Pakistan

Employer Of Record In Pakistan‍

Skuad’s Pakistan EOR (Employer of Record) solution helps you expand your business into Pakistan without having to set up a separate entity. Any organization’s development depends upon a good HR team that can easily handle the onboarding of remote teams, payroll management, attendance, compliance, etc., accurately and on time. Skuad supports your global HR needs through its international network with an automated and unified platform.

Skuad helps you create exceptional remote teams, hire contractors or full-time employees, and understand the details of compliance and taxation structure in Pakistan. Book a demo to understand our process.

Pakistan at a Glance

Estimated population: 245.2 million

Currency: Pakistani Rupee

Capital: Islamabad

Languages spoken: Urdu, English

GDP: USD 374.7 billion

Employment In Pakistan

Pakistan’s employment laws are comprehensive and include various ordinances, acts, rules, and regulations with statutes relating to industrial, commercial, and labor establishments. The federal labor laws in Pakistan include the Workmen Compensation Act, the Payment of Wages Act, the Employer’s Liability Act, and more. Some other statutes apply to Sindh, Punjab, and Khyber Pakhtunkhwa provinces in Pakistan.

Pakistan’s labor laws apply to both citizens as well as foreign nationals. Foreign employees can easily work in Pakistan with a work visa unless there is a Visa Abolition Agreement between Pakistan and the employee’s home country. An application for this must be submitted to the Board of Investment, Pakistan.

Therefore, to stay compliant with the laws, Skuad provides an effective global network solution to expand your business and handles complete payroll without you having to set up another entity. Here are some important aspects of employment in Pakistan.

Visit Skuad to learn more about employment laws and employment agreements in Pakistan and get customized solutions.

Contractors vs. Full-Time Employees

When the company scales up and expands internationally, there are generally two options for hiring; contractors or full-time employees. Before hiring, companies must be familiar with the prevailing laws in Pakistan for hiring contractors and full-time employees. The relevant laws in Pakistan to define employment are:

1. Industrial and Commercial Employment (Standing Orders) Ordinance 1968 (applicable in Balochistan, ICT, and Punjab)
2. Khyber Pakhtunkhwa Industrial and Commercial Employment (Standing Orders) Act, 2013
3. Sindh Terms of Employment (Standing Orders) Act, 2015

For the workmen to whom the above ordinances apply, a formal employment letter is issued to define the terms and conditions of service. Workers in Pakistan are divided into six categories.

The maximum duration for a fixed-term contract worker doing tasks of a permanent nature is nine months. Sindh legislation defines a contract worker as a worker who works on a contract basis for a specific period mentioned in the contract in any establishment but does not include third-party employment. Hence, it is helpful to choose a global payroll provider such as Skuad, who can easily maintain your compliance and leave you free to focus on core business operations.

Hiring In Pakistan

Employees are valuable assets for a business’s growth, so it is essential to hire the right person for the right job. This has increased the importance of human resource management in all kinds of organizations. The system of recruitment and selection in Pakistan customarily relies on placing advertisements in the Sunday edition of the national newspapers, namely Daily Jang and Nawaiwaqt in Urdu and Dawn, The News, and The Nation in the English language.

Jobs in the government sector are advertised as a regulatory requirement through the National job portal, and jobs in the private sector are filled up through agencies, references, and popular websites such as Rozee, Brightspyre, Bayrozgar, Mustakbil, etc. Candidates who fulfill the criteria as per the job descriptions undergo a screening test followed by an interview.

The general etiquette during interviews suggests that the candidate wears a necktie during the interview and decent formal attire. Shaking hands with females is not permitted on religious grounds. After the interview process, a suitable candidate is given an opportunity for the job and is sent an employment offer containing the terms and conditions of the services.

There is a lack of equal employment opportunities among candidates. The literacy rate among females is lower than that of males, leading to the limited presence of females in the organization. Contractual jobs in Pakistan offer good packages and benefits in the short term without any job security.

Skuad helps to solve all such issues and provides a good compliance and payroll management system through which the right person from the right place can be selected as per the job requirement. Click here to learn more.

Probation & Termination

Get all the details of the probation period and termination period in Pakistan from Skuad experts today!

EOR Solution In Pakistan

Companies looking to expand their business in Pakistan can rely on Skuad as we cater to virtually all sizes of enterprises, from startups to medium to well-established companies. Skuad handles contract drafting, screening, hiring, onboarding, taxation filing, and providing day-to-day employment solutions for companies looking to expand overseas.

Before expanding operations, it is important to decide whether you want to build an in-house team or take the services of an EOR to manage payroll and employee hire-to-fire lifecycle.

Choosing the Skuad route for all important business practices can enable quicker onboarding and business management processes through simplified business solutions. Learn more about our process here.

General Employer of Record Service Terms

Types Of Visas In Pakistan

The types of visas in Pakistan are as follows:

Work Permit

When planning to set up a subsidiary and hire remote teams to carry on business operations in Pakistan, one needs to be aware of the laws on work permits and visas in Pakistan. Some of the important documents required while applying for a work visa are as follows:

• Employee’s photograph
• Employee’s passport
• Company registration letter from the Securities and Exchange Commission of Pakistan (SECP)
• Recommendation letter by the Board of Investors (BOI)/Ministry of Interior (MOI) for an extension
• Contact details
• Undertaking on company letterhead
• The employer cover letter on company letterhead
• Company’s profile
• Employment agreement
• Company’s FBR NTN certificate

These applications must be filled in English, and 4 identical sets of the application must be submitted to the embassy with a visa fee. The time taken to obtain a visa is three to four months. Applicants may need to go for an interview. After that, the BOI will process it, and then it approves the work visa and sends a recommendation to the Ministry of Interior. After this approval, you will finally be authorized for the issuance of a visa.

Skuad EOR can help provide you with a work permit in Pakistan. As a reliable EOR partner in Pakistan, Skuad’s EOR platform helps client organizations efficiently hire and manage their employees' activities in Pakistan.

Payroll & Taxes In Pakistan

To set up payroll and manage taxation in Pakistan, you need to be aware of the payroll and taxation rules which vary across different categories. With Skuad’s EOR Pakistan solution, you can rest assured that we manage a locally compliant payroll in Pakistan. The decision to be made is whether you want to manage payroll remotely or you prefer outsourcing to Skuad to manage your payroll along with compliance with local rules and regulations. Moreover, while choosing to set up a Pakistan payroll, it is necessary to establish a subsidiary in the country through which you can legally operate.

Taxes in Pakistan

Employer Taxation

Employee Taxation

Talk to us and know more about payroll and taxes in Pakistan!

Incorporation: How To Set Up A Subsidiary In Pakistan

A company that is planning to grow its business in Pakistan needs to decide, first and foremost, which state it wishes to set up the subsidiary in. Each region has different subsidiary laws that can impact the working of the company.

The types of business that can be set up are Limited Liability Company (LLC), Free Zone Company (EPZ company), Limited Liability Partnership (LLP), Public Limited company and representative office. The most common among these are Limited Liability companies.

The Pakistan Limited Liability Company (LLC)

An LLC can be registered with two directors and two shareholders with a minimum capital of USD 1,000. Directors and shareholders can be non-residents and need to register individually for an NTN number with the local tax authority. The Pakistan government also requires the LLC to have a legal advisor ordinarily residing in Pakistan if the entity has a share capital over US$5,000.

The steps to incorporate an LLC include:

• Name approval by the Securities and Exchange Commission
• Payment of application fees by any designated Muslim commercial bank
• Opening a bank account in Pakistan
• Completing the memorandum with signatures and then submitting a list of directors
• Obtaining a digital signature from the National Institutional Facilitation Technologies
• Registering with the regional tax office
• Registering with the social security institution depending on the location
• Registration with the Labor Department 
• A waiting period of 6 weeks to get incorporated as an LLC

Setting up a subsidiary in Pakistan raises many questions and queries. With Skuad’s EOR solution, you can put your concerns to rest, as we will help you operate legally and hire employees, manage payroll, and maintain business relationships on your behalf.

We recommend taking your time to work with your finance team and finding the right budget for the location where you want to set up a business. Connect with Skuad to streamline the process.

Professional Employer Organization (PEO)

PEOs help companies hire employees in Pakistan without having to establish a legal setup. The PEO manages all HR benefits, payroll, and compliance needs for the employees. The key difference between PEO and EOR is as follows:

It is up to the company to decide whether it wants to partner with a PEO or an EOR solution for growing its business.

In Skuad’s EOR solutions, you are not required to form an entity in the country of expansion. Skuad completely handles all the hassles of working through the various stages of incorporation, documentation, and handling employment contracts.

Conclusion‍

Skuad's comprehensive solution allows you to have peace of mind and assists in every detail related to recruitment, tax, and compliance, payroll management, a sound tracking system, and updated details of changes in local employment laws in Pakistan. The main features of Skuad are:

• Global Infrastructure
• Unified Employment Platform
• Single Invoice for Everything
• Compliance with local taxation and employment laws
• IP Protection and Safety

‍Skuad comes with experience and expertise in building a team anytime, anywhere, and in any mode, covering over 160 countries around the globe. Contact us and learn more about our Pakistan EOR solution to shape your ideas for business expansion in Pakistan.

FAQs

1) What is the employer of record in Pakistan?

An Employer of Record in Pakistan becomes the legal employer for your staff, handling everything from payroll and taxes to labor laws and HR. This lets you hire Pakistani talent without establishing a local entity.

2) What is an EOR?

An Employer of Record acts as your legal employer for international staff. They handle HR complexities like payroll, taxes, and benefits administration in your target country, eliminating the need for a local entity setup.

3) What is the difference between employer of record and payroll?

EORs act like your global employment HR department, handling everything from hiring to benefits for your international team. Payroll companies, however, focus on software solutions for wage disbursement.

4) What is the difference between EOR and PEO?

An employer of record (EOR) legally employs individuals on behalf of another company and handles all compliance, payroll, and HR tasks. A Professional Employer Organization (PEO) co-employs staff, sharing responsibilities with the client company but typically requires the client to have an established business entity in the country.