Starting your own business in Pakistan? A sole proprietorship is often the fastest, simplest, and most affordable way to get going. Whether you’re launching a freelance career, opening a small shop, or testing a startup idea, this structure offers flexibility with minimal red tape.
What Is a Sole Proprietorship?
A sole proprietorship is the most basic form of business ownership in Pakistan. In legal terms, it means there’s no separation between you and your business. You own it, control it, and are personally responsible for any profits, losses, or liabilities.
This structure is especially popular among:
- Freelancers and consultants
- E-commerce sellers
- Small shop owners
- Service-based startups
- Home-based businesses
Why Choose a Sole Proprietorship in Pakistan?
Here’s why many entrepreneurs start with a sole proprietorship:
✅ Easy and Quick to Register
No need to register with the SECP (Securities and Exchange Commission of Pakistan). You just need an NTN (National Tax Number) and a business name.
✅ Full Control
You’re the sole decision-maker. You keep all the profits and have total freedom in running your business.
✅ Low Startup Costs
There’s no capital requirement and no legal fees for incorporation.
⚠️ But Be Aware: Unlimited Liability
You are personally liable for debts and taxes. That means if the business is sued or falls into debt, your personal assets may be at risk.
How to Register a Sole Proprietorship in Pakistan: Step-by-Step
Here’s what you need to do to get started:
1. Choose a Business Name
Pick a unique name that reflects your brand. You don’t need to register the name separately, but you should check for availability to avoid duplication.
2. Get Your NTN (National Tax Number)
This is the most important step.
How to apply:
- Visit the FBR Iris Portal: https://iris.fbr.gov.pk
- Create an account using your CNIC
- Fill out the form for “Registration of Individual”
- Upload required documents:
- Copy of CNIC
- Utility bill (for address verification)
- Business address details
- Recent passport-size photo
Once submitted, your NTN is usually issued within 2–5 working days.
3. Register for Sales Tax (If Required)
If you’re selling taxable goods or services, you’ll also need to register for Sales Tax with FBR.
4. Open a Business Bank Account
After receiving your NTN, visit your preferred bank with:
- NTN certificate
- CNIC
- Business proof (e.g., utility bill or letterhead)
- Account opening form
Use this account for all business transactions to keep things clean for accounting and tax purposes.
As your business grows, you can always transition into a more complex structure like a Private Limited Company. If you’re thinking ahead, here’s how to legally register your startup in Pakistan with SECP —a helpful guide for when you’re ready to scale.