Textile company is a type of business or company that buys and sells a variety of fabric or textile. There are a variety of textile companies around the world, each serves its purpose. Textile mills provide the raw material to make apparel and textile products. They take natural and synthetic materials, such as cotton and polyester, and transform them into fiber, yarn, and thread.

Yarns are strands of fibers in a form ready for weaving, knitting, or otherwise intertwining to form a textile fabric.

Textiles are made from many materials, with four main sources: animal (wool, silk), plant (cotton, flax, jute, bamboo), mineral (asbestos, glass fibre), and synthetic (nylon, polyester, acrylic, rayon). The first three are natural. In the 20th century, they were supplemented by artificial fibres made from petroleum.

The textile industry of Pakistan contributes 57% to the exports of the country, thereby playing a significant role in the country’s economy and is the biggest production section of the nation. It also sits as being the source of jobs and trade profits, utilizing 40% of the workforce and contributing up to 8.5% of the total GDP of the country. At the beginning of 2018, the entire sector was worth USD 7.72 billion.


The major portions of the textile industry are contributed by the following sectors:

  • cotton spinning sector;
  • cloth sector;
  • textile made-up sector including towels, tents, canvas, cotton bags, bed wear, hosiery, readymade garment;
  • synthetic fiber manufacturing sector;
  • filament yarn manufacturing industry;
  • art silk and synthetic weaving industry; and
  • woolen industry.

The textile sector has recently received a setback due to power outages, scarcity of gas, thread price fluctuations, depreciating value of rupee and lack of technological advancements in the sector. However, by the end of 2020, Pakistan has seen a revival in the industry. Lifting the comprehensive lockdown in May has redirected all textile export demands to Pakistan as other exporting countries such as China and India are still in a lockdown. Incentives and export facilitations introduced by the government has also improved the export of textile in the country.

On March 2020, the government announced the introduction of a Textile Policy 2020-2025 which was set to improve the textile imports up to $28 billions in the next five years. The important initiatives under this policy include:

  • Fixing electricity and gas tariffs at US cent 7.5 per KWh and $6.5 per MMBTU for the next five years;
  • Formation of Specialized Economic Zones;
  • Increasing production and yield of cotton and improving cotton seed quality to increase exports;
  • Increasing the availability of Man-Made Fiber (MMF) and increasing the ratio of cotton to MMF usage 50:50 from 70:30
  • Simplifying the procedure for application for temporary import schemes;
  • Allowing inter/intra-bond schemes transfers of intermediate products to indirect / direct / commercial importers will be allowed;
  • Reviewing the withdrawal of SRO 1124 or Zero rating on textile industry;
  • Enhancing the long-term financing facility by at least $1 billion per year;
  • Drawback of local taxes and levies is to be provided to garments and made-ups;
  • Minimum turnover tax will be reverted to 0.5% from 1.5% and indirect exporters will be also included within the taxation regime available for direct exporters.

The Textile Policy 2020-2025 is yet to be approved by the cabinet for it to be implemented.


Incorporating a textile company in Pakistan is a simple process with no requirement of any additional licensing or registration with any other Association and simply requires registration with the Securities and Exchange Commission of Pakistan (SECP) and the Federal Board of Revenue (FBR). The process is entailed as follows:


The SECP is a regulator granted with the mandate to regulate the corporate sector and thereby specifically handles the object of incorporation of all public and private companies. The incorporation procedure is divided into three steps:


The first step towards the incorporation of a company is to reserve a suitable name subject to Section 10 of the Companies Act 2017. Three proposed names which fulfill the criteria provided are to be specified for approval. Such reservation can either be made by a separate application or the same can be made alongside the application for incorporation. No extra fee is chargeable for reserving a name alongside the application for incorporation of company. However, for a separate application, a fee of rupees 200/- is chargeable for an e-application and for a physical application a fee of rupees 500/- is chargeable.

After the submission of the application and due fees, the registrar will examine the names provided, and if they fulfill the criteria provided, will issue a certificate for reservation of name for up to 60 days, within which the application for incorporation of company is to be made.


As previously stated, an application for incorporation of company can either be separate or alongside application for reservation of name. Fee for incorporation is in accordance to the type, capital and size of the company, in accordance to Seventh Schedule of the Companies Act 2017.

Such application is to be accompanied by the following documents:

  • Memorandum of Association duly signed by the subscribers. In case of physical submission, it shall be duly stamped under Stamp Act 1877.
  • Articles of Associations duly signed by the subscribers.
  • Copies of NIC / NICOP of the subscribers / directors / chief executive officers.
  • Copy of NIC of witness in case of physical filing of application.
  • Duly stamped authority letter of subscriber or intermediary authorizing him to file documents for incorporation for a physical submission.
  • Original paid bank challan in case of physical submission.

For an online application, all relevant documents are to be scanned and uploaded except for the memorandum and articles which will be generated online.


Once all the relevant documents have been submitted to the Registrar, SECP, he shall examine the same and determine if all relevant documents are complete and all requirements have been complied with. Once the registrar is satisfied, he shall register the Memorandum & Articles of Association and other documents, and will issue a certificate for incorporation of company under his signatures and authenticated by his official seal.


Previously a separate application had to be made to the FBR for issuance of BNTN number, however the SECP has introduced a one window facility, whereby which the data collected by the SECP is sent to the FBR for registration of NTN number.

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