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An agribusiness company is an entity involved in the cultivation, processing, and distribution of agricultural products through wholesalers, retailers, and other intermediaries. These businesses are key players in various stages of the agricultural supply chain, from the farming and processing of food products to the marketing, warehousing, and retail distribution of farm products.
In Pakistan, the agricultural sector holds immense significance, not only as a primary source of foreign exchange but also as a cornerstone of the nation's economy. Contributing 18.9% to the GDP and employing 42.3% of the country's labor force, the agricultural industry plays a vital role in stimulating growth across other sectors. According to the Economic Survey 2019-2020, agriculture accounted for 19.3% of Pakistan’s annual GDP.
While the sector has faced challenges due to recent locust attacks on crops and the widespread impacts of the COVID-19 pandemic, some positive developments were noted in 2020. There was an increase in the production of essential crops like rice, wheat, pulses, oilseeds, and vegetables. Livestock production also showed signs of growth, while fertilizer production rose by 5.8%. Moreover, Pakistan saw a significant reduction in fertilizer imports, with a 20.7% decrease reported.
To support the agriculture sector, the Economic Coordination Committee (ECC) of Pakistan approved a multi-billion-dollar relief package in 2020, amounting to PKR 50 billion. This package aimed to provide subsidies to farmers on fertilizers, reduce bank interest rates on agricultural loans, and offer subsidies on cotton seeds, pesticides for whitefly control, and locally manufactured tractors. The subsidy scheme was designed to be implemented and monitored carefully through a scratch card system, ensuring that only genuine farmers benefited from the program.
For incorporating and registering an agribusiness company in Pakistan, three primary agencies are involved:
The SECP serves as the regulatory authority responsible for overseeing the corporate sector, specifically managing the incorporation of public and private companies. The incorporation process consists of three steps:
The initial step in incorporating a company is reserving an appropriate name as per Section 10 of the Companies Act 2017. Three proposed names meeting the specified criteria must be submitted for approval. This reservation can either be done through a separate application or alongside the incorporation application. No additional fee is charged if the reservation is included with the incorporation application. However, for a standalone application, the fee is PKR 200 for an e-application and PKR 500 for a physical application. After submission and payment, the registrar reviews the proposed names and, if they meet the criteria, issues a name reservation certificate valid for 60 days, during which the incorporation application must be filed.
As mentioned, the application for incorporation can be filed separately or along with the name reservation application. The incorporation fee depends on the type, capital, and size of the company as outlined in the Seventh Schedule of the Companies Act 2017.
The application must include the following documents:
For online applications, all documents must be scanned and uploaded, except for the memorandum and articles, which will be generated online.
Once the necessary documents are submitted, the registrar will review them to ensure compliance and completeness. If satisfied, the registrar will register the memorandum and other documents, issuing a certificate of incorporation bearing their signature and official seal.
Previously, a separate application was required for obtaining an NTN (National Tax Number) from the FBR. However, the SECP has now implemented a one-window facility where the data collected during company incorporation is automatically shared with the FBR for NTN registration.
The Government of Punjab mandates compulsory registration with relevant departments depending on the specific nature of the agribusiness. Businesses requiring mandatory registration include:
Agribusiness seed companies are required to register with the Government of Punjab under the Federal Seed Certification & Registration Department (FSC & CD). This registration aims to strengthen the company's relationship with the government, prevent the sale of substandard or uncertified seeds, and resolve legal disputes.
The documents required for the registration process include:
The registration process typically takes 3-6 months for approval. Currently, no governmental fee is charged for this procedure.
Pesticide distributors in Punjab are required to register with the Punjab Government under the Punjab Agricultural Department. The following documents are necessary for the registration process: