Pakistan has a large, English-speaking graduate workforce in finance, IT, engineering and customer service. For UK businesses, the question is rarely whether the talent exists. It is how to employ people there properly.
There are three main routes. Each suits a different stage of growth.
Option 1: Hire freelancers or contractors
Engaging an independent contractor is quick and needs no local entity. It works for genuine project work with a clear end date.
The risk comes when a "contractor" works full time, only for you, on your schedule, using your tools. That arrangement looks like employment. It can leave the worker without statutory protections and leave your business exposed to claims, back-dated contributions and disputes over who owns the work.
Option 2: Set up your own company in Pakistan
You can incorporate a private limited company in Pakistan through the Securities and Exchange Commission of Pakistan, then register for tax and social security, open a local bank account and run payroll yourself.
This gives you full control and makes sense for a large, permanent team. It also brings set-up time, local directors or representatives, annual filings, audits and the ongoing cost of local accountants and legal advice.
Option 3: Use an Employer of Record
An Employer of Record employs the person through its own registered entity in Pakistan. You choose the candidate and direct their work, and the EOR handles the contract, payroll, statutory contributions and HR administration.
For most UK businesses hiring their first one to twenty people in Pakistan, EOR offers proper employment without the cost and time of incorporation.
Step by step: hiring in Pakistan through an EOR
- Define the role. Write the job description, working hours and the UK overlap you need.
- Agree the salary. Ask your EOR for local salary guidance and a written monthly cost, including employer contributions.
- Find the candidate. Use your own network or ask the EOR to shortlist. Interview and choose yourself.
- Issue the offer and contract. The EOR issues a local employment contract that protects your confidentiality and IP.
- Onboard. Documents are checked, the employee is registered, and equipment and system access are set up.
- Run monthly payroll. The EOR pays salary in Pakistani rupees and invoices you in GBP.
Working hours and time difference
Pakistan Standard Time is UTC+5 all year. That puts Pakistan five hours ahead of the UK in winter and four hours ahead during British Summer Time. Many teams work a shifted day so they overlap with UK office hours. Others work an earlier schedule so tasks are ready when your UK team starts.
Payroll, tax and statutory contributions
Employees in Pakistan are paid in rupees, with income tax withheld by the employer. Employers also make mandatory contributions, which include provincial social security and the Employees' Old-Age Benefits Institution (EOBI) scheme. Rates and thresholds change, so ask your EOR for a current breakdown for the specific salary.
Data protection when your team is in Pakistan
If staff in Pakistan will access personal data held by your UK business, that is an international transfer under UK GDPR. You need appropriate safeguards, such as the UK International Data Transfer Agreement (IDTA), and a data processing agreement with your provider. Practical controls matter too: managed devices, role-based access and the ability to remove access instantly.
Which route should you choose?
| Employer of Record | Own Pakistan company | Contractor | |
|---|---|---|---|
| Time to first hire | Days | Months | Days |
| Upfront cost | None | High | None |
| Employee protections | Full statutory | Full statutory | Usually none |
| Compliance burden | On the EOR | On you | On you (misclassification risk) |
| Best for | 1–20 full-time hires | Large permanent teams | Short, genuine projects |
Read more about our Employer of Record service, or book a free consultation.
Frequently asked questions
Can a UK company employ someone in Pakistan without a local entity?
Not directly as the legal employer. A UK company either sets up its own entity in Pakistan or uses an Employer of Record that employs the person through its registered Pakistani entity.
What currency are employees in Pakistan paid in?
Employees are paid in Pakistani rupees. With an EOR, your business is normally invoiced in GBP and the EOR handles currency conversion and local payment.
How many hours ahead is Pakistan from the UK?
Pakistan is five hours ahead of the UK in winter and four hours ahead during British Summer Time, because Pakistan does not change its clocks.
Do I need a data transfer agreement for staff in Pakistan?
If staff in Pakistan access personal data your UK business controls, UK GDPR treats this as a restricted transfer. Safeguards such as the UK IDTA are normally needed.