SECP seeks amnesty scheme for offshore company owners

ISLAMABAD – The Securities and Exchange Commission of Pakistan (SECP) has proposed the government to give one time amnesty scheme for the owners of offshore companies to declare their hidden assets by paying nominal tax.

“I have asked the Finance Minister Ishaq Dar to give one opportunity to offshore companies owners to declare their assets by paying certain amount of tax, so they should bring back their investment in the country,” said SECP Chairman Zafar Hijazi while addressing a press conference.

He further said that people had taken their capital to other countries due to the law and order situation of Pakistan few year back.

He said the government exempted the foreign companies from disclosing their beneficial owners in Pakistan to local authorities in its proposed Companies Ordinance Bill 2016. He said that sub-committee of the National Assembly on Finance had received 45 comments from public and media and they raised concern on 60 sections of the Companies Bill 2016. He said the committee made amendments in 41 sections of the bill. Now the bill along with amendments will be sent to the main committee of National Assembly’s standing committee on Finance to complete the needed legislative process, he added.

Sharing details of the amendments, Hijazi said that the committee has proposed to revise the section 452 of the Companies Bill that is related to global register of beneficial ownership. This section would now applicable only to Pakistani nationals, as the foreigner would be exempted. Earlier, the SECP was empowered to seek details of beneficial ownership of directors having 10 percent or more shares in a foreign company.

The committee also suggested revision in section 439 of the Companies Bill, which is related to information relating to beneficial owners of foreign companies. Now, such information will only be required to be provided by the foreign company to the commission if required. Any other information required in connection with any inspection, inquiry or investigation may also be demanded. Further, a penalty of level 3 has been proposed to be imposed on default.

The sub-committee of the National Assembly on Finance also recommended amendment in section 461 of the bill, relating to security clearance of shareholders, directors and office bearers of companies is being restricted to companies notified by the federal government. The committee has asked to give powers to the SECP to grant exemption from the requirement for a director to hold NTN as per the provisions of Income Tax Ordinance, 2001.

Real estate companies soliciting advances shall be required to recognise their income in accordance with IFRS. Further, the escrow account to be maintained for the real estate project shall be not subject to any attachment except for the purpose of the project.

Hijazi urged the investors not to lose their hard-earned money to unscrupulous elements. They should always deal with licensed brokers who are registered with the SECP.

He said SECP has issued these guidelines for capital market investors.

He said that investment deal should be made with a licensed broker registered with SECP, as investment with the unauthorised broker is at risk and prone to fraud and investors could loose his money in the hands of unauthorised broker. “Trade only through your own accounts with the broker & CDC and never authorises 3rd party to operate your account,” he added. The SECP chairman also said, “Always make payments to broker by crossed cheque and obtain receipts.”