01/11/2024
NGO and NPO Registration in Pakistan
The non-profit sector in Pakistan is diverse and evolving, spanning a wide range of organizations from traditional charity groups to modern, development-focused NGOs. With an increasing government recognition of NGOsโ contributions to national progress and public welfare, this sector has seen remarkable growth. The term "NGO" in Pakistan broadly includes organizations operating for public benefit, though it lacks a distinct legal definition. Many NGOs operate as societies or voluntary welfare organizations, while a significant number remain informal and unregistered community networks.
Legal Framework for NGOs in Pakistan
Although Pakistan's Constitution ensures the right to form associations, this right comes with certain limitations. Multiple legal frameworks exist for registering NGOs, including:
Voluntary Social Welfare Agencies Registration and Control Ordinance, 1961: This ordinance allows organizations with social welfare objectives to register, especially those seeking government funding.
Societies Registration Act, 1860: Provides a means for societies focused on charitable and public-benefit activities to become registered entities.
Cooperative Society Act, 1925: This act supports registration for cooperative societies.
Companies Ordinance, 1984 (Section 42): Not-for-profit companies working towards "useful objects" may register as public limited companies with restricted liability.
Trust Act, 1882: This act is relevant to private trusts for various purposes.
Income Tax Ordinance, 2001: Outlines the tax exemptions available to registered NGOs.
Although registration is voluntary, foreign NGOs and organizations seeking government funding must register with the Economic Affairs Division and the Central Board of Revenue. Notably, around 65.4% of NGOs in Pakistan register under the Societies Registration Act, with approximately 20% operating informally.
Regulatory Oversight
With Pakistan's decentralized government structure, regulatory oversight of NGOs is shared across provincial and federal levels. Major agencies include:
Ministry of Social Welfare and Special Education, along with Provincial Social Welfare Departments: Oversee organizations registered under the Voluntary Social Welfare Agencies Ordinance, 1961.
District Industry Offices: Handle registration under the Societies Registration Act, 1860.
Securities and Exchange Commission of Pakistan (SECP): Licenses not-for-profit companies, enforcing requirements such as public access to financial records and member restrictions.
International NGOs are expected to register with the Economic Affairs Division (EAD), though it is not a legal requirement. For those involving foreign staff or operating in sensitive regions, approval from the Ministry of Interior is necessary.
Benefits of Registering an NGO
Registered NGOs, including international ones, may apply for tax exemptions, though these are not granted automatically. NGOs focused on charity can seek exemptions for various income types, provided that funds are used according to their specified mission. The Ministry of Finance generally grants exemptions for three years, which can be renewed thereafter.
Reporting Obligations
Voluntary Social Welfare Agencies: Must keep financial records and submit annual reports, including audits, to District Officers. These are publicly accessible.
Registered Societies: Required to submit an updated annual membership list.
Not-for-Profit Companies: File annual returns and audited financial statements with SECP, making these available to the public.
International NGOs: Submit plans to the EAD, which coordinates feedback from ministries for alignment with national development goals.
For NGOs with tax exemptions, annual audited accounts, donor and beneficiary lists, and other financial reports must be submitted to the Central Board of Revenue.
Government Support for NGOs
In Sindh, the Ministry of Social Welfare and Special Education provides a training institute to support NGOs under the Voluntary Social Welfare Agencies Registration Ordinance. This institute offers on-site and mobile training programs across the province to build NGO capacity.
Snapshot of Pakistan's NGO Sector
According to a 2002 study by Johns Hopkins University, Pakistan hosts around 45,000 active NGOs, with a large portion (46%) focusing on religious education. The sector generates an estimated income of 16.4 billion rupees annually, with organizations ranging from small community groups to large national entities offering health, education, and rights-based services.
Analysis of the Independent Sector
The Pakistan Centre for Philanthropy conducts regular studies and reports on the non-profit sector, highlighting its contributions and ongoing challenges.
Role of International Programs
Since 2003, the International Program has partnered with Pakistanโs government to strengthen NGO regulation and capacity-building. Achievements include establishing a national NGO database, creating a regulatory code of conduct, and training over 1,500 regulatory staff across Pakistan. The program continues to enhance the regulatory environment by offering advanced training and resources.
This landscape provides NGOs in Pakistan with both opportunities and responsibilities, as they work to support and enhance public welfare initiatives across the country.
