Foreign companies operating in Pakistan are now mandated to uphold records of their ultimate beneficial owners, which must be submitted to Pakistan’s Securities and Exchange Commission (SECP). The SECP has introduced provisions regarding foreign companies in the Companies Regulations of 2024, replacing the Companies (Incorporation) Regulations of 2017.
According to the new provisions, an “ultimate beneficial owner” refers to a natural person who directly or indirectly owns or controls a foreign company, holding at least 25 percent of shares or voting rights, or exercising effective control through other means. “Control through other means” can be exerted through a chain of ownership or by close relatives or associates with significant influence or control over the foreign company’s finances or decisions.
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Suppose a member of a foreign company holds at least 25 percent of shares, voting rights, or controlling interest on behalf of another person. In that case, additional details of the ultimate beneficial owner(s) must be obtained, maintained, and regularly updated by the foreign company. These details include:
- Name of the member of the foreign company without a beneficial interest.
- Name of the natural person who is the ultimate beneficial owner of the foreign company.
- Father’s name/Spouse’s Name; NIC/NICOP/Passport number along with the date of issue; nationality; country of origin; usual residential address; email address.
For cases of indirect shareholding or control, the following particulars of legal persons or arrangements through which shareholding, interest, or control is exercised in the chain of ownership or control must be provided:
- Name of the entity.
- Legal form [Company/LLP/Partnership Firm/Trust/Any other body corporate (to be specified)].
- Date of incorporation/registration.
- Name of registration authority; Business Address; country; email address.
- Percentage of shareholding, control, or interest of UBO in the legal person or arrangement.
- Percentage of shareholding, control, or interest of the legal person or arrangement in the foreign company and identity of the natural person who ultimately owns or controls the legal person or arrangement.
These regulations have been added to ensure transparency and accountability in the operations of foreign companies within Pakistan.