South Asia · current conditions as of 11 October 2026 · fundamentals reviewed 16 October 2026
🇵🇰 Doing business in Pakistan
230M population market with significant macro challenges.
Long-term risk: High
Current alert: Elevated
Two-front pressure: the conflict with Afghanistan flared again after the Kohat attack (18–19 Sep, 31 killed), followed by Pakistani air strikes in Afghanistan on 21 and 23–24 Sep. At home, fuel and LNG supply stress from the Hormuz closure is driving power cuts (reported shortfall above 4,000 MW in early October).
Pakistan's border conflict with Afghanistan, under way since February 2026, flared in September: militants attacked Kohat on 18–19 Sep (31 killed) and Pakistan struck targets in eastern Afghanistan on 21 and 23–24 Sep. Heavy reliance on Gulf crude and Qatari LNG means the Hormuz closure is causing fuel and power stress, with 3–4 hours of load shedding reported in early October and LNG-linked cuts in Karachi. Inflation was 10.3% in September. A 2 Oct border shooting also raised tensions with India.
Conditions change fast. Check current government travel and trade advisories before acting.
What makes up the long-term score
Highlights: Large young population · IMF programme dependency · Currency instability
Key industries
Textiles & Garments → Stable
Pakistan is worlds 4th largest cotton producer and major garment exporter. Textile sector employs 40% of industrial workforce.
Main investors: China, UAE, UK, US
Agriculture → Stable
Agriculture contributes 24% of GDP. Pakistan is a major exporter of rice, cotton, wheat and sugarcane.
Main investors: China, UAE, Saudi Arabia, Netherlands
Technology & IT Services ↑ Growing
Pakistan exports $2.6B in IT services. Karachi and Lahore are growing tech hubs with strong freelance developer community.
Main investors: US, UK, UAE, Saudi Arabia
Energy & Power → Stable
CPEC energy projects have added 10,000MW of capacity. Renewable energy is a growing priority under IMF programme.
Main investors: China, Saudi Arabia, UAE, US
Sector priorities
- Technology & IT Outsourcing: PSEB support, competitive talent costs and strong English proficiency making Pakistan increasingly attractive for IT outsourcing.
- Agriculture & Food Processing: Large agricultural base with low processing value add creating significant opportunity for food technology and processing investment.
- Renewable Energy: Pakistan solar and wind potential is among South Asias highest. Government AEDB incentives support renewable project development.
Talent & work permits
Pakistan has a young population with 64% under 30. English widely used in business. Strong IT and engineering talent at competitive cost.
- Foreign workers: Work permit required from Ministry of Interior. Employer sponsored. Process can take 8 to 16 weeks.
- Localisation: No formal localisation quota outside of some sectors. Companies expected to prioritise local hiring as general practice.
- Key consideration: Pakistan offers some of the most cost competitive English speaking IT talent globally making it attractive for technology outsourcing.
Summarised from our dataset and not yet linked to sources. Verify with local counsel before acting.
How to enter: first four steps
Pakistan market entry requires careful planning given macro instability. SECP registration is straightforward but FX and repatriation planning is critical.
- Register with SECP: Securities and Exchange Commission of Pakistan online portal for company incorporation
- Register with FBR: Federal Board of Revenue for NTN national tax number and sales tax registration
- Open PKR and USD accounts: establish banking relationships with HBL, UBL or MCB before commencing operations
- Register with BOI: Board of Investment for foreign investment facilitation and repatriation approval processes
Indicative cost: 10-person team
Professional-services team (1 senior manager, 5 professionals, 2 admin, 2 support), Grade A office, registration, legal, audit and tax compliance. Model estimate, not a quote.
First year by industry (10 people)
Compare with South Asia peers
Tap a market to see it side by side with Pakistan.
Common questions
Is Pakistan a good market to enter in 2026?
Pakistan has a long-term score of 4.4/10 on EmergingMarketIQ’s index (long-term risk: High) and scores 3.9/10 now, as of 11 October 2026. 230M population market with significant macro challenges. Pakistan's border conflict with Afghanistan, under way since February 2026, flared in September: militants attacked Kohat on 18–19 Sep (31 killed) and Pakistan struck targets in eastern Afghanistan on 21 and 23–24 Sep. Heavy reliance on Gulf crude and Qatari LNG means the Hormuz closure is causing fuel and power stress, with 3–4 hours of load shedding reported in early October and LNG-linked cuts in Karachi. Inflation was 10.3% in September. A 2 Oct border shooting also raised tensions with India.
How much does it cost to set up a 10-person office in Pakistan?
Our cost model estimates about US$248k for the first year (≈US$19k per month run-rate plus ≈US$9k one-off setup) for a 10-person professional-services team; depending on industry the range is US$197k–US$278k. Indicative only.
What are the first steps to set up a company in Pakistan?
Register with SECP: Securities and Exchange Commission of Pakistan online portal for company incorporation Then: Register with FBR: Federal Board of Revenue for NTN national tax number and sales tax registration Then: Open PKR and USD accounts: establish banking relationships with HBL, UBL or MCB before commencing operations Then: Register with BOI: Board of Investment for foreign investment facilitation and repatriation approval processes
Source: EmergingMarketIQ country dataset. Current conditions and alerts updated 11 October 2026; GDP (World Bank 2025) and FX 24 September 2026; structural scores reviewed 16 October 2026. Rules, rates and conditions change, so verify with local counsel before acting. Not legal, tax or investment advice.