or disputes arising between them. Ordinance does not apply to employees in Police, Government administration, Government printing press, installations and services exclusively connected with armed forces, non-commercial institutions maintained for mentally unfit, sick or infirm and members of security staff of establishments engaged in production or distribution of petroleum products, seaport or airport. Some substantial changes were introduced by amendments made in 1975 for betterment of workmen some of which have been abolished by new Ordinance which tilts more in favour of employers. National Industrial Relations Commission introduced in 1975 shall now consist of not more than eight members including chairman to be appointed by Federal Government. Main functions of Commission are to promote formation of trade unions of workers within same industry, federations of such trade unions and federations at national level and also to adjudicate and determine industrial dispute to which an industry-wide trade union or federation of trade unions is party and any other industrial dispute which, in opinion of Federal Government, is of national importance and is referred to it by Government. Functions of National Industrial Commission also include registration of industry-wide trade unions, federation of such trade unions and federations at National level, to determine collective bargaining agent amongst said unions and federations, to try offences punishable under Industrial Relations Ordinance 2002, and to deal with cases of unfair labour practices and to take such measures as are necessary to prevent an employer or workman from committing an unfair labour practice. However, power of Commission to grant interim relief in cases related to dismissal or transfer has been made subject to pendency of industrial dispute.

Amending Ordinance of 1975 introduced shop steward system to act as link between labour and management in every establishment where 50 or more workmen are employed. Shop stewards are to be elected by CBA, or if no CBA exists then workmen at secret ballot in shop, section or department. Main function of shop steward is to act as link between workers and employer, assist in improvement of arrangements for physical working conditions and production work in workshop, section or department and also to help workers in settlement of their problems either connected with work or with any individual grievance of workman. Provision in repealed 1969 Ordinance giving power to workers to participate in management of factory to extent of 50% has now been abolished. Instead, now every establishment which employs 50 persons or more shall set up Joint Works Council consisting of not more than ten members in which workers’ participation shall be to extent of 40%. Convener of council shall be from management and employers representatives shall be from amongst Directors or their nominees or senior executives whereas workers’ representatives shall be from Collective Bargaining Agent (“CBA”) office bearers. Council shall deal with matters, namely: (a) Improvement in production, productivity and efficiency; (b) provision of minimum facilities to such workers not covered by laws relating to welfare of workers; (c) promoting settlement of differences through bilateral negotiations; (d) promoting conditions of safety and health for workers; (e) encouraging vocational training and (f) provision of educational facilities for workmen’s children.

Under Industrial Relations Ordinance 2002 workers and employers have been granted rights to establish and join associations of their own choice to draw up their constitutions, to elect their representatives in full freedom to organise their programmes, to establish and join any federations or confederations. Every CBA has to affiliate with any federation at national level registered with National Industrial Relations Commission within two months after its determination as CBA. § 3 of Ordinance is intended to conform to requirements of ILO Conventions Nos. 87 and 98 which Pakistan has ratified.

Ordinance also prohibit unfair labour practice on part of employers and workmen. Even threat to dismiss, discharge, remove from employment or injure workman is unfair labour practice. Intimidation, coercion, etc., of any officer of collective bargaining agent is also unfair labour practice. Workmen or unions are prohibited from canvassing for trade union membership or otherwise during working hours. Intimidation or coercion on employer to sign memorandum of settlement and to interfere in ballot or carry arms within premises of employer without legal authority are also unfair labour practices on part of workmen or their unions. Maximum penalty for employer for contravening provisions may be Rs. 30,000 and for workers Rs. 20,000.

By Ordinance of 2002 tripartite Board of Conciliators can be formed by Federal or Provincial Government to conciliate in industrial dispute involving more than one establishment in province or in industry on national level or in industrial dispute of national importance. Appeals from Labour Court now have to be made to High Court instead of Labour Appellate Tribunal which has been abolished by new Ordinance.

Other important provisions: Limits application of conspiracy laws under Pakistan Penal Code and confers immunity on registered trade unions from certain civil suits; defines collective bargaining agent whose officers may represent workmen in any proceedings under Ordinance; provides for appointment of conciliator, arbitration, establishment of joint work councils to promote measures for securing and preserving good relations between employers and workmen; provides for establishment of Labour Courts for adjudication of industrial disputes and other matters relating thereto; legalizes strikes and lock-outs as permitted under law except in public utility service like electricity, gas, oil, water, hospitals, post, telephone, telegraph, railways and airways etc., provides penalty of Rs. 20,000 fine for breach of settlement, award or decision and similar penalties for other offences under Ordinance.

Factories Act 1934 regulates conditions of labour employed in a “factory” as defined in Act. This has been amended by Factories (Amendment) Act, 1973. One of amendments, makes all offences against Act, Rules and Order made thereunder as cognizable and bailable.This Act ensures that health and safety of labour are not ignored by factory owners. Chapter III of the Act requires employer to keep a minimum standard of cleanliness, ventilation, artificial humidification, lighting etc., and keep the building and machinery used by the factory in proper condition lest harm may be caused to labour. Vaccination and inoculation of each factory worker against such diseases and at such intervals as may be prescribed is made compulsory. Appointment of welfare officers by occupier or manager of every factory where not less than 500 workers are ordinarily employed is made compulsory.

In order to further ensure due observance of the conditions laid down in said Chapter III of Act, it provides for the appointment of inspectors who have been empowered to require the factory owners to fulfil the requirements of Act.

Every district magistrate is the inspector for the district in his jurisdiction. An appeal from the decisions of an inspector lies to the government concerned.

Besides making special provision regarding child and female labour, Act seeks to regulate daily and weekly working hours, weekly holidays, compensatory holidays, intervals of rest, overtime and shift working etc.

Chapter IV deals with working conditions of adults, Chapter V with conditions of work of children and adolescents. Children below 14 are prohibited to be employed.

Separate chapters have been devoted to “holidays with pay”, “small factories”, and “penalties and procedure”.

Shops and Establishments Laws.

West Pakistan Shops & Establishments Ordinance 1969 regulates hours and other conditions of work and employment of persons employed in shops and commercial and industrial establishments. Ordinance has repealed Sind Shops & Establishments Act 1940, North West Frontier Trade Employees Act 1947, Punjab Trade Employees Act 1940, and Weekly Holiday Act 1942 in its application to provinces of Pakistan except tribal areas.

Ordinance primarily regulates daily and weekly hours of work, holidays, wages for overtime and leaves with pay in shops, commercial, industrial and other establishments. Children below 14 are prohibited to be employed.

Provisions for appointment of shops inspectors have been made in Ordinance. Inspectors are empowered to challenge any shop, establishment, etc., found guilty of breach of any mandatory provision of law.

Law on Industrial and Commercial Employment in Pakistan

This is governed by West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance 1968 as amended by West Pakistan Industrial and Commercial Employment (Standing Orders) (Amendment) Act 1973.

Standing Orders lay down minimum terms and conditions of service which must be allowed to “workmen” by every employer of an industrial or commercial establishment as defined in enactments, provided such industrial or commercial establishment employs, or did employ on any day during preceding 12 months, 20 or more workmen.

Minimum terms and conditions of service given in schedule to Ordinance, in form of Standing Orders, cannot be changed except by way of improvement from workmen’s point of view, for which it is made compulsory for employer to enter into a collective agreement with a trade union or a representative body of his workmen.

Standing Orders contained in Schedule are to be displayed to workmen in English and Urdu so that minimum terms of employment should be made known to them.

Non-observance of Standing Orders or any other provision of Ordinance by any “commercial establishment” or “industrial establishment” has been made punishable with fines or imprisonment or both.

Payment of Wages Act 1936 regulates payment of wages. Its applicability has been extended to all employees working in any industrial or commercial establishment regardless of their wages.

Act casts responsibility of payment of wages to workmen upon employer or manager of establishment and regulates wage period and time for payment of wages.

Cuts imposed on wages on account of fines and various kinds of deductions and the circumstances under which these can be imposed have also been laid down in the act.

Special provisions have been made for: (1) deductions for absence from duty; (2) deductions for damage or loss to employer’s property; (3) deductions on account of services rendered by employer; (4) deductions for recovery of advances; and, (5) deductions from wages for payment to cooperative societies and insurance schemes.

A single workman or a group of workmen, if aggrieved on account of non-payment or delay in payment of wages by employer or on account of a deduction made by him contrary to provisions of Act, can make an application within three years of time when deduction was made or payment was delayed or refused, to Commissioner appointed under Act. Appeal lies to District Court from a decision of Commissioner within 30 days of the directions given by Commissioner.

Inspectors appointed under Act have been empowered to check relevant books containing salary accounts to be maintained by employer.

For breach of certain provisions of Act, fines up to Rs. 500 may be imposed as punishment.

The Federal and provincial governments have made their own rules for proper functioning of Act in their respective jurisdictions.

Workmen’s Compensation Act, 1923.

This has been amended by Labour Laws (Amendment) Act 1972 and by Act of 1986 which has introduced some important changes. Schedules I and IV have been substituted and list of injuries and amounts of compensation have been revised and increased to provide substantial benefits to workmen.

There has been further amendment by Labour Laws (Amendment) Ordinance 1994, and now workmen are covered by Act. Schedule II to Act gives definition of “workmen” as being same under Industrial Relations Ordinance, 2002. Act provides for payment of compensation by employer to his workmen injured during course of employment.

Compensation allowed by Act ranges between lump sum amount of Rs. 100 and Rs. 200,000 according to nature of injury and wages drawn by workmen concerned at time of receiving injury. Half-monthly payments at specified rates are payable in cases of temporary disablement for maximum period of five years.

The Act also lays down circumstances when employer will not be liable to compensate an injured workman.

Injuries have been defined under the Act to be mainly of the following kinds: (1) Injuries resulting in death of a workman; (2) permanent total disablement; (3) temporary total disablement; (4) permanent partial disablement; (5) temporary partial disablement.

Schedule I to Act gives list of injuries, a combination of two or more of which may constitute total disablement within meaning of Act. Loss of a limb or member of the body, is to be compensated according to the percentage loss of earning capacity as indicated in Schedule I.

List of diseases is given in Act which are recognized as occupational diseases.

Besides laying down provisions as to method of calculating compensation, Act provides details for payment of compensation to survivors in case of death of a workman resulting from injury received during employment.

Commissioners have been appointed under Chapter III of Act to entertain claims for compensation against employer from injured workmen. Commissioners’ powers, procedure to be observed before them and provisions for appeals against decisions made by them are also laid down in this Chapter.

Under Chapter II of Act an injured workman is required to serve notice of his claim for compensation in the prescribed manner on employer and claim before Commissioner must be made within one year of time of receiving injury or date of death as case may be.

Special provisions have been made for keeping of an up-to-date record of fatal accidents by Commissioners and duty has been cast upon employers to furnish details regarding same to Commissioners. Employer is required to send periodic returns of compensation paid to injured workmen, to appropriate authority appointed by the government concerned.

Exhaustive rules have been framed by the central government under § 32 of Act for smooth and efficient working of Act. Provincial governments observe separate rules.Separate rules have been made by the central government for workmen’s compensation returns and transfers of money due as compensation under Act.

Income Tax Ordinance 2001.

Part I of Sixth Schedule relates to certain classes of provident funds which employer may establish for benefit of his employees.

Provident funds recognized by Commissioner of Income Tax have following advantages:
(1) To employer: (a) Employer obtains income tax relief on its contributions to fund; (b) employer is not liable

for any fixed rate of interest (return to the member is governed by the actual return obtained on funds by trustees).

(2) To member employee: (a) Fund is in the hands of trustees; (b) members obtain income tax relief on their contributions to the fund; (c) when a member withdraws from fund he obtains entire balance free of tax; (d) circumstances in which a member can borrow against his contributions to the fund are clearly set out.

Minimum Wages Ordinance 1961.

Minimum Wages Ordinance which came into force on Sept. 29, 1961, provides for regulation of minimum rates of wages for workers employed in “industrial undertakings”, as defined in Ordinance.

Ordinance provides for establishment of Minimum Wages Council by central government for advising central government and provincial governments on all matters relating to carrying out of provisions of Ordinance and other matters relating thereto. Ordinance also provides for establishment of Minimum Wages Board of provincial governments. According to scheme of Ordinance, Minimum Wages Board will, upon a reference being made by provincial government, recommend to such government after such enquiry as Board thinks fit, minimum rates of wages for workers employed in industrial undertakings in province. Upon receipt of recommendation of Board provincial government may declare minimum rate of wages for such workers and no employer may pay any worker wages at rate lower than rate declared under Ordinance. Any employer who contravenes provisions of Ordinance is punishable with imprisonment for term which may extend to six months or with fine which may extend to 500 rupees or with both. Board and Council may, for purpose of an enquiry under Ordinance, direct any employer to furnish such records, documents, information or do such other acts as Board, Council or Chairman may require. Rate of minimum monthly wage has been enhanced to Rs. 6,000/—.

Fringe benefits in Pakistan are not the subjects of legislation. These benefits are provided by collective bargaining agreement between unions and management as well as by judicial precedents which are based on practice prevailing in the region-cum-industry.

Fringe benefits which are generally provided to workmen in Pakistan include house, conveyance, medical, officiating and compensatory allowances, gratuity, pension, retirement scheme and provident fund.

Quantum of the benefit varies from industry to industry.

Special legislation in form of maternity benefits has been enacted for welfare of women employed in factories.

Bonuses in Pakistan in actual practice are no longer regarded as ex gratia payments. The industrial courts in the country allow claims for bonuses if there is an available surplus, and the workers have contributed substantially towards profits. For commercial and industrial concerns employing more than 20 “workmen” (as defined) compulsory bonus, related to profits, but compulsory maximum of one months salary, has to be paid, if profits are sufficient.

West Pakistan Employees Social Security Ordinance 1965, Ordinance No. 10 of 1965.

This extends to whole of Pakistan except tribal areas. This has been amended by West Pakistan Employees Social Security (Amendment) Act 1973. Contingencies covered by social security benefits are sickness benefits, maternity benefits, death grant, medical care during sickness and maternity, injury benefits, medical care in case of employment injury. All employees employed in or in connection with affairs of industry or establishment whose wages are up to Rs. 5,000 per mensem are covered irrespective of their designation, status or nature of work.

All above benefits are available in case of any injury or accident or occupational disease arising out of and in the course of employment. Subsection 3 of § 1 provides that it shall come into force at once but shall apply only to such areas, classes of persons, industries or establishments, from such date or dates and with regard to provisions of such benefits as Government may by notification specify in this behalf. Government has from time to time notified areas, classes of persons, industries and establishments etc. Ordinance deals with benefits in respect of sickness, maternity, death grant, medical care during sickness and maternity injury benefits, disablement pensions, disablement gratuity etc. This Ordinance has repealed Employee’s Social Security Ordinance, 1962.

Control of Employment Ordinance 1965.

Ordinance is intended to control and check termination of service of essential personnel in industrial undertaking. Under Ordinance, three bodies have been constituted, namely: Manpower Board, Manpower Council and Manpower Tribunal. Manpower Board is most important.

Manpower Board is vested with wide powers. Section 5 defines functions and powers of Manpower Board. Board can control or regulate employment in any industrial undertaking, prohibit persons from accepting employment, lay down terms and conditions of service of persons employed or to be employed, etc.

Notified industries have to report to Board all situations which are vacant or likely to be vacant and employ such essential personnel and on such terms as may be directed by Board. No employer of notified industrial undertaking can fill any vacancy in which essential personnel are employed except with previous permission of Board.

Rule 10 of these Rules framed under this Ordinance is of general importance. Under this rule, no owner or manager of industrial undertaking is permitted to discharge or dismiss any person without previous permission in writing of Board.

Employers who have to comply with this Rule appear to be those who have received prior notice from Board requiring them to put up, before specified date, notices making known to employees provisions of this Rule and intimating place to which applications to Board may be addressed.

It is, however, not necessary for employer to obtain prior permission to discharge or dismiss his employee in cases of probationary period, employment for specific period, completion of piece of work for which employee was engaged, medical grounds or where employee has been guilty of gross insubordination, habitual absence from work or any other serious misconduct, etc. In all such cases employer has to give notice in writing to Board with reasons of discharge or dismissal within 24 hours of such discharge or dismissal.

It may further be mentioned that in cases where employer has to apply to Board for permission to discharge or dismiss, Board is required to communicate its order within 15 days of date of despatch of employer’s application, failing which, Board’s permission is deemed to have been given.

Phrases “industrial undertaking,” “personnel” and “persons” have not been used with sufficient clarity in Ordinance and its Rules. These phrases in all probability refer only to “Notified Industrial Undertaking” and “Essential Personnel” respectively.

Breach of any of provisions of Ordinance or of Rules has been made a penal offence.

Companies Profits (Workers Participation) Act, 1968 came into force on 4th July, 1968 and extends to whole of Pakistan. This has been amended by Companies Profits (Workers Participation) Ordinance 1972 and 2002. Substantial change made by Act is payment by employer of 5% of profits of company every year to fund created for workers, including contract workers (even hired through contractors).

Under § 3 of this Act every company to which scheme is applicable shall establish a workers participation fund in accordance with scheme given in schedule and company shall pay 5% of its annual profits to this fund. This scheme applies to all industrial undertakings where number of workers is 50 or more or if its paid-up capital is two million rupees or more or if value of its fixed assets is four million rupees or more.

Workers’ Children (Education) Ordinance 1972 as amended by Workers’ Children (Education) Act.

An Employer is obliged under Act in respect of a person employed in his establishment who is not earning more than Rs. 3,000 per month to pay to Provincial Government an education cess at rate of Rs. 100 per worker per annum in respect of establishments in which number of workers employed at any time during year is 20 or more. Provincial Government shall provide education free of cost up to matriculation examination to one child of every worker employed in an establishment referred to in § 3.

Employees Cost of Living (Relief) Act, 1973.

This Act was promulgated for payment of Cost of Living Allowance to employees periodically, though not at regular intervals. Under this Act sum of Rs. 300/- was payable to employees whose salary did not exceed Rs. 4065/- p.m. Now this wage limit has been deleted so that all those who are employees under Act are entitled to Rs. 300/- p.m. as Cost of Living Allowance.

Employees Old-Age Benefits Act 1976.

Applies to every industry or establishment wherein ten or more persons are employed directly or through any other person whether on behalf of himself or any other person, or were so employed on any day during preceding 12 months. Though under Labour Law (Amendment) Ordinance 2001 industry or establishment with less than ten workers may also apply for voluntary registration.

  • 9(1). Contributions payable every month by employer to Employees’ Old-Age Benefits Institution in respect of every person in his insurable employment, at rate of 5% of his wages.
  • Old Age Pension: Insured person entitled to old age allowance at rates specified in schedule provided that: (a) He is over 60 years of age or in case of woman, 55 years, (b) contributions in respect of him were paid.
  • Invalidity Pension: Insured who sustained invalidism (i.e., condition other than that caused by employment injury as result of which insured person is permanently incapacitated to such extent as to be unable to earn from his usual or other occupation more than 1/3 of normal rates of earning in his usual occupation) shall be entitled to invalidism allowance at rate specified in schedule subject to conditions in § 23.
  • Right to invalidism and old age allowance is extinguished if claim is not made within 12 months from date it becomes payable, but Institution may condone delay if it was caused for reasons beyond control of insured person or survivor. Through amendments made by 2002 Ordinance employer may opt to register under self-assessment scheme instead of normal pension scheme whereby he shall be liable to pay fixed amount of Rs. 150 in respect of every person in his insurable employment irrespective of his wages. Effective July 1, 2001, employees (insured persons) have been made liable to pay through employer Rs. 20 per month as contribution to Institution fund.


In Dec. 1997, Pakistan Environmental Protection Act, 1997 (Act) was passed so as to repeal Pakistan Environmental Protection Ordinance, 1983. Act extended existing coverage and provided systematic judicial mechanism taking cognizance of offences relating to environments. Pollution Charge for Industry (Calculation and Collection) Rules 2001 were published on Oct. 5, 2001 stipulating levy of “pollution charge” payable by any industrial unit breaching environmental laws. Charge shall be calculated by multiplying pollution level, as determined by specially constituted inspection team, with actual production during period in which charges are to be paid, and with applicable rate per pollution unit for year in accordance with rates and escalation table shown in Schedule III.

Under new Act, like previous Ordinance, offices of Pakistan Environmental Protection Council were retained to administer and implement provisions of this Act. Offices are headed by Prime Minister or other person nominated by Prime Minister and consist of federal and provincial ministers in charge of environment and Pakistan Environmental Protection Agency (PEPA) headed by Director General both at Federal and Provincial levels.

Other important feature of Act was establishment of Environmental Tribunals to handle all cases relating to contraventions under Act. Tribunal also possesses appellate powers. However appeal against order of Tribunal shall lie to High Court. Provincial Sustainable Development Funds is also established to provide financial assistance to projects designed for protection and improvement of environment.

Land Improvement Loans Act 1883 provides for loans for improvement of land such as storage, supply or distribution of water, drainage, reclamation from rivers or other waters etc.

In addition there are various other federal and provincial statutes which regulate water and air quality, noise, toxic and hazardous substances, solid wastes and effluents, marine and fisheries, forest conservation, parks, wildlife and mineral development.

DEATH: Presumption of, in Pakistan

Under Art. 124 of Qanun-e-Shahadat Order, 1984 where missing man is dead or alive, and it is proved that he has not been heard of for seven years by those who would naturally have heard of him if he had been alive, burden of proving that he is alive is shifted to person who affirms it.

In case of commorientes or persons dying in a common disaster or calamity, the old English rule governs which recognizes no presumption either of survivorship or of contemporaneous death, and treats matter as one of fact to be decided on the evidence. Therefore, party on whom onus lies of proving survivorship of one individual after another will fail if he has no evidence beyond the presumption that from age or sex that individual must have struggled longer against death than his companion.

Personal Injury law in Pakistan

Where death of a person is caused by a wrongful act, neglect or default even amounting in law to a crime, and act, neglect or default is such as would, (if death had not ensued) have entitled injured party to maintain an action and recover damages in respect thereof, under Fatal Accidents Act 1855 such an action or suit may be brought by and in name of a successor, administrator or representative of the deceased person for benefit of wife, husband, parents and children, including grandparents, grandchildren and stepchildren.

In every such action court may award such damages as it thinks fit proportionately to loss suffered by the respective parties for whom and for whose benefit such action is brought, resulting from said death. Provided that not more than one action or suit is brought for and in respect of same subject matter, a claim for recovery of any pecuniary loss occasioned to deceased’s estate by such wrongful act, neglect or default may be inserted in the action or suit.

Under Art. 21 of Limitation Act 1908 such action or suit if not brought within one year from date of death is barred.


This is governed either by the personal religious law of the deceased or else by the Succession Act XXXIX of 1925. Hindus, Muhammadans, Buddhists, Sikhs and Jains are excluded under this Act and Parsis have a special chapter relating to them.

Where intestate has left a widow if he has also left lineal descendants, one-third of his property belongs to his widow and two-thirds to descendants, distribution amongst them inter se following certain prescribed rules.

If intestate left a widow and no lineal descendants but has left persons who are kindred to him and if his estate exceeds Rs. 5,000 the widow takes Rs. 5,000 outright. Of the residue, further one-half of this will go to his widow and one-half to the kindred again following certain prescribed rules for distribution amongst them. If the estate does not exceed Rs. 5,000 widow takes all.

If there are no lineal descendants or kindred, the widow inherits all. If intestate has left no widow, the property goes to lineal descendants or to kindred and if there is none, to state.

Rules for distribution where there are lineal descendants are that where there are surviving only children or a child or grandchildren or grandchild the property passes to them equally or him entirely. Where intestate leaves lineal descendents not all in same degree of kindred to him and those through whom the more remote are descended are dead the property is equally divided into shares corresponding to the number of lineal descendants who stood in the nearest degree of kinship to the intestate at his decease or who having been of like degree of kindred to him, died before him, leaving lineal descendants who survived him. One such share is allowed to each of the lineal descendants who stood in the nearest degree of kinship to the intestate at his decease, and one of such shares allotted in respect of each such deceased lineal descendant belongs to his surviving child or children or more remote lineal descendant as the case may be.

If there are no lineal descendants father of the deceased will inherit the property. If there is no father but mother and also brothers or sisters of the deceased and no child of any deceased brother or sister, the mother and each living brother or sister succeeds to the property in equal shares. Where there are children of any deceased brother or sister these children inherit per stirpes the share of their deceased parent. Where there are only the mother and a nephew or niece these take in equal shares or where there are more than one the nephews and the nieces take in equal shares the shares their respective parent would have taken if living at the intestate’s death.

Where mother is the sole survivor she inherits the whole property.

Where intestate has left no lineal descendants nor any parents but brothers or sisters, estate will be distributed between them and the children of any deceased brother or sister will take per stirpes.

Where intestate has left neither lineal descendant nor parent, nor brother or sister, his property is divided equally between those of his relatives who are in the nearest degree of kindred to him.

Special rules exist for Parsi intestates as above stated.

Rules of intestate succession according to personal laws are very detailed. Not more than third of his property can be bequeathed by Muslim. Rules of succession further vary in Sunni and Shiah Schools of law, which are two main Schools of Muhammadan law.


No right as an Executor can be established in any court of justice unless a court of competent jurisdiction in the provinces or capital of the Federation has granted probate of the will under which the right is claimed or has granted letters of administration with the will or with a copy of an authenticated copy of the will annexed. These rules apply only to wills made by Hindus, Buddhists, Sikhs or Jains and they are of classes specified in § 57, clauses (a) & (b) of Succession Act 1925, and not at all to the wills of Muslims. (See topic 12.05 Wills.) Where deceased was intestate and was Hindu, Muslim, Buddhist, Sikh or Jain or exempted person letters of administration may be granted to any person who, according to rules of distribution of estate applicable in case of such deceased, would be entitled to whole or part of such deceased’s estate, in discretion of court as to which of these persons, if there be more than one, they will grant these letters. Failing such persons administration may be granted to creditor of deceased. Where deceased was not one of categories above-mentioned following are entitled to letters of administration in order of their entitlement: (1) Widow unless court sees fit reason to exclude her; (2) widow along with others entitled in absence of widow, in discretion of court; (3) if there is no widow, or she is excluded, than to those persons who would be beneficially entitled to estate according to rules of distribution of intestate’s estate but where mother is one of these persons she alone is entitled to administration; (4) widower has rights of widow; (5) those who stand in equal degree of kindred to deceased are equally entitled to administration.

Law on Probate in Pakistan, probate may be granted to an executor appointed by the will and such appointment may be expressed or implied.

Law of Capacity in Pakistan

Probate or letters of administration cannot be granted to persons of unsound mind or minors nor to any association of individuals unless it is a company which satisfies the conditions made by the government. Grant of probate can be made to several executors simultaneously or at different times.

Special Kinds of Administration in Pakistan

Administration with a copy annexed of authenticated copy of will proved abroad may be granted. In event of failure to accept or renouncing an executorship within the time limited for acceptance or refusal thereof, will may be proved and letters of administration with a copy of the will annexed may be granted to the person who would be entitled to administration in case of intestacy.

Universal legatees may be appointed where: (a) There is a will but no executor has been appointed; or (b) appointed executor refuses to act or is incapable of acting; or (c) executor dies after having proved will but before administrating estate of the deceased.

Rights of executorship and that of universal legatee may pass by succession.

Grant of letters of administration with the will annexed will not be made to any legatee other than an universal or residuary legatee before citation has been issued and published calling on next-of-kin to accept or refuse letters of administration. Where a person appointed executor has not renounced the executorship, provided that when one or more of several executors have proved a will, the court may, on death of the survivor of those who have proved, grant letters of administration without citing those who have not proved. When executor is absent, under S. 241, from the provinces in which application is made and there is no executor within the province willing to act, letters of administration, with the will annexed, may be granted to the attorney or agent of the executor limited until he obtains probate or letters of administration granted to himself.

In case of the minority of a sole executor or sole residuary legatee, letters of administration may be granted to minor’s legal guardian for the period of minority. Similarly where a sole executor or a sole universal or residuary legatee or a person who would be solely entitled to the estate of the intestate is a minor or a lunatic letters of administration may be granted to the person to whom in the case such minor’s or lunatic’s estate has been committed by competent authority or if there be no such person to such other person as the court may deem fit.

Grants may be limited for purpose specified in the will or granted with an exception or for a remainder of the deceased’s estate.

Grants may be altered, rectified or revoked by courts of competent jurisdiction.

Law of TRUSTS in Pakistan

Law relating to trusts (apart from waqf which is governed by Muslim Law, the relations between members of an undivided family which are governed by customary or personal law, and public or private religious or charitable endowments) is contained in Trusts Act 1882.

A trust under the Act may be created for any lawful purpose by a person competent to contract (“author of the trust”) for the benefit of a person capable of holding property (“beneficiary”) in respect of property transferable to the beneficiary which is not merely a beneficial interest under a subsisting trust. A trustee must also be a person capable of holding property and, if the trust involves the exercise of discretion, a person competent to contract. A trustee may accept or disclaim a trust.

Creation of Trusts in Pakistan

A trust of immoveable property must be declared by an instrument in writing signed by author of the trust or the trustee and, unless the instrument is a will, registered. No trust of moveable property is valid unless declared as aforesaid or unless ownership of the property is transferred to the trustee. In either case author of the trust must indicate with reasonable clarity: (a) an intention to create a trust, (b) purpose of the trust, (c) the beneficiary, and (d) the trust-property, and (unless the trust is declared by will or author of the trust is himself to be the trustee) transfer the trust-property to the trustee.

Duties and Liabilities of Trustees in Pakistan

A trustee is bound to fulfil the purpose of the trust and, except as modified by consent of the beneficiaries, obey the directions of the author of the trust given at time of its creation; to acquaint himself with, and (where necessary) secure the transfer to himself of, the trust-property; to take steps for its preservation and deal with it as carefully as man of common prudence; to convert perishable trust-property into permanent and profitable property and to prevent waste; to keep accounts of the trust-property, and to observe impartiality as between several beneficiaries.

Rights and Powers of Trustees in Pakistan

A trustee is entitled to possession of the instrument of trust and title deeds relating to the trust-property; to reimbursement of expenses and to recoup overpayments made to a beneficiary; to apply to the court for its advice or direction as to management of the trust-property; if empowered to sell the trust-property, to sell the same either together or in lots, by public auction or by private contract, and subject to such special conditions as he thinks fit; to vary investments; to apply property held in trust for a minor for the minor’s maintenance, education and advancement; to give receipts for money and moveable property; to compound debts relating to the trust; and generally to do all acts for the realization, protection or benefit of the trust-property and for the protection and benefit of a beneficiary not competent to contract.

Disabilities of Trustees in Pakistan

A trustee having accepted the trust cannot renounce it, unless so empowered by the instrument of trust, except with the court’s permission or the consent of the beneficiary if competent to contract. The act contains restrictions on a trustee’s right to delegate his office and prohibits a trustee from charging for his services unless so authorized in the instrument of trust, from using the trust-property for his own profit and from buying trust property.

Vacating Office of Trustee in Pakistan

Office of trustee can be vacated only by the trustee’s death or his discharge by the extinction of the trust, completion of his duties, by any means prescribed in the instrument of trust, by the appointment of a new trustee under the act, by consent of the beneficiaries if competent to contract, or by the court.

Appointment of New Trustees in Pakistan

New trustee may be appointed by the person nominated in the instrument of trust or, if none, by author of the trust or the surviving or continuing trustees or the legal representative of the last surviving or continuing trustee or (with consent of the court) the retiring trustees or the last retiring trustee. Such appointment must be in writing under the hand of the person making it.

Extinction of Trusts in Pakistan

A trust is extinguished when its purpose is fulfilled or becomes unlawful, when fulfilment becomes impossible or, being revocable, it is revoked. Except in case of a trust created by will, a trust can be revoked only when all the beneficiaries are competent to contract, with their consent; in exercise of an express power reserved to author of the trust; or, when the trust is for payment of debts of author of trust and has not been communicated to his creditors, at pleasure of author of the trust.

Law on Investment of Trust money in Pakistan

Section 20 of Act lists the types of securities in which trust money must be invested (briefly, government stocks and first mortgages of immoveable property) unless the instrument of trust authorizes investment in other securities.

By virtue of Finance Act, 1998 new clause (g) is proposed to be added to § 20 of Trusts Act, 1882, whereby investment of trust money would henceforth be permitted in units issued by schemes established under Asset Management Companies Rules, 1995.

WILLS in Pakistan:

Making of a will is governed by the Succession Act 1925 and is based on the law in England. This does not, however, apply to Muslims and the law applicable to them is stated infra under subhead Muslims.

Capacity in Pakistan

No one who is not a major or of sound mind can dispose of his or her property by will. Women, whether married or single may dispose of any property which they could have alienated or transferred during their lifetime. Physical handicaps do not bar a person from becoming a testator provided such handicaps do not prevent him from understanding the import of his actions. Insane persons may make a will during a lucid period. No person can make a valid will when he is in such a state that it may be presumed that he was incapable of knowing what he was doing. Aliens are not barred except as above by minority or insanity, from making wills. Domicile is the deciding factor under this law for the validity of a will.

Application of Wills on Muslims in Pakistan

The majority of the population being Muslim does not come within the purview of the above act. Such persons are governed by their personal law. Muslims are divided into two main communities, Sunnis and Shiahs, and the large majority of the Muslims in Pakistan are Sunnis of the Hanafi School. The remarks hereinafter made are therefore applicable only to them. The Shiahs are in a minority and are in themselves split up into several smaller sects, of which the Ismailis, with the Aga Khan as their religious head, are one. Every Muslim can dispose of his property by will if he is a major and not insane. The will can be either in writing or verbal. Not more than one-third of the estate can be disposed of by will in any case and no bequests may be made to persons who are heirs under the laws of intestate succession except with consent of all other heirs. Nor can more than one-third of the property be bequeathed without a similar consent. A Muslim will does not have to be proved and the taking out of a succession certificate is sufficient.

Limitation on Charitable and Religious Gifts

No Person with any near relation can validly dispose of any property to religious or charitable uses except where the will was executed 12 months prior to his death and deposited within six months of execution in office of Sub-Registrar of Assurances.

Ordinarily a Will must be in writing and signed by testator or some person on his behalf and in his presence. The signature must indicate that contents of the will were being approved. Signature must further be attested and the attesting witnesses must have seen the testator, or his attorney, sign in their presence or received an acknowledgment by testator of the signing of the will. Witnesses must each sign in presence of testator but need not sign in each other’s presence.

Revocation of a Will in Pakistan

A will may be revoked at any time during the testator’s lifetime or amended by the addition of codicils. Marriage will usually revoke a will. Deliberate destruction of will with intent of revocation also serves to revoke will.

Privileged Wills in Pakistan

Any soldier, sailor or airman, if he is over 18 and employed in expedition, or at sea, can make will and such will is privileged one. It can be either oral or in writing provided, if oral, it is declared before two witnesses. One month after testator of privileged will ceases to be in service, will becomes void. Written wills do not require signature or attestation unless written in some one other than testator’s hand in which case they require signature. Privileged will may be revoked by subsequent unprivileged will if that will is properly executed and clearly revokes previous will.

Testamentary Gifts to Subscribing Witnesses in Pakistan

No witness who is a beneficiary may take, but the will remains valid.

Foreign wills in Pakistan are governed by the law of domicile of testator except insofar as they relate to immoveable property in Pakistan. Foreign probate of such a will is proof of its due execution as far as the courts here are concerned, provided a properly authenticated copy of the will and probate are produced, notarial certification being sufficient. In other cases the court must satisfy itself of due execution of the foreign will. Probate cannot be granted of a foreign will executed within Pakistan relating only to property outside Pakistan.

Grant of foreign probate though evidence of due execution of the will is not sufficient for the grant of letters of administration here and application must be made to the courts. Law of testators domicile in this respect is not binding.

DIVORCE Law in Pakistan

Law relating to dissolution of marriage is governed partly by personal law and partly by statute law which apply to different religious communities. If one of parties is Christian question of divorce would be governed by Divorce Act 1869, as amended by The Divorce (Amendment) Act 1975. Under Divorce Act 1869 both parties must be domiciled in Pakistan at time petition is presented and petitioner must be resident here. Jurisdiction to entertain petitions for divorce lies with High Court and also in District Court and decrees for dissolution under Act will be given as far as possible in conformity with principles and rules on which court for divorce and matrimonial causes in England acts. By powers given under Family Courts (Amendment) Act 2002, family courts have jurisdiction to try offences where one of spouses is victim of offence by another notwithstanding provisions of Code of Criminal Procedure.

Grounds for Divorce in Pakistan

Christian husband can ask for dissolution of marriage only on ground of wife’s adultery, wife may seek dissolution on any of the following grounds: (a) Husband has changed his Christian religion; (b) he has gone through a form of marriage with another woman; (c) he has been guilty of incestuous adultery; (d) he has been guilty of marriage with another woman and committed adultery; (e) he has been guilty of rape, sodomy or bestiality; (f) he has been guilty of adultery with such cruelty as would have entitled his wife to divorce mensa et thoro; (g) he has been guilty of adultery coupled with desertion for two years.

Collusion or petitioner’s own adultery will vitiate a petition but where such petition is dismissed on these grounds by District Court a similar petition may be presented to High Court. Adultery will be deemed to have been condoned where conjugal habitation has been resumed or continued. Relief can be granted to respondent on his or her application where respondent opposes petition and court will not be bound to pronounce any decree of dissolution where it finds that petitioner has been guilty of adultery, or unreasonable delay in presenting petition or cruelty to, or desertion or separation from, respondent. Every decree of divorce granted by District Court will have to be confirmed by High Court and such confirmation decreed by two or more Judges. The court may also hear additional evidence. Every decree for dissolution of marriage made by High Court not being a confirmation as above will be a decree nisi not to be made absolute less than six months from pronouncement thereof.

Where the parties are Muslim the contract of marriage under the Mohammedan Law may be dissolved in any one of following ways: (1) By husband at his will (2) by mutual consent of husband and wife, without intervention of a court; (3) by a judicial decree at suit of husband or wife; (4) by wife through delegated right of divorce.

Formerly any Mohammedan male of sound mind, who obtained puberty, could divorce his wife whenever he desired without assigning any cause by the pronouncement of talaq effected either orally or in writing.

Muslim Family Laws Ordinance 1961 has made some changes. By § 7 subsection (1) of this Act, any man who wishes to divorce his wife must, as soon as may be after the pronouncement of talaq in any form whatsoever, give the Chairman notice in writing of his having done so, and must supply a copy thereof to the wife, a talaq unless revoked earlier, expressly or otherwise is not effective until expiration of 90 days from day on which notice under subsection (1) is delivered to the Chairman. Within 20 days of receipt of notice under subsection (1), Chairman must constitute an Arbitration Council for purpose of bringing about a reconciliation between parties, and Arbitration Council takes all steps necessary to bring about such reconciliation.

Woman married under Muslim Law is entitled to obtain decree for dissolution of marriage under Dissolution of Muslim Marriage Act 1939 on ground simply that she does not want to live with husband anymore.

By Family Courts (Amendment) Act, 2002, period for disposal of suit for dissolution of marriage was fixed as four months and appeal against such order shall also be decided within four months. Under recent amendment, plaint for dissolution for marriage may contain all claims relating to dowry, maintenance, dower, personal property and belongings of wife, custody of children and visitation rights.

Renunciation by a married Muslim woman of Islam or her apostacy does not by itself operate to dissolve her marriage nor are her rights under Act affected.

Divorce by mutual consent is also possible between two Muslims.
See also topic 13.04 Marriage, subhead Nullity.
Parsis are governed by Parsi Marriage and Divorce Act 1936 which lists several varied grounds.

By Amendment Act, 1975 (Act IV of 1976) jurisdiction has now been conferred solely on Court of Civil Judge, within local limits of whose jurisdiction husband and wife reside or last resided.

The ‘HUSBAND AND WIFE’ rule in Pakistani Law:

Husband and wife are reckoned as separate persons and may freely contract either between themselves or individually as if they were unmarried. Suits in tort are maintainable between spouses.

  • 20 of the Succession Act 1925 further lays down that marriage neither entails accession to nor loss of property by married women. This section does not include in its operation Hindus, Muslims, Buddhists, Sikhs or Jains. Muslim women, however, by their personal law are equally protected.

Married Women’s Property Act 1874 also excludes from its operation Hindus, Muslims, Sikhs, Buddhists and Jains, except when included specifically. Under it the wages, earnings or any separate property acquired by wife are protected and remain in her entire ownership.

A married woman can sue in her own name to recover any wages or property belonging to her, as if she were unmarried and her husband need not be joined in the suit as plaintiff. Nor is he necessarily liable to be joined as defendant in any suit against her.

A husband is not liable for his wife’s pre-nuptial debts except where he undertakes to make payment of them. Nor is he liable for any debts she may contract after marriage except where these debts are contracted through his wife’s agency, such as the supplying of necessaries to his house.

A husband is responsible for maintenance of his wife and children and a court order may be obtained to force him to make an adequate allowance to his wife. Default in this respect renders him liable to a fine and also to simple imprisonment for a month or to both. No maintenance arrears can be claimed for a period over a year from the institution of the suit.

A wife may take out insurance for her husband’s benefit. Insurance for her benefit will be deemed to be a trust in her favour and this section has been made applicable equally to Hindus, Muslims, Sikhs and Jains.

A husband is not liable for his wife’s breach of trust or where she is executrix for devastation, unless he has meddled with the Estate she is administrating.

Law relating to INFANTS in Pakistan

By the Majority Act 1875 the age of minority ceases for both sexes at 18 unless the minor has been made a ward of the court when it continues to age 21. Majority Act does not, however, effect minor’s rights, under his personal law, during minority, of marriage, dower, divorce, and adoption.

Under Child Marriage Restraint Act 1929, however, minimum ages for marriage are for male 18 years and were for female 14 years. Family Laws Ordinance 1961 has now raised limit to 16 for females. Marriages contracted under these ages render parents or guardians of the minor, the major contracting party (if either of the parties is major, i.e., over 18) and the solemnizers of the marriage to penalties but marriage is not void.

Under Christian Marriage Act 1872 a minor is defined as a person who has not attained his or her 21st birthday.

For purpose of guardianship under Divorce Act 1869, children of Pakistani descent remain minors until their 16th and 13th birthdays respectively for males and females but for children of other descent minority continues till their 18th birthdays.

Bringing or defending of suits by a minor is governed by Order XXXII of Civil Procedure Code. Every suit by a minor must be instituted in his name by a person called “next friend” of the minor, and a suit instituted directly by the minor may be struck off the file.

Where defendant is a minor, the court on being satisfied of the fact of his minority must appoint a proper person to be guardian ad litem for the suit for such minor. No person can be appointed guardian for a minor who has an interest adverse to that of the minor. Guardians ad litem must also be appointed for minors in petitions for letters of administration, and in any other matter in which the minor is directly or indirectly involved.

Capacity Contracts in Pakistan

Minors cannot enter into valid contracts except in relation to marriage, divorce or dower.

MARRIAGE Law in Pakistan

Marriage, like divorce, is governed by different statutes and by personal customs for different communities. Under the Child Marriage Restraint Act minimum ages for male and female were respectively 18 and 14, but by Family Laws Ordinance 1961 minimum age for a female has now been raised to 16 years. No medical examination is required before marriage.

By Marriages (Prohibition of Wasteful Expenses) Act, 1997, no person celebrating his marriage or marriage of any other shall decorate any house or building with lights and illumination and serve meals or other edibles to persons participating in marriage except hot and cold soft drinks. Whoever contravenes provision shall be punishable with fine not less than Rs. 100,000 and not more than 300,000.

Christian marriages are governed by the Christian Marriage Act 1872. It applies where either one or both parties are Christians. Such marriages can be solemnized by any person who has received Episcopal ordination and according to the rites of that church, by a clergyman of the Church of Scotland, and by any minister of religion, marriage registrar or other licensed person. Marriage must, unless a special license is obtained, be celebrated between the hours of 6 a.m. and 7 p.m., and should normally be at a church unless special license is obtained or there is no church within five miles of the parties’ residences. Notice must be given to the minister who is to solemnize the wedding, stating full names, status, profession, residential address and length of residence, if under a month, of the parties, and intended place of solemnization. Where one of parties is a minor consent in writing is also required of such person’s parent or guardian and a copy of the notice and consent must also issue to Marriage Registrar unless the parents or guardians are not resident in Pakistan in which case no consent is required. This notice must be published both by the minister and by Marriage Registrar where it is sent to him and on the request of either party a certificate of notice given and a declaration made can be obtained from Registrar or minister, where no lawful impediment exists and the giving of such a certificate is not forbidden. Any person whose consent is necessary can forbid the marriage but the minister must examine the notice forbidding the marriage and satisfy himself that it is authorized. Where the marriage is to be solemnized by Marriage Registrar and consent is withheld, the parties may appeal on petition to District Judge. Marriages solemnized by Marriage Registrar are also governed by virtually similar rules.

Marriages must be solemnized within two months of issuance of a certificate of notice, otherwise, unless a certificate is reissued, the marriage will be void.

The marriage must be witnessed by two witnesses. Marriages must be registered and a register kept according to the rules under part IV of Act.

Special Marriage Act 1872 governs the marriages of persons who are not professing Buddhists, Christians, Hindus, Muslims, Parsis, Sikhs or Jains and also those persons who profess the Hindu, Buddhist, Sikh or Jain religion where such persons wish to marry out of their community into one of the remaining three communities. The minimum age under the Act is 18 for males and 14 for females and consent of the guardian or parents is required for the party who is under 21. No persons can marry who would have been unable to marry according to the laws of consanguinity or affinity under their personal law. No law of consanguinity operates however unless a relationship can be traced between the parties through some common ancestor who stands to each of them in a nearer relation than that of a great-great-grandfather or a great-great-grandmother or unless one of the parties is a lineal ancestor or brother or sister of some lineal ancestor of the other.

Marriages are solemnized before Registrars appointed for this purpose. Notice of marriage must be given and in absence of any objections can be solemnized after 14 days. Objections must be filed in court and if the court is in vacation Registrar must wait 14 days after opening of court so that objections can be lodged. A certificate of the filing of suit must be lodged with Registrar if he is to take cognizance that such objections have been made. Where such objections are frivolous, the person making them may be fined. The marriage must be solemnized before three witnesses and parties must sign a declaration in their presence and that of Registrar, stating that they are not professing Buddhists, Christians, etc., as above, or that being Hindu, Buddhist, etc., they will be marrying some person outside that community. Where either party is under 21, this declaration must also be signed by the father or guardian except where the party under 21 is a widow. The declaration must be countersigned by Registrar.

Marriages contracted under this Act are monogamous and dissolution of such marriages is governed by the Divorce Act 1869

Issue of such marriage will be subject to the laws of consanguinity that governed the parties.

Rights of Hindus, Jains, Buddhists and Sikhs continue except rights to inherit any kind of religious position or status in their community.

Succession to property is governed by the Succession Act 1925.

A party’s right of adoption ceases on marriage but the party’s father may have the right to adopt where the party to such a marriage was an only son.

Other marriages are contracted under the parties’ personal laws. Muslim marriages have been modified by the Family Laws Ordinance 1961 which provides that during the existence of one marriage no further marriage may be contracted by the husband without prior permission of an arbitral commission or any other person so appointed having authority to grant or withhold such permission. No such second marriage is void, however, but the husband may be liable to a fine, or a year’s imprisonment, or both. Muslim women can only marry Muslim men, but Muslim men can also contract marriages with Christian or Jewish women.

Nullity of Marriage in Pakistan

A marriage contracted under Christian Marriage Act and Special Marriage Act can be annulled for impotence at time of marriage continuing to date of presentation of the petition, as also in case of incapacity at the time of marriage, marriages between persons within prohibited degrees of consanguinity, and bigamy with respect to the second marriage. The children of a marriage contracted in good faith during the existence of a previous subsisting marriage are legitimate.

Marriage with a Foreigner in Pakistan

There are no restrictions on marriage with a foreigner except on Government servants.

CUSTOMS Law in Pakistan

The Customs Act 1969, as amended by The Prevention of Smuggling Ordinance 1977 Ch. VI (Amendment of Customs Act 1969), consolidates and amends law relating to levy and collection of customs duties and also provides for other allied matters. This Act repeals (a) The Sea Customs Act 1878, (b) Inland Bonded Warehouse Act 1896 and (c) Land Customs Act 1924.

Central Board of Revenue which is Chief Customs authority may appoint officers of Customs or may entrust, either conditionally or unconditionally any functions of any officer of Customs under this Act to any officer of Federal or Provincial Government.

Under Act, Federal Government has power from time to time by notification to prohibit or restrict bringing or taking by air, sea or land goods of any specified description into or out of Pakistan. Contravention of this section would make goods liable to detention and confiscation by Customs authorities.

Act provides for levying of customs duties at rates prescribed under Finance Act, passed annually or under any law for time being in force on: (a) Goods imported into or exported from Pakistan; (b) goods brought from any foreign country to any Customs Station and without payment of duty there transshipped or transported for, or hence carried to and imported at, any other Customs Stations; and (c) goods brought in bond from one Customs Station to another.

Federal Government has general power to exempt from customs duties any goods imported into or exported from Pakistan.

Central Board of Revenue has power to declare certain places as Customs Ports or Customs airports or Land Customs Stations.

Federal Government may by special order in each case recording such circumstances exempt any goods from payment of whole or any part of customs duties chargeable thereon. Under S.R.O. 1972 Federal Government exempted samples of no commercial value from whole of customs duty leviable thereon on export from Pakistan.

Where goods are imported only temporarily with a view to subsequent re-exportation, Chief Customs authority has power to exempt them from duty subject to such limitations and conditions as it sees fit to impose on such goods either by generally prescribed rules or in any particular case by special order.

Where prescribed goods of such class or description which are intended to be used in production, manufacture, repair or refitting are imported into Pakistan, Chief Customs authority with previous sanction of Federal Government and subject to such terms and conditions as it sees fit to impose, may either exempt goods from duty or authorise repayment in full or in part of duty already paid.

Where goods capable of being easily identified are imported into Pakistan and upon which customs duties have been paid on importation are exported to any place outside Pakistan seven-eighths of such duties shall be repaid as drawback, subject to following conditions: (a) Goods are identified to satisfaction of an officer of Customs not below rank of Assistant Collector of Customs at same Customs Station, through which goods had been imported; and (b) goods are entered for export within two years of date of their importation as shown by records of Customs House or if such time is extended by Central Board of Revenue or Collector of Customs for sufficient cause within such extended time. Provided that Collector of Customs shall not extend time beyond three years of importation of such goods.

Federal Government has powers to make rules according to which repayment of duty as drawback will be allowed on such goods as are taken into use between importation and re-exportation.

Any conveyance entering Pakistan from any place outside Pakistan must call or land in first place at a Customs Station and deliver within 24 hours import manifest to appropriate Customs Officer.

Penalties for offences in above act range in specified cases to a maximum fine of Rs. 10,000, confiscation of conveyance and/or goods, a penalty not exceeding ten times the value of goods and/or imprisonment not exceeding six years on conviction before a Magistrate. New provisions on Alternate Dispute Resolution have been incorporated into law to provide for efficient and quick mode of determination of disputes.

Countervailing Duties Ordinance 2001 gives effect to provisions of Arts. VI and XVI of General Agreement on Tariffs and Trade 1994 and to Agreement on Subsidies & Countervailing Measures. Ordinance amends law relating to imposition of countervailing duties to offset such subsidies to provide framework for investigation and determination of such subsidies and injury in respect of goods imported into Pakistan and ancillary matters thereto. Anti-dumping Ordinance 2000 amends and consolidates laws relating to imposition of anti-dumping duties. National Tariff Commission can impose anti-dumping measures on products imported into Pakistan if investigated product is dumped within meaning of Ordinance or injury is being caused to domestic industry.

By Import of Goods (Development Surcharge) Ordinance, 1984, development surcharge of three rupees and 50 paisa per ton is to be levied and collected on all goods other than food grains, fertilizers and petroleum products, imported through Karachi customs port.


In May 1998 Government of Pakistan after nuclear tests declared emergency throughout country thus freezing all foreign currency accounts and suspending all kinds of foreign currency transactions. Main purpose of this declaration was to plug outlets used for foreign currency transfer. However foreign currency accounts maintained by diplomatic missions accredited to Pakistan, their nonresident employees, all international organizations were not affected. Furthermore restrictions did not apply to special foreign currency accounts allowed to be opened by firms/companies in Pakistan for receiving foreign equity and foreign currency loans for purpose of import of plant and machinery, and to foreign currency accounts opened by independent power projects. Note: All these restrictions have been removed. State Bank of Pakistan (“SBP”), through its Circular No. FE/8, has adopted market-based Unified Exchange Rate System, under which SBP fixes exchange rate for foreign currencies on daily basis, and all scheduled banks are then allowed to convert currencies on those rates. Supreme Court, in its judgment in Civil Appeal No. 319 of 99, has ordered Government to make arrangements to lift restrictions imposed on foreign exchange transactions under Foreign Exchange (Temporary Restrictions) Act, 1998, as same are unjustified and without authority. In view of this decision, and fact that country’s economic condition has improved reasonably since imposition of emergency, it is hoped that total restrictions will soon be lifted. In this regard, Foreign Currency Accounts (Protection) Ordinance 2001 was promulgated on Sept. 28, 2001. This provides complete protection of foreign currency accounts and stipulates that no person holding foreign currency account shall be deprived of his right to hold or operate such account or in any manner be restricted from, temporarily or permanently, lawfully selling, remitting, transferring, using as security or taking foreign currency from within or outside Pakistan. Protection provided under this Ordinance is in addition to, and not in derogation of, protection provided under Protection of Economic Reforms Act 1992.

Exchange Control is regulated by the Foreign Exchange Regulation Act of 1947 as amended by F.E.R. (Amend.) Act 1973 and 2002. It covers payments and dealings in foreign exchange and securities and import and export of currency and bullion. No person except authorized dealer and exchange companies may deal in foreign exchange without previous general or special permission of State Bank. This includes buying, borrowing, selling, lending or exchanging any foreign exchange with any person who is not authorized dealer. State Bank may on application made to it authorize any company registered under Companies Ordinance 1984 to deal in foreign exchange. Authorized dealers, money changers and exchange companies are now free to determine exchange rates for conversion of Rupees into any foreign currency and vice versa. Effective Aug. 1991, under general permission of State Bank all individuals, companies including investment banks and registered firms may have and freely operate foreign currency bank accounts in Pakistan without restriction save that exports proceeds and earnings on account of services, commissions etc. may not be credited to such accounts. Foreign currency may now be held, exported and imported without restriction and such bank accounts are free from all other exchange control regulations. If foreign exchange is acquired from authorised dealer under general or special permission of State Bank for special purpose it must be used for that purpose and that purpose only or else sold to authorized dealer. Foreign national resident in Pakistan is deemed to be nonresident for purpose of Act. Federal Government has right to acquire foreign exchange by way of sale or assignment but not at price less than market rate of foreign exchange which is still exercised in respect of export proceeds and earnings of residents on account of services, commissions and the like. No acquisition can be made of any foreign exchange owned by authorized dealer and retained by him with permission of State Bank. Restrictions exist on import and export of gold or silver jewellery or precious stones. As regards transfer of securities to person resident outside Pakistan which, for this purpose, includes foreign national for time being resident in Pakistan and company registered in Pakistan which is controlled, directly or indirectly, by person resident outside Pakistan and control of Pakistani companies by such person, see topic Corporations (Companies), subhead Foreign Exchange Regulation Act 1947. Federal Government may acquire foreign securities in same manner as it may foreign exchange. No person resident in Pakistan may, except with State Bank permission, settle any property otherwise than by will, upon any trusts under which person who at time of settlement is resident outside Pakistan elsewhere than in territories indicated by State Bank will have interest in property, or may exercise power under said trust, and any such settlement or exercise of power is void to that extent.

Nonresidents are allowed to trade freely in Federal Investment Bonds (FIB’s) and Treasury Bills (TB’s) in secondary market through Special Convertible Rupee Accounts. Nonresident shareholders have choice of receiving dividends in US Dollars or in currency of country in which they reside if designated Authorised Dealer is maintaining account in that currency. Investment by nonresident (including overseas Pakistanis) are allowed on repatriable basis in corporate debt instruments viz Participation Term Certificates (PTC’s) and Term Finance Certificates (TFC’s) etc.

Federal Government or State Bank may at any time by notification in Official Gazette direct owners of foreign exchange to make returns thereof to State Bank and supply particulars thereof. Federal Government may, by notification in official Gazette, direct citizens of Pakistan resident in Pakistan, or any class of such citizens, to make within such time, and giving such particulars as may be specified in notification, a return of any immoveable property or any industrial or commercial undertaking or company outside Pakistan, held, owned, established or controlled by them or in which they have any right, title or interest. Rights of entry and seizure exist in cases of suspected contravention of Act but action may be taken only on representation in writing supported by a statement on oath from informer, or subject to authorization in writing by Federal Government or State Bank a person may, for purpose of making an inquiry which he considers necessary for purposes of this Act, enter any place and call for and inspect any accounts, books or other documents kept in such place.

Contracts to avoid this act are invalid but not such contracts as make it a condition that State Bank permission be obtained and it will be an implied term of all such contracts that where anything is to be done that requires State

Bank or Federal Government permission it need not be done unless such permission is granted. Legal proceeding to recover any amounts due are not however barred under the above provisions but no steps will be taken to enforce any judgement or order for payment except for the amount which the Federal Government or State Bank may permit.

Contravention of the Act can be punishable with two years imprisonment or fine or both, as well as confiscation of the property in respect of which the offence has been committed. Forum of such trial is either before a magistrate or an adjudication officer having the powers of a first class magistrate or a tribunal constituted by the Federal Government having these powers and appeal lies to the central government from an order of the adjudication officer or to High Court on appeal from the tribunal. Burden of proof rests with accused to show that he had permission to enter into the dealings or transactions, or to do the acts done.


Government attaches great importance to inflow of direct foreign investment, particularly in areas where it brings advanced technology, managerial and technical skills and marketing expertise. Foreign investment is welcomed virtually without restriction in equity in manufacturing industry but has also been permitted in investment banking and other financial sector activities with Government approval and is being encouraged in power generation and other infrastructure development.

Foreign capital invested in accordance with laws is guaranteed repatriation facilities, and current profits thereon are remittable after payment of all taxes.

Under latest Investment Policy 2007, foreign investment on repatriable basis is allowed in manufacturing/ industrial, services/infrastructure, social and agriculture sectors. There are no regulatory requirements for investment in manufacturing/industrial sector. Foreign companies wishing to invest in other sectors must fulfill requirements of registration with Board of Investment and under Companies Ordinance 1984. Minimum required investment in Services sector is US$0.15 million whereas in Social, Infrastructure and Agriculture sector this amount is US$0.3 million. For agricultural sector, minimum of 40% equity must be held by Pakistani investors within five years of registration of foreign company with Board of Investment and repatriation of profits is restricted to maximum of 60%. Facility to contract private foreign loans not involving any guarantee by Government of Pakistan is available to all foreign investors making investments in sectors open to foreign investment for financing cost of imported plant and machinery required for setting up project. Such loan agreement has to be registered with State Bank.

Pakistan has signed bilateral agreements on promotion and protection of investment with 43 countries: Australia, Azerbaijan, Bangladesh, Belarus, Belgium, China, Egypt, France, Germany, Indonesia, Iran, Italy, Japan, Kuwait, Kyrgyz Republic, Malaysia, Mauritius, Netherlands, Oman, Philippines, Portugal, Qatar, Romania, Singapore, South Korea, Spain, Sri Lanka, Sweden, Switzerland, Syria, Tajikistan, Thailand, Tunisia, Turkey, Turkmenistan, United Arab Emirates, U.K. and Uzbekistan.

Foreign Private Investment (Promotion and Protection) Act, 1976.

Applies to all industrial undertakings in Pakistan having foreign private investment established with approval of Federal Government after Sept. 1, 1954.

“Foreign private investment” means investment in foreign capital by person who is not citizen of Pakistan or by company incorporated outside Pakistan, but does not include investment by foreign government or agency of foreign government.

  • 3: Federal Government may, consistent with national interest, for promotion of foreign private investment, authorise such investment in any industrial undertaking: (a) Which does not exist in Pakistan and establishment whereof, in opinion of Federal Government, is desirable; or (b) which is not being carried on in Pakistan on a scale adequate to economic and social needs of country; or (c) which will contribute to: (i) development of capital, technical and managerial resources of Pakistan; (ii) discovery, mobilisation or better utilization of national resources; (iii) strengthening of balance of payments of Pakistan; (iv) increasing employment opportunities in Pakistan; or (v) economic development of country in any other manner.
  • 4: Where Federal Government sanctions an industrial undertaking having foreign private investment, it may do so subject to such conditions as it may specify in this behalf. When foreign private investment is by person who, being citizen of Pakistan, is also citizen of any other country, he shall deposit entire amount of repatriable foreign investment in foreign exchange account in Pakistan for its subsequent use for purchase of machinery and other fixed assets of undertaking.
  • 5: (1) Where Federal Government considers it necessary in public interest to take over management of an industrial undertaking having foreign private investment or to acquire ownership of shares of citizens of Pakistan in capital of such industrial undertaking, any agreement approved by Federal Government relating to such undertakings entered into between foreign investor or creditor and any person in Pakistan shall not be affected by such taking over or acquisition. (2) Foreign capital or foreign private investment in an industrial undertaking shall not be acquired except under due process of law which provides for adequate compensation therefor to be settled in currency of country of origin of capital or investment and specifies principles on and manner in which compensation is to be determined and given.
  • 6: Subject to provisions of Foreign Exchange Regulation Act, 1947 (VII of 1947): (a) Foreign investor in an industrial undertaking established after Sept. 1, 1954, and approved by Federal Government, may at any time repatriate in currency of country from which investment originated: (i) foreign private investment to extent of original investment; (ii) profits earned on such investment; and (iii) any additional amount resulting from re-invested profits or appreciation of capital investment; and (b) creditor of an industrial undertaking referred to in clause (a) may repatriate foreign currency loans approved by Federal Government and interest thereon in accordance with terms and conditions of said loan; Provided that nothing in this section shall affect terms of permission to make such investment granted to foreign investor before commencement of this Ordinance.
  • 7: Foreign nationals employed with approval of Federal Government in any industrial undertaking having foreign private investment may make remittances for maintenance of their dependants in accordance with rules, regulations or orders issued by Federal Government or State Bank of Pakistan.
  • 8: (1) Federal Government may allow such concessions to industrial undertakings having foreign private investment as may be admissible under any law for time being in force. (2) Foreign private investment shall not be subject to other or more burdensome taxes on income than those applicable to investment made in similar circumstances by citizens of Pakistan. (3) Foreign private investment shall be allowed all tax concessions which may be admissible on basis of any agreement for avoidance of double taxation which Government of Pakistan may have entered into with government of country of origin of such investment.
  • 9: Industrial undertakings having foreign private investment shall be accorded same treatment as is accorded to similar industrial undertakings having no such investment in application of laws, rules and regulations relating to importation and exportation of goods.

By § 8 of Protection of Economic Reforms Act, 1992 no industrial or commercial enterprise established or owned in any form by foreign or Pakistani investor for private gain in accordance with law and no investment in share or equity of any company, firm or enterprise, and no commercial bank or financial institution established or owned by any foreign or Pakistani investor shall be compulsorily acquired or taken over by Government.

To facilitate foreign investment in country, standard guidelines for payment of fees for technical know-how, royalties, have been prescribed. Ceilings on payments of royalties and technical fees have been abolished. Agreements falling within these prescribed limits do not need formal Government permission but have merely to be registered with State Bank of Pakistan. Entrepreneurs are free to contract foreign private loans/credits for financing foreign currency cost of industrial projects covered by Government’s industrial policy on best possible terms and no approval is required for rate of interest, front end fees/ charges for cash loans and repayment period from State Bank. Loan agreements have to be registered with State Bank through bank and registration constitutes exchange control authority to that bank to make necessary remittances to lender on due date. Government is also open-minded on issue of quantum of foreign equity, which is decided on case by case basis where Government approval is still required.


Imports and exports are chiefly controlled by annual Import Policy Order and Export Policy Order (made under Import and Exports (Control) Act 1950) which, in case of imports, sets out specific restrictions applicable to import of goods inter alia in form of “negative list”. Items not on negative list or otherwise subject to any restriction may be freely imported, and except in certain specific cases, import licences have been abolished. However, 6% fee for privilege to import still required. SRO 490(I)/2002 issued by Federal Government rescinds Registration (Importers & Exporters) Order 1993 with immediate effect, which required registration of importers and exporters with Export Promotion Bureau and Ministry of Commerce. Nominal registration fee is payable.

By Imports and Export (Control) (Amendment) Ordinance,1980 Federal Government have set up Commercial Courts with exclusive jurisdiction to deal with contravention by exporters of orders under § 3 of Imports and Exports (Control) Act, 1950, relating to restrictions and control of exports. Commercial Courts can compel exporter guilty of contravention to deposit with court amount equivalent in court’s opinion to damage suffered by foreign buyer as result of such contravention. These courts can also direct immediate compensation of such foreign buyer from revolving fund set up by Federal Government.

Amendment in Merchandise Marks Act 1889 requires that goods imported into or produced in Pakistan shall bear indication of country they were made in or name of manufacturer (with address). This only applies to classes of goods that government may by notification require to be so marked.

Under Inspection, Valuation and Assessment of Imported Goods Rules, 1994 certain classes of imported goods required pre-shipment inspection by PSI Companies, Clean Report of Findings (CRF) and Discrepancy Reports. But SRO 185(1)97, issued by Central Board of Revenue, withdrew requirement of inspection of goods by PSI Companies w.e.f. 12th Mar. 1997 and of issuance of CRF and Discrepancy Report by PSI Companies w.e.f. 1st Apr. 1997. After 1st Apr. 1997 importers are liable to pay duties and taxes and other charges on value fixed under § 25B of Customs Act, 1969, on normal value ascertained under § 25 thereof whichever is applicable.


The Development of Industries (Federal Control) Act 1949 authorizes the Federal government to plan and regulate establishment of any new enterprise or development of any new or existing undertaking in any of industries specified in Schedule to Act and to otherwise make rules with regard to development of scheduled industries.

The rules governing these industries are set out in the Development of Industries Rules 1950.

Investment Regulations in Pakistan

Projects for investment in manufacturing industry in Pakistan no longer are subject to sanction of any governmental authority except in case of certain specified industries in certain limited cases (see infra). List of specified industries now includes only: (a) Arms and ammunitions; (b) security printing; currency and mint; (c) high explosives; (d) radioactive substances; (e) alcoholic beverages.

Questions relating to income-tax reliefs and concessions, and remittance of dividends are dealt with respectively by Central Board of Revenue and State Bank of Pakistan.

Board of Investment, Prime Minister’s Secretariat, assists would-be investors with information.

By Export Processing Zones Authority Ordinance, 1980, Federal Government is empowered to create Export Processing Zones in which industries will be set up and operated by sanction of Export Processing Zones Authority. Zones will be bonded customs areas and Federal Government may exempt them from any law in force in rest of Pakistan. Movement of goods from zones to remainder of country will only be in manner and extent specified by Authority. Authority is statutory corporation and will make master plan and phased master programme for development of zones. Industries will function according to conditions contained in letter of sanction issued by Authority.

DRUGS: Regulation of Drugs in Pakistan

Manufacture, import and sale of drugs in Pakistan is regulated by Drugs Act 1976 (“Drugs Act”) that makes it illegal for anyone to carry out these activities unless appropriate license from Central Licensing Board has been acquired. Further, all drugs manufactured or imported into Pakistan are required to be registered with Registration Board; manufacture, import or sale of drugs in Pakistan without license is offence. By drugs (Amendment) Ordinance 2002, subject to directions given by Federal Government, only drugs that are on sale in any western European country, USA, Japan, Australia or other prescribed countries can be imported.

Applications for license or registration are made under Drugs (Licensing, Registering and Advertising) Rules 1976 on prescribed forms. Separate applications are needed for manufacturing drug on different premises. Duration of license is two years, but may be renewed for further periods of two years. Licensing Board considers following factors when deciding to grant application: suitable premises for manufacturing of drugs, adequacy of plant/ equipment, competence of technical staff, quality control mechanism, standards of hygiene on premises and so on. Toll manufacturing (agreement whereby licensee agrees with non-licensee to manufacture on behalf of non-licensee is toll manufacturing agreement) is allowed but in exceptional cases only and with approval of Licensing Board.

Under § 23 of Drugs Act, it is offence to export, import or manufacture any spurious, counterfeit, misbranded, adulterated, substandard or unregistered drugs. Special Drug Courts try cases involving breach of Drugs Act or Rules made thereunder, with accused given direct right of appeal to Division Bench of respective High Court. Apart from penalties meted out by Drug Courts, Central Licensing Board and Registration Board may also, if considered appropriate, cancel/suspend license of any individual or registration of drug. By sales Tax (Amendment) Ordinance 2002, further tax of 1_% has been abolished on supply of substances registered under Drugs Act 1976 by registered person.

Advertising of drugs is regulated directly by Federal Government under Drugs Act 1976 and Drugs (Licensing, Registering and Advertising) Rules 1976. Any interested person intending to advertise drug is generally required to make application to Government in this regard. However, promotion of drugs to medical representatives, medical staff, pharmaceutical companies etc. or through medical journals and publications meant exclusively for medical related personnel may be made without prior approval of Government. However, copy of such publication must be filed with Government.

There are strict conditions for advertising of drugs through public media. Drugs must not be advertised in manner that would encourage self-medication or promote drug in question as “best-available” or “most efficacious” medicine. Further, advertisement must contain information on risks and precautions associated with drug as necessary for protection of public health as well as its maximum retail price.

Drug (Labelling and Packing) in Pakistan

Following particulars are required under Drugs (Labelling and Packing) Rules 1986 to appear in conspicuous manner on label of innermost container of drugs (except in cases of capsule/tablet strips etc.) and also on cover of package (though not outer transparent wrapper): registered and generic name of drug, active ingredients with their weights/measure, name and principal place of business of manufacturer, license number, registration number, date of expiry, Urdu (national language of Pakistan) version of registered name of drug, dosage and instruction for use, and distinctive batch number, date of manufacture and maximum retail price. Packing of drugs/substances meant for “external use” such as creams, lotions, liquid, liniment and antiseptic etc. must further contain words for external use only.

Import and Export of Drugs in Pakistan

Under Drugs (Import and Export) Rules 1976, finished drugs may be imported into Pakistan by any person possessing valid license to sell said drug and having adequate facilities for proper storage to preserve its properties.

Unfinished drugs, on other hand, may not be imported into or exported out of Pakistan in commercial quantities without appropriate license from Licensing Authority. Such license will be issued for period of two years and may subsequently be renewed. Usual conditions for issuance of such licenses include: conditions of license must be complied with by importer/exporter, drugs being imported/exported conform to provisions of drug laws of country, licensee will allow licensing authority to inspect premises and plant/appliances to manufacture finished drug at all times. Complete record of utilization is to be maintained by importer/exporter etc.

Miscellaneous Drug Rules in Pakistan

Apart from above, Government regulates manufacture, sale and import/export of drugs under The Drugs (Research) Rules 1978, Drugs (Specifications) Rules 1978, The Drugs (Generic Names) Act 1972 and Rules of 1973, The Destructive Insects and Pests Act 1914, Central Manufactured Drug Rules 1934, Pharmacy Act 1960, Control of Narcotic Substance Act 1997 etc.

Registration of Drugs in Pakistan

Drugs must be registered with Registration Board. Registration is valid for period of five years, upon expiry of which registration may be renewed for further five-year periods. Before registering drugs, Registration Board customarily inspects process of manufacture intended to be employed by applicant, premises, plant/appliances and means to be employed for complying with mandatory standards. Applicant must undertake that drug would be produced in sufficient quantities to ensure adequate supply in market and that manufacture of drug would not be discontinued without prior approval of Registration Board unless such discontinuance is beyond control of applicant.


Registration of medical and dental practitioners is effected by Medical and Dental Council of Pakistan (“Council”) established under Medical and Dental Council Ordinance 1962 (“Ordinance”). Council is entrusted with task of overseeing granting of degrees by medical institutes in country and recognizing degrees conferred by foreign institutes. Registers of medical and dental practitioners possessing recognized qualifications are maintained by Council; registers are public document. Council is also authorized under Ordinance to make necessary rules and regulations to regulate these professions.

ALIENS Law in Pakistan

Aliens are defined in Pakistan Citizenship Act 1951, § 2 (as Amendment Act 1952) to mean persons who are neither citizens of Pakistan nor Commonwealth citizens who have status of Commonwealth citizen under British Nationality Act, 1948 and British Protected person under same Act.

Alien visitors must register with the police within 24 hours of arrival and also, if they move about from area to area, in each area to which they go.

Acquisition of Citizenship in Pakistan

Every person is deemed to be a citizen of Pakistan (1) whose parents or grand parents were born in territories now included in Pakistan and who after August 14, 1947 has not been permanently resident outside Pakistan, or (2) who had any parent or grandparents born in territories included in India on March 31, 1937 and who has been domiciled at commencement of Pakistan Citizenship Act 1951 in Pakistan or in territories now included in Pakistan, or (3) who is a person naturalized as a British subject in Pakistan and has before the date of commencement of the Pakistan Citizenship Act 1951 renounced citizenship of the United Kingdom and of any foreign state; or (4) who before commencement of said Act migrated to territories now included in Pakistan from any territory in the Indo-Pakistan subcontinent and who migrated with intention of settling there permanently.

Furthermore, every person born in Pakistan after commencement of said Act is citizen of Pakistan by birth unless (1) such person’s father possesses at time of his birth such immunity from suit and legal process as is accorded to an envoy of an external sovereign accredited in Pakistan and is not a citizen of Pakistan or (2) his father is an enemy alien and the birth occurs in a place then under enemy occupation. A person may also acquire citizenship by naturalization or by incorporation of new territory.

Under the § 2 Pakistan Citizenship (Amendment) Ordinance 1972, dual nationality is permissible where a person who being a citizen of Pakistan, is also citizen of U.K. and Colonies or of such other country as Federal Government may, by notification in official gazette specify in this behalf.

Under Pakistan Citizenship (Amendment) Act, 1973, § 8(2) a subject of State of Jammu and Kashmir who, being under protection of a Pakistan passport, is resident in U.K. or such other country as Federal Government may, by notification in official gazette, specify in this behalf, shall, without prejudice to his rights and status as a subject of that State, be deemed to be, and always to have been, a citizen of Pakistan.

Under latest Investment Policy, any person of country recognized by Pakistan may get Pakistani citizenship by investing minimum of US$0.75 million in tangible assets and US$0.25 million in cash, both on non-repatriable basis and subject to fulfillment of conditions of Pakistan Citizenship Act.

Married women do not in most cases acquire the status of Pakistani Citizens when their husbands do.

Any alien woman married to a citizen of Pakistan or to a person who but for his death could have acquired such citizenship as above (see subhead Acquisition of Citizenship, supra) is entitled to make application to Federal Government, and, by taking oath of allegiance and obtaining certificate of domicile, she may be registered as citizen of Pakistan whether or not she is 21.

Registration: A person who has ceased to be a citizen of Pakistan under Pakistan Citizenship Act 1951, § 1, or has not renounced his dual nationality, where such renunciation is required by law, or has been deprived of his citizenship, is not entitled to be registered as citizen except with previous consent of Federal Government. Minors may be registered as citizens of Pakistan by their guardians and become citizens from date of their registration.

Under National Registration Act, 1973, every citizen of Pakistan, whether in or out of Pakistan, who has attained age of 18 years shall get himself, and a parent or guardian of every citizen who has not attained that age shall get such citizen, registered in accordance with provision of Act. (§ 4). Under § 5 Registrar-General shall cause to be issued to every citizen, who has attained age of 18 years and registered himself under § 4, an identity card. Identity card is subject to be called for inspection by Registration Officer or any gazetted officer under control of, and authorized by, Registrar-General. Identity card shall be surrendered on death of holder or within 60 days of holder ceasing to be a citizen. No citizen who has attained age of 18 years but does not possess or produce an identity card shall be granted a passport, permit or other travel document for going out of Pakistan and he will further not be allowed to vote.

Penalties for offences under Act are a fine not exceeding Rs. 50, or in default of payment of fine, simple imprisonment for a period not exceeding 15 days.

Under § 10 any person who (a) being a person employed for purposes of this Act, publishes or communicates to any person, otherwise than in ordinary course of such employment, any information acquired by him in course of employment, or (b) having possession of any information which to his knowledge has been disclosed in contravention of Act, publishes or communicates that information to any other person, shall be punishable with imprisonment with term which may extend to six months, or with fine which may extend to Rs. 1,000, or with both, provided that nothing in this section shall apply to any publication or communication of information made: (i) for purpose of any criminal proceedings, or (ii) to any gazetted officer authorized by Federal Government or Registrar-General.

Deprivation of Domicile in Pakistan

If any certificate of domicile or naturalization was obtained by fraud, false representations or concealment of any material fact deprivation of citizenship will be by order of Federal Government. Furthermore, a certificate of naturalization may be revoked for acts of disloyalty, trading with enemy in wartime, imprisonment for 12 months or over within five years of naturalization or continuous absence for seven years unless the absence was in service for the Government or an international organization of which Pakistan at any time during that period was a member, or where the person has registered annually at the Pakistan Consulate or Mission as prescribed.

Suits may be brought by alien enemies residing in Pakistan with permission of central government and other aliens may sue, without permission. (Civil Procedure Code, § 83). However, it has been held by High Court in cases arising during and after Indo-Pakistan war of Sept. 1965 that an alien enemy is neither competent to institute a suit nor can he continue suit. He is not competent during continuance of hostilities to file an appeal or to continue appeal or execute a decree obtained by him. However, if a suit is filed against an enemy defendant he is not only entitled to defend suit but he is also entitled to file an appeal if a decision is given against him during continuance of hostilities. He is, however, debarred from executing any benefit derived by him in such litigation.

Corporations Owned or Controlled by Aliens.

IMMIGRATION:Entry into PakistanPassport Rules 1955.

To enter into Pakistan visa is generally required except in case of country which has reciprocal arrangements with Pakistan.

All foreigners entering the country (not being Commonwealth citizens) must register with police within 24 hours. If they wish to stay in Pakistan after expiry of their visa, they must obtain permission of Police Department.

Technicians, experts and industrial personnel may enter country under the general rules of entry, but their contracts of service in Pakistan must be approved by Investment Promotion Bureau of Ministry of Industries.

A foreign employee whose contract of service has been approved by Investment Promotion Bureau is entitled to remit 50% of his monthly salary up to ceiling of US$750 per month, which may in special cases be raised.

Emigration Ordinance 1979 regulates emigration of Pakistanis for employment abroad. Bureau of Emigration and Overseas Employment headed by Director General controls emigration and is responsible for welfare of emigrants. Protector of Emigrants fulfils same function in relation to particular district. Overseas Employment Corporation recruits Pakistanis for employment abroad. All other persons or agencies may only perform such recruitment, or advertise for such recruitment, if they possess licence from Federal Government.

Pakistani may emigrate if he can furnish proof of permission to work abroad such as employment visa issued by foreign employer or foreign government. Emigrant must appear before Protector of Emigrants and furnish him with any information required before emigrating.

Offences against this Ordinance are treated as criminal offences and tried by Special Courts created by Federal Government. Penalties include fine and imprisonment which may extend to five years.

Acquisition of Citizenship in Pakistan


Pakistan Intellectual Property Rights Organization has been created under Pakistan Intellectual Property Rights Organization Ordinance 2005 to provide for protection of intellectual property in Pakistan. Ordinance also provides for creation of Policy Board with functions to promote modern system for protection of intellectual property rights in Pakistan and to formulate procedures and necessary framework for utilization of funds generated or acquired through services, donations or grants, etc. More importantly, Ordinance effects integration of Trade Marks Registry, Copyright Office and Patent Office and makes them part of Organization.


This is governed by Copyright Ordinance 1962 which came into force in Feb. 1967 as amended . by Copyright (Amendment) Act 1992 and 2000.

Nature and Term of Copyright Laws in Pakistan

Copyright is property and is exclusive right to do or authorise others do such acts in relation to original work in question as are set out in § 3 of Ordinance.

Literary, Dramatic or Musical Work including Computer Software.

Copyright in these works extends to acts of reproducing work in any material form; publishing or performing it in public; producing, reproducing, performing or publishing any translation; authorizing rentals of computer programs or cinematographic works; making adaptation of work; using work in cinematographic work or making record of it; communicating work by radio or loudspeaker. To protect IT industry in Pakistan, recent amendments now define computer programs as literary works. Term of copyright is 50 years from beginning of calendar year next following year of author’s death if his true name is published or 50 years after publication of work if true name not published, provided that where identity of author is published before expiry of this 50 year period copyright will subsist until 50 years after his death. For joint authorship, copyright runs from death of survivor.

Artistic Work.

Copyright in artistic work extends to acts of reproducing work in any material form; publishing it; using it in cinematographic work; televising it or adapting it. Term of copyright is as above.

Cinematographic Work including Video Films.

Copyright here extends to acts of copying it; broadcasting it or causing it to be seen or heard in public. Term of copyright is 50 years from beginning of calendar year next following year in which work is published.


Copyright here extends to making any other record embodying same recording; using record in sound track of a film; causing record to be heard in public and broadcasting it on radio. Term of copyright is 50 years from beginning of calendar year next following year in which work is published.

Rights of Broadcasting Companies.

Broadcasting companies can authorise rebroadcasting of their broadcasts; fixation of their broadcasts and copying of such fixations. These rights exist until 25 years from beginning of calendar year next following year of first broadcast.

Rights in Published Editions of Works.

Publisher enjoys rights of making or authorising making by photographic or other process of copies intended for sale in commerce of typographical arrangement of edition. Such rights subsist for 25 years from beginning of calendar year next following year in which edition first published.


Author of a literary, dramatic, musical or artistic work is entitled to copyright except where work is commissioned or done during course of employment or done for Government or for an international organisation, when person who commissioned or employer or Government or international organisation is owner.

Term of copyright of Government or international organisation extends to 50 years from beginning of calendar year next following year of publication.

Term of Copyright of Posthumous or Unpublished Work.

In case of posthumous work 50 years from beginning of calendar year next following year of publication. If work whose author’s identity is known is not published within 50 years after death of author, such work shall fall into public domain after 50 years from beginning of calendar year next following year in which author dies. Where author’s identity unknown, and work not published within 50 years of creation, work falls into public domain after 50 years from beginning of calendar year next following year of creation.

Copyright (AmendmentAct 1973.—Because of effect of § 10(2A) of Copyright (Amendment) Act 1973, copyright shall not subsist in original literary, dramatic, musical and artistic works, cinematographic works and records as respects its reprint, translation, adaptation or publication, by or under authority of Federal Government, as textbook for purposes of teaching, study or research in educational institutions.


Owner or prospective owner of future copyright can assign either wholly or partially, generally or subject to limitations and either for whole or part of term of copyright. Assignments must be made in writing and signed by owner or duly authorised agent. Assignment can also be made by testamentary disposition and where unpublished work is disposed of by will, it is inferred that copyright also passes unless contrary intention is expressed in will.

Copyright assigned in respect of unpublished work for specific purpose of publication reverts to owner if such work remains unpublished for period of three years from date of assignment.


Owner can relinquish all or any rights comprised in copyright by giving notice in prescribed form to Registrar of Copyrights who must publish this notice. Relinquishment will not affect any rights existing prior to date of notice.

Registration of Copyright.

Author, publisher or owner of any copyright may make an application to Registrar in prescribed form and upon payment of prescribed fee for registration in Copyright Office. Assignments and licences can also be registered. Register of Copyrights is prima facie evidence of particulars entered therein and documents or extracts certified by Registrar and sealed with seal of Copyright Office are admissible in evidence. Certificate of registration is prima facie evidence of subsistence of a copyright and that person named in certificate is owner thereof.

Performing rights societies must, within prescribed time and in prescribed manner, prepare, publish and file with Registrar statements of all fees, charges or royalties which it proposes to collect for grant of licences or for public performance of works in respect of which it has power to grant licence. Failure so to do results in society being unable to commence any action or proceeding to enforce any remedy for infringement except with consent of Registrar. Objections to any such fees, charges, royalties, etc., can be lodged at Copyright Office and must be referred to Copyright Board for decision.

Copyright Board has jurisdiction to determine disputes between licensing bodies and persons claiming licences and hear objections to any fees, charges, royalties or licensing schemes. When determining such disputes and hearing such objections, Board has all powers of a civil court under Code of Civil Procedure in respect of summoning, enforcing attendance of and examining any person on oath, receiving evidence on affidavits, issuing commissions for examination of witnesses or documents, requisitioning any public record or copy thereof from any court or office.


Owner or exclusive licensee of a copyright may sue on an infringement and is entitled to all such remedies by way of injunction, damages, accounts and otherwise as are or may be conferred by law for infringement of a right. Custom officers have now been empowered to detain consignments suspected to contain infringing copies of any work. Both civil and criminal actions are provided for infringement of copyright. If defendant proves that at date of infringement he was not aware of copyright or had reasonable grounds for believing copyright did not subsist, plaintiff is not entitled to any other remedy except injunction and decree for profits made by defendant by sale of infringing copies as court may deem reasonable. In any action, author or publisher named is, until contrary is proved, presumed to be author or publisher. Copyright owner is deemed to be owner of any infringing copy and may sue for recovery of possession thereof or in respect of conversion thereof. All offences under Ordinance are cognizable and non-bailable. If person having interest in copyright is unable to institute regular legal proceedings for lack of sufficient cause, applications may be made to court for immediate provisional orders to prevent infringement of copyrights.

There is no infringement in use of any literary, dramatic, musical or artistic work for purpose of research, private study, criticism or review or reporting of current events. Use in judicial proceedings, reporting in newspapers of an address of a political nature unless such report is prohibited, reading or recitation of an extract in public, publication, reproduction or adaptation for use in educational institutions, or quoting of extracts for purpose of examination questions is not infringement. Amateur performances before a nonpaying audience or for benefit of religious, charitable or educational institution of any literary, musical or dramatic works is not infringement. There is no infringement of an artistic work if it is used for private or critical purposes or as a background to a film or television broadcast or if a photograph, painting, drawing or engraving of an architectural work is published.

Registrar may, upon application by owner or his agent and upon payment of prescribed fee and after making necessary enquiries, order that copies made out of Pakistan or work which would be an infringement if made in Pakistan shall not be imported. Copies in respect of which order made deemed to be goods of which import has been prohibited or restricted by Sea Customs Act and provisions of that Act will apply accordingly.

International Copyright.

Federal Government may by notification direct that all or any of provisions of this Ordinance may apply to foreign works provided that reciprocal arrangements exist in foreign country for protection of works entitled to protection under Ordinance.


Under Patents Ordinance 2000, Controller shall refer to examiner every application in respect of which complete satisfaction has been filed, for making report to Controller after detailed scrutiny of application, specification, claims and drawing, if any, to determine whether invention is new and involves inventive step, and to also determine whether other requirements under Ordinance have been met. Examiner is required to make this report within 18 months of filing of application. To give effect to International Convention on Trade related Intellectual Property Rights 1994, Patents (Amendment) Ordinance 2002 has been promulgated. Now, application for registration of invention relating to genetically modified organisms require clearance.

On and from date of advertisement of acceptance of complete specification and until date of sealing of patent, applicant shall have all privileges and rights of registered proprietor. Under § 22, applicant may institute proceedings for infringement of patent after its sealing, and court may grant relief sought if it is convinced that applicant is true proprietor of invention, shall suffer irreparable loss if infringement of its patent is not stopped, and applicant, in due course, shall be properly registered as patentee.

  • 12 of Ordinance provides that right to patent for invention made by employee during course of his employment in area of activity of employer shall in absence of contractual obligation to contrary belong to inventor unless employer proves that invention could not have been made without use of employer’s facilities and equipment, etc.

Ordinance allows for “Convention applications” to be made in cases where applicant has made application in member country of World Trade Organization. Such applications must be made within 12 months of making of application in Convention country that would afford claimant single or multiple priorities from such application, as case may be.

Applications for patents can be made by a person of any nationality according to the prescribed form. However, resident Pakistani may not generally make application outside Pakistan without written authority of Controller unless he files application for invention in Pakistan not less than six weeks before making application outside of Pakistan. Applicant must be first and true inventor of invention or else assignee of such person. Application should be accompanied by provisional or complete specification plus documents supporting applicant’s title where he is assign. If provisional specification is filed in first instance, complete specification must be filed within at most 12 months. Patent is granted for 20 years from date of filing of application.


All inventions can be used in the interim period without prejudice to the patent and such protection is known as provisional protection.


After application is accepted by the Controller (which if not done within 18 months will mean that application is rejected) it will be advertised as accepted. Opposition can then be filed within four months only on one of the following grounds: (i) That opposer is the true inventor or assign thereof; (ii) that the invention described in the specification is the same as another invention filed elsewhere in the country which if granted will be prior in date to the grant of this patent; (iii) that the specifications are not clear; (iv) that the invention has been publicly used or been made publicly known in any part of Pakistan; (v) that the completed specification does not agree with the provisional specification and the invention described in the completed specification is one that is the subject of another application which if granted would be dated between the date of the second application and the filing of the completed specification. Controller will give notice to applicant of these objections before deciding case.


After grant of a patent, application may be made for compulsory grant of license or revocation. If this application is refused by the central government appeal lies to High Court. Revocation cannot be ordered before four years have elapsed from date of making of application or three years from grant of patent, nor, in any case, if patentee gives satisfactory reasons to government against such revocation. Grant can also be revoked on following grounds: (i) Because patent in respect of that invention already exists; (ii) that grant was obtained by perpetrating fraud; (iii) that applicant was not true inventor nor his assign; (iv) that no new improvement or invention step is involved; (v) that patent was obtained on false suggestion or representation; (vi) that primary uses of invention are against law; (vii) that scope of invention is not clearly ascertainable. Similarly, patent may be revoked by High Court on petition filed by any interested person or Federal Government on any ground upon which grant of patent may be refused. Federal Government may also revoke patent under § 48 if of view that it is generally prejudicial to public.

Act also covers copyright of designs, and, subject to notification in official gazette, provides for reciprocal arrangements between Pakistan and foreign States for mutual protection of inventions and designs of applicants in those States.


Trade Marks Ordinance 2001 effective April 12, 2004, along with Trade Marks Rules 2003 repealed Trade Marks Act 1940 and provides statutory recognition to provisions of Paris Convention for the Protection of Industrial Property of 20th Mar. 1883. It introduces for first time comprehensive regime of registration of goods as well as services and affords protection to “well-known” trademarks, as defined in Paris Convention, and to “collective marks”, “certification marks” and “domain names”. In addition, Act confers substantial powers on various government authorities, such as customs officials, to confiscate infringing goods. Act also declares unlawful unfair competition as well as misleading and, subject to certain defences, competitive advertising.

Trademarks may be acquired by any person claiming to be proprietor of a trade mark used or proposed to be used by him who is desirous of registering it. Nothing scandalous or likely to deceive, or hurtful to the religious susceptibilities of others, or contrary to law or morality can be registered. Use of chemical names is not permitted nor registration of identical or similar trade marks, but in the latter cases where there is honest concurrent user such registration may be permitted. Where proprietor claims to be entitled to exclusive use of any part of a mark, he may register the whole and the parts of the whole as separate trade marks. Each separate trade mark must however satisfy all conditions applying to it and all incidentals of an independent trade mark.


Application is made to Registrar who may in first instance reject application in which case applicant can appeal to court. If application is accepted it is numbered and advertised so that opposition, if there is going to be any can be made. Unless opposition succeeds trade mark can be registered, with any such disclaimers as Registrar may think fit, and registration runs from date of application. A sealed certificate of registration will be issued to proprietor. Registration is for seven years and can be renewed. Where renewal fees are not paid mark can be removed but will be held to continue for purposes of barring other applications for registration of a similar trade mark for one year unless applicant can show that original trade mark had not been used for two years before removal and that no deception would result from his application.

Applications for registration are to be made to Registrar of Trade Marks, CD 3, Behind KDA Civic Centre, Gulshan-e-Iqbal, Karachi.

Government filing fees for single application for registration of a trademark is Rs. 1,000; additional amount of Rs. 3,000 is to be paid once application is accepted.

Effect of registration is to make infringers of trademark liable to action being taken against them. It gives proprietor exclusive right to the trademark. Registration is prima facie evidence of validity and after ten years it becomes conclusive evidence of this.


After trademark has been registered application may be made for registration of licence, if any.
Assignment is possible for registered trademark but not where multiple rights would be created nor where exclusive rights would be created in different parts of country in which case Registrar’s approval is required. In case of unregistered trademarks they can be assigned only under shadow of registered trademarks at same time and to same person.

Resale price agreement is not protected under Trade Marks Act.

Infringement occurs when a person not a registered proprietor thereof uses a trade mark or a mark deceptively similar to it in relation to same class of goods. Such action is punishable under Penal Code and also is actionable under provisions of Trade Marks Act. Unregistered trade marks are not protected by Act but have same rights under Penal Code. They are also protected under the common-law remedy against passing off. Passing off is actionable as a common-law tort.

Drugs in Pakistan

Drugs Act 1976 regulates registration, import and export, manufacture and sale of drugs. Pakistan National formulary contains name of all drugs allowed to be imported, manufactured or sold. By Act, government has power to fix maximum prices of drugs and also to inspect, seize, analyse and punish importers and manufacturers of faulty drugs.



The four provinces of Pakistan have High Courts at Karachi, Lahore, Peshawer and Quetta. High Court of Sindh exercises original civil jurisdiction for district of Karachi for suits valued over Rs. 3,000,000/—. All district courts elsewhere in Pakistan exercise unlimited original civil jurisdiction.

Advocates in Pakistan

The Legal Practitioners and Bar Council Act, 1973 governs all matters regarding advocates in the four provinces of Pakistan.

Act envisages single class of practitioners, namely advocates, abolishing all previous distinctions between advocates, solicitors, pleaders, etc. Under this Act Pakistan Bar Council and Provincial Bar Councils for each province were constituted with tenure of five years.

Function of Pakistan Bar Council and Provincial Bar Council: (1) to prepare and maintain common roll of advocates whereby advocates registered on roll of Bar Council of one province are entitled to practise in every province of Pakistan; (2) to admit persons as advocates entitled to practise before High Court/Supreme Court; (3) to entertain and determine cases of misconduct against advocates of High Court/Supreme Court; to award punishment; (4) promote and suggest legal reforms and provide legal aid etc.

Qualifications for Membership of Pakistan Bar Council in Pakistan

Person is qualified if: he has been on roll of advocates of Supreme Court maintained by Provincial Bar Council, has been advocate for not less than ten years on day of filing of nomination papers and cleared all dues payable to Pakistan Bar Council. (§ 11.A).

Persons Who May Be Admitted as Advocates in Pakistan

Barristers who have been called to Bar in England or persons who were enrolled as advocates of High Court in any area which before 14 Aug. 1947 was comprised within India may be enrolled as advocates of any Provincial Bar Council on payment of necessary dues.

To qualify as advocate in Pakistan today, candidates must obtain law degree of Pakistani University or from University outside Pakistan recognized by Pakistan Bar Council. In addition, candidate must pass written exam and interview conducted by Bar Council.

Citizenship and Other Requirements in Pakistan

It is not necessary to be citizen of Pakistan to be enrolled as advocate, provided that person has resided in Pakistan for period of not less than one year immediately preceding day on which person applies for admission and belongs to country wherein citizens of Pakistan duly qualified are permitted to practice law. Advocates must also have completed age of 21 years. (§ 26).

To Qualify as Advocates Of High Court in Pakistan

Primary conditions for admission as advocates of High Court are: practice for period of not less than two years as advocate, vakil or pleader before subordinate courts in Pakistan or practice outside Pakistan as advocate before any High Court specified in this behalf by Pakistan Bar Council and payment of enrollment fee and fulfillment of such conditions as may be prescribed by latter. (§ 27).

Advocates of Supreme Court in Pakistan

Such persons must make application for enrollment as advocate of Supreme Court addressed to Chairman of Pakistan Bar Council. (§ 106). Admission is governed by Rules made by Supreme Court. Person is qualified for enrollment as advocate of Supreme Court if: he has been enrolled as advocate in High Court for not less than ten years; has been certified by Chief Justice of Pakistan and Judge of High Court and is fit and proper person to appear and plead as advocate before Supreme Court.

Advocate on Record in Pakistan

Advocate of five years standing in Supreme Court shall be qualified to be registered as Advocate on Record on making application in this behalf. Provisions relating to enrollment of advocates contained in Supreme Court Rules shall mutatis mutandis apply to registration of Advocates on Record. No advocate other than Advocate on Record shall be entitled to act for party in any proceedings in Court regarding procedural matters. It is Advocates of Supreme Court and not Advocates on Record that appear and plead on behalf of party.


MINES, OIL FIELDS AND MINERAL DEVELOPMENT:Regulation of Mines and Oil Fields and Mineral Development (Federal Control) Act 1948.

In exercise of powers conferred by § 2 of 1948 Act, Pakistan Mining Concessions Rules 1949 and Pakistan Petroleum (Production) Rules 1949 were made. Former apply to all minerals other than petroleum and natural gas whereas latter apply only to petroleum and natural gas. Pakistan Petroleum (Production) Rules, 1949 were repealed on Sept. 14, 1986 and replaced by Pakistan Petroleum (Exploration & Production) Rules, 1986.

1948 Act was amended by Regulation of Mines and Oil Fields and Mineral Development (Federal Control) (Amendment) Act 1976. By 1976 Act, following additional concessions have been granted: (1) Any provisions of rules made under § 2, or of any amendment in Income Tax Act, 1922 (XI of 1922), hereinafter referred to as Act, made after effective date of agreement for grant of licence or lease to explore, prospect or mine petroleum, which are inconsistent with terms of agreement, shall not apply to extent of such inconsistency to company which is party to agreement. (2) Royalty shall be charged at fixed rate of 12% of well-head value and shall form part of sum of payments to Federal Government and taxes on income which shall neither be more than 55% nor less than 50% of profits or gains before deduction of “payments to the Government” referred to in sub-rule (2) of rule 4 of Second Schedule to Act, hereinafter referred to as said Schedule. (3) Before commencement of commercial production of petroleum, any expenditure on searching for, or on discovering and testing, petroleum deposit, or on winning access thereto allocable to surrendered area and to drilling of dry hole, shall be deemed to be lost at time of surrender of area or completion of dry hole, as case may be, for purpose of Second Schedule to Act. Such lost expenditure shall be allowed in one of two ways mentioned in sub-rule (1) of rule 2 of said Schedule. (4) In addition to net profits, amount charged in annual financial accounts on account of additional allowance admissible under rule 3 of Second Schedule to Act, and depreciation at such rate as may be agreed upon between President and licensee or lessee, which is company incorporated outside Pakistan, including its assignee, shall be allowed to be remitted and retained abroad, provided that aggregate amount of such additional allowance and depreciation does not exceed agreed percentage of investment in assets on which depreciation is charged. (5) Value of crude oil for purposes of royalty and income tax to be calculated on basis of price realised in transactions with purchasers other than subsidiaries or affiliates of licensee or lessee, including its assignee, and in case of transactions with subsidiary or affiliate, value shall be calculated on such basis as may be agreed upon between Federal Government and licensee or lessee. (6) Income derived by licensee or lessee from use of any surplus capacity of its pipeline by any other licensee or lessee shall be assessed on same basis as its income from petroleum produced by it from its concessions area. (7) Licensee or lessee which is company incorporated outside Pakistan including its assignee, shall be allowed to export its share of petroleum after meeting such portion of internal requirement of Pakistan as may be agreed upon. (8) Sale proceeds of share of petroleum exported by licensee or lessee which is company incorporated outside Pakistan, including its assignee, shall be allowed to be retained abroad and to be used freely by it, subject to condition that it shall bring back such portion of these proceeds as is required to meet its obligations under lease. (9) No customs duty or sales tax shall be levied on import of machinery and equipment specified in agreement for purposes of exploration and drilling prior to commercial discovery. (10) Concessionary consolidated rate of 5_% customs duty ad valorem, including sales tax and any surcharge related thereto, shall be charged on import of machinery and equipment required for development of each commercial discovery until 24 months from effective date of mining lease granted with respect to each such discovery, and thereafter normal rate of customs duty, sales tax and any other duty shall be applicable. (11) Foreign nationals employed by licensee or lessee or its contractor shall be allowed to import commissary goods free of customs duty and sales tax to extent of U.S. $550 per annum, subject to condition that same shall not be sold or otherwise disposed of in Pakistan. (12) Foreign nationals employed by licensee or lessee or its contractor shall be allowed to import used and bona fide personal and household effects, excluding motor vehicles, free of customs duty and sales tax subject to condition that same shall not be sold or otherwise disposed of in Pakistan. (13) Foreign nationals employed by licensee or lessee or its contractor shall not be charged income tax for period of three years from date of their arrival in Pakistan in accordance with, and subject to provision of, clauses (xii) and (xiiia) of subsection (3) of § 4 of Act as in force on effective date of agreement with licensee or lessee. (14) Data in respect of areas surrendered by previous licensee or lessee shall be made available for inspection to prospective licensee free of charge. (15) Initial participation by Federal Government in exploration shall be to such extent as may be agreed upon between Federal Government and licensee. However, by Privatisation Commission (Amendment) Ordinance 2002, Privatisation Commission may withhold specified amount out of privatisation proceeds of Government of Pakistan’s shares in oil and gas fields located in specified areas.

In order to improve efficiency and availability of natural gas transportation and distribution services through increased private ownership and improved regulation, Natural Gas Regulatory Authority Ordinance, 2002 has been promulgated. Main feature of new Ordinance is establishment of Natural Gas Regulatory Authority responsible for matter connected to distribution and transportation of natural gas. Authority has exclusive power to grant, renew or terminate licence in respect of any regulated activity. Ordinance does not apply to upstream petroleum activities except where holder of petroleum rights claims transportation or transmission tariffs for pipeline connecting petroleum field to point of delivery. Marketing of Petroleum Products (Federal Control) Act was repealed in 2002, effective date of repeal being transfer of all government shares in Pakistan State Oil to private sector investors.

Hydrocarbon Development Institute of Pakistan Act, 2006 sets up Institute by this name with Federal Minister of Petroleum and Natural Resources as its chair. Functions of Institute include assisting Government in formulation of national policies for development of hydrocarbon industry, carrying out basic studies, research and development explorations of hydrocarbons, carrying out quality control and standardization of hydrocarbons to develop, and promoting use of clear, economic and alternative fuels, etc.


Charges over moveable property can be created by way of hypothecation or by way of pledge. In the latter transaction possession of the goods is transferred whereas in a hypothecation possession of the goods is not transferred.

After-acquired Property in Pakistan

Deed of Hypothecation can also be drawn up to include after-acquired property but this has to be done specifically.Hypothecation may cover floating stock and other stock in cases where, for instance money is advanced to a trading Stock in Trade company and provisions to cover this stock are incorporated in hypothecation.

Future Advances.

Can be covered by a hypothecation. It is also possible to provide that while any part of the debt is unpaid the whole security will continue as a security and not be diminished proportionately.


Instrument must be signed by both parties to it and where one of parties is a Company, in accordance with the articles of association, but if a hypothecation is witnessed it requires mortgage stamp duty. (See topic 20.03 Mortgages, subhead Stamp Duty.)


Is optional under § 18 of Registration Act, 1908 Act XVI, but in case of company, unless particulars are filed under § 121 of Companies Ordinance, 1984 such chattel mortgage shall be void against liquidator and any creditor of company.



The law relating to mortgages has developed against the background of the anxiety of the government to protect farmers against unscrupulous moneylenders. This means that the remedies of a mortgagee are sometimes slower and less effective than would be desirable in a primarily commercial community and therefore full and careful drafting is absolutely essential to safeguard the mortgagee.

A mortgage is a transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or the performance of an engagement which may give rise to a pecuniary liability.

Kinds of Mortgages.

A simple mortgage is created where without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage money and agrees, expressly or impliedly, that failure to do so will give mortgagee a right to have mortgaged property sold, and to apply sale proceeds towards his debt.

A mortgage by conditional sale exists where mortgagor ostensibly sells the mortgaged property on condition either that if payment is not made by a certain date the sale will become absolute or else on condition that if payment is made buyer will transfer the property to the seller or that sale would be void on payment. These conditions have to be expressly written into contract for sale.

A usufructuary mortgage exists where the mortgagor delivers, or undertakes to deliver, possession of the mortgaged property to the seller and authorizes him to retain possession until payment of the mortgage money and to receive the rents and profits in lieu of interest or partly in lieu of interest and partly in lieu of mortgage money.

Where the mortgagor binds himself to repay the mortgagee on a certain day and transfers the mortgaged property absolutely to mortgagee subject to proviso that mortgagee will retransfer it to mortgagor upon payment of the mortgage money as agreed, the transaction is called an English mortgage. This transfer may be with or without possession.

Where a debtor delivers to his creditor, or his agent documents of title to immoveable property, with intent to create security thereon transaction is called mortgage by deposit of title deeds.

Any other mortgage is called an anomolous mortgage.

Registration is required where the property is valued at over Rs. 100 and all mortgages except by deposit of title deeds can only be effected by a registered instrument attested by two witnesses. Where the property is less than Rs.100 in value and where the mortgage to be created is not a simple mortgagee the mortgage can be effected by delivery of the property.

Stamp Duty is worked out ad valorem. Stamp duty varies from province to province but is maximum of 5% of amount secured if possession is given and 4.5% of amount secured where possession is not given (in Sind) but only 1% for loans in Islamic mode of financing.


In general the first in time is first in rights but where a second mortgagee is induced to accept by the fraud, misrepresentation or gross neglect of first mortgagee, the prior mortgage will not take effect until after second mortgage.

If a mortgage made to secure future advances or the performance of an engagement or balance of a running account expresses the maximum to be secured thereby, a subsequent mortgage of the same property, if made with notice of the prior mortgage, will be postponed to the prior mortgage in respect of all advances or debts not exceeding the maximum though made or allowed with notice of the subsequent mortgage.

A first mortgagee buying the mortgaged land acquires rights of the mortgagor as against a second mortgagee.

Rights and Liabilities.

A mortgagor has the right after payment to redeem the mortgaged property, but where his interest is only a share in the property he is not entitled to redeem his share only, on payment of a proportionate part of the amount, except where the mortgagee or mortgagees has or have acquired the share of a mortgagor in the property. If mortgagor requires it mortgagee must transfer the property on redemption to a third person. Mortgagor has right to inspect documents, lease the property or commit waste unless the act is destructive or permanently injurious thereto or renders the security insufficient, i.e., reduces its value to less than one-third or where the property is buildings, one-half in excess of the amount due. Mortgagor is also entitled to any improvements without payment unless these improvements were necessary to prevent deterioration or under municipal direction. Mortgagor must defend mortgagee’s title and possession; pay all public charges where the mortgagee is not in possession; where the mortgaged property is a lease, have paid all rents due and performed all covenants undertaken; and where the mortgage is a second mortgage, mortgagor will pay the interest, as and when it becomes due on each prior incumbrance and at the proper time discharge the principal.

After the mortgage money has become due, mortgagee has a right to foreclosure and sale but this right must be exercised before a decree has been made for redemption and the money deposited in court. The exercise of the power of sale without reference to the court is limited in most cases. Where mortgagee holds two or more mortgages executed by the same mortgagor if he brings a suit on one he must sue on all the others, too. His right to sue for the mortgage money arises when the mortgagor binds himself to repay same, where the mortgaged property is destroyed either wholly or partly or security is rendered insufficient, where the mortgagee is deprived of the whole or part of his security in consequence of the wrongful act or default of the mortgagor, or where the mortgagee in possession is not given quiet enjoyment of the property. A mortgagee must generally manage the property as man of ordinary prudence would manage it if it were his own.


Any person who has an interest in or charge upon the property mortgaged, the surety for the payment of the mortgage debt, a creditor of the mortgager who has in a suit for the administration of his estate obtained a decree for sale of the mortgaged property all have similar rights of redemption.

Deposit in Court.

Any time after payment becomes due mortgagor may deposit the amount owed in court and the court must issue notice to mortgagee of this payment. Mortgagee must then express willingness to accept the money deposited and himself deposit in court all documents in his possession of power relating to the property and will receive the money instead, while the documents will be handed over to mortgagor and all mortgagee’s interest in the mortgaged property will be held to have ceased.


Persons resident outside Pakistan can institute suits against persons resident within, or apply for Letters of Administration to estates here or, under section 13 of Civil Procedure Code seek to have judgments obtained outside Pakistan enforced in Pakistan. Likewise suits may be brought against persons resident outside Pakistan and judgments obtained enforced against the judgment debtor’s property within Pakistan.

Care of Property.

There are no special provisions but absentees may appoint an attorney under Powers of Attorney Act 1882 to deal with their property.


  • 28 of Limitation Act, 1908 was held un-islamic by Shariat Appellate Bench of Supreme Court as right of person shall not extinguish merely on account of another holding same adversely for more than 12 years. It is offence under Illegal Dispossession Act, 2005 to enter into or upon any property to dispossess, grab, control or occupy it without having any lawful authority to do so with intention to dispossess, grab, control, or occupy property from owner or occupier of such property. Offence is punishable by imprisonment of up to ten years and fine/compensation.


No transfer of property can operate to create an interest which is to take effect after the life-time of one or more persons living at the date of such transfer and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains that age, the interest created is to belong.


Technically speaking there is no such classification of property in Pakistan. The contrast is not between real property and personal property but between moveable and immoveable property. There are no restrictions on ownership of immovable property in Pakistan by foreign controlled Pakistani incorporated companies; however foreign individual persons require prior approval of Home Department of relevant Provincial government or Federal Ministry of Interior in case of Islamabad Capital Territory.

See also topic 21.03 Perpetuities.

ESTATE TAX: Estate duty abolished.

GIFT TAX: By Gift Tax Act (Repeal) Order 1985 Gift Tax Act 1963 has been repealed, and as of July 1, 1985 no gift tax is leviable.


Effective from July 1, 2002, Income Tax Ordinance 2001 came into force. However, provisions of 1979 Ordinance shall remain effective for any income year ending on or before June 30, 2002. All pending proceedings shall also be carried out in accordance with provisions of 1979 Ordinance. The 2001 Ordinance does away with concepts of “income year” and “assessment year” and replaces them with single concept of “tax year” ending normally on June 30, though “special tax year” may be chosen by assessee with prior permission of Commissioner Income Tax.

Under Ordinance 2001, if shares of listed company are not traded during year, it will not be regarded as public company. Any benefits under share option schemes provided by employer shall now be taxed as “salary”. However, the mere grant of option will not impose any tax, which would only become due when option is exercised, with market value of shares on that date, as reduced by amount paid by employee for option, being treated as “salary”.

Capital Gains have been exempted from charge of income tax until 2005. Through amendment made by Finance Ordinance 2003, concept of “Advance Tax Ruling” from Central Board of Revenue has been introduced in case of nonresident for transaction proposed or entered into by taxpayer. Further residence status of individual would now be determined on basis of his stay in country in current year only. Company shall not be considered to be resident for tax purposes unless control and management of its affairs is situated “almost wholly” within Pakistan.

Income Tax (“Tax”) is chargeable by reference to income of taxpayer (“Assessee”) in previous year (“income year”) which is either year ending June 30th or calendar year or such other year ending as may be permitted by Central Board of Revenue. Tax year runs from July 1st to June 30th. By Finance Act, 1991, extensive withholding tax provision enacted also turnover tax payable by companies and registered firms. CBR also enabled to prescribe scheme for payment of fixed tax by person maintaining small establishment to carry on business or profession.

Through Finance Supplementary (Amendment) Act, 1997 person who owns immovable property with land area of 250 sq. yards or more, or owns motor vehicle, or subscribes to telephone, or has undertaken foreign travel except for Haj during income year must file income tax return irrespective of amount of total income unless they are covered by exceptions.

For purposes of charge of tax and computation of total income all income is classified under following heads: (a) Salaries, (b) interest on securities, (c) income from house property, (d) income from business or profession, (e) capital gains, and (f) income from other sources.

In line with tax regime of certain developed jurisdiction, one of persistent demands of corporate sector is proposed to be met in context of taxation of group of companies as one fiscal unit. Proposed provision would tend to promote culture of corporate consolidation and is consistent with emerging needs of country’s current status of economic development and demand of globalization.

Companies opting for group taxation should consider that losses of any company of group prior to it joining group will not be taken into account and no relief will be available to same for purposes of group taxation.

Proposed provision seeks to allow, under certain circumstances, subsidiary of company to surrender its evaluated loss, not including capital losses for that tax year, either to its holding company or to another subsidiary of same holding company. Loss submitted to holding company or any part of holding company will be set off against income from business in tax year in which it surrendered and following two tax years.


This head covers all income received by way of salary, annuity, pension or gratuity, fees, commissions and perquisites or profits in lieu of or in addition to salary or wages.

Interest on Securities in Pakistan

Income from interest receivable by person from any security of federal or provincial government or any debenture or other security issued by or on behalf of local authority or company is classified under this head. Standard withholding rate of 30% is applicable to such income except in case of interest on debentures issued by local authority or company for which recipient gets credit at time of his own assessment. Interest on Government Securities is exempt from tax provided that this is condition of issue of such securities.

Income from House Property in Pakistan

Tax under this head is leviable in respect of annual rental value of property.

Tax on Income from Business or Profession in Pakistan

This head applies to all income derived from commercial and industrial activities as well as from exercise of profession or vocation such as law, medicine, engineering, accountancy, etc. Income under this head is computed according to normal principles of accountancy after allowing deduction of business expenses. Losses are allowed to be set off against current income from all sources and where these are not completely absorbed in this manner can be carried forward for six years to be set off against further profits from same business profession or vocation. Six year time limit does not apply to unabsorbed depreciation allowance which can be carried forward indefinitely until it is completely set off against future profit. Special rules for computation of profits apply to undertakings engaged in exploration, production and extraction of oil, gas and mineral deposits as well as insurance business.

Capital gains derived from disposed of capital assets other than, inter alia, any stock-in-trade (not being stocks and shares), personal effects and land from which income derived by assessee is agricultural income, is charged under this head. Note: Exemption from capital gains tax on locally listed securities has been extended again.

Taxation Income from Other Sources in Pakistan

Under this head all residual income from any source other than those listed above is included. This includes dividends, interest, royalties and fees for technical services. Dividend income received by assessee (not being company) from company is taxed at 10% as separate slice of income; likewise income from prize bonds (at 10%); interest/profit from banks, finance society or company profit on specified security issued by any of foregoing (at 10%) deductible at source. Tax on income of nonresidents from fees for technical services and on invoice for royalty fees is charged at 15%, unless lower rate is prescribed under tax treaty.

Taxation on Personal Tax.

All individuals, unregistered firms, association of persons and every artificial juridical person other than company are liable to tax on their taxable income at rates set out in First Schedule to the Ordinance with minimum of 0.5% (of total income) where total income is more than Rs. 100,000 but less than Rs. 110, 000 (no tax is payable by female citizen unless her total income exceeds Rs. 250, 000).

Tax on Companies.

Tax on dividend received by public or insurance company is payable at rate of 5%, 10% in all other cases. Bonus shares no longer taxable in hands of shareholders; nor is S company required to withhold tax on bonus shares. Nonresident air and shipping enterprises are taxed at flat rate of 3% and 8% respectively on their gross earnings.

Primary principle for taxation of banking companies is that all profit and gains for purposes of taxation will mainly be pre-tax profits from all sources as computed in yearly financial statements submitted to State Bank of Pakistan.

In order to rationalize taxation of banking companies in Pakistan and to diminish undue litigation of certain claims unusual for banking companies, significant changes were proposed in Finance Bill 2007. Seventh schedule was introduced under § 100A of Ordinance under which all income profits and gains of banking companies will be processed in line with proposed schedule.

Foreign banks will be allowed deduction on account of head office expenses in ratio of Pakistani turnover to world turnover. Substantial change is also proposed whereby capital gains of banking company would be subject to tax at 10% of gross amount.

The rate of Income Tax – Corporate in Pakistan 
This is 35 percent. The exception to this is small companies, which are taxed at 25 percent. A company is considered to be resident in Pakistan if it is incorporated, formed by or under any law in force in Pakistan. Companies incorporated under foreign law are considered to be Pakistan resident if control and management of the affairs of the company is situated wholly in Pakistan at any time during the year. Resident companies are taxed on their worldwide income. Non-resident companies are taxed only on their Pakistan source income.

Assessment system – Self assessment. However, an assessment under self assessment scheme may be subject to tax audit and amendment.

Filing due date

  • For companies with tax year ending between 1 July and 31 December: 30 September following the end of tax year § For companies with tax year ending between 1 January and 30 June: 31 December following the end of tax year

Dividends paid to non-residents are subject to withholding tax of10 percent. For dividends declared/distributed by a purchaser of a power project privatized by WAPDA (Water and Power Development Authority) or a company setup for power generation, the withholding tax rate on dividends is 7.5 percent.

Royalties and fees for technical service paid to non-residents are subject to withholding tax of 15 percent.

Interest payments to non-residents (that have no permanent establishment in Pakistan) are subject to withholding tax of 10 percent.

Other payments to non-residents, for which a withholding tax rate is not specified in the Income Tax Ordinance, 2001 (the Ordinance), is subject to withholding tax of 20 percent.

The withholding tax rates may be reduced under the terms of applicable tax treaties.

© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Holding rules

Dividends distributed by a resident company are taxable at the rate of 10 percent.
Dividends paid by a non-resident company are taxable at the corporate tax rate of 35 percent in the hands of resident company.

Capital gains tax applies in Pakistan. However, the tax treatment of the capital gain depends on a range of factors including the industry and the holding period.

For companies which are in the banking industry in Pakistan, a gain on the sale of shares of listed companies (disposed of after one year or more from acquisition), shall be taxed at 10 percent. All other capital gains for companies in the banking industry shall be taxed at 35 percent.

Capital gain tax rates on securities vary according to the status of the taxpayer deriving such gain.

Where the security is held for more than twelve months, the capital gains tax rate is 0 percent.

Capital gains on capital assets other than securities shall be taxable at 35 percent, unless the capital asset has been held for more than twelve months, in which case 75 percent of the gain will be taxable.

© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Tax Losses

The tax loss rules in Pakistan differ depending on the type of revenue stream associated with the loss incurred.

  • Losses associated with “income from business” can be offset against any other type of income during a tax year. To the extent the loss cannot be offset, it may be carried forward and offset against “income from business” (and not other tax types) for up to six years.
  • Losses representing unabsorbed depreciation and amortization are allowed to be carried forward until completely set- off.
  • Losses associated with “income from other sources” can be set off against any other type of income during a tax year.

However, the amount that cannot be offset is not allowed to be carried forward.

  • Losses associated with “capital gains – other than securities” are not allowed to be set off against any other income type but can be carried forward and offset against capital gains income in future periods for up to six years.
  • Losses associated with “capital gains on the sale of securities” are allowed to be set off against other capital gains on the sale of securities. However, the amount that cannot be offset is not allowed to be carried forward.
  • Foreign losses can be carried forward for up six years but can only be offset against foreign income. . There is no loss carry-back provision.

Pakistan has a tax consolidation regime whereby a holding company and its wholly-owned subsidiary companies may opt to be taxed as one fiscal unit, subject to specified conditions being met.

In addition, group relief is also available in certain circumstances. Under the regime, a company may surrender its assessed loss (excluding capital losses) for the tax year to its holding company, another subsidiary of its holding company or its subsidiary.

Stamp duty at the rate of 1.5 percent of face value (par value) will apply to the transfer of shares. Capital Value Tax (CVT) at the rate of 0.01 percent of the purchase value of shares of a public listed company will also apply. The CVT will be collected by the respective Stock Exchange.

Tax Consolidation / Group relief

Transfer of shares

© 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.

Transfer of assets

Stamp duty, capital value tax, property tax, town tax etc. at varying rates (according to prescribed tables/values) may apply to the transfer of land and buildings.

Other tangible assets – Transfer of tangible assets is treated as disposal and resulting gain / loss on disposal of such assets may have tax impact.

Intangible assets – Transfer of intangible assets is treated as disposal and resulting gain / loss on disposal of such assets may have tax impact.

Other assets – Transfer of other assets is treated as a disposal and any resulting gain or loss on disposal of such assets may have a tax impact.

There is no specific CFC regime in Pakistan. However, where the tax authority is of the opinion that profits being retained with an offshore subsidiary are without justification or commercial reasoning, they may seek to deem profits on the resident holding company.

Pakistan tax law contains transfer pricing provisions. Documentation is not required by law; however it may be required during a tax audit.

There are no provisions in law for advance pricing agreements. However, the law contains rules for mutual agreement procedure where a reference is received from the Competent Authority of a country outside Pakistan under an agreement with that country with regard to any action taken by any income-tax authority in Pakistan.

Pakistan has a thin capitalisation regime. These rules apply where a foreign-controlled resident company (including a branch of a foreign company operating in Pakistan) has a foreign debt-to-foreign equity ratio in excess of 3:1 at any time during a tax year.

However, thin capitalization rules do not apply to the following:
§ A foreign controlled resident company that is a financial institution or a banking company.
§ Where the recipient of profit on foreign debt is subject to tax in Pakistan at corporate tax rate.

Pakistan tax law includes anti-tax avoidance rules under which transactions not reflecting substance, having no substantial economic effect or transactions entered into as part of a tax avoidance scheme may be disregarded or re-characterised.

Specific anti avoidance rules apply for salary paid by private companies, unexplained income or assets, security transactions, payment of royalty, management fee, interest by permanent establishment to head office or another permanent establishment of head office (except reimbursements).

Advance rulings may be obtained by non-residents with the exception of permanent establishments of a non-resident.
A person is allowed an amortisation deduction under income tax law in a tax year for the cost of the person’s intangibles.

100 percent deduction is allowed for research and development expenditure incurred in Pakistan but is restricted to the extent of research which has been undertaken in Pakistan.

Non-residents operating through a branch in Pakistan can claim a deduction for head office expenses (including regional head office costs) which should be in the nature of executive and general administration expenses. Such expenses can be remitted to the head office without payment of withholding taxes, subject to approval from the State Bank of Pakistan.

Other tax incentives include:

  • 50 percent initial allowance (tax depreciation / capital allowances) on plant and machinery
  • 90 percent first year allowance (tax depreciation / capital allowances) for specified companies
  • 90 percent accelerated tax depreciation for alternative energy projects
  • Tax credit of 10 – 20 percent of the investment made for balancing, modernization and replacement
  • Tax credit of 100 percent of tax payable for five years to newly established industrial undertakings
  • Tax credit of 100 percent of tax payable for five years attributable to expansion projects or new projects by an existing industrial undertaking

Tax exemptions, subject to meeting specified criteria, may be available in following sectors: § Power generation
§ Information Technology
§ Agriculture

No special rules for hybrid instruments.

Hybrid Instruments

Hybrid entities

Special tax regimes for specific industries or sectors

No special rules for hybrid entities.

Special tax regimes apply in the following industries:
§ Insurance sector – Fourth Schedule to the Income Tax Ordinance, 2001
§ Exploration and production of Petroleum – Fifth Schedule to the Income Tax Ordinance, 2001 § Banking – Seventh Schedule to the Income Tax Ordinance, 2001

Tax exemptions, subject to meeting specified criteria, may be available in following sectors: § Power generation
§ Information Technology
§ Agriculture

Tax on Registered Firms.

Registered firms (partnership) are liable to pay super tax only at rates specified in First Schedule to the Ordinance. Share of income of each partner of registered firm is added to his other income if any and tax is levied on his aggregate income after deducting super tax.

New provisions on Alternate Dispute Resolution have been incorporated into law to provide for efficient and quick mode of determination of disputes.

PROPERTY TAXES: Capital Gains Tax.

Capital Value Tax payable in certain transactions relating to transfers of immovable property if transferee not taxpayer.

STAMP TAX: Stamp Duty.

Stamp Duty is leviable under Stamp Act, 1899 by provinces at rates which vary from province to province; Punjab rates adopted in Islamabad Capital Territory. All instruments chargeable with duty must be stamped before or at time of execution, and instruments executed abroad within three months of receipt in Pakistan. Certificate of Stamp Officer that full duty is paid or no duty is payable is conclusive.No instrument chargeable with duty may be admitted in evidence unless it is properly stamped. A penalty may be imposed on all instruments which are not properly stamped to the extent of ten times the duty payable.

Rates of duty are fixed by provincial governments. Highest rate presently payable on any instrument is 9% ad valorem in Sindh, which is payable on conveyance of immoveable property.

TREATIES AND AGREEMENTS: Double Taxation Agreements in Pakistan

Government of Pakistan has signed agreements to avoid double taxation with 51 countries including almost all developed countries of world. These Agreements set ceilings on tax rates applicable to different types of income arising in Pakistan. They also set some basic principles of taxation which cannot be modified unilaterally. List of countries with which Pakistan has concluded tax treaties are: Austria, Bangladesh, Belarus, Belgium, Canada, China, Denmark, Egypt, Finland, France, Germany, Greece, Hungary, India, Indonesia, Iran, Ireland, Italy, Japan, Jordan, Kazakstan, South Korea, Kuwait, Lebanon, Libya, Malaysia, Malta, Mauritius, the Netherlands, Nigeria, Norway, Oman, Philippines, Poland, Qatar, Romania, Saudi Arabia, Singapore, South Africa, Sri Lanka, Sweden, Switzerland, Syria, Thailand, Tunisia, Turkey, Turkmenistan, United Arab Emirates, U.K., U.S.A., and Uzbekistan.

WEALTH TAX in Pakistan

Wealth tax has been abolished effective assessment year 2000-2001.
See category 1 Introduction, topic 1.02 Government and Legal System, subhead Islamic Laws.

MOTOR VEHICLES Law in Pakistan

Vehicle registration is required. Number plates must be displayed front and rear and must be of requisite size. Operations licence is required. Any person eligible to do so may apply to the licensing authority having jurisdiction in the area in which he ordinarily resides or carries on business for issue to him of a licence.

(1) No person under age of 18 is allowed to drive a motor vehicle in any public place. (2) No person under age of 21 is allowed to drive transport vehicle i.e., public service vehicle, locomotive or tractor unless latter two vehicles are used for agricultural purposes.The licensing authority may revoke a licence when there are reasonable grounds for believing that holder of the license is by virtue of any disease or disability unfit to drive a motor vehicle.

Licensing authority has power to disqualify a person for a specified period from holding or obtaining a licence in certain cases viz: if person is habitual criminal or habitual drunkard, or the person has by his previous conduct as driver of a motor vehicle shown that his driving is likely to be attended with danger to public.

A certificate of registration containing a detailed description of the motor vehicle is issued by the registering authority. Within 30 days of transfer of ownership of any motor vehicle transferee must report transfer to registering authority within whose jurisdiction he resides and must forward certificate of registration to that registering authority together with prescribed fee in order that particulars of the transfer of ownership may be entered therein.

Any person using or permitting another to use a motor vehicle in a public place must be insured against third party risks. Certificate of insurance must be produced if demanded by police officer in uniform authorised to make demand by provincial government.

Visitors to Pakistan having Carnet Registration may on reporting to the authorities obtain a free tax token for one month. On expiry of month visitors pay taxes normally imposed. Unless renewed by issuing authority for a further period, on expiry of Carnet Registration (usually valid for a year) visitor must pay relevant import duty on the vehicle and obtain fresh registration.

Visitors may not sell their motor vehicles in Pakistan until after two years from date of issue of the import permit by office of Controller of Imports and Exports. Then too vehicles may only be sold to non-Pakistani nationals and payment must be made in foreign exchange only. Customs duties must be paid prior to sale.

Nationals of Member States of International Convention holding international driving licences are permitted to use these licences until date of expiry when they may on application to licensing authority obtain a Pakistan driving licence.

Visitors from U.S. and nationals of states who are not members of International Convention may on basis of reciprocity obtain a Pakistan licence for duration of their stay in Pakistan on production of their respective driving licences.

SHIPPING Law in Pakistan

Principal Acts applying to shipping include the British Merchant Shipping Act of 1894 (with regard to registration, mortgages, and various other matters) and the Maritime Conventions Act 1911 which incorporates “International Convention For The Unification of Certain Rules of Law With Respect To Collisions Between Vessels”, 1910.

Carriage of Goods by Sea Act 1925 incorporates the Hague Rules into the law of Pakistan for outward bills of lading. An express statement should be contained in every outward bill of lading or document of title as to the applicability of these rules. Carrier is bound to exercise due diligence to make ship seaworthy, properly to equip the ship and make the holds, etc., fit for the carriage of goods. Goods loaded must be clearly marked and a bill of lading giving all particulars should be handed to shipper. Neither carrier nor shipper will be liable for any loss caused by the un-seaworthiness of the ship unless this was caused by want of due diligence on part of carrier. Defaults of others, fire, perils of the sea, act of God, war, latent defects, omissions of shipper, are listed, amongst other causes of damage, as causes for which carrier is not responsible. Carrier may surrender or increase all or any of his rights provided that such surrender or increase is embodied in bill of lading. Special conditions in respect of special goods may be imposed and scope of above rules can be limited by contract, provided that bill of lading is made nonnegotiable.

Merchant Shipping Ordinance 2001.

Law relating to limitation of liability of ship-owners in Pakistan has undergone significant change on Promulgation of the Merchant Shipping Ordinance 2001 with effect from Oct. 3, 2001. Ordinance gives effect to limits of liability for maritime claims under 1996 (London) Protocol to the 1976 Limitation Convention. Pakistan has also adopted limit of liability in respect of carriage of passengers in ship as prescribed under 1974 Athens Convention.

By § 541 of Ordinance following limits have been prescribed: For loss of life or personal injury 333,000 units of account for ship with tonnage not exceeding 500 tons, thereafter there is sliding scale providing for each additional ton 500 units up to 3,000 tons; 333 units per ton up to 30,000 tons, 250 units per ton up to 70,000 tons, and 167 units for each ton in excess of 70,000 tons. In respect of any other claims: 167,000 units of account up to 500 tons and thereafter for each additional ton 167 unites up to 30,000 tons and 125 units for each additional ton up to 70,000 tons and 83 units per ton in excess of 70,000 tons.Units of account are units of Special Drawing Rights “SDR” of International Monetary Fund, which will be converted into Pakistan currency at rate determined by State Bank of Pakistan on date of payment or on date when security is given. Equivalent in local currency of value of SDR unit on Feb. 12, 2002 was Rs. 75.0813.

  • 542 of Ordinance, which came into force on Oct. 3, 2001, prescribes that maximum limit of liability of shipowners in respect of passengers shall be in sum of 46,666 units of account multiplied by number of passengers which ship is authorized to carry but not exceeding 25 million units of account. Above limit of liability is for loss of life and personal injury. But no limit is prescribed for loss of luggage, which will be governed by conditions of carriage on ticket. By Merchant Shipping (Amendment) Ordinance 2002 licenses to shipping companies, shipping agents and non-vessel operating carriers shall be issued only after grant of no-objection certificate from Shipping Rates Advisory Board.

Admiralty Jurisdiction of High Courts Ordinance 1980, gives High Court extensive jurisdiction to hear admiralty cases relating to large number of specified questions or claims. In most cases, action in rem against ship will also lie.


Pakistan is a signatory to several multilateral and bilateral treaties, conventions and agreements concerning commerce, trade and foreign investment.

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