How to get Solar Company Registration in Pakistan?

As energy crises are increasing day by day and we are not sure when it will over in Pakistan. In such a scenario, solar energy is the best alternative solution for electricity. Some people are using generators and others are fulfilling the requirement of electricity from UPS but they both have some drawbacks such as if a person uses a generator to fulfil electricity requirement he/she needs to bear the cost of petrol/gas to run the generator. Similarly, if a person installs UPS, it needs to be charged 8-12 hours to provide sufficient backup.  Therefore, solar energy is a reliable source to generate electricity and fulfil electricity as per the requirement with a one-time investment to get rid of electricity shortages at the household level or industry level. So, a Solar system is required & for professional solar installation, Solar Company Registration in Pakistan will be required

Solar Company Registration with AEDB

www.aedbregistration.com

Why start solar business in Pakistan?

Pakistan is blessed with plenty of renewable alternative energy resources, among them Solar energy is the best alternative solution to generate electricity and is easily accessible. In Pakistan, solar radiation intensity (SRI) is 1500W/m2 to 2750W/m2 all the year which indicates 45MW to 83MW electricity can be generated in an area of 100 m2.

There is a huge shortfall of 4000 MWs is being faced by Pakistan due to demand and production gape of electricity. This shortfall arises an electricity crisis in Pakistan that is directly affecting the daily lives of Pakistan’s people and the industry sector. To overcome this issue government of Pakistan took initiative to promote the Net Metering process with AEDB by which the consumer owns a solar setup and generate electricity for his/her usage and surplus electricity supplies to the national grid station which adjusted in consumer electricity bill by concern electricity department. Similarly, solar energy helps in reducing the electricity bill.

In Pakistan 6-8 months, summer season remains which provide an opportunity to generate a sufficient amount of electricity by solar setup. If a consumer does not fulfil his/her 100% electricity requirement by solar energy setup but definitely will notice the sophisticated impact in electricity bill because of solar energy usage throughout the month.

Moreover, solar energy can play a major role in relieving energy crisis issue in Pakistan. A own powerhouse can fulfill consumer electricity demand with some support to national grid station by providing excess energy that can be distributed to reduce electricity short at national level. Solar energy is also beneficial for the environment and let us reduce carbon footprint on earth. To take first step, Solar Company registration is mandatory.

Potential of solar business in Pakistan

Pakistan has massive potential to generate energy by solar system as mostly areas are hot and dry but it’s not being utilized as the environment can offer and seems focused in generating energy with fossil fuels, only 1.16% electricity is generated by solar power and 64% with fossil fuels and rest 27% with hydropower, 5% with nuclear and 4% renewable energy sources. Experts said that if there is enough political will and support, Pakistan has the capabilities to generate more than 2900 Gigawatts which is an impactful figure to reduce or eliminate energy crisis issues in Pakistan.

Solar company has more domains not specific to solar installation and to start solar business one needs to survey market and competitors and select a niche fill that gap and capture the market.

Solar business has different domains and mainly can categorize in three;

  • 1.     Solar equipment manufacturer

Make company that produce the equipment used in solar business for example photo voltaic panels, inverters, batteries, chargers etc. or become dealer of these to supply customers as per their demands.

  • 1.     Contractor:

They are expert people in installing solar system and provides installation services to their clients. FOr solar installations, Solar Company Registration with AEDB is mandatory

  • 1.     Investors:

They invest money in solar business and earn from it.

Solar business is growing at fast pace and various solar companies are in joining the queue of solar business and capturing market share by providing solar energy services to their clients but they are not enough to cater each customer and the market gap is still available to start solar business in Pakistan. It is a money making in any term whether it’s selling of solar equipment or providing installation services.

Steps to setup solar business

Before starting a solar business a few steps are required to cater

  • Prepare Business Plan of solar company registration
  • Need to form solar business as legal entity
  • Register your business with Tax Authorities
  • Open a Bank account in the name of business
  • Set & plan to manage  Accounts of Solar Business
  • Acquire solar business licenses & certificates 
  • Solar Business Insurance
  • Name Solar Business Brand
  • Design an eye catching website of  Solar Business
  • Create a communication system for business
  • Apply marketing strategies to promote solar business
  • Utilize internet marketing and social marketing

Above steps will help in setting up new solar business and will ensure that it properly registered and legally compliant.

1.     Prepare a Business Plan of solar company registration

A comprehensive business plan is necessary to be a successful entrepreneur. It guides and helps out details of business and detects some unknown factors. Some points are also needed to be noticed while making a business plan such as

  • What will be the initial cost to start business
  • Prospect /target customers.
  • The charges of customers will have to pay
  • Brand name.

Solar Company registration Initial Cost

Initially, investment is required in order to set up the business and it depends on startup business setup as this investment is necessary to gain access to market, hire staff and perform first project and other expenses like payroll, ordering equipment from distributor for project, marketing, to get registration and license of business,  to train staff for business etc.

Prospect/ Target customers:

As the energy crisis increases and not define when resolved, solar is best alternative energy solution to alleviate electricity breakdown for the people. Hence, a single household or industry that wants to run smooth life and business will intend to approach to solar energy providers.

The charges of customers will have to pay

Service fee or charges can be varied as per customer requirement of solar system to be installed in his/her household or business and different plan can be designed with respect to customers.

Brand Name

A unique name of product/services is like a pillar that support overall building, hence, a brand name must reflects the product/services is provided and must be clear and easy to remember. It’s important to prior research on a business name from government business and trademark records, from social media platforms and website availability to protect from unknown claims of business name or web portal.

2.     Need to form solar business as legal entity

There are four types of business organization as mentioned below and  before jumping into business world, entrepreneurs should carefully decide which types of business is best suited to them.

  1. Sole Proprietorship
  2. Partnerships
  3. Limited Liability Partnership(LLP) registered from SECP
  4. Limited Company or Limited Liability Company (Private Limited and Public Limited)

1.      Sole Proprietorship

 This type of business owns and runs by individual and owner has sole responsibility to look after all the matters related to business, he/she is completely liable for any profit or loss business. To register as sole proprietor business following are the requirements.

  • A unique business name.
  • A letterhead of business with logo, phone number and physical address of business.
  • Free online registration facility is available through FBR website ‘www.fbr.gov.pk’  on business in IRIS.

Latest paid electricity bill and rent agreement (not three month later) are required 

  • A bank account is required to be opened in the business name in any bank by providing CNIC, business letterhead, business stamp and copy of online NTN verification etc.. After account opening account maintenance letter will be provided by bank.

2.     Partnerships

It is a group of two or more persons who jointly decides to perform business activities equally and share profits and losses. Partnership agreement can be written or oral. It is better to be in written form to settle any dispute arising in partnership tenure. Partnership must be registered in Pakistan as per partnership Act, 1932 otherwise it has no legal entity.

3.     Limited Liability Partnership (LLP) registered from SECP

It’s a different and new business structure in Pakistan introduced by SECP (Security Exchange Commission of Pakistan) in 2017 to fulfill high demand of entrepreneurs as alternative business structure to the traditional partnership and private limited company and that can allow entrepreneur to organize their business in flexible and efficient manners.

In LLP liability of each partner is limited and LLP is a separate entity, taxation criteria is same a (AOP) partnership whereas cost to administrate is higher than (AOP) but lower than a private limited company.

4. Limited Company or Limited Liability Company (Private Limited and Public Limited)

Minimum two people can register a private limited company and a person can be shareholder and director in company. It lies between partnership and public limited company. The liability of members is limited as per shares they hold.

5.   Registration of company in Pakistan 

As per the company Act 2017, SECP is authorized to register, form and regulate companies in Pakistan and required the following information in the prescribed manner to register the company.

  • Company Name
  • Company Principal business place
  • Nature of company business
  • Memorandum and Articles of Association-MOA
  • Company Directors names , their permanent addresses and other particulars
  • Share capital amount , Authorized and Paid up
  • Each shareholder’s number of shares

3. Get solar Company registration for taxes (Income Tax, Sales Tax and Professional Taxes)

Income Tax, Sales Tax & Professional Tax

To register business in Income tax , need to apply for NTN at tax facilitation of regional tax office (RTO) of FBR along with following required documents.

  • NTN form
  • Registration Proof
  • Memorandum and Articles of association
  • Bank account number
  • CNIC copies  of companies’ Directors
  • Business address attestation

Application for Sales Tax Number (STN) can be processed like income tax at the tax facilitation centre of the Regional Tax Office (RTO) of the Federal Board of Revenue (FBR) whereas Professional tax can be registered with Excise and Taxation (ET) Department of district.

EOBI and ESSI Registration

A company needs to be registered with EOBI (Employee Old age Benefit Institution) and ESSI (Employee Social Security Institution) as per business location. For Sindh SESSI, for Punjab PESSI, of Balochistan BESSI and for KPK KPKESSI.

District Registration at the Labor Department

The organization consists of more than one worker is obliged to get registered with the Labor Department. Labor department preserves the labor standards of the employees working in the firms. A bank challan with application is submitted to the bank for registration.

 4. Open a Bank account in the name of business

The next task after the company registration is to opening a bank account. There are number of banks in Pakistan that offer services for opening business account on providing a few SECP attested documents as enlisted below with an account opening application on behalf of company’s directors.

For Partnership firms to provide:

  • certificate of registration attested copies
  • Partnership/partner deed Certified copy
  • Letter of partnership
  • NTN certificate copy
  • Partners’ CNIC verified copies

For Companies to provide:

  • Incorporation certificate
  • Memorandum of association -MOA
  • Articles of association
  • Form 29 certified copy
  • Signatories’ verified CNIC copies
  • NTN certificate copies and SECP registration

5. Set up business accounting

A proper accounting system is necessary for a business to determine expense and revenue and another transaction record of the business. Accounts detail and keeping it accurately helps in simplify annual tax filing and keep concerned updated about the financial status of the business.

6. Solar company Registration with PEC & AEDB 

Licenses and permits must be received before starting new business, Failure to get required permits and licenses can result in substantial penalties, or even can cause business to be closed. Only AEDB certified vendors/installer/service providers are eligible for sale, installation and services of PV solar power generation system. AEDB monitors and ensures the certified vendors/ installer/service provider detail correctly displayed on the DISCO website and the consumer can select any of them for service from AEDB certified vendors/installer/service providers. For more details, please visit https://aedbregistration.com/contact/.

Get your solar company Insured

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Apply marketing strategies to promote solar business

Utilize internet marketing and social marketing

Leave a Comment