BOI Approval for Foreign Shareholders – Complete Walkthrough
Introduction
When a company in Pakistan includes foreign shareholders, it must obtain approval from the Board of Investment (BOI) — a government body that regulates and facilitates foreign investment. Whether you’re registering a foreign-owned company or adding an overseas partner later, BOI approval ensures legal entry of foreign capital and compliance with Pakistan’s investment laws.
What Is BOI Approval?
The Board of Investment (BOI) operates under the Prime Minister’s Office and serves as the regulatory gateway for foreign investors entering Pakistan. BOI approval is required for incorporating a foreign-owned company with SECP, adding a foreign shareholder to an existing Pakistani company, transferring shares from a local to a foreign investor, or opening a branch or liaison office of a foreign company. This approval confirms that the foreign investment complies with Pakistan’s Foreign Private Investment (Promotion and Protection) Act, 1976 and related policies.
When Is BOI Approval Required?
You must apply for BOI approval in the following cases:
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New Company Incorporation – When a foreign individual or company is listed as a shareholder in the Memorandum of Association.
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Post-Incorporation Change – When existing shares are transferred to a foreign person or entity.
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Equity Investment from Abroad – When foreign funds are injected to increase paid-up capital.
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Branch/Liaison Setup – When a foreign company wants to establish operations in Pakistan.
Step-by-Step Process for BOI Approval
Step 1: Prepare SECP Documents
Before applying to BOI, ensure your company is properly registered with the Securities and Exchange Commission of Pakistan (SECP). Keep the following ready: Certificate of Incorporation, Memorandum and Articles of Association, Form 29 (List of Directors), and Form A (Annual Return, if applicable).
Step 2: Fill the BOI Application Form
Download or access the form through the BOI e-services portal (www.invest.gov.pk). Choose the relevant category: Foreign Ownership in Local Company or Branch Office / Liaison Office Registration. Provide detailed information about the foreign shareholder(s), type and amount of investment, and business activity.
Step 3: Attach Supporting Documents
Prepare a complete set of required documents, including SECP Incorporation Certificate, Memorandum & Articles of Association, Board Resolution approving shareholding, Passport copy (for individual foreigner), Certificate of Incorporation (for foreign company), Proof of remittance / investment (bank document), and Power of Attorney (if submitted through a representative).
Step 4: Submit Application Online
Submit all documents on the BOI e-portal or via the relevant regional office (Islamabad, Karachi, Lahore). Pay the processing fee, typically around PKR 5,000–10,000 depending on the type of approval.
Step 5: BOI Review and Verification
The BOI reviews the application to ensure compliance with foreign investment rules. They may verify the source of funds and business nature to confirm it aligns with Pakistan’s negative list (sectors restricted to foreign investment).
Step 6: Approval Letter Issued
Once approved, BOI issues a Letter of Approval or Permission Certificate confirming the investor’s eligibility. This letter is required for updating SECP records (Form 3, Form 29), informing the State Bank of Pakistan (SBP) for remittance inflow, and opening a foreign currency account in Pakistan.
Important: Restricted or Sensitive Sectors
Foreign investors cannot invest without special permissions in certain industries such as arms and ammunition, high explosives, radioactive materials, currency and mint operations, and security printing. All other sectors are open to 100% foreign ownership under current BOI policy.
Timeline and Validity
Processing time is usually 2–3 weeks (subject to complete documentation). The approval remains valid as long as the company maintains compliance with SECP and FBR regulations.
Post-Approval Requirements
Once you receive BOI approval: -
Update SECP Records – Submit relevant forms (Form 3 or Form 29) showing the new shareholding structure.
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Report to State Bank of Pakistan (SBP) – Inform SBP through your bank regarding the foreign investment inflow.
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Tax Registration (FBR) – Update the company’s FBR profile if there’s a change in ownership or capital.
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Annual Reporting – Ensure compliance by filing annual returns and maintaining transparency for BOI audits if required.
Common Mistakes to Avoid
Submitting incomplete or unsigned forms, failing to disclose the exact share percentage of foreign investors, missing attestation on foreign documents (from Pakistani Embassy or Consulate), or not reporting the remittance to SBP through proper banking channels.
Why BOI Approval Matters
Obtaining BOI approval legitimizes your company’s foreign investment and provides legal protection under Pakistan’s investment laws. It also helps with smooth capital remittance, repatriation of profits, avoiding penalties or delays in SECP compliance, and enhancing credibility with banks and investors.
Final Thoughts
BOI approval is a critical step for companies with foreign participation. It ensures your investment is recognized and protected by law, allowing you to operate confidently within Pakistan’s regulatory framework. Whether setting up a joint venture or transferring shares, getting your BOI approval early saves time, avoids compliance risks, and builds investor trust.
