ISLAMABAD: The Securities and Exchange Commission of Pakistan (SECP) has formally sent the final draft of the Companies Bill, 2016 to the Ministry of Finance for initiating necessary legislative process and its passage by the Parliament.
These new concepts are being introduced to meet the international standards and requirements. Public suggestions regarding the bill have also been invited to be later made part of the final Companies Bill 2016.
Earlier, the SECP chairman briefed Finance Minister Ishaq Dar on the draft bill. The minister directed that provisions relating to Companies Global Register with respect to beneficial owners, duties of the officers of the company to take adequate measures to avoid fraud and money laundering, new concepts relating to free zone companies, real estate companies and agricultural promotion companies should be further deliberated with the stakeholders.
The SECP should finalise such provisions after broader consultation and consensus of the stakeholders. In order to ensure corporate transparency and facilitate meaningful due diligence, the SECP proposes to maintain a Companies’ Global Register of officers and beneficial owners of the companies having beneficial ownership in local or foreign companies.
The information will be reported by the company to the registrar along with the annual return of the company; however, for the first time such information will be reported through a special return on a prescribed form within a stipulated timeframe.
Furthermore, for prevention of fraud and money laundering every officer of the company would be required to take necessary measures to prevent the commission of fraud and money laundering in the respective company. Any failure on the part of such officer shall be an offence.
The SECP also proposes to introduce provisions regarding certain specialised companies, including free zone companies, real estate companies and agricultural promotion companies. The free zone companies will cater to carry out business in export processing zones notified by the federal government.
The introduction of free zone companies will support Pakistan's future export needs especially in the wake of CPEC which will potentially change the economic landscape of the country. The concept of free zone companies is prevalent internationally and successfully attracting foreign investors and investments.
At present in Pakistan, the export processing zones and free zones are notified by the federal government under the Export Processing Zone Authority Ordinance, 1980 and various exemptions have been granted therein.
However, the Companies Ordinance, 1984 did not cater to the concept and there was a need to provide further incentives, especially to foreign nationals and entities investing in free zones. Through the proposed provision the foreign nationals would be exempted from disclosure requirements. Further, the SECP will also be able to give concessions with respect to filing requirements under the draft bill.
