# Pakistan

 Country code: PK · Currency: PKR · Language: English

**Pros**
- Access to a vast, young, and cost-effective labor pool for scalable service-based ventures.
- Significant tax exemptions and incentives within designated Special Economic Zones for foreign investors.
- Rapidly expanding digital infrastructure and a burgeoning startup scene with limited initial state intervention.

**Cons**
- Pervasive systemic corruption and burdensome red tape complicating basic property rights and contract enforcement.
- Chronic energy shortages and aging physical infrastructure increasing operational costs for manufacturing.
- High inflation rates and volatile currency values undermining capital preservation and long-term financial planning.

Long story short: Here, the real threat isn't the taxman, it's your own bank: getting your dollars out turns into an obstacle course, thanks to currency controls and a hard currency shortage that has brought companies to their knees.

The administration looks the other way if you keep a low profile, corruption gets negotiated rather than crushing you, and in the posh parts of Islamabad or Karachi you live comfortably behind private guards.

Other things worth knowing: frequent power cuts, food that's generous and spicy, jaw-dropping Himalayan landscapes, and people with fierce hospitality.

## Will your income be taxed?

Long story short: YES, A LOT.
They'll shear you for up to **35%** at the top marginal rate in **Pakistan**, and the taxman has *long arms*: linger a bit too long, park your economic interests here, and the net closes.

Steep rate, wide catchment: the classic combo of states that don't let go of their cash cows. Don't expect a plane ticket to fix it.

**01.1 Income tax**

| Metric | Value | Detail |
| --- | --- | --- |
| Personal income tax | 0 → 35% | progressive · 6 brackets |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 2,159 | exempt |
| 2,159 – 4,318 | 1% |
| 4,318 – 7,916 | 11% |
| 7,916 – 11,514 | 23% |
| 11,514 – 14,752 | 30% |
| 14,752 + | 35% |

**01.2 Tax residence test**

_A single active rule is enough to make you tax-resident._

| Metric | Value | Detail |
| --- | --- | --- |
| 183-day rule | exists here |  |
| Economic interest | does not exist here |  |
| Family centre | does not exist here |  |
| Habitual abode | does not exist here |  |
| Extended-stay test | does not exist here |  |

## Will your wealth be taxed?

Long story short: YES, A LOT.
**Pakistan** runs the full shearing kit on wealth: capital gains at **35%**, *plus* an annual wealth tax above a threshold (top rate **1%**).

Flow, stock, transfer: every angle gets clipped. Holding assets here is how you feed the machine.

**02.1 Investment income**

| Metric | Value | Detail |
| --- | --- | --- |
| Capital gains | 35% | progressive · +9% salaried individuals with taxable income exceeding PKR 10 million · +10% non-salaried individuals and AOPs with taxable income exceeding PKR 10 million |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 2,159 | exempt |
| 2,159 – 4,318 | 1% |
| 4,318 – 7,916 | 11% |
| 7,916 – 11,514 | 23% |
| 11,514 – 14,752 | 30% |
| 14,752 + | 35% |

| Metric | Value | Detail |
| --- | --- | --- |
| Dividend tax | 15% | flat · +100% recipient of dividend is a resident but inactive taxpayer |
| Interest income | 15% | progressive |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 17,990 | 20% |
| 0 – 17,990 | 15% |

**02.2 Wealth & estate**

| Metric | Value | Detail |
| --- | --- | --- |
| Wealth tax | 1% | progressive |
| Inheritance system | NONE | no estate tax · no heir-based duties · no succession tax framework. Wealth transfers across heir-classes are not taxed in this jurisdiction. Only standard probate / registration fees may apply. |

**02.3 Crypto**

| Metric | Value | Detail |
| --- | --- | --- |
| Crypto · tax regime | PROGRESSIVE | Rate: 35% · As of March 2026, Pakistan has legalized and regulated crypto-assets under the Virtual Assets Act 2026, which established the Pakistan Virtual Assets Regulatory Authority (PVARA). While the Act introduced a specific 5% capital gains tax on crypto-to-fiat conversions, gains are generally treated as 'Income from Other Sources' or 'Capital Gains' under the Income Tax Ordinance 2001, subject to progressive individual tax rates reaching up to 35%. Crypto-to-crypto swaps are considered taxable disposals. Professional trading is taxed as business income at the same progressive rates. |
| Crypto-to-crypto | TAXABLE | each swap counts as a disposal — gains realised at every trade |
| FATF travel rule | NOT SIGNED | no information-sharing obligation on VASP transfers |

## Easy to run a company there?

Long story short: YES.
Corporate tax in **Pakistan** sits at a *low* **10%**, VAT included in the good mood. Setting up and running a company is cheap; whatever ends up killing your venture here, it won't be the tax bill.

**03.1 Rates**

| Metric | Value | Detail |
| --- | --- | --- |
| Corporate tax | 0 → 10% | progressive · +1% Super tax imposed on income slabs |

| Bracket (USD) | Rate |
| --- | --- |
| 0 – 539,700 | exempt |
| 539,700 – 719,600 | 1% |
| 719,600 – 899,500 | 1.5% |
| 899,500 – 1,079,400 | 2.5% |
| 1,079,400 – 1,259,300 | 3.5% |
| 1,259,300 – 1,439,200 | 5.5% |
| 1,439,200 – 1,799,000 | 7.5% |
| 1,799,000 + | 10% |

| Metric | Value | Detail |
| --- | --- | --- |
| VAT standard rate | 18% | single rate · no reduced tiers |

**03.2 Regime & registry**

| Metric | Value | Detail |
| --- | --- | --- |
| IP Box · Patent Box | NONE | no IP regime · IP income taxed under standard corporate rules |
| Misuse of corporate assets | NO CRIMINAL | no criminal liability · In Pakistan, which follows a common law tradition, the misuse of assets by a sole shareholder-director of a solvent company is primarily a civil or regulatory matter. While the company is a separate legal entity, criminal charges like 'Criminal Breach of Trust' (Section 405/409 of the Pakistan Penal Code) require 'dishonest' intent to cause wrongful loss. Since the sole owner consents to the use of funds and the company remains solvent (no loss to creditors), the criminal threshold is not met. Such acts are instead treated as breaches of fiduciary duty or violations of the Companies Act 2017, punishable by administrative fines or tax penalties. |
| Shareholders privacy | PUBLIC PAYWALL | Securities and Exchange Commission of Pakistan (SECP) |
| Directors privacy | PUBLIC PAYWALL | Securities and Exchange Commission of Pakistan (SECP) |

**03.3 Incorporation cost**

_In this country, the most standard company form is called Private Limited Company (Private Limited Company (Pvt. Ltd.)). The costs below are for incorporating a company in its simplest form, for reference only._

| Metric | Value | Detail |
| --- | --- | --- |
| SECP Official Registration & Name Reservation Fees | USD 18 |  |
| Professional Legal & Incorporation Services (Foreigner Package) | USD 1,482 |  |
| Total | USD 1,500 |  |

## A good fit for a holding?

Long story short: NO.
**Pakistan** has no treaty network at all, which buries the holding question, full stop.

Every dividend in or out eats the statutory withholding at full rate, and no domestic regime can patch a hole that sits on the source side. Don't park a holding here.

**04.1 Substance & exemptions**

| Metric | Value | Detail |
| --- | --- | --- |
| Territorial · individuals | WORLDWIDE | worldwide income taxation regardless of source |
| Territorial · corporates | WORLDWIDE | worldwide corporate taxation |
| Participation exemption | NONE | no dividend participation exemption regime |
| CFC rules | APPLY | Retained income of a foreign entity is taxed at the dividend tax rate (15%) if it is controlled by Pakistani residents (over 50% ownership or over 40% by a single resident), lacks active business income, is not listed on a recognized exchange, and pays low foreign tax. |

**04.2 Withholding tax · non-resident**

| Metric | Value | Detail |
| --- | --- | --- |
| WHT · dividends | 15% | non-resident outbound |
| WHT · interest | 10% | non-resident outbound |
| WHT · royalties | 15% | non-resident outbound |
| Tax-haven WHT | NONE | no punitive rate on record |

**04.3 Treaty network**

| Metric | Value | Detail |
| --- | --- | --- |
| Treaties signed | 0 | active |
| Treaties pending | — | in negotiation |

## Easy to come and go?

Long story short: SOME.
**Pakistan** taxes your worldwide income while you're resident, but at least the exit is free: *no exit tax* on the way out.

Leaving costs you paperwork, not money; your unrealised gains walk out the door with you, untouched.

**05.1 Exit & dual nationality**

| Metric | Value | Detail |
| --- | --- | --- |
| Exit tax | NONE | no triggers active · residence change tax-free · no deemed-disposal mechanism |
| Dual citizenship | FORBIDDEN | naturalisation requires renouncing existing citizenship |

**05.2 Citizenship paths**

| Metric | Value | Detail |
| --- | --- | --- |
| Residence | 5 years | available path to naturalisation |
| Marriage | — | not available |
| Birth | jus soli | available path to naturalisation |
| Descent | — | not available |
| Investment | — | not available |

## Is your money watched?

Long story short: PARTLY.
**Pakistan** has signed *most* of the standard exchange frameworks *and* runs a public corporate registry. Your accounts get reported to your home tax office, and your shareholdings sit in the shop window.

Watched on both axes: not wall-to-wall, but don't come here for discretion.

**Multilateral reporting frameworks — 3/9 active · 3 pending**

| Item | Status | Detail |
| --- | --- | --- |
| CRS | Signed | 2018 |
| CARF | None | — |
| FATCA | None | — |
| MLI | In force | 2020 |
| BEPS | Signed | — |
| MAAC | In force | 2016 |
| GLOBAL FORUM | Signed | — |
| EOIR | In force | — |
| CRYPTO TRAVEL RULE | None | — |

## Is it blacklisted?

Long story short: NO.
**Pakistan** sits on no major blacklist, though it's *outside* the FATF club.

Some counterparties will run a bit of extra due diligence out of habit, but there's no formal stigma: you won't get hassled for dealing with it.

**Blacklist exposure — Clear everywhere**

| Item | Status | Detail |
| --- | --- | --- |
| EMBARGO | Clear | un / us / eu sanctions |
| FATF | Clear | grey / black list |
| EU | Clear | non-cooperative list |
| FRANCE | Clear | ETNC list |
| SPAIN | Clear | tax-haven list |
| PORTUGAL | Clear | favourable regimes |
| BRAZIL | Clear | low-tax list |

## Do you feel free there?

Long story short: NO.
Press freedom in **Pakistan** is *locked down* (RSF rank **\#158**). Independent media and civic space operate under pressure (when they operate at all), and that kind of grip usually spills over into economic life too.

Small mercy: crypto isn't formally banned.

**08.1 Press freedom**

| Metric | Value | Detail |
| --- | --- | --- |
| Press freedom · RSF index | 158/180 | score 29 · ↓ 6 ranks year-on-year |

Central bank digital currency

    Program Status Cross-border Sources     Pakistan CBDC

Goal of issuing a CBDC would be to promote financial inclusion and reduce corruption, and inefficiency.

State Bank of Pakistan

   RESEARCH   —   [announce →](https://asia.nikkei.com/business/markets/currencies/pakistan-s-digital-currency-effort-gets-support-from-japan%20https://www.ledgerinsights.com/pakistan-planning-cbdc-pilot/ "Announcement")

 programs 1

## Connected to the world?

Long story short: POORLY CONNECTED.
The two rails that matter are both dead in **Pakistan**. *Stripe* won't onboard you, so card payments mean a foreign structure or a local processor with its own rules. *Amazon* doesn't deliver either.

Some secondary services run (**4/11**), but for an online business this is swimming against the current.

**Accept payments — 2/6 available**

| Item | Status | Detail |
| --- | --- | --- |
| Stripe | Not available | card payments |
| PayPal | Not available | wallet payments |
| Adyen | Available | enterprise psp |
| Mollie | Not available | eu payments |
| GoCardless | Not available | direct debit |
| Paddle | Available | merchant of record |

**Bank and move money — 1/3 available**

| Item | Status | Detail |
| --- | --- | --- |
| Wise | Available | multi-currency |
| Revolut | Not available | personal banking |
| Revolut Business | Not available | business banking |

**Buy and sell on Amazon — 1/2 available**

| Item | Status | Detail |
| --- | --- | --- |
| Amazon | Not available | consumer delivery |
| Amazon Seller | Available | marketplace selling |

  SEE ALSO## Other jurisdictions worth comparing

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